Para 2.2.14 — MSO

2.2.14 Under the provisions of Articles 114 to 116 of the Constitution in the case of the Union, Articles 204 to 206 in the case of a State, and Sections 29 to 31 of the

Government of Union Territories Act, 1963, in the case of a Union Territory having a Legislature, no expenditure can be met from the respective Consolidated Fund on or after 1st April of a financial year unless an Annual Budget (Annual Financial Statement of Estimated Receipts and Expenditure) is prepared and an Appropriation Act authorising withdrawal of funds from the Consolidated Fund to the extent of provisions in the Annual Budget is passed in accordance with the provisions of Article 114 or 204 of the Constitution or Section 29 of the said Act, as the case may be. All disbursements from the Consolidated Fund during a financial year, which are not within the sums authorised by an Appropriation Act passed by the appropriate Legislature before the close of the year, will therefore be challenged by Audit as unauthorised expenditure under the provisions of Section 13

(a) of the Comptroller and Auditor General's (Duties, Power and Conditions of Service) Act, 1971, until regularised by an Appropriation Act. Under Article 267 of the Constitution/Section 48 of the Government of Union Territories Act 1963, advances from Contingency Fund of India or of a State or of a Union Territory can be drawn for meeting unforeseen expenditure pending authorisation of such expenditure by the Parliament/Legislature concerned. On such authorisation the advances drawn will be recouped to the Contingency Fund.

Note: If the Annual Budget for the ensuing year is not likely to be passed by the concerned Legislature before 31st March, it becomes necessary for the Central or the State or Union Territory Government, as the case may be, to obtain a ‘Vote on Account’ from the Parliament/Legislature authorising the incurring of expenditure for the initial part of the financial year pending passing of the budget for that year. The ‘Vote on Account’ is intended to enable the Government to carry on its functions and activities till such time as the budget for the whole year is passed. The expenditure incurred on the authority of the ‘Vote on Account’ is subsequently adjusted against the regular budget and the ‘Vote on Account’ becomes non-operational when the budget is passed. This authority cannot, however, be invoked for expenditure on a new service.