Money Bill and Finance Bill

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    Definition of Money Bill

    While dealing with the definition of “Money Bills”, Article 110 of the Constitution of India states that a Bill is supposed to be a ‘Money Bill if it contains only provisions dealing with all or any of the following matters’:

    •  the imposition, abolition, remission, alteration or regulation of any tax;
    •  the regulation of the borrowing of money by the Government of India;
    •  the custody of the Consolidated Fund or the Contingency Fund of India, the payments of moneys into or the withdrawal of moneys from any such funds;
    •  the appropriation of moneys out of the Consolidated Fund of India
    •  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;
    •  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 accounts of the Union or of a State; or
    •  any matter incidental to any of the matters specified in sub clauses(a) to (f).

    However, a Bill is not to be supposed to be a Money Bill only because of that it provides for the impositions of fines or other financial penalties, or for the demand or payment of fees for licences or fees for services rendered.

    Moreover, if any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the Lok Sabha shall be final. This means once the Speaker of the Lok Sabha certifies a Bill as a Money Bill then it cannot be challenged in either in a Court of Law or in either House of Parliament or even by the President.

    Must Read: Real Estate Regulatory Bill 2016

    Types of Money Bills

    Finance Bills:

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    Generally, Finance Bill may be said to be any Bill that relates to revenue and expenditure. However, It is in a technical sense that the expression is used in the Constitution of India. Finance Bill is introduced every year in the Lok Sabha immediately after the presentation of the General Budget to provide effect to the financial proposals of the Government for the following fiscal.

    Legislative Process of Finance Bill

    There are two types of Finance Bills – ‘Category A’ and ‘Category B’. Category A comes within the ambit of the clause(1) of the Article 110 of the Constitution of India and,therefore, can be introduced only in the Lok Sabha on the recommendation of the President. However, other restrictions related to Money Bills do not apply to this category.

    ‘Category B’ comprises provisions that embrace expenditure from the Consolidated Fund of India. These can be introduced in either House of Parliament. It must be noted here that recommendation of the President is mandatory for consideration of these Bills(both categories) in both the Houses.

    Appropriation Bills:

    An Appropriation Bill is introduced in the Lok Sabha immediately ‘after the grants under Article 113 have been made by the House of the People to provide for appropriation out of the Consolidated Fund of India of all moneys required to meet'(Article 114) the provisions mentioned in the sub­ clauses(a) and (b) of the clause (1) of the Article 114.

    No amendment can be proposed in this Bill in either House of Parliament that will have the effect of varying the amount or altering the destination of any grant so made.

    No money can be withdrawn (subject to the provisions of Articles 115 and 116) from the Consolidated Fund of India except under appropriation made by Law passed in accordance with the provisions of the Article 114.

    It can be assessed, in short, that Money Bills are substantially different from Finance Bills that are also known as Annual Financial Assessment. Money Bill is only confined to Article 110 of the Constitution of India whereas a Finance Bill can deal with other provisions as well.

    Read Also: Aadhaar Bill: Passage and its Characteristics

    Relationship Between Finance Bill and Money Bill

    The Finance Bills and the Appropriation Bills can be introduced without prior circulation of copies to members. The Finance Bills usually comprises a declaration under the Provisional Collection of Taxes Act, 1931 by which the declared provisions of the Bill related to imposition or increase in duties of customs or excise come into force immediately on the expiry of the day on which the Bill is introduced.

    As the Finance Bill comprises taxation proposals, it is considered and passed by the Lok Sabha only after the Demands for Grants have been voted and the total expenditure is known.

    Powers of Rajya Sabha Concerning Money Bills

    In the context of Money Bills Rajya Sabha has Very limited powers. A Money bill can be introduced only in the Lok Sabha and after being passed by the Lok Sabha it is sent to the Rajya Sabha. Rajya Sabha has to return Money Bills to the Lok Sabha within fourteen days with or without recommendations asit does not have the power to amend Money Bills,it can make only recommendations. Rajya Sabha’s recommendations are not binding on the Lok Sabha. Once, the recommendations are accepted or rejected after the Bill is returned to the Lok Sabha, the Bill is deemed to have been passed by both the Houses.

    Also Read: National Food Security Bill

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    1. Very clearly described both money & finance bill. I hope it will be beneficial for every aspirant of upsc as well as state level examinations.

      thank you so much for your serious concern about us & Best wishes team.

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