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Q85 (IAS/2024) Polity & Governance › Parliament › Budgetary process Parliament Official Key

With reference to Union Budget, consider the following statements : 1. The Union Finance Minister on behalf of the Prime Minister lays the Annual Financial Statement before both the Houses of Parliament. 2. At the Union level, no demand for a grant can be made except on the recommendation of the President of India. Which of the statements given above is/are correct ?

Result
Your answer: —  ·  Correct: C
Explanation

The correct answer is option B (Statement 2 only).

**Statement 1 is incorrect**: The President of India causes the Annual Financial Statement to be laid before both Houses of Parliament[2], not the Prime Minister. Article 112 explicitly states that the President shall cause to be laid before both Houses of Parliament a statement of the estimated receipts and expenditure[3]. While the Finance Minister physically presents the budget, it is done on behalf of the President, not the Prime Minister.

**Statement 2 is correct**: No demand for a grant shall be made except on the recommendation of the President (Article 113)[4]. This is a constitutional requirement that ensures presidential recommendation for all grant demands. No demand for a grant can be made except on the President's recommendation[5], which is one of the key financial powers of the President.

Therefore, only statement 2 is correct, making option B the right answer.

Sources
  1. [1] https://cms.rajyasabha.nic.in/UploadedFiles/Procedure/RajyaSabhaAtWork/English/826-833/CHAPTER24.pdf
  2. [2] https://dea.gov.in/files/budget_division_documents/BUDGET_MANUAL_FINAL_15_11_22.pdf
  3. [3] https://dea.gov.in/files/budget_division_documents/BUDGET_MANUAL_FINAL_15_11_22.pdf
  4. [4] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Constitutional Provisions > p. 251
  5. [5] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 18: President > Financial Powers > p. 194
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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 Union Budget, consider the following statements : 1. The Union Finance Minister on behalf of the Prime Minister lays th…
At a glance
Origin: Books + Current Affairs Fairness: Moderate fairness Books / CA: 5/10 · 5/10

This is a classic 'Constitutional Text vs. TV Visuals' trap. While you see the Finance Minister speaking on TV, the Constitution (Art. 112) assigns the duty to the President. Statement 2 is a verbatim lift from Article 113. The question tests if you can distinguish between the 'formal authority' (President) and the 'functional agent' (Minister).

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
For India's Union Budget, does the Union Finance Minister, on behalf of the Prime Minister, lay the Annual Financial Statement before both Houses of Parliament?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"In respect of every financial year, the President causes to be laid before both Houses of Parliament an “annual financial statement” – a statement of the estimated receipts and expenditure of the Government of India."
Why this source?
  • Explicitly states who causes the Annual Financial Statement to be laid before Parliament.
  • Identifies the 'annual financial statement' (the Budget) as being laid before both Houses by the President.
Web source
Presence: 5/5
"Article 112 says that the President shall, in respect of every financial year, cause to be laid before both the Houses of Parliament, the House of People (Lok Sabha) and the Council of States (Rajya Sabha), a statement of the estimated receipts and expenditure of the Government for that year. This statement is known as the ‘Annual Financial Statement’."
Why this source?
  • Cites Article 112 and repeats that the President shall cause the Annual Financial Statement to be laid before both Houses.
  • Defines the Annual Financial Statement as the Budget, reinforcing that the President is the authority to lay it before Parliament.
Web source
Presence: 5/5
"112. Annual financial statement.— (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"."
Why this source?
  • Provides the constitutional text (Article 112) specifying the President's duty to lay the Annual Financial Statement before both Houses.
  • Makes clear the formal responsibility rests with the President, not with a Minister or Prime Minister in the quoted text.

Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 257
Strength: 5/5
“,Financial legislation At the beginning of every financial year, the Preside'nt in Parliament. shall,in respect of the 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. This is known as the "annual financial statement" (i.e. the "Budget") [Article 112]. It also states the ways and means of meeting the estimated expenditure. Policy Statement in In conformity with the usual Parliamentary practice in the the Budget. ' United Kingdom, the Budget not only gives the estimates for the ensuing year but offers an opportunity to the Government to review and explain its financial and economic policy and programme to the Legislature to discuss and criticise it.”
Why relevant

States that the President 'shall cause to be laid before both the Houses of Parliament a statement ...' (the Annual Financial Statement) — identifies the constitutional source (Article 112) for who 'causes' the statement to be laid.

