Charged expenditure

Also called: Article 112(3) · Topic: Parliamentary Procedure, Committees and Privileges · NCERT: Beyond NCERT

Meaning

Charged expenditure is spending "charged on" the Consolidated Fund of India (the government's main account) under Article 112(3). Parliament may discuss it, but it is not put to vote (Article 113(1)) [2]. It covers items such as the President's emoluments, the pay of presiding officers, Supreme Court judges and the CAG, the pensions of High Court judges, and debt charges.

It matters because it keeps the pay of key neutral offices out of the yearly majority vote, which protects their independence. It also marks a limit on Parliament's "control of the purse".

Explanation

What counts as charged expenditure (Art. 112(3))

• The President: emoluments, allowances and office expenses.
• Presiding officers:
• the Chairman and Deputy Chairman of the Rajya Sabha;

• the Speaker and Deputy Speaker of the Lok Sabha.

• Supreme Court judges: salaries, allowances and pensions.

• High Court judges: pensions only.

• Their salaries are charged on the state's Consolidated Fund, not the Union's.

• CAG (Comptroller and Auditor General): salary, allowances and pension.

• Debt charges: interest on government loans and their repayment.
• Court orders: any sum needed to pay a court judgment, decree or award against the government.
• Anything else Parliament declares charged by law.
• Example: UPSC expenses are charged under Article 322.

How it is treated in Parliament

• Charged expenditure:
• It is shown in the Annual Financial Statement (Art. 112). This is the Constitution's name for the budget.
• Either House may discuss it.

• It is not put to vote (Art. 113(1)) [2].

• Voted expenditure:

• This is all other spending.
• Ministries ask for it through demands for grants (a ministry's request for money).

• The Lok Sabha may approve, reduce or reject each demand (Art. 113).

• Both kinds still need a law before money leaves the Consolidated Fund.

• Art. 266(3) says no money can be withdrawn without an appropriation law (a law that says how much may be spent, and on what).
• The Appropriation Bill (Art. 114) covers both voted and charged spending.
• So charged spending escapes the vote on demands, but not the rule that spending needs a law.

Why charge these items, and the limits

• Why:
• These offices judge, audit or preside over the government and Parliament.
• If their pay depended on a yearly vote, a ruling majority could use that vote to pressure them.

• Charging their pay removes that pressure.

• Limits:

• Parliament can still debate charged items. It cannot vote them down.
• Parliament can add new charged items by law, as with UPSC expenses (Art. 322).
• The Rajya Sabha does not vote on demands for grants at all. So it has no vote on either charged or voted spending at this stage.

In the Constitution and practice

• Article 112(3): lists the items of charged expenditure in the Union budget.
• Article 113(1): charged expenditure is not put to vote, but it may be discussed [2].
• Article 113(2): voted expenditure goes to the Lok Sabha as demands for grants.
• Article 114: the Appropriation Bill authorises withdrawal of both charged and voted sums from the Consolidated Fund.
• Article 266(1) and (3): set up the Consolidated Fund of India and say money leaves it only under an appropriation law.
• Article 322: charges UPSC expenses on the Consolidated Fund.
• States: each state has its own Consolidated Fund under Art. 266. The salaries of High Court judges are charged on it.

• The budget in practice (order of steps): 1. The Finance Minister presents the Annual Financial Statement in the Lok Sabha. It is laid in the Rajya Sabha the same day. Charged and voted items are shown separately. 2. Both Houses hold a general discussion, with no voting. Charged items can be debated here. 3. The departmentally related standing committees (in place since 1993) examine the demands for grants. 4. The Lok Sabha alone votes on the demands for grants. Charged items are skipped at this step. 5. The Appropriation Bill (Art. 114) includes the charged sums and the voted grants. 6. The Finance Bill, a money bill (a bill only about taxes, borrowing or spending, Art. 110), puts the tax proposals into effect.

• After spending: the CAG audits the accounts and the PAC (Public Accounts Committee) examines the CAG's reports. This check covers charged spending too.

Don't confuse with

• Voted expenditure: the Lok Sabha votes on it through demands for grants (Art. 113) and can reduce or reject it. Charged expenditure is only discussed, never voted.
• Public Account of India (Art. 266(2)): money the government holds as a banker or trustee, such as provident funds and small savings. It is paid out by executive order with no appropriation law. Charged expenditure comes from the Consolidated Fund and still needs the Appropriation Bill.
• Contingency Fund of India (Art. 267): a fixed sum at the President's disposal for urgent, unforeseen spending. Parliament approves it later [1]. Charged expenditure is a fixed class of items listed in the budget, not an emergency advance.
• Salaries of High Court judges: these are charged on the state's Consolidated Fund. Only their pensions are charged on the Consolidated Fund of India.

Prelims Hooks

• Art. 112(3) lists charged expenditure. Art. 113(1) says it may be discussed but not voted [2].
• Trap: "Charged expenditure needs no appropriation law." This is false. The Appropriation Bill (Art. 114) covers both charged and voted spending (Art. 266(3)).
• High Court judges: their pensions are charged on the Consolidated Fund of India, but their salaries are charged on the state's Consolidated Fund.
• UPSC expenses are charged on the Consolidated Fund under Art. 322.
• The President's emoluments, the pay of the Speaker, Deputy Speaker, Chairman and Deputy Chairman, the pay and pensions of SC judges and the CAG, debt charges and court decrees are all charged.
• Only the Lok Sabha votes on demands for grants. The Rajya Sabha can only discuss the budget, including charged items.

Mains Points

• It protects independence, but at a cost.
• It keeps the pay of the President, judges, the CAG and presiding officers out of the yearly majority vote, so these offices can act without fear.

• Critics say it also narrows Parliament's control over a growing share of spending, such as interest on debt, which is never voted.

• Accountability still exists after spending.

• Charged items are debated in the House, included in the Appropriation Bill, audited by the CAG and examined by the PAC.

• Stronger committee scrutiny of the budget can make up for the missing vote.

• The power to expand the list needs care.

• Parliament can declare new items charged by law (for example, UPSC expenses under Art. 322).
• Using this power widely would shrink the voted part of the budget, so it should be kept for bodies that truly need protection from the executive and the majority.

Related concepts

• No tax without authority of law
• Consolidated Fund of India
• Public Account of India
• Contingency Fund of India
• Voted expenditure
• Union Budget
• Interim budget

Read more

• Public money: funds, charged expenditure and the Union Budget