(1)The Governor-General shall in respect of every financial year cause to be laid before both Chambers of the Federal Legislature a statement of the estimated receipts and expenditure of the Federation for that year, in this Part of this Act 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 Act as expenditure charged upon the revenues of the Federation; and
(b)the sums required to meet other expenditure proposed to be made from the revenues of the Federation,
and shall distinguish expenditure on revenue account from other expenditure, and indicate the sums, if any, which are included solely because the Governor-General has directed their inclusion as being necessary for the due discharge of any of his special responsibilities.
(3)The following expenditure shall be expenditure charged on the revenues of the Federation :—
(a)the salary and allowances of the Governor-General and other expenditure relating to his office for which provision is required to be made by Order in Council;
(b)debt charges for which the Federation 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;
(c)the salaries and allowances of ministers, of counsellors, of the financial adviser, of the advocate-general, of chief commissioners, and of the staff of the financial adviser;
(d)the salaries, allowances, and pensions payable to or in respect of judges of the Federal Court, and the pensions payable to or in respect of judges of any High Court;
(e)expenditure for the purpose of the discharge by the Governor-General of his functions with respect to defence and ecclesiastical affairs, his functions with respect to external affairs in so far as he is by or under this Act required in the exercise thereof to act in his discretion, his functions in or in relation to tribal areas, and his functions in relation to the administration of any territory in the direction and control of which he is under this Act required to act in his discretion : provided that the sum so charged in any year in respect of expenditure on ecclesiastical affairs shall not exceed forty-two lakhs of rupees, exclusive of pension charges ;
(f)the sums payable to His Majesty under this Act out of the revenues of the Federation in respect of the expenses incurred in discharging the functions of the Crown in its relations with Indian States;
(g)any grants for purposes connected with the administration of any areas in a Province which are for the time being excluded areas;
(h)any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
(i)any other expenditure declared by this Act or any Act of the Federal Legislature to be so charged.
(4)Any question whether any proposed expenditure falls within a class of expenditure charged on the revenues of the Federation shall be decided by the Governor-General in his discretion.