How to extend

A student could combine this constitutional attribution to the President with knowledge that the President normally acts on aid-and-advice of the Council of Ministers to ask whether a minister (not the PM) practically presents it.

Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
Strength: 5/5
“Relative parts played by the two Houses in financial legislation. As has been already explained. financial business in Parliament starts with the presenting of the Annual Financial Statement. This Statement is caused to be laid by the President before both Houses of Parliament [Article 112]. After the Annual Financial Statement is presented, there is a general discussion of the Statement as a whole in either House. This discussion is to be a general discussion relating to a policy involving a review and criticism of the administration and a valuation of the grievances of the people. No motion is moved at this stage nor is the Budget submitted to vote.”
Why relevant

Reiterates that financial business 'starts with the presenting of the Annual Financial Statement' and that it 'is caused to be laid by the President before both Houses' — emphasises the constitutional/formal actor is the President.

How to extend

Use this formal assignment plus practical parliamentary procedure to probe who physically presents the Statement in each House.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.2 Budget Procedure > p. 148
Strength: 5/5
“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

Explains actual parliamentary practice: 'The General Budget is presented in Lok Sabha by the finance minister ... and after the speech it is presented in the Rajya Sabha.'

How to extend

Combine this practice with the constitutional provision that the President 'causes' the Statement to be laid to infer a distinction between formal (President) and practical (Finance Minister) roles.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.7 Fiscal Responsibility and Budget Management (FRBM) Act 2003 > p. 157
Strength: 4/5
“The finance minister shall review, on half-yearly basis, the trends in receipts and expenditure in relation to the budget and place before both Houses of Parliament the outcome of such reviews.• 10.Except as provided under this Act, no deviation in meeting the obligations cast on the Central Government under this Act, shall be permissible without approval of Parliament.• 11.The Central Government may entrust the CAG of India to review periodically as required, the compliance of the provisions of this Act and such reviews shall be laid on the table of both Houses of Parliament.• 12.Central government shall lay, in each financial year, before both the houses of parliament, the following statements of fiscal policy along with the budget document: • (a) Medium Term Fiscal Policy Statement• (b) Fiscal Policy Strategy Statement• (c) Macroeconomic Framework Statement• (d) 'Medium-Term expenditure Framework Statement' should be laid in the session immediately following the session of the Parliament in which the budget has been presented)”
Why relevant

FRBM-related text says 'The finance minister shall review ... and place before both Houses of Parliament the outcome of such reviews' and requires several fiscal statements to be laid 'along with the budget document' — showing a statutory role for the Finance Minister in placing fiscal documents before both Houses.

How to extend

A student could extend this pattern to argue that the Finance Minister routinely performs the tangible act of laying financial statements before Parliament, even if the President is the constitutional source.

Indian Polity, M. Laxmikanth(7th ed.) > Chapter 92: World Constitutions > STATEMENT_I AND STATEMENT_II PATTERN > p. 782
Strength: 3/5
“Answer the following questions by using the codes given below: l (a) Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I (b) Both Statement-I and Statement-II are correct and Statement_II is not the correct explanation for Statement-I (e) Statement-I is correct but Statement-II is incorrect (d) Statement-I is incorrect but Statement-II is correct 128. Statement-I: A minister at the Central level can be dismissed by the Prime Minister. Statement-II: A minister is appointed by President only on the advice of Prime Minister. • 129. Statement-I: The Finance Commission facilitates the maintenance of financial balance between the Union and the states in the Indian federal system.”
Why relevant

States as a general rule that 'a minister is appointed by President only on the advice of Prime Minister' — showing the PM's central role in ministerial appointments and influence over ministers.

How to extend

A student might combine this with the evidence that the Finance Minister presents the budget to infer whether the Finance Minister acts 'on behalf of' the PM (i.e., as the PM's ministerial agent), noting this is an inference rather than a documented procedural fact in the snippets.

