Authored by Vishnu Padmanabhan and Priya Soman The Budget speech may have already been scrutinised and the numbers analysed but the Budget process is far from complete. The Constitution requires expenditure from the government’s Consolidated Fund of India to be approved by the Lok Sabha (the Rajya Sabha does not vote, but can suggest changes). After the Finance Minister presents the Union Budget, Parliament holds a general discussion followed by a detailed discussion and vote on Demands for Grants. In the general discussion, the House discusses the Budget as a whole but no motions can be moved and no voting takes place. In the 15th Lok Sabha, the average time spent during the Budget Session on general discussion has been 13 hours 20 minutes so far. Following the general discussion, Parliament breaks for recess while Demands for Grants – the projected expenditure by different ministries - are examined by the relevant Standing Committees of Parliament. This year Parliament is scheduled to break for a month from March 22nd to April 22nd. After the break, the Standing Committees table their reports; the grants are discussed in detail and voted on. Last year, the total time spent on the Union Budget, on both general and detailed discussion was around 32 hours (or 18% of total time in the session), largely in line with the average time spent over the last 10 years (33 hours, 20% of total time). A unique feature of Indian democracy is the separate presentation and discussion for the Railway Budget. Including the Railway Budget the overall time spent on budget discussion last year was around 55 hours (30% of total time in the session).
Note: All data from Budget sessions; data from 2004 and 2009 include interim budget sessions. Source: Lok Sabha Resume of Work, PRS
During the detailed discussion, MPs can call for ‘cut motions’ to reduce the amounts of demands for grants made by a Ministry. This motion can be tabled in three ways: (i) ‘the amount of the demand be reduced to Re.1/’ signifying disapproval of the policies of that ministry; (ii) ‘the amount of the demand be reduced by a specified amount’, an economy cut signifying a disapproval of the amount spent by the ministry and (iii) ‘the amount of the demand be reduced by Rs.100/-', a token cut airing a specific grievance within the policy of the government. However in practice almost all demands for grants are clubbed and voted together (a process called guillotining). In 2012, 92% of demands for grants were guillotined. The grants for Ministries of Commerce and Industry, Health and Family Welfare, Home Affairs and Urban Development were the only grants taken up for discussion. Over the last 10 years, 85% of demands for grants have been voted for without discussion. The most frequently discussed demand for grants come from the Ministry of Home Affairs (discussed in 6 of the last 10 sessions) and the Ministry of Rural Development (5 times). Demand for grants for Defence, the largest spending Ministry, has only been voted after discussion once in the last 10 years.
Source: Lok Sabha Resume of Work, Union Budget documents, PRS
If the government needs to spend any additional money, it can introduce Supplementary Demands for Grants during the year. However if after the financial year government spending on a service exceeds the amount granted, then an Excess Demand for Grant has to be introduced and passed in the following year. The Budget process concludes with the introduction and passage of the Appropriation Bill authorising the government to spend money from the Consolidated Fund of India. In addition, a Finance Bill, containing the taxation proposals of the government is considered and passed by the Lok Sabha after the Demands for Grants have been voted upon.
In law, the addition or deletion a single punctuation or a single word can have a major impact on the effect of that law. One such example can be seen from the recommended changes in the Civil Liability for Nuclear Damage Bill, 2010 by Parliament’s Standing Committee. The Civil Liability for Nuclear Damage Bill, 2010 was introduced in the Lok Sabha on May 7, 2010. The Bill was referred to the Parliamentary Committee on Science and Technology, Environment and Forests, which submitted its report on the Bill yesterday (August 18, 2010). The Committee has made a number of recommendations regarding certain clauses in the Bill (See summary here). One of these may have the effect of diluting the provision currently in the Bill. The main recommendations pertain to:
Clause 17 of the Bill which gives operators a right of recourse against those actually causing damage had been opposed as it was felt that it was not strong enough to hold suppliers liable in case the damage was caused by them. Clause 17 gave a right of recourse under three conditions. The exact clause is reproduced below: The operator of a nuclear installation shall have a right of recourse where — (a) such right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment or services, or of his employee; (c) the nuclear incident has resulted from the act of commission or omission of a person done with the intent to cause nuclear damage. Under this clause, a right of recourse exists when (a) there is a contract giving such a right, or (b) the supplier acts deliberately or in a grossly negligent manner to cause nuclear damage, or (c) a person causes nuclear damage with the intent to do so. If any of the three cases can be proved by the operator, he has a right of recourse. The Committee has stated that “Clause 17(b) gives escape route to the suppliers of nuclear materials, equipments, services of his employees as their willful act or gross negligence would be difficult to establish in a civil nuclear compensation case.” It recommended that Clause 17(b) should be modified to cover consequences “of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or service.” The Committee also recommended another change in Clause 17. It recommended that clause 17(a) may end with “and”. This provision may dilute the right of recourse available to operators. The modified clause 17 would read as: The operator of a nuclear installation shall have a right of recourse where — (a) such right is expressly provided for in a contract in writing; and, (b) the nuclear incident has resulted as a consequence of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or services.; (c) the nuclear incident has resulted from the act of commission or omission of a person done with the intent to cause nuclear damage. This implies that for Clauses 17(b) or (c) to be applicable, the condition specified in clause 17(a) has to be compulsorily satisfied. Two examples highlight the consequence of the recommended change in Clause 17(a) of the Bill:
The effect of the changes recommended by the committee may thus dilute the provision as it exists in the Bill. The table below compares the position in the Bill and the position as per the Standing Committee’s recommendations:
| Right of recourse - The Bill gives operators a right to recourse under three conditions: (a) if there is a clear contract; (b) if the damage is caused by someone with intent to cause damage; (c) against suppliers if damage is caused by their wilful act or negligence. | In the Bill the three conditions are separated by a semi-colon. The Committee recommended that the semi-colon in clause 17(a) should be replaced by “and”. | This might imply that all three conditions mentioned need to exist for an operator to have recourse. |
| Right to recourse against suppliers exists in cases of “willful act or gross negligence on the part of the supplier”. (Clause 17) | The Committee felt that the right of recourse against suppliers is vague. It recommended that recourse against the supplier should be strengthened. The supplier is liable if an incident has occurred due to (i) defects, or (ii) sub-standard material, or (iii) gross negligence of the supplier of the material, equipment or services. | The variance with the Convention continues to exist. |
