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Updated March 24th, 2023 at 12:35 IST

Nirmala Sitharaman moves Finance Bill in Parliament: What is it and why does it matter?

The Finance Bill is accompanied by a Memorandum containing explanations of the provisions included in it. The Finance Bill can be introduced only in Lok Sabha.

Reported by: Isha Bhandari
Finance Bill 2023
Image: (PTI) | Image:self
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Nirmala Sitharaman, the Union Finance Minister, moved the Finance Bill in Lok Sabha on Friday, March 24. The Finance Bill contains tax proposals that the FM had moved while presenting the Budget on February 1. Sitharaman moved the Demands for Grants for 2023–24 and relevant appropriation bills for discussion and voting in the Lok Sabha at 6 pm on Thursday while the Opposition members continued to protest in the Well of the House.

What is a Finance Bill and why is it important?

A Finance bill is a money bill that deals with the nation's finances; it may be about taxes, spending, borrowing, revenues, etc. Since the Union Budget deals with these things, it is passed as a Finance Bill. Definition: 

Via this bill, the administration is proposing the Parliament the imposition of additional taxes, changes to the current tax system, or continuation of the current system for a longer period of time. 

The Finance Bill is accompanied by a memorandum containing explanations of the provisions included in it. The Finance Bill can be introduced only in Lok Sabha.

However, the Rajya Sabha can recommend amendments in the Bill. The bill has to be passed by the Parliament within 75 days of its introduction.

Features of the Finance Bill

  1. Finance Bills are divided into three classes - Finance Bill Category I, Finance Bill Category II, and the Money Bill.
  2. Money Bills contain provisions related to regulation or borrowing, amendments to tax laws at the Union or the state level, withdrawal of money from a contingency or consolidated fund, etc.
  3. Finance Bills, of both categories, contain provisions related to expenditure, taxation, or any other matter.
  4. A Money Bill will always be a Finance Bill. However, a Finance Bill need not necessarily be a Money Bill.
  5. The Finance Bill can only be introduced in the lower chamber of the Parliament or the Lok Sabha.
  6. The Rajya Sabha can make recommendations to the bill. The bill will have to be returned by the Rajya Sabha within 14 days of receiving it, else it will be deemed as passed.
  7. If the bill is returned without any recommendations to the Lok Sabha, the same will be presented to the President for his/her approval.
  8. Even if the bill is returned with recommendations, the Lok Sabha has the power to accept or reject all of these recommendations. The Lok Sabha will have to inform the Rajya Sabha about the status of the recommendations.
  9. Whether the Lok Sabha accepts all the recommendations or not, the bill will be deemed to have been passed by both the Houses.
  10. For all other bills, the final passing of the said bill will happen at the Rajya Sabha. However, for Money Bills, the final passing will happen at the Lok Sabha. This will then be sent to the President of India for his/her assent.
  11. The President cannot return a Money Bill to the Lok Sabha, for any purpose.

Earlier yesterday, March 23 the Lok Sabha approved the Union Budget envisaging an expenditure of around ₹45 lakh crore for the fiscal year starting April 1 without any discussion, as the Opposition continued to create ruckus.

After two adjournments during which the ruling and opposition MPs engaged in a duelling match over demands for Rahul Gandhi to apologise and the Adani problem, the Lower House of Parliament resumed its work on the demands for grants and appropriation bills.

Notably, due to protests from both sides, the majority of the second leg of the budget session was rained out, making it one of the few times when the budget was enacted without any discussion.

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Published March 24th, 2023 at 09:44 IST

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