Finance Minister presents 2022 Appropriation Bill

COLOMBO (News 1st); The Minister of Finance, Basil Rajapaksa presented the 2022 Appropriation Bill in Parliament today (07).

It also received cabinet approval recently.

Allocations to the Ministries for next year are to be made through the Budget Appropriation Bill.

This time's Appropriation Bill is a document which is worth Rs. 2,505 billion (2.5 trillion).

What is the Budget Appropriation Bill?

The Budget, which is also referred as the Appropriation Bill, is the bill which carries the Government's estimates of revenue and expenditure for the following financial year.

Usually given precedence than many other motions at the Parliament, the Budget Bill also goes through the first, second and third reading stages and only becomes a law when it is passed.

The Budget is not an average Finance Bill, yet however, follows the same procedures of any Bill. The Minister of Finance uses this opportunity to announce to the country and the world of the Government's economic policy, its performance in the past years, and new directions it is proposing to take, which becomes of major importance to all taxpayers, commercial enterprises, investors, and all those who are relying on state welfare.

How is the Budget prepared?

• The Ministry of Finance issues the Budget Circular in the first quarter of the current year. Ministries with the help of departments and agencies functioning under them, prepare estimates of revenue and expenditure.

• The Finance Commission, in accordance with its constitutional mandate recommends allocations to the Provincial Councils, and submits them to the President. These allocations are then taken into account by the Treasury.

• The Ministry of Finance holds discussions with Ministries in order to make estimates conform to Government policy and priorities. Then the estimates are submitted to cabinet for their study and approval. The finalized estimates will reveal a surplus or deficit for the Government budget.

These estimates are presented to Parliament in the Appropriation Bill, which is in fact the First Reading of the Budget, by the Minister of Finance.

What is the procedure followed in presenting the Appropriation Bill?

The usual procedure is for the Minister of Finance to present the Appropriation Bill in the early part of October in the current year and after passage through Parliament, it will be in force from the 01 January of the following year. This practice is deviated when a General Election has been called and a new Parliament has not been elected as yet, or when a new Government has just been sworn in and they have had no time to neither prepare nor to present a proper budget.

In such a situation, the Parliament resorts to passing a Vote on Account. This procedure is a convention of Parliament, not mentioned in either the Constitution or the Standing Orders. In such occasion, the Parliament does not pass funds for new projects, but only for those that are in progress. Departments and public agencies are allocated funds to the extent that services essential to the community have to be maintained.

Thereafter, the second reading of the Appropriation Bill commence with the Budget Speech, which is the detailed presentation of the Government's proposals to raise revenue for its programs through its annual Budget in relation to the following financial year.

Since the Appropriation Bill follows the same procedure as any average Bill of Parliament, after the First Reading, a citizen may challenge the constitutionality of its provisions before the Supreme Court in accordance with Article 121.

Moreover, Standing Orders prescribe that not more than a total of 26 days for the total budget process, of which not more than 7 days may be devoted to the Debate on the 2nd Reading, and not more than 22 days may be used for the Third Reading or Committee Stage.

The Minister of Finance will indicate Government's position in relation to fiscal and monetary policy, foreign aid and foreign investment, employment and social welfare in his speech, in which he is expected to highlight the state of finances and the economy of the country, revenues and expenditure proposals, to detail the manner in which taxes will be levied and the level of expenditure, interest rates, subsidies and other concessions the Government will be committed to implement in the following year.

The presentation of the Budget is followed by a maximum of seven days of debate. At the end of the allocated seven days the Appropriation Bill is put to a vote. Once Parliament votes for the Bill, it will be referred to a Committee of the whole House, known as the 'Committee Stage' of the Appropriation Bill.

The Committee stage of the Appropriation Bill will be conducted over a period of a maximum of 22 days, with the Opposition Party deciding on how much time the House should devote to each Ministry vote. Thereafter, time is allocated between the Government and the Opposition, with the Opposition receiving more speaking time.

Having passed all Ministry Votes in a Committee of Whole House, Parliament resumes sitting at the House immediately thereafter. At this point, the Hon. Speaker would announce that the Appropriation Bill for the particular year has been passed by Parliament, with or without amendments.

If the Appropriation Bill is rejected by the Parliament, the Cabinet of Ministers shall stand dissolved, as per Article 48(2) of the Constitution.