Part VI - The States • Article

Article 202 Simplified: Annual financial statement

Article 202 is the State Budget's constitutional foundation. It requires the Governor to place the Annual Financial Statement (the State Budget) before the legislature every financial year, showing estimated receipts and expenditure. The Budget has two parts: (a) Charged expenditure—fixed obligations like the Governor's salary, High Court judges' salaries, debt charges—which cannot be voted upon but can be discussed; and (b) Voted expenditure—the rest, which the Assembly debates and approves as 'demands for grants.'

Official Text

(1) 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”. (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 the State; and (b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State, and shall distinguish expenditure on revenue account from other expenditure. (3) The following expenditure shall be expenditure charged on the Consolidated Fund of each 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 of the Legislative Council; (c) debt charges for which the State 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) 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.

Simple Meaning

Explain Like Ten

Think of the State Budget like a family's annual budget plan. The head of the family (Governor) must show everyone (the Assembly) how much money is coming in and how it will be spent before the year begins. Some expenses are fixed—like loan repayments—and can't be argued about (charged expenses). Everything else, like new projects and schemes, the family members (MLAs) vote on.

Student Mode

Article 202 mirrors Article 112 (Union Budget). Three key elements: (1) Governor's duty to lay the Annual Financial Statement before the legislature; (2) Separation of 'charged' expenditure (non-votable: Governor's emoluments, Speaker's salary, High Court judges' salaries, debt charges, court decree payments) from voted expenditure; (3) Separation of revenue account from capital account within the statement.

Example

Each year before April 1, the Odisha Governor (acting on the Chief Minister's advice) presents the State Budget to the Assembly. Salaries of High Court judges appear as 'charged expenditure' and are automatically paid without a vote. But the education and road departments' allocations appear as 'demands for grants' and the Assembly debates and votes on each.

Key Takeaway

Article 202 mandates the State Budget and divides expenditure into two categories—charged (non-votable) and voted—ensuring accountability while protecting essential constitutional costs.

FAQs

What are the items listed as 'charged' on the State Consolidated Fund under Article 202(3)?

Governor's emoluments and office expenses; salaries of Assembly Speaker, Deputy Speaker, Council Chairman, Deputy Chairman; state debt charges; High Court judges' salaries; amounts needed to satisfy court decrees; and any other expenditure so declared by the Constitution or State law.

Can the legislature debate charged expenditure even though it cannot vote on it?

Yes. Article 202(2) explicitly states that charged expenditure 'shall not be submitted to the vote' but 'nothing shall be construed as preventing the discussion' of those estimates in the legislature.

Quiz

Under Article 202, which of the following is classified as 'charged' expenditure on the State Consolidated Fund?

Answer: Salaries of High Court judges

Can the State Legislature vote to reduce the salary of a High Court judge included as charged expenditure in the Annual Financial Statement?

Answer: No, charged expenditure cannot be voted on