Actual Article
Article 202: Annual financial statement
- The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this part referred to as the “annual financial statement”.
- The estimates of expenditure embodied in the annual financial statement shall show separately the amounts required to meet the expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of the State and the amounts required to meet other expenditure proposed to be made from the Consolidated Fund of the State.
- The following expenditure shall be expenditure charged on the Consolidated Fund of the State:
- (a) the emoluments and allowances of the Governor and other expenditure relating to his office;
- (b) the salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly, and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman thereof;
- (c) debt charges for which the State is liable including interest and sinking fund charges;
- (d) expenditure in respect of the salaries and allowances of Judges of any High Court;
- (e) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
- (f) any other expenditure declared by this Constitution or by the Legislature of the State by law to be so charged.
UPSC Notes for Article 202
Explanation:
- Annual Budget Presentation: Article 202 mandates that the Governor of each state must present an annual financial statement, commonly known as the budget, before the state legislature. This statement provides a detailed estimate of the state’s expected income and expenditure for the upcoming fiscal year.
- Separation of Expenditures: The financial statement must distinctly separate the expenditures charged directly upon the state’s Consolidated Fund (which are not subject to vote of the legislature) from other expenditures.
- Charged Expenditures: Expenditures that are charged on the Consolidated Fund include the Governor’s emoluments, salaries of key legislative officers, debt liabilities of the state, judicial salaries, and any statutory requirements like court orders.
Key Points:
- Transparency and Accountability: This article ensures financial transparency and accountability by requiring a detailed budget presentation, facilitating legislative review and control over public finances.
- Constitutional Safeguards: The specification of expenditures that are not to be voted on protects essential state functions and constitutional offices from potential financial instability or legislative caprice.
Important Cases and Commissions Related to Article 202
Cases:
- No specific landmark cases interpreting Article 202 have been noted, as it deals more with procedural financial governance.
Commissions:
- Administrative Reforms Commission: Might have discussed fiscal transparency and the effectiveness of budget processes in enhancing administrative accountability and financial management.
Important Reports Related to Article 202:
- Law Commission Reports: Could include discussions on improving budgetary processes and fiscal responsibility frameworks at the state level to enhance governance efficiency.
Previous Year Prelims Questions Related to Article 202
- (UPSC Prelims 2016) What is the annual financial statement referred to in a state’s context?
- A. The report of the Comptroller and Auditor General
- B. The state’s economic survey
- C. The budget presented by the Governor
- D. The revenue generated report by the state Correct Answer: C. The budget presented by the Governor
- (UPSC Prelims 2018) Which of the following is a charged expenditure on the Consolidated Fund of the State according to Article 202?
- A. Development projects expenditure
- B. Salaries of the state government employees
- C. Salaries and allowances of the Governor
- D. State defense expenditure Correct Answer: C. Salaries and allowances of the Governor
Previous Year Mains Questions Related to Article 202
- Mains 2016: “Evaluate the role of the annual financial statement in fostering fiscal responsibility within state governments as outlined in Article 202.”
- Mains 2019: “Discuss the significance of distinguishing between charged and other expenditures in the annual financial statement as per Article 202.”
Additional Insights:
- Fiscal Discipline and Planning: Article 202 promotes fiscal discipline and meticulous financial planning by mandating the clear delineation of all financial activities and obligations of the state government.
- Legislative Scrutiny and Oversight: By presenting the budget to the state legislature, Article 202 ensures that elected representatives have the opportunity to scrutinize and discuss the state’s fiscal policies, enhancing democratic governance and oversight.
Understanding Article 202 is crucial for UPSC aspirants as it provides
insights into the budgetary processes of state governments, emphasizing the constitutional framework for fiscal management and accountability. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the governance and financial operations within states.