Financial Bill, Finance Bill and Money Bill
India being a federal country, laws can be made separately by Union Government and State Governments covering their domains. The Union Government (Federal Government) makes laws for the entire country and the State Governments for their respective states as permitted. The legislative procedure in India for the Union Government requires that proposed bills pass through the two legislative houses (Lok Sabha and Rajya Sabha) of the Indian parliament.
The proposal introduced to the Parliament is called a Bill. When the same gets the assent of the President after approval by the Parliament the Bill becomes an Act. Money Bill is an exception in this process.
What is a Financial Bill?
Any bill that relates to revenue or expenditure is a Financial Bill. Money Bill and Finance Bill are subset of financial bills. Thus, Finance Bill is different from Financial Bill. Financial Bills can be broadly divided into two groups.
The first group of Bills has the characteristics both of a Money Bill and an ordinary Bill. This group of Bills cannot be introduced in Rajya Sabha and cannot be introduced without the recommendations of the President. Except these difference, a Financial Bill is similar to an ordinary Bill. Financial Bill under article 117(1) of the Constitution can be referred to a Joint Committee of the Houses.
The second category, are those bills that contain provisions involving expenditure from the Consolidated Fund of India, on enactment. Such Bills can be introduced in either House of Parliament. But, recommendation of the President is essential for consideration of these Bills by either House and if such recommendation is not received, neither House can pass the Bill. Such Bills are more like ordinary Bills.
What is a Finance Bill?
Finance Bill/Act normally deals with income tax, customs, service tax, central excise, cess and related aspects. Finance Bill is a bill introduced every year in Lok Sabha. It is presented immediately after the presentation of the Union Budget. Finance Bill is to give effect to the financial proposals of the Government of India for the immediately following financial year. A Finance Bill also include a Bill that gives effect to supplementary (additional) financial proposals for any period. It is through the Finance Act that amendments are made to the various Acts like Income Tax Act 1961, Customs Act 1962 etc. In effect, Finance Act can be considered as an umbrella Act and the various chapters of Finance Act can exist independently and hence enforceable.
In an election year, there can be two Finance Bills – one presented by the outgoing Government alongwith its interim budget or votes on account and the other by the new Government , titled as Finance Bill (No. 2) of that year.
Finance Bill cannot be referred to even joint Committees of the two Houses of the Parliament (to resolve differences between the two Houses), as is in the case of other bills.
Finance Bill generally seeks approval of the Parliament for raising resources through taxes, cess etc., An Appropriation Bill seeks Parliament’s approval for the withdrawal from the Consolidated Fund of India to meet the approved expenditures of the Government.
What is a Money Bill?
A Money Bill is a specific kind of Financial Bill, defined very precisely: a Bill can be considered as Money Bill only if it deals exclusively with matters specified in Article 110 (1) (a) to (g). 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. It may contain some other provisions also.
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:
(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) regulation of borrowing by the government;
(c) custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds;
(d) appropriation of moneys out of the Consolidated Fund of India;
(e) 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) 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).
What are the special features of a Money Bill?
A Money Bill can be introduced only in the Lok Sabha. Thereafter, the bill is placed in Rajya Sabha and Rajya Sabha can return the Bill with or without its recommendations. But the bill must be returned within a period of 14 days from the date of its receipt, else it is deemed to have been passed by both Houses at the expiry of 14 days. If at all, Rajya Sabha return the bill with amendments, Lok Sabha is not bound to accept these amendments. If Lok Sabha accepts any of the recommendation, the Bill shall be deemed to have been passed by both the Houses. Even if, not accepted by Lok Sabha, the Bill shall be deemed to have been passed by both the Houses. In the case of Money Bill, final approval happens at Lok Sabha where as in all other Bills, final passage happens at Rajya Sabha. Unlike other bills, the President cannot return the Money Bill with his recommendations to the Lok Sabha for reconsideration. Further, Speaker has unquestionable powers to decide whether a Bill is a Money Bill or not and it cannot be questioned in any court. The Standing Committee of the Parliament also cannot scrutinize a Money Bill and it cannot be referred to even joint Committees of the two Houses.
Aadhaar Bill was presented as a Money Bill. It was alleged by the opposition that the ruling party opted this method to avoid the scrutiny and amendments by the Rajya Sabha where opposition had majority.
