DH Deciphers: What is Appropriation Bill?

DH Deciphers: What is Appropriation Bill?

Vidhana Soudha

The threat of a ‘government shutdown’ looms over Karnataka as the Karnataka Appropriation (Vote on Account) Bill, 2019, is yet to be passed by the legislature to meet statutory expenses required to run the administration for the remaining eight months of 2019-20 fiscal. The catch: There is currently no government that is in power in the state. DH gives a lowdown on the issue:

What’s an Appropriation Bill?

An Appropriation Bill empowers the government to withdraw funds from the Consolidated Fund to meet expenditure during the financial year. 

How is it different from the Finance Bill?

While the Appropriation Bill deals with how much and for what purpose the government wants to withdraw, or appropriate funds, a Finance Bill contains provisions on how the government intends to meet its expenditure (taxes, levies etc). 

Why is this an issue now?

In February 2019, Chief Minister H D Kumaraswamy sought the permission of the legislature to draw Rs 80,16,837 crore from the Consolidated Fund for the first four months of 2019-20 fiscal - from April 1 to July 31. Accordingly, the Karnataka Appropriation Bill, 2019, was passed on a vote on account. 

What is a vote on account?

Generally, when elections are scheduled a few months into the new fiscal year, the government seeks a vote on account for the first four months. In other words, a vote on account is interim permission of the legislature to spend money instead of approving the full budget for the entire financial year. 

What happens after July 31?

If the Karnataka Appropriation Bill, 2019, is not passed by the legislature before July 31, the government will not be able to draw funds to pay salaries, wages and meet other expenses needed to run the administrative machinery. This could lead to a ‘shutdown’ of the government. The US, for instance, has seen 21 shutdowns since 1976 due to the failure in approving legislation to fund government expenditure. 

Why can’t it be passed?

It’s simple - there is no government currently in power in the state. The Congress-JD(S) coalition fell after its confidence motion was defeated earlier this week. Before putting the trust motion to vote, outgoing Chief Minister H D Kumaraswamy sought to table to Bill, but the Opposition BJP refused. 

What can be done?

If a new government is installed, a session of the legislature can be convened expressly to pass the Bill. Else, there is a possibility of the Parliament passing the Bill if no new government is formed at the state. If it is not passed before July 31, then the Assembly can go into suspended animation with the Governor taking charge.