List the four components of the Union Budget and explain their constitutional basis.
Subtopic: Economy · Government Budgeting
How to structure your answer
Introduction: Article 112 mandates the Annual Financial Statement; Budget presented 1 February since 2017.
Body: 1) Revenue Budget — receipts and expenditure not creating assets. 2) Capital Budget — borrowings, asset creation. 3) Demand for Grants — voted by Lok Sabha (Article 113). 4) Finance Bill — taxation proposals (Article 110). Charged vs Voted expenditure distinction.
Way forward: Strengthen outcome budgeting; align Public Financial Management System (PFMS) with Demands; widen pre-Budget consultations under FRBM Strategy Statement.
Written within the word limit
140 words · target 150 words · 9 min
Introduction: Union Budget 2025-26 has total expenditure of ₹50.65 lakh crore, presented to Parliament under Article 112 of the Constitution as the Annual Financial Statement.
Body: The Budget has four constitutional components. (i) Annual Financial Statement under Article 112 — Centre's estimated receipts and expenditure for the financial year. (ii) Demands for Grants under Article 113 — Consolidated Fund expenditure voted by Lok Sabha; charged items (judges' salaries, CAG, interest) are non-votable. (iii) Finance Bill under Article 110 — taxation proposals, certified as a Money Bill by the Speaker. (iv) Appropriation Bill under Article 114 — authorises withdrawal from the Consolidated Fund of India once Demands are passed. Allied documents include FRBM Statements (Macroeconomic Framework, Medium-Term Fiscal Policy-cum-Strategy) under the FRBM Act 2003, and the Output-Outcome Framework under the Department of Expenditure.
Way forward: The Ministry of Finance should align Output-Outcome monitoring with PFMS dashboards by FY27 to strengthen Article 114 accountability.
What an examiner expects to see
- Article 112 — Annual Financial Statement
- Article 110 — Money Bill definition
- Article 113 — Demands for Grants
- Article 114 — Appropriation Act
- Charged on CFI vs voted
- Outcome Budget initiative since 2005-06
- PFMS for fund flow tracking
Concrete cases, schemes and judgments
- Article 266 — Consolidated Fund of India
- Article 267 — Contingency Fund
- Public Account under Article 266(2)
- Cut motions in Parliament