Difference Between Finance Bill and Money Bill

Difference Between Finance Bill and Money Bill: The difference between a Finance Bill and a Money Bill is important to understand because both deal with the country’s financial matters, but they are not the same. A Money Bill focuses solely on specific financial subjects, such as taxes, borrowing, and government spending. 

A Finance Bill, on the other hand, covers a wider range of financial proposals and includes all changes needed to implement the Union Budget. Knowing how they differ helps us understand how laws related to money are made and passed in Parliament.

Difference Between Finance Bill and Money Bill

While all Money Bills are technically Financial Bills, not all Financial Bills are Money Bills. The procedural and constitutional distinctions are the most significant difference between the Finance Bill and the Money Bill.

 What are a Money Bill and a Finance Bill?

Both Money Bills and Finance Bills are types of Financial Bills, which is a broader category of legislation concerning the government’s revenue or expenditure.

What is a Money Bill?

A bill is considered a Money Bill if it exclusively deals with matters specified in Article 110 of the Constitution of India. These matters are strictly financial in nature and include:

• The imposition, abolition, remission, alteration, or regulation of any tax.

• The regulation of government borrowing or giving any guarantee.

• The custody of the Consolidated Fund or the Contingency Fund of India, or the payment/withdrawal of money from these funds.

• The appropriation (setting aside) of money out of the Consolidated Fund of India.

• Declaring any expenditure to be 'charged' upon the Consolidated Fund of India.

The procedure for passing a Money Bill is outlined in Article 109.

What is a Finance Bill?

A Finance Bill is a bill that concerns the country's overall finances, including taxes, government expenditures, and revenues. It is a broader term, and it forms a part of the Union Budget, detailing the legal amendments required for the proposed changes in taxation.

Since the scope of a Finance Bill is wider, it is classified into two sub-categories under Article 117:

• Financial Bill (Category-I): Dealt with under Article 117(1). It includes all the matters of a Money Bill (Article 110) but also contains other provisions of general legislation.

• Financial Bill (Category-II): Dealt with under Article 117(3). It contains provisions involving expenditure from the Consolidated Fund of India but does not include any of the specific matters mentioned in Article 110.

Role of the Speaker of the Lok Sabha

The role of the Speaker of the Lok Sabha is paramount in the case of a Money Bill.

The Constitution empowers the Speaker to take the final decision on whether a bill is a Money Bill or not. This decision is conclusive and cannot be challenged in a court of law.

This power is significant because classifying a bill as a Money Bill allows the government to bypass the Rajya Sabha's power to amend or reject it. Once certified by the Speaker, the bill is transmitted to the Rajya Sabha and presented to the President with the Speaker's endorsement.

Rajya Sabha Power in Passing Financial Bills

The distinct treatment of the Rajya Sabha (Upper House) is a key aspect separating a Money Bill from other Financial Bills.

• Money Bills: The Rajya Sabha is restricted to making recommendations. If the Rajya Sabha fails to return the bill within 14 days, the bill is deemed to have been passed by both Houses. This limited power ensures that the government's crucial fiscal measures are not unduly delayed by the Upper House.

• Financial Bill (Category I & II): The Rajya Sabha has the power to discuss, vote on, amend, and reject the bill. In essence, they follow a procedure similar to Ordinary Bills, and the bill must be passed by both Houses.

Constitutional Provisions

The constitutional framework lays down the specific procedures and limitations for each type of bill:

• Money Bill: Governed by Article 110 (Definition) and Article 109 (Procedure).

• Financial Bill (Category-I): Governed by Article 117(1). Since it includes Article 110 matters and general legislation, it must be introduced only in the Lok Sabha with the President's recommendation.

• Financial Bill (Category-II): Governed by Article 117(3). It involves expenditure from the Consolidated Fund of India and follows the procedure of an Ordinary Bill after its introduction.

Types of Financial Bills

It is important to remember that 'Financial Bill' is an umbrella term for all bills that relate to the nation's revenue and expenditure. They are categorised into three types:

1. Money Bill (Article 110): Strictly limited to matters of taxation, government borrowing, and funds.

2. Financial Bill (I) (Article 117(1)): Contains all matters of a Money Bill plus other general legislative matters.

3. Financial Bill (II) (Article 117(3)): Contains provisions involving expenditure from the Consolidated Fund of India, but none of the specific matters of Article 110.