The Lok Sabha recently passed the Finance Bill 2023 giving effect to tax proposals.
About Finance Bill:
- Financial Bills are also called "Act for Appropriation of Funds for Appropriations".
- Financial bills are responsible for fiscal matters such as government spending or revenue.
- It specifies the amount of money to be spent by the government and the way it is to be spent.
- According to Rule 219 of the Lok Sabha's Rules of Procedure, a "Finance Bill" is defined as the Bill that is typically introduced each year to give effect to the Government of India's financial proposals for the upcoming fiscal year, as well as a Bill to give effect to supplementary financial proposals for any period.
- Financial bills are a component of the union budget. The Indian Constitution's Article 110(a) requires that a finance bill be presented together with the budget.
- It proposes all the necessary legal changes required for the proposed tax adjustments.
- It is accompanied by a Memorandum containing explanations of the provisions included in it.
- When a question arises about whether a Finance bill is a money bill or not, the speaker of the house decides on the matter, and his decision shall be final in this regard.
Types Of Financial Bills:
- Financial bills (i): Article 117 (1)
- It includes not only the subjects stated in Article 110 of the Constitution but also other legislative provisions.
- Financial bill (i) is comparable to the money bill in two ways. Firstly, both of these bills can only originate in the Lok Sabha and not Rajya Sabha. Secondly, both the bills can be introduced only on the President's advice.
- A finance bill (I) follows the same parliamentary process as an ordinary bill in all other respects.
- Financial bills (ii): Article 117 (3)
- A financial bill (II) does not contain any of the items listed in Article 110, but it does contain measures impacting Consolidated Fund of India spending.
- It is regarded as an ordinary bill and is handled in every way by the same parliamentary process as an ordinary bill.
- This bill's sole unique feature is that neither House of Parliament may pass it without the President first requesting that it be brought up for consideration.
What is a Money Bill?
- Under Article 110(1), a Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, and expenditure from or receipt to the Consolidated Fund of India.
- Bills that only contain provisions that are incidental to these matters would also be regarded as Money Bills.
- Who decides if a Bill is a Money Bill? The Speaker certifies a Bill as a Money Bill, and the Speaker’s decision is final.
- Passage of Money Bills:
- A Money Bill may only be introduced in Lok Sabha on the recommendation of the President.
- It must be passed in Lok Sabha by a simple majority of all members present and voting.
- Following this, it may be sent to the Rajya Sabha for its recommendations, which Lok Sabha may reject if it chooses to. If such recommendations are not given within 14 days, it will be deemed to be passed by Parliament.
How is a Money Bill different from a Financial bill?
- While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.
- For example, the Finance Bill, which only contains provisions related to tax proposals, would be a Money Bill.
- However, a Bill that contains some provisions related to taxation or expenditure but also covers other matters would be considered a Financial Bill.
- The Rajya Sabha cannot amend or reject the money bill, but it has the power to amend or reject the finance bill.
- Money bills and finance bill (1) can be introduced only in the Lok Sabha, whereas a Finance Bill (2) can be introduced both in Rajya Sabha and the Lok Sabha.
- To resolve a deadlock, the President can summon a joint sitting of Lok Sabha and the Rajya Sabha in case it is a finance bill. However, no such provision is made in case of a money bill.
Q1) What is an Appropriation bill?
The Appropriation Bill gives power to the government to withdraw funds from the Consolidated Fund of India for meeting the expenditure during the financial year. Post the discussions on Budget proposals and the Voting on Demand for Grants, the government introduces the Appropriation Bill in the Lok Sabha. It is intended to give authority to the government to withdraw from the Consolidated Fund, the amounts so voted for meeting the expenditure during the financial year.