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Q60 (IAS/2015) Economy › Government Finance & Budget › Government funds structure Official Key

With reference to the Union Government, consider the following statements : 1. The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament. 2. No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India. 3. All the disbursements made from Public Account also need the authorization from the Parliament of India. Which of the statements given above is/are correct?

Result
Your answer: —  Âˇ  Correct: C

Explanation

The Budget Division in the DEA (Department of Economic Affairs) has the prime responsibility for the preparation and submission of the Union Budget[1], not the Department of Revenue. Therefore, statement 1 is incorrect.

All expenditures incurred by the government are debited against the Consolidated Fund and no amount can be withdrawn from the Fund without the authorization from the Parliament[2]. This is further reinforced by the constitutional provision that no money can be withdrawn from the Consolidated Fund except under an Appropriation Act[3]. Therefore, statement 2 is correct.

However, disbursements from the Public Account are not subject to vote by the Parliament, as they are not moneys issued out of the Consolidated Fund of India[4]. The Public Account contains moneys held in trust by the government (like provident funds, small savings, etc.) and their disbursement does not require parliamentary authorization. Therefore, statement 3 is incorrect.

Only statement 2 is correct, making option C the right answer.

Sources
  1. [1] https://dea.gov.in/files/budget_division_documents/Budget_Manual_1.pdf
  2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.3 Government Accounts > p. 150
  3. [3] Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
  4. [4] https://dea.gov.in/files/budget_division_documents/Budget_Manual_1.pdf
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PROVENANCE & STUDY PATTERN

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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. With reference to the Union Government, consider the following statements : 1. The Department of Revenue is responsible for the preparat…
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 3.3/10 ¡ 6.7/10
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This is a classic 'Polity-Economy Hybrid' question. While technical manuals exist, the core answers lie in standard texts like Laxmikanth (Parliamentary Funds) and basic Economy NCERTs (Budget Process). The difficulty comes from the specific administrative detail (Department of Revenue vs. DEA) which tests if you read the 'fine print' of the Ministry of Finance structure.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Under the Union Government of India, is the Department of Revenue responsible for preparing the Union Budget presented to Parliament?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"ROLE OF BUDGET DIVISION IN THE DEPARTMENT OF ECONOMIC AFFAIRS (DEA): The Budget Division in the DEA has the prime responsibility for the preparation and submission of"
Why this source?
  • Explicitly names the Budget Division in the Department of Economic Affairs (DEA) as having the prime responsibility for preparation and submission.
  • Identifies DEA (not Department of Revenue) as the organizational unit charged with preparing the Union Budget.
Web source
Presence: 4/5
"The Union Budget of India, also referred as the General Budget, is presented each year on the last working day of February by the Finance Minister of India to the Parliament."
Why this source?
  • States that the Union Budget is presented to Parliament by the Finance Minister of India, indicating presentation and central management lie with the Finance Ministry/DEA ecosystem.
  • Reinforces that budget presentation is a Finance Ministry function rather than a role attributed to the Department of Revenue in these passages.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > How is the Budget Prepared by the Government? > p. 119
Strength: 5/5
“The presentation of the Union Budget by the Finance Minister has been shifted from the last week of February to the 1st of February every year. From 2017-18 onwards, Railway Budget (which was continuing since 1924) has also been merged with the Union General Budget. It was separated from main budget in 1924 by Acworth Committee. Again, it has been merged with Union Budget in 2016 by Bibek Debroy Committee. Budget Division of the Department of Economic Affairs, Ministry of Finance is the nodal agency for the preparation of general budget. It is based on the data provided by each Ministry.”
Why relevant

Explicitly states that the Budget Division of the Department of Economic Affairs, Ministry of Finance is the nodal agency for preparation of the general budget.

How to extend

A student could check organisational charts or official Ministry of Finance documents to compare the roles of Department of Economic Affairs versus Department of Revenue.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.1 Introduction > p. 146
Strength: 5/5
“Budget is an estimate of income and expenditure for a future period of time. The estimated receipts and expenditure of the government of India in respect of each financial year is called the budget of GoI. Article 265 of the Constitution provides that no tax shall be levied or collected except by authority of law. And as per Article 266 no expenditure can be incurred except with the authorization of the legislature. Government takes the approval of the parliament for the taxes/receipts through the Finance Bill and the approval for the expenditures through the Appropriation Bill. Budget is prepared by the Budget Division, Department of Economic Affairs, Ministry of Finance.”
Why relevant

Says the budget is prepared by the Budget Division, Department of Economic Affairs, Ministry of Finance, giving a clear rule about which department prepares the budget.

How to extend

Use this rule to rule out Department of Revenue unless external sources show responsibility transferred or shared.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.2 Budget Procedure > p. 148
Strength: 4/5
“The budget is presented in the parliament on the first working day of February at 11.00 am. The General Budget is presented in Lok Sabha by the finance minister and he/she makes a speech introducing the budget and after the speech it is presented in the Rajya Sabha. No discussion on Budget takes place on the day it is presented to the parliament. The main budget documents presented to parliament comprise, besides the Finance Minister Budget Speech, of the following: • Annual Financial Statement• Demand for Grants• Appropriation Bill• Finance Bill Budget is discussed in two stages - the general discussion followed by detailed discussion.”
Why relevant

Describes the procedural role of the Finance Minister in presenting the General Budget and lists main budget documents, implying central coordination in Ministry of Finance.

How to extend

Combine with knowledge that Finance Minister heads the Ministry of Finance to infer which internal departments likely coordinate budget preparation.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.15 Previous Years Questions > p. 187
Strength: 3/5
“With reference to the Union Government, consider the following statements: [2015] • (i) The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament• (ii) No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India• (iii) All the disbursements made from Public Account also need the authorization from the Parliament of India• Which of the statements given above is/are correct?• (a) (i) & (ii) only• (b) (ii) & (iii) only• (c) (ii) only• (d) (i), (ii) & (iii)”
Why relevant

Contains a past exam-style item that explicitly questions whether 'The Department of Revenue is responsible for the preparation of Union Budget', indicating this is a contested or testable claim.

How to extend

A student could use this as a prompt to verify which department is actually responsible by consulting authoritative sources or the Ministry's organisational responsibilities.

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