Budget FAQs: What is Finance Bill?

Budget FAQs: What is Finance Bill?

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India's Finance minister Nirmala Sitharaman will present the budget of Narendra Modi-led government on February 1.

Taking up the crucial Finance Ministry portfolio, Sitharaman has a big task at hand. In her new role, the former defense minister needs to address issues such as economic slowdown, auto sector crisis, severe agrarian crisis, NPAs marring the banking sector.

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While all eyes will be on Budget 2020, it is imperative for people to know the key terms associated with the annual exercise.

Here’s a lowdown on some of the important terms to help understand the Budget.

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What is a Finance Bill?

Before a piece of legislation is passed as a law by the Houses of parliament, it is called a Bill. A Finance Bill concerns the country's finances ranging from taxes,  expenditure to government's borrowings, revenues, etc. 

After the presentation of the annual budget, the finance bill is introduced in the Lok Sabha to implement financial proposals for the following year. The bill is largely related to changes in taxes and levies by the government. 

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For example, If the government proposes changes in income tax during the budget speech, the proposal will be introduced as a Finance Bill in the parliament.

There are different kinds of Finance bills among which Money Bills concern with the same clauses.

What is Money Bill?

Only those financial bills that contain provisions on matters listed in Article 110 of the constitution are called Money Bills.

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The decision on whether a bill is related to Finance or a Money Bill is made by the Speaker when passed by the Lok Sabha and sent to Rajya Sabha. The Artice 110 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."

Therefore, a Finance Bill will necessarily be a Money Bill but a Money Bill cannot necessarily be a Finance Bill.