Introduction

A Finance Bill is a Bill that, as the name suggests, concerns the country's finances — it could be about taxes, government expenditures, government borrowings, revenues, etc. Since the Union Budget deals with these things, it is passed as a Finance Bill.

Finance Bill

• Rule 219 of the Rules of Procedure of Lok Sabha states that a finance bill means a 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.
• Article 117 of the Constitution of India, 1950 (COI) deals with financial bill.

Article 117 of the COI

• This section deals with the special provisions as to financial bills. It states that—

(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States.

Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.

(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licenses or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.

(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.

Essential Characteristics of Financial Bill

• It is introduced in the Lok Sabha after the presentation of the annual budget is passed by the House.
• It contains provisions involving expenditure from the Consolidated Fund of India but does not include any of the matters mentioned in Article 110 of the COI.
• It is governed by the same legislative procedure which is applicable to an ordinary bill that is
  • It can be either rejected or amended by the Rajya Sabha.
  • In case of a disagreement between the two Houses over such a bill, the President can summon a joint sitting of the two Houses to resolve the deadlock.
  • When the bill is presented to the President, he can either give his assent to the bill or withhold his assent to the bill or return the bill for reconsideration of the Houses.
• All financial bills are not money bills, but all money bills are financial bills.
• Only those financial bills are money bills which contain exclusively those matters which are mentioned in Article 110 of the COI.
• A financial bill is similar to a money bill in two respects–
  • 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.

Categories of Financial Bills

• In the first category are Bills which contain provisions attracting article 110(1)(a) to (f) of the COI.
  • They are categorized as financial bills under Article 117(1) of the COI.
  • It is a bill which has characteristics both of a money bill and an ordinary bill.
• In the second category are those Bills which contain provisions which on enactment would involve expenditure from the Consolidated Fund of India.
  • Such Bills are categorized as Financial Bills under Article 117 (3) of the COI.
  • Such Bills are more in the nature of ordinary Bills rather than the money Bills and financial Bills.