Article 112

Annual Financial Statement (The Union Budget)

Official heading: “Annual financial statement”

Check this article against the official editionAwaiting human legal review

Source edition: The Constitution of India (as on 1 May 2026)
Source locator: Part V, Article 112, printed pages 51–52
Last human source-link check: Not yet checked
Last human legal review: Not yet reviewed

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1. In One Sentence

Article 112 requires the President to cause the Annual Financial Statement (the Union Budget) to be laid before both Houses of Parliament every financial year, distinguishing charged expenditure from votable demands.

2. What It Means in Everyday Language

Article 112 is the constitutional foundation for the Union Budget. The Constitution does not use the colloquial word 'Budget'; it designates this financial document as the 'Annual Financial Statement'.

In respect of every financial year, the President causes this statement of estimated receipts and expenditure of the Government of India to be presented to both the Lok Sabha and the Rajya Sabha.

Clause (2) creates a fundamental constitutional distinction between two categories of expenditure: (a) expenditure CHARGED upon the Consolidated Fund of India; and (b) expenditure MADE from the Consolidated Fund of India.

Charged expenditure includes non-negotiable sovereign obligations: presidential emoluments, salaries and pensions of Supreme Court judges, allowances of the CAG, debt repayment charges, and court decree settlements. Under Article 113(1), charged expenditure is open to discussion but is NOT submitted to the vote of Parliament.

All other expenditures constitute demands for grants and must be voted upon by the Lok Sabha.

3. Practical Illustrative Example

Everyday Scenario:

During parliamentary budget sessions, an opposition MP moves a motion to reduce the statutory salary of a Supreme Court judge by ten percent.

Core takeaway: The motion is inadmissible because judicial salaries are 'charged' upon the Consolidated Fund under Article 112(3)(d) and cannot be voted upon by Parliament.

Illustrative Notice: Departmental expenditures for ministries are 'votable' and can be reduced or rejected through parliamentary cut motions.

4. Important Limits, Qualifications & Exceptions

Article 112 mandates executive fiscal transparency and safeguards core institutional independence.

Annual obligation: Executive must present comprehensive estimated receipts and expenditures.
Charged vs Votable dichotomy: Protects judicial and sovereign salaries from political manipulation.
Debt charges guarantee: Protects national debt servicing and sovereign creditworthiness.
Bicameral presentation: Laid before both Houses, though voting is exclusive to the Lok Sabha.

5. Operative Constitutional Text

(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India 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 India; and (b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure. (3) The following expenditure shall be expenditure charged on the Consolidated Fund of India— (a) the emoluments and allowances of the President and other expenditure relating to his office; (b) the salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People; (c) debt charges for which the Government of India 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) (i) the salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court; (ii) the pensions payable to or in respect of Judges of the Federal Court; (iii) the pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in a Governor's Province of the Dominion of India; (e) the salary, allowances and pension payable to or in respect of the Comptroller and Auditor-General of India; (f) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal; (g) any other expenditure declared by this Constitution or by Parliament by law to be so charged.

Transcription for reference; compare with the linked official editionNot yet verified by a human legal reviewer

6. Sources & Historical Assembly Deliberations

Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.

Sources & Citation Metadata

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Constitutional TextThe Constitution of India (as on 1 May 2026)Cited PDF page
Government of India (Legislative Department, Ministry of Law and Justice) • Part V, Article 112, printed pages 51–52 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.

Human legal review is pending; compare the text with the cited editionNon-partisan educational resource