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Tuesday, May 20, 2014

Legislative Process - Types of Money Bills and Financial Bills introduced in the Parliament of India


Money Bills are those Bills which contain only provisions dealing with article 110 of the Constitution. If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of Lok Sabha shall be final. Under article 110 (1), a Money Bill could contain provisions dealing with following matters:

a. The imposition, abolition, remission, alteration or regulation of any tax.
b. The regulation of the borrowing of money by the Government of India.
c. The custody of the Consolidated Fund or the Contingency Fund of India.
d. The appropriation or of moneys out of the Consolidated Fund of India.
e. The receipt of money on account of the Consolidated Fund of India or the public account of India.
f. The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India
g. Audit of the accounts of the union or of a state.
h. any matter incidental to any of the above-mentioned matters.

Types of Money Bills

1. Finance Bill – Finance Bill is introduced in Lok Sabha every year immediately after the presentation of the General Budget to give effect to the financial proposals of the Government of India for the following financial year.
2. Appropriation Bill – An Appropriation Bill is introduced in Lok Sabha immediately after adoption of the relevant demands for grants.

We shall discuss them in detail.

Legislative Process relating to Financial Bills

Money Bills are substantially different from the ‘Financial Bills’. A money bill is only circumscribed to article 110 (1) whereas a Financial Bill could deal with other provisions as well.

As we discussed in the last post that there are two kinds of Financial Bills, Category A and Category B. Category A deals only with article 110 (1) and can be introduced only in the Lok Sabha on the recommendation of the President. But, other restrictions relating to Money Bills do not apply to this category. Category B contains provisions that involve expenditure from the Consolidated Fund of India. These can be introduced in either house of the Parliament. However, recommendation of the President is mandatory for consideration of these Bills in both the houses.

Powers of Rajya Sabha

Rajya Sabha has limited powers with respect to Money bills. A Money bill can only originate in Lok Sabha and once it has been passed by the Lok Sabha and sent to Rajya Sabha, it has to be returned to Lok Sabha with in a period of fourteen days with or without recommendations. The recommendations are not binding on the Lok Sabha. In any case, 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. If the bill is not returned to Lok Sabha within fourteen days, it is again deemed to have been passed by both the Houses.

Legislative Process relating to Appropriation Bill

After the demands for grants have been passed by the House, a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet the grants and the expenditure charged on the Consolidated Fund of India is introduced, considered and passed.

The introduction of such Bill cannot be opposed. The scope of discussion is limited to matters of public importance or administrative policy implied in the grants covered by the Bill and which have not already been raised during the discussion on demands for grants.

No amendment can be proposed to an Appropriation Bill which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the Speaker as to whether such an amendment is admissible is final. An amendment to an Appropriation Bill for omission of a demand voted by the House is out of order.

In other respects, the procedure in respect of an Appropriation Bill is the same as in respect of other Money Bills.

Legislative Process relating to Finance Bill

“Finance Bill” means a Bill ordinarily introduced every year to give effect to the financial proposals of the Government of India for the next following financial year and includes a Bill to give effect to supplementary financial proposals for any period.

The Finance Bill is introduced immediately after the presentation of the Budget. The introduction of the Bill cannot be opposed. The Appropriation Bills and Finance Bills may be introduced without prior circulation of copies to members.

The Finance Bill usually contains a declaration under the Provisional Collection of Taxes Act, 1931, by which the declared provisions of the Bill relating 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. In view of such provisions and the provision of Act of 1931, the Finance Bill has to be passed by Parliament and assented to by the President before the expiry of the seventy-fifth day after the day on which it was introduced.

As the Finance Bill contains 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. The scope of discussion on the Finance Bill is vast and members can discuss any action of the Government of India. The whole administration comes under review.

The procedure in respect of Finance Bill is the same as in the case of other Money Bills.

Constitution Amendment Bill v. Money Bill

A Constitution Amendment Bill is not treated as a Money Bill even if all its provisions attract article 110(1) for the reason that such amendments are governed by article 368 which over-rides the provisions regarding Money Bills.

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