Finance bill

Finance bill

Subject: Polity

Context: The Lok Sabha on Tuesday passed the Finance Bill, 2021, which gives effect to the financial proposals of the central government for the financial year 2021-22.

Concept:

• A Finance Bill concerns the country’s finances i.e., it could be about taxes, government expenditures, government borrowings, revenues, etc.
• Rule 219 of the Rules of Procedure of Lok Sabha states: ‘Finance Bill’ means the Bill ordinarily introduced in each year to give effect to the financial proposals of the Government of India for the following financial year and includes a Bill to give effect to supplementary financial proposals for any period.
• It is introduced in Lok Sabha after the presentation of the annual Budget is passed by the House.

Money Bills and Financial Bills: Constitutional provision

1. Money Bills–Article 110
2. Financial Bills (I)– Article 117 (1)
3. Financial Bills (II)– Article 117 (3)

Money bill vs financial bill

• All Money bills are Financial bills but all Financial bills are not Money bills.
• Only those financial bills are Money bills which contain exclusively those matters which are mentioned in Article 110 of the Constitution.

Financial Bills (I)

• A financial bill (I) contains not only any or all the matters mentioned in the Money Bill, but also other matters of general legislation. It is dealt under Article 117 (1) of the Constitution.

Similarity to a money bill:

• Both of them can be introduced only in the Lok Sabha and not in the Rajya Sabha.
• Both of them can be introduced only on the recommendation of the President.
• In all other respects, a financial bill (I) is treated as an ordinary bill.

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. It is dealt under Article 117 (3) of the Constitution.
• It is governed by the same legislative procedure which is applicable to an ordinary bill.
• Such Bills can be introduced in either House of Parliament. However, recommendation of the President is essential for consideration of these Bills by either House and unless such recommendation is received, neither House can pass the Bill.