Article 202 of CoI : Article 202: Annual financial statement.

Explanation using Example

Example 1:

Scenario: The State of Maharashtra is preparing its budget for the upcoming financial year.

Application of Article 202:

1. Governor's Role: The Governor of Maharashtra ensures that a detailed statement of the estimated receipts (income) and expenditure (expenses) for the upcoming financial year is prepared. This document is known as the "annual financial statement."
2. Presentation to Legislature: The Governor presents this annual financial statement to the Maharashtra Legislative Assembly and, if applicable, the Legislative Council.
3. Expenditure Breakdown:
   • Charged Expenditure: The statement separately lists the amounts required for expenditures that are automatically charged to the Consolidated Fund of Maharashtra. This includes:
     • Salaries and allowances of the Governor.
     • Salaries and allowances of the Speaker and Deputy Speaker of the Legislative Assembly.
     • Debt charges, including interest and repayment of loans.
     • Salaries and allowances of High Court judges.
     • Any sums required to satisfy court judgments or arbitral awards.
   • Other Expenditure: The statement also lists other proposed expenditures from the Consolidated Fund, such as funding for public projects, education, healthcare, and infrastructure.
4. Revenue vs. Other Expenditure: The statement distinguishes between revenue expenditure (day-to-day operational costs) and other types of expenditure (capital investments, etc.).

Example 2:

Scenario: The State of Karnataka is facing a legal judgment requiring it to pay a significant sum to a contractor due to a breach of contract.

Application of Article 202:

1. Governor's Role: The Governor of Karnataka includes the required payment to the contractor in the annual financial statement as part of the expenditure charged on the Consolidated Fund of the State.
2. Presentation to Legislature: This financial statement is then presented to the Karnataka Legislative Assembly and, if applicable, the Legislative Council.
3. Expenditure Breakdown:
   • Charged Expenditure: The statement lists the payment to the contractor under the category of sums required to satisfy any judgment, decree, or award of any court or arbitral tribunal.
   • Other Expenditure: The statement also includes other proposed expenditures, such as salaries for government employees, funding for state-run schools, and infrastructure projects.
4. Revenue vs. Other Expenditure: The statement clearly distinguishes between revenue expenditure (e.g., salaries, operational costs) and other expenditures (e.g., capital projects, legal judgments).

Example 3:

Scenario: The State of Tamil Nadu is planning to raise funds through a new loan to finance a large infrastructure project.

Application of Article 202:

1. Governor's Role: The Governor of Tamil Nadu ensures that the details of the new loan, including the debt charges (interest, sinking fund charges, and redemption charges), are included in the annual financial statement.
2. Presentation to Legislature: The Governor presents this financial statement to the Tamil Nadu Legislative Assembly and, if applicable, the Legislative Council.
3. Expenditure Breakdown:
   • Charged Expenditure: The statement lists the debt charges related to the new loan under the category of debt charges for which the State is liable.
   • Other Expenditure: The statement also includes other proposed expenditures, such as funding for healthcare, education, and public safety.
4. Revenue vs. Other Expenditure: The statement distinguishes between revenue expenditure (e.g., operational costs) and other expenditures (e.g., infrastructure projects, debt charges).

Example 4:

Scenario: The State of West Bengal needs to allocate funds for the salaries and allowances of the newly appointed judges of the High Court.

Application of Article 202:

1. Governor's Role: The Governor of West Bengal includes the salaries and allowances of the new High Court judges in the annual financial statement as part of the expenditure charged on the Consolidated Fund of the State.
2. Presentation to Legislature: This financial statement is then presented to the West Bengal Legislative Assembly and, if applicable, the Legislative Council.
3. Expenditure Breakdown:
   • Charged Expenditure: The statement lists the salaries and allowances of the High Court judges under the category of expenditure in respect of the salaries and allowances of Judges of any High Court.
   • Other Expenditure: The statement also includes other proposed expenditures, such as funding for public welfare programs, infrastructure development, and administrative costs.
4. Revenue vs. Other Expenditure: The statement distinguishes between revenue expenditure (e.g., salaries, operational costs) and other expenditures (e.g., capital projects, judicial salaries).