Statement 2
In the context of the Union Budget of India, is it true that no demand for any grant can be made in Parliament at the Union level except on the recommendation of the President of India?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
Presence: 5/5
“258 INTRODUCTION TO THE CONSTITUTION OF INDIA [CHAP. 12 (b) So much of the estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People. And that House shall have power to assent, or to refuse LO assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein. No demand for a grant shall however be made except on the recommendation of the President [Article )13]. In practice. the presentation of the Annual Financial Statement is followed by a general discussion in both the Houses of Parliament.”
Why this source?
  • Explicitly records Article 113 requiring Presidential recommendation before any demand for a grant is made.
  • Places the submission of estimates and demands-for-grants within the legislative procedure, tying them to the President's recommendation.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Constitutional Provisions > p. 251
Presence: 5/5
“f r 11 r The Constitution of India contains the following provisions with regard to the enactment of budget' 1. The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of estimated receipts and expenditure of the Government of India for that year (Article 112). • 2. No demand for a grant shall be made except on the recommendation of the President (Article 113). • 3. No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law (Article 114). • 4. No money bill imposing tax shall be introduced in the Parliament except on the recommendation of the President, and such a bill shall not be introduced in the Rajya Sabha (Article 117). • 5.”
Why this source?
  • Lists constitutional provisions for the budget and explicitly includes the rule that no demand for a grant shall be made except on the recommendation of the President (Article 113).
  • Presents the provision as a core constitutional requirement in budget enactment.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 18: President > Financial Powers > p. 194
Presence: 5/5
“The financial powers and functions of the President are: (a ) Money bills can be introduced in the Parliament only with his prior recommendation. • (b) He /she causes to be laid before the Parliament the annual financial statement (ie, the Union Budget). • (c) No demand for a grant can be made except on his recommendation. • (d) He/she can make advances out of the contingency fund of India to meet any unforeseen expenditure. • (e) He/she constitutes a finance commission after every five years to recommend the distribution 'Jf revenues between the Centre and the states.”
Why this source?
  • In the President's financial powers, explicitly records that no demand for a grant can be made except on the President's recommendation.
  • Frames the requirement as part of the enumerated financial powers and functions of the President.
Pattern takeaway: UPSC consistently swaps constitutional authorities. If a statement says 'The Prime Minister lays...' or 'On behalf of the PM...', pause. In the Indian Constitution, formal executive actions and parliamentary layings are almost always attributed to the President, even if performed by a Minister.
How you should have studied
  1. [THE VERDICT]: Sitter for Polity veterans; Trap for news-watchers. Source: Laxmikanth Ch 18 (President) & Ch 22 (Parliament).
  2. [THE CONCEPTUAL TRIGGER]: 'Financial Procedures in Parliament' (Articles 112–117). Specifically, the executive's exclusive privilege over financial demands.
  3. [THE HORIZONTAL EXPANSION]: Memorize the 'Presidential Recommendation' list: Money Bills (Art 110), Financial Bills Type I (Art 117(1)), Demands for Grants (Art 113). Contrast this with Financial Bills Type II (Art 117(3)) which need recommendation for 'consideration', not introduction.
  4. [THE STRATEGIC METACOGNITION]: Create a 'Who vs. Whom' table for Parliament. Column A: Who formally causes it? (President). Column B: Who physically presents it? (Minister). Column C: Who recommends it? (President). Never conflate the constitutional source with the political face.
Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Presidential role in laying the Annual Financial Statement
💡 The insight

The President causes the Annual Financial Statement (the Union Budget) to be laid before both Houses of Parliament.

High-yield constitutional fact: it clarifies the formal/constitutional actor responsible for 'laying' the Budget and links to Article 112. Mastering this prevents confusion between ceremonial/formal powers of the President and the executive actions of ministers; useful in questions on constitutional procedure and separation of powers.

📚 Reading List :
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 257
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 18: President > Financial Powers > p. 194
🔗 Anchor: "For India's Union Budget, does the Union Finance Minister, on behalf of the Prim..."
📌 Adjacent topic to master
S1
👉 Finance Minister's role in presenting the Budget in Parliament
💡 The insight

The Finance Minister formally presents the Budget speech and introduces the Budget documents in Lok Sabha and then in Rajya Sabha.

Essential procedural knowledge for UPSC: distinguishes who actually explains and moves budget-related documents in Parliament (Finance Minister) from who formally causes the statement to be laid (President). Useful for questions on parliamentary procedure, the Finance Bill, and money bill processes.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Procedure of Laying Budget > p. 120
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.2 Budget Procedure > p. 148
  • 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
🔗 Anchor: "For India's Union Budget, does the Union Finance Minister, on behalf of the Prim..."
📌 Adjacent topic to master
S1
👉 Distinction between 'laying' and 'presentation' of budget documents
💡 The insight

There is a constitutional act by the President to cause the Annual Financial Statement to be laid, while the Finance Minister presents and discusses the Budget in Parliament.

Conceptual precision that recurs in UPSC mains and prelims: knowing the difference helps answer questions about formal constitutional responsibilities versus practical parliamentary actions; links to topics on President's financial powers and parliamentary debates.

