Money & Finance Bill

Money Bill

Under article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:

(a)  the imposition, abolition, remission, alteration or regulation of any tax;

(b)  the regulation of the borrowing of money or the giving of any guarantee by theGovernment of India, or the amendment of the law with respect to any financial obligationsundertaken or to be undertaken by the Government of India;

(c)  the custody of the Consolidated Fund or the Contingency Fund of India, the payment ofmoneys into or the withdrawal of moneys from any such fund;

(d)  the appropriation of moneys out of the Consolidated Fund of India;

(e)  the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

(f)    the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or

(g)   any matter incidental to any of the matters specified in sub-clauses (a) to (f).

A Bill is not deemed to be Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

Appropriation Bill

After the General Discussion on the Budget proposals and Voting on Demands for Grants have been completed, Government introduces the Appropriation Bill. The Appropriation Bill is intended to give authority to Government to incur expenditure from and  out of the Consolidated Fund of India. The procedure for passing this Bill is the same as in the case of other money Bills.

Finance Bill 

The Finance Bill seeking to give effect to the Government’s taxation proposals which is introduced in Lok Sabha immediately after the presentation of the General Budget, is taken up for consideration and passing after the Appropriation Bill is passed. However, certain provisions in the Bill relating to levy and collection of fresh duties or variations in the existing duties come into effect immediately on the expiry of the day on which the Bill is introduced by virtue of a declaration under the Provisional Collection of Taxes Act. Parliament has to pass the Finance Bill within 75 days of its introduction.

Money Bill as distinguished from Financial Bill

Whereas a Money Bill deals solely with matters specified in article 110(1) (a) to (g) of the Constitution, a Financial Bill does not exclusively deal with all or any of the matters specified in the said article that is to say it contains some other provisions also.

Only those financial bills are money bills which contain exclusively those matters which are mentioned in Article 110 of the Constitution. 

The financial bills (I) and (II), on the other hand, have been dealt with in Article 117 of the Constitution.

Financial Bills (I)

A financial bill (I) is a bill that contains not only any or all the matter mentioned in Article 110, but also other matters of general legislation. A bill that contains a borrowing clause, but does not exclusively deal with borrowing. In two respects, a financial bill (I) is similar to a money bill (a) both of them can be introduced only in the Lok Sabha and not in the Raya Sabha, on the recommendation of the president. A financial bill (I) is governed by the same legislative procedure applicable to an ordinary bill, it can be either rejected or amended by the Rajya Sabha than an amendment other than for reduction or abolition of a tax cannot be moved in either House without the recommendation of the president.

Financial Bills (II)

A financial bill (II) contains provisions involving expenditure from the Consolidated Fund of India, but does not include any of the matters mentioned in Article 110.

The only special feature of this bill is that it cannot be passed by either House of Parliament unless the President has recommended to that House the consideration of the bill. Financial bill (II) can be introduced in either House of Parliament and recommendation of the President is not necessary for its introduction.

When the bill is presented to the President, he can either give his assent to the bill or withhold his assent to the bill or return the bill for reconsideration of the Houses.