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Definition: Appropriation

Appropriation in simple terms is the allocation of money in various departments or projects which is done by the authority, government or company to delegate cash for different business needs and functions to carry out those smoothly. Business functions may include operations, marketing and advertising, administrative costs (e.g. electricity bills, phone bills), salaries to the employees, research and development works, dividends to the shareholders and many other things.


Appropriation is usually done in two ways. First is annual appropriation where annual funding for government operations and other programs and other investment in assets are provided. It is available to entities until the relevant amount is full expended. The second way is special appropriation where there is provision for the authority to spend money for specific purposes. For example, to carry out a particular project the government can allocate money for that under this provision anytime whenever necessary.


In India there is appropriation bill which is a kind of money bill. Here in a budget session, money can be asked for a specific project in terms of “Grant”. After the Grant is approved, it is called “Demand for Grant”. When this demand for grant is approved, an appropriation bill is introduced under which money can be taken out from the CFI (Consolidated Fund of India). An Appropriation bill is introduced in Lok Sabha just after the relevant grants are adopted. The introduction of such a bill cannot be opposed. No amendments can be proposed also to this bill which may have an effect of varying the amount. Otherwise the procedure of appropriation bill is same as other money bills.



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