📚 Reading List :
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 257
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Procedure of Laying Budget > p. 120
🔗 Anchor: "For India's Union Budget, does the Union Finance Minister, on behalf of the Prim..."
📌 Adjacent topic to master
S2
👉 Article 113 — Presidential recommendation for Demands for Grants
💡 The insight

Article 113 requires the President's recommendation before any demand for a grant is made in Parliament.

High-yield constitutional provision for budgetary procedure questions; connects to Articles on budget enactment and executive-legislative financial relations. Mastery enables answers on procedural limits, checks on legislative withdrawal from the Consolidated Fund, and related Article-based questions.

📚 Reading List :
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 258
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Constitutional Provisions > p. 251
🔗 Anchor: "In the context of the Union Budget of India, is it true that no demand for any g..."
📌 Adjacent topic to master
S2
👉 Financial powers of the President
💡 The insight

The President's financial powers include recommending money bills, laying the annual financial statement, and recommending demands for grants.

Crucial for questions on separation of powers and executive authority in financial matters; links to topics like money bills, budget presentation, and limitations on Parliament's power over expenditure. Helps answer procedural and polity mains and prelims items.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 18: President > Financial Powers > p. 194
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 18: President > Financial Powers > p. 194
🔗 Anchor: "In the context of the Union Budget of India, is it true that no demand for any g..."
📌 Adjacent topic to master
S2
👉 Voting on Demands for Grants — Lok Sabha exclusivity
💡 The insight

Voting on demands for grants is the exclusive privilege of the Lok Sabha; Rajya Sabha can only discuss but not vote.

Important for understanding bicameral budgetary roles and the supremacy of Lok Sabha in financial matters; relevant for questions on legislative procedure, checks and balances, and differences between votable and charged expenditure.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Stages in Enactment > p. 253
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Stages in Enactment > p. 253
🔗 Anchor: "In the context of the Union Budget of India, is it true that no demand for any g..."
🌑 The Hidden Trap

The 'Excess Grant' (Article 115). While Demands for Grants are voted annually, 'Excess Grants' (money spent beyond the voted amount) must be voted by Lok Sabha *after* the financial year ends, and crucially, they must be scrutinized by the Public Accounts Committee (PAC) *before* voting.

⚡ Elimination Cheat Code

The 'Constitutional Nameplate' Hack: In the context of Parliament and formal papers, the phrase 'on behalf of the Prime Minister' is legally suspect. The Constitution vests executive power in the President. Papers are laid by the government, but the *duty* to cause them to be laid is the President's. If you see 'Prime Minister' assigned a formal procedural duty in Parliament (other than leadership of the House), it's likely a trap.

🔗 Mains Connection

Link this to 'Executive Control over Finance' (GS2 Mains). The rule that 'no demand for a grant can be made except on President's recommendation' prevents private members from making populist demands, ensuring the Executive (which is responsible for finding resources) retains control over the budget deficit.

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SIMILAR QUESTIONS

IAS · 2015 · Q60 Relevance score: 4.78

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?

IAS · 2002 · Q87 Relevance score: 3.44

With reference to the Indian Public Finance consider the following statements: 1. External liabilities reported in Union Budget are based on historical exchange rates 2. The continued high borrowing has kept the real interest rates high in the economy 3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments. 4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government. Which of these statements are correct ?

IAS · 2009 · Q61 Relevance score: 3.13

With reference to Union Government, consider the following statements : 1. The Ministries/Departments of the Government of India are created by the Prime Minister on the advice of the Cabinet Secretary. 2. Each of the Ministries is assigned to a Minister by the President of India on the advice of the Prime Minister. Which of the statements given above is/are correct ?

CAPF · 2008 · Q39 Relevance score: 3.12

Consider the following statements : 1. The Prime Minister of India is the ex-officio Chairman of the Planning Commission. 2. The Union Finance Minister is the ex-officio Chairman of the Finance Commission. Which of the statements given above is/are correct ?

IAS · 2021 · Q98 Relevance score: 2.95

With reference to the Union Government, consider the following statements : 1. N. Gopalaswamy Iyengar Committee suggested that a minister and a secretary be designated solely for pursuing the subject of administrative reform and promoting it. 2. In 1970, the Department of Personnel was constituted on the recommendation of the Administrative Reforms Commission, 1966, and this was placed under the Prime Minister's charge. Which of the statements given above is/are correct?