The Difference Between Finance Bill and Money Bill is significant for the Indian Polity Syllabus. The Finance Bill forms a crucial part of the Union Budget, dealing with legal amendments for tax changes, while Money Bills focus on financial matters like taxation and public expenditure. This comprehension aids UPSC Civil Service aspirants in understanding key concepts and their comparisons.
The Finance Bill pertains to legal amendments related to taxation proposed by the Finance Minister within the Union Budget, while Money Bills focus specifically on financial matters like taxation and public expenditure. Understanding this disparity is crucial for comprehensively grasping Indian governance and legislative processes. Check the provided table for a clear difference between Finance Bill and Money Bill.
Money Bill | Finance Bill | |
Financial Bill – I | Financial Bill – II | |
To introduce this bill, a recommendation of the President is required. | To introduce this bill, the recommendation of the President is required. | To introduce this bill, a recommendation of the President is not required. |
Rajya Sabha does not have the power to amend or reject the Money Bill | Rajya Sabha has the power to amend or reject Financial Bill – I | Rajya Sabha has the power to amend or reject Financial Bill – II |
Whether a bill is money bill or not is decided by the Speaker of Lok Sabha. | This Bill does not require any kind of approval from the Speaker to classify it as a Financial Bill-I | This Bill does not require any kind of approval from the Speaker to classify it is as Financial Bill II |
The recommendation of the President of India is needed to introduce Money Bill. | Recommendation of the President of India is needed to introduce Financial Bill – I | The recommendation of the President of India is not needed to introduce Financial Bill – II |
Money Bill can be introduced only in Lok Sabha | Financial Bill-I can be introduced only in Lok Sabha | Financial Bill-II can be introduced in Lok Sabha as well as in Rajya Sabha |
To resolve the deadlock on the Money Bill, there is no provision for a joint sitting of Lok Sabha and Rajya Sabha. | To resolve the deadlock on Financial Bill-I, the President can summon a joint sitting of both Lok Sabha and Rajya Sabha | To resolve the deadlock on Financial Bill II, the President can summon a joint sitting of both Lok Sabha and Rajya Sabha |
Money Bills are dealt with by Article 110 of the Constitution | Finance Bill-I is dealt with by Article 117(1) of the Constitution | Finance Bill II is dealt with by Article 117(3) of the Constitution. |
Money Bill only deals with provisions mentioned in Article 110 | Finance Bill-I not only deals with provisions of Article 110 but also other matters of general legislation | Finance Bill II deals with provisions on expenditure from the Consolidated Fund of India but is not included in Article 110. |
Money Bill is a Government Bill | Finance Bill -I is an ordinary Bill | Finance Bill II is an ordinary Bill |
Occasionally, a bill incorporating Article 110 provisions may include additional clauses, earning it the designation of a Category-I Financial Bill. This bill mirrors the characteristics of a Money Bill and is initiated in the Lok Sabha upon the President’s prior recommendation. However, post-approval by the Lok Sabha, it assumes the status of an ordinary bill, allowing the Rajya Sabha the authority to reject it. In such cases, the option of a joint sitting exists to resolve legislative impasses.
This bill lacks the provisions present in Article 110 but includes expenditure from the Consolidated Fund of India. It shares similarities with ordinary bills in all aspects, enabling passage through either House. Both the Lok Sabha and Rajya Sabha wield equal powers regarding this bill.
Finance Bills, addressing taxation, government spending, and financial affairs, undergo a structured approval process:
Finance Bills focusing solely on matters present in Article 110 of the Constitution, about finances, are termed Money Bills. The designation of a Financial bill as a money bill rests with the Lok Sabha Speaker, who endorses it after passage in the Lok Sabha before transmission to the Rajya Sabha. Specific criteria dictate a bill’s categorization as a money bill if it involves:
Money bills, termed as “Acts for raising Revenue,” hold substantial significance in Indian politics owing to their extensive usage by Parliament over the years. These bills play a pivotal role in governance as they authorize government expenditure, encompassing clauses that empower the government to levy taxes and sanction borrowing through the issuance of securities.
The two types of financial bills include - Financial bill category-I and Financial bill category-II.
Any financial bill which contains provisions on matters listed exclusively under article 110 of the constitution is called Money Bill.
A bill concerning matters of taxes, government expenditures, government borrowings, revenues, etc., is termed as financial bill.
The speaker of the Lok Sabha decides whether the bill is a Money bill or not.
The President may withhold assent but cannot reject or return it for reconsideration of the Lok Sabha.
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