Money Bills vs Finance Bills

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Money Bills vs Finance Bills

Money Bills vs Finance Bills

News: The Parliamentary Affairs Minister has said that the Digital Personal Data Protection (DPDP) Bill, 2023 is an ordinary Bill and not a money bill.

What are Money Bills and Financial Bills?
• A Financial Bill is any Bill that relates to revenue or expenditure.
• A Money Bill is a specific type of Finance Bill that deals only with matters specified under Article 110(1) and deals with taxes, borrowing, expenditure, etc. It can only be introduced in the Lok Sabha and must be certified by the Speaker.

What are the prerequisites for a Financial Bill to become a money bill?
• Firstly, it must only be introduced in the Lok Sabha and not the Rajya Sabha.
• Secondly, these bills can only be introduced on the President’s recommendation.

What are the types of Financial Bills?
There are 2 types of Financial Bills. Financial Bill (I) and Financial Bill (II)
Financial Bill (I)
• Financial Bill (I) encompasses matters both related to money bills and general legislation.
• It is presented under Article 117 (1) of the Constitution
• It can only be introduced in the Lok Sabha and upon the President’s recommendation.
• Unlike money bills, a Financial Bill (I) can be subject to amendments or rejection by the Rajya Sabha. In case of disagreement between the two Houses, a joint sitting can be convened by the President to resolve the deadlock.

Financial Bill (II)
• Financial Bill (II) concerns provisions involving expenditure from the Consolidated Fund of India but does not cover the subjects outlined in Article 110.
• Governed by Article 117 (3) of the Constitution, Financial Bill (II) follows the legislative procedure of ordinary bills.
• It can be introduced in either House of Parliament, and while the President’s recommendation is not necessary for introduction, it becomes crucial during the consideration stage. Without the President’s recommendation, neither House can pass the bill.

Comparison between Money Bill and Finance Bill:

Basis	Money Bill	Finance Bill
Introduction	It can only be introduced in the Lok Sabha	It can be introduced either in LS or RS
President’s recommendation	Prior recommendation of The President is necessary	President’s recommendation is necessary for Category I at the introduction stage and for Category II at the consideration stage.
Role of Rajya Sabha	Limited involvement. It can only provide recommendations.	RS can participate freely.
Rajya Sabha recommendations	Not mandatory for Money Bills to include Rajya Sabha’s recommendations.	Provision for Rajya Sabha’s recommendations to be included in Financial Bills.
Subjects Covered	Deals exclusively with matters listed in Article 110(1) of the Constitution.	Deals with matters beyond those listed in Article 110(1) and can include other financial provisions.
Overriding Authority	Lok Sabha’s decision prevails in case of disagreements with the Rajya Sabha.	Requires agreement of both Houses for passage.