सं Samvidhan

The Constitution of India

Article 202

Annual financial statement

(1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this Part referred to as the "annual financial statement".

(2) The estimates of expenditure embodied in the annual financial statement shall show separately —

(a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of the State; and

(b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State; and shall distinguish expenditure on revenue account from other expenditure.

(3) The following expenditure shall be expenditure charged on the Consolidated Fund of each State —

(a) the emoluments and allowances of the Governor and other expenditure relating to his office;

(b) the salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman of the Legislative Council;

(c) debt charges for which the State is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(d) expenditure in respect of the salaries and allowances of Judges of any High Court;

(e) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;

(f) any other expenditure declared by this Constitution, or by the Legislature of the State by law, to be so charged.

Why this exists

This Article mirrors Article 112 (the Union Budget) but applies it to the states. It ensures that state governments cannot spend public money without the legislature's knowledge and, for most items, its approval — a core principle of parliamentary democracy borrowed from British constitutional practice. Certain expenses (like judges' salaries or debt repayment) are protected from being voted down, so that essential constitutional functions and the state's credit-worthiness are not held hostage to political disputes in the Assembly.

How courts read it

There is little independent judicial elaboration specific to Article 202, since courts generally treat it in parallel with Article 112 (the Union's equivalent provision) and its associated case law on the distinction between 'charged' and 'votable' expenditure, and on the limited scope for courts to interfere in budgetary matters, which are treated as primarily a legislative and executive function.

Common misconceptions
  • Myth: The state legislature votes on every single item in the state budget.
    Fact: Charged expenditures — like judges' salaries, the Governor's expenses, and debt repayments — are not put to a vote; only the 'other expenditure' portion is voted on.
  • Myth: The Governor personally decides the state budget.
    Fact: The Governor only causes the budget prepared by the state government (Finance Department) to be laid before the legislature; the content is decided by the Council of Ministers.
Article 202 — Annual financial statement · Samvidhan