New Delhi: The Finance Bill is introduced in the Lok Sabha, after the presentation of the annual budget, to implement the financial proposals for the following financial year.
Finance Bills can be divided into three categories: Finance Bill category I, Finance Bill category II and a Money Bill.
What is a Money Bill?
Money Bills contain provisions only on matters listed in Article 110 which include amendments to any tax at the Union or state level (but not at a local level), regulation of borrowing, allows withdrawal of money from consolidated or contingency fund, and accounts on receipts made in the consolidated fund and public account.
The decision on whether a bill is related to finance or money is made by the Speaker when passed by the Lok Sabha and then sent to Rajya Sabha. Article 110 (3) says, “If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final”.
After it is introduced in the Lok Sabha, a Money Bill is sent to Rajya Sabha for its recommendations. Rajya Sabha, however, can neither reject nor amend the Bill and must return it within 14 days. Once Rajya Sabha sends the Bill back to Lok Sabha, the lower house of the Parliament may choose to accept or reject all or any of its recommendations.
Finance bills (category I and II), on the other hand, generally contain provisions related to taxation and expenditure (as explained in a money bill) or provisions related to any other matter.
It is important to note that a finance bill will necessarily be a Money Bill but a Money Bill may not be a finance bill. A finance bill is presented with the budget as mandated in Article 110 (a) of the Constitution of India. This means that apart from the provisions of a Money Bill, it also provides detailed provisions on how it will be used and what will be the duties of government among other things.