What is Article 202 of Indian Constitution – Defination & Meaning

Article 202: Annual financial statement (1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the
📅 Part VI – The States
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Article Number

202

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Part VI – The States

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Active

Bare Acts Text

Article 202: Annual financial statement

  • (1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this Part referred to as the “annual financial statement”.
  • (2) The estimates of expenditure embodied in the annual financial statement shall show separately—
    • (a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of the State; and
    • (b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State; and shall distinguish expenditure on revenue account from other expenditure.
  • (3) The following expenditure shall be expenditure charged on the Consolidated Fund of each State—
    • (a) the emoluments and allowances of the Governor and other expenditure relating to his office;
    • (b) the salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman of the Legislative Council;
    • (c) debt charges for which the State is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;
    • (d) expenditure in respect of the salaries and allowances of Judges of any High Court;
    • (e) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
    • (f) any other expenditure declared by this Constitution, or by the Legislature of the State by law, to be so charged.
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Full Definition & Explanation

Article 202 of the Indian Constitution outlines the process of presenting the annual financial statement for each state. This statement is prepared by the Governor and provides an estimate of the state’s expected income and expenses for the financial year. It plays a key role in financial governance, as it ensures transparency and accountability in how public funds are managed. The financial statement must be laid before the legislative house, giving elected representatives the chance to review and discuss it before any budget decisions are made. This process directly affects the lives of citizens, as it ultimately determines the allocation of funds for public services, infrastructure, and welfare programs. The article also specifies how the estimated expenditure should be categorized. It mandates a clear distinction between funds that are charged on the Consolidated Fund of the State and other types of expenses. Certain expenditures, like the salaries of judges, the Governor’s allowances, and debt charges, are classified as ‘charged,’ meaning they do not require legislative approval for disbursement. This classification ensures that critical government functions continue without delays caused by budget debates, which can sometimes be lengthy and contentious. Real-world implications of Article 202 are visible during the annual budget sessions in state assemblies. The presentation of this financial statement serves as a foundation for discussions on fiscal policies and expenditure priorities. It affects various sectors, from education to health and infrastructure, thereby influencing state development. By mandating a systematic approach to budget presentation, Article 202 ensures that the financial workings of the state are open to scrutiny, fostering public trust in governance.

Historical Context

This statement is prepared by the Governor and provides an estimate of the state’s expected income and expenses for the financial year. It plays a key role in financial governance, as it ensures transparency and accountability in how public funds are managed. The financial statement must be laid before the legislative house, giving elected representatives the chance to review and discuss it before any budget decisions are made. This process directly affects the lives of citizens, as it ultimately determines the allocation of funds for public services, infrastructure, and welfare programs.

Key Features

– The Governor presents the annual financial statement for each state.
– It includes estimates for receipts and expenditures for the financial year.
– Expenditures are categorized into charged and non-charged funds.
– Certain expenditures do not require legislative approval for disbursement.
– The statement promotes transparency and accountability in state finances.

Importance & Impact

– The annual financial statement affects state budgeting and financial planning.
– It ensures transparency in how public funds are allocated and spent.
– Legislators can debate and scrutinize state financial management effectively
– Budget discussions influence critical public services and development projects
– Proper financial management can enhance citizen trust in government

Sample UPSC Question

Which of the following statements about Article 202 of the Indian Constitution is correct? Consider that: Article 202 of the Indian Constitution outlines the process of presenting the annual financial statement for each state in the context of Article 202. A) It allows states to create their own currency. B) The financial statement is prepared by the Chief Minister. C) It mandates the Governor to present an annual financial statement. D) The statement does not require any legislative discussion. Choose the correct option.

Answer

The correct answer is C. Article 202 mandates that the Governor must present an annual financial statement to the state legislature. This ensures that the state’s financial plans are subject to legislative review and approval, promoting fiscal accountability. Article 202 of the Indian Constitution outlines the process of presenting the annual financial statement for each state.

Key Takeaways

✓ The Governor presents an annual financial statement to the legislature.
✓ The statement categorizes expenditures into charged and non-charged funds.
✓ Legislators review the financial statement for transparency and accountability.
✓ Certain expenditures do not need legislative approval for payment.
✓ This process impacts public services and state development plans.

FAQs

Article 202 of the Indian Constitution outlines the process of presenting the annual financial statement for each state. This statement is prepared by the Governor and provides an estimate of the state’s expected income and expenses for the financial year. It plays a key role in financial governance, as it ensures transparency and accountability in how public funds are managed.

It mandates a clear distinction between funds that are charged on the Consolidated Fund of the State and other types of expenses. Certain expenditures, like the salaries of judges, the Governor’s allowances, and debt charges, are classified as ‘charged,’ meaning they do not require legislative approval for disbursement. This classification ensures that critical government functions continue without delays caused by budget debates, which can sometimes be lengthy and contentious.

The presentation of this financial statement serves as a foundation for discussions on fiscal policies and expenditure priorities. It affects various sectors, from education to health and infrastructure, thereby influencing state development. By mandating a systematic approach to budget presentation, Article 202 ensures that the financial workings of the state are open to scrutiny, fostering public trust in governance.

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Pramod is the Founder and Editor-in-Chief of StudyHub. He holds a Master's degree and is currently pursuing a Ph.D. in Geology, alongside more than 7+ years spent building and verifying competitive exam content for Indian aspirants. He leads StudyHub's editorial process across Indian Polity, the Constitution, Indian Economy, History, Geography, Science, and the platform's other subject areas — checking every article against primary sources (bare act text and Gazette notifications for constitutional topics, government and Economic Survey data for economy content, standard reference material elsewhere) and flagging it for re-verification whenever a relevant amendment, policy, or data update makes an earlier version outdated.
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