1. Context

2. What is an Appropriation Bill?

• Under Article 114(3) of the Constitution, no amount can be withdrawn from the Consolidated Fund without the enactment of such a law by Parliament.
• After the Demands for Grants are voted by the Lok Sabha, Parliament's approval of the withdrawal from the Consolidated Fund of the amounts so voted and of the amount required to meet the expenditure charged on the Consolidated Fund is sought through the Appropriation Bill.
• The whole process begins with the presentation of the Budget and ends with discussions and voting on the Demands for Grants requires a fairly long time. The Lok Sabha is, therefore, empowered by the Constitution to make any grant in advance in respect of the estimated expenditure for a part of the financial year pending completion of the procedure for the voting on the demands.
• The purpose of the 'Vote on Account' is to keep the government functioning, pending voting of 'final supply'. The vote on account is obtained from Parliament through an Appropriation (Vote On Account) Bill.
• The government can not withdraw money from the Consolidated Fund of India till the enactment of the appropriation bill. However, this takes time and the government needs money to carry on its normal activities. To meet the immediate expenses the Constitution has authorized the Lok Sabha to make any grant in advance for a part of the financial year. This provision is known as the 'Vote on Account'.
• A vote on account is defined in Article 116 of the Indian Constitution.
• During an election year, the Government either opts for an 'interim Budget' or a 'Vote on Account' as after the election the Ruling Government may change and so the policies.

3. Difference between an Appropriation Bill and Finance Bill

• While the Finance Bill contains provisions for financing the expenditure of the government, an Appropriation Bill specifies the quantum and purpose for withdrawing money.
• Both appropriation and finance bills are classified as money bills that do not require the explicit consent of the Rajya Sabha. The Rajya Sabha only discusses them and returns the bills.

4. Consolidated fund of India

• All revenues received by the government of India;
• All loans raised by the government through the issue of treasury bills, loans, or other ways and means of advance; and 
• All money received by the government in repayment of loans. This fund is used to make all legally authorized payments on behalf of the Indian government.
• All government expenditure is made from this fund, except exceptional items which are met from the Contingency Fund or the Public Account.
• No money from this fund can be allocated (issued or drawn) unless a parliamentary statute authorizes it.
• It is constituted under Article 266 (1) of the Constitution of India.
• Each state can establish its own Consolidated Fund with identical features.
• The Comptroller and Auditor General of India audit the consolidated funds and report on their management to the appropriate legislatures.

For Prelims