Differences between Voted expenditure & Charged expenditure
Ø Para 302 of Finance Code - Article 112 (2) of Constitution of India prescribes estimates of expenditure embodied in the Annual financial statement i.e., Annual Budget shall show separately i.e., 1. Charged expenditure - the amounts required to meet expenditure charged upon the Consolidated Fund of India & 2. Voted expenditure - the amounts required to meet other expenditure proposed to be made from the Consolidated Fund of India.
Ø Charged Expenditure : Article 113 (1) of Constitution of India specify "the estimates of expenditure CHARGED upon the Consolidated Fund of India shall not be submitted to the Vote of Parliament". That means charged expenditure doesn't require the approval of Parliament. However there is no restriction on either House of Parliament discussing any of these estimates (charged), where after funds are sanctioned by the President.
Ø The meaning of "Charge" (adjective) is "to impose on". In reality too, Charged expenditure is imposed on Consolidated fund instead of obtaining the approval of Parliament, because of the requirement of safeguarding the interest of constitutional bodies.
Ø The concept of Charged expenditure and its specific privilege is in operational in European countries too.
Examples of Charged expenditure in respect of Indian Railways:
a) The salary, allowances and pension payable to or in respect of CAG of India.
b) Any amounts required to satisfy any judgment, decree or award of any Courts or awards of Arbitrators where made into rule of court
c) Any other expenditure declared by the Constitution or by Parliament by law to be so charged.
Ø Voted Expenditure: Article 113 (2) of Constitution of India specify "that the estimates of Voted expenditure shall be submitted in the form of Demands for Grants (say Demand No.03A, 04B etc) to the House of People (Lok Sabha) and the Lok Sabha shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein".
Ø There was a misconception that charged expenditure and contingent fund are inter related i.e., Voted expenditure is met from Consolidated Fund and Charged expenditure is met from Contingency Fund. But it is not correct. Both Voted and Charged expenditure are met from Consolidated Fund of India only.
- Authority is Article 112 (3) of Constitution of India. Click the link here.
- In fact, Contingency Fund of India is not at all a FUND in its character, but nature of an IMPREST. (which would be discussed separately in the blog)
1. Requires approval of Parliament.
1. Doesn't requires approval of Parliament. However Parliament can discuss about the estimates of Charged expenditure.
2. Rationale: In Democratic country like India, the Govt. cannot spend from the Consolidated Fund unless the expenditure is voted in the lower house of the Parliament. Because the real power lies in public. Parliament which consists of representatives of Public i.e., Members of Parliament have control on the expenditure to be met from Consolidated Fund of India.
2. Rationale: To safeguard the freedom/interest of judiciary, constitutional bodies like President of India, Vice- President of India, Speaker,CAG etc, the expenditure related to these are placed outside the scope of approval of Parliament. Otherwise they are not able to discharge their duties independently.
Readers are advised to reproduce the same notes (duly modify) even in a case, if the short notes on "Charged Expenditure" is asked in the examination.