Polity Notes Sample

Parliament VII – Money Bills & Budget
Money Bills:
● Money bills are those bills which are mentioned in Article 110.
● According to Article 110, money bill is any bill which talks about imposition, abolition,
remission, or regulation of any tax.
● They also regulate government borrowings.
● Any money which is to be appropriated out of the Consolidated fund of India, requires a money
bill.
● Article 109 deals with the procedure of passing the money bills.
● Unlike the ordinary Bill, the money bill is introduced only in Lok Sabha on the
recommendation of the President.
● After Lok Sabha passes the bill, it is moved to Rajya Sabha which has only restricted powers. It
cannot reject or amend the bill.
● Rajya Sabha has to return the bill within 14 days with or without recommendations of the
amendments.
● If it does not return the bill within the prescribed days, the bill is deemed to have been passed by
it.
● Lok Sabha may or may not accept the amendments.
● After passing through both the houses, the President's assent is required. He can take two actions:
Give assent or Withhold assent.
● The President can't return the bill for reconsideration.
● Any bill which only talks about imposition of fines or pecuniary penalties, which
demand payment of license fee or regulation taxes by local authority will not be
deemed as a money bill.
Financial Bills:
● All money bills are financial bills but not all financial bills are money bills.
Financial Bills (I):

● These bills are mentioned under Article 117 (1) as they contain matters of Article 110 and other
legislation matters. For Example: CAMPA bill of 2015 (This bill consisted of funds as well
general protection of forests)
● Finance Bill (I) does not require certification of Speaker. They can be amended and rejected
by Rajya Sabha. They also have provision of joint sitting.
● The President's recommendation is required for them and they can only be introduced in Lok
Sabha.
● Exception: If the bill is about reduction or abolition of tax, it can be introduced without the
President's recommendation.
Financial Bills (II):

● It contains money utilization from the consolidated fund of India. Hence, it is regarded as
Ordinary bill only.
● In this bill, the President’s recommendation is required at the stage of consideration of the bill.
Process of Union Budget
Cut Motions:
➢ The motions to reduce the amounts of demands for grants are called ‘Cut Motions’. The object
of a cut motion is to draw the attention of the House to the matter specified therein.
➢ Cut Motions can be classified into three categories:
(i) Disapproval of Policy Cut; (ii) Economy Cut; and (iii) Token Cut.
○ Disapproval of Policy Cut: A cut motion which says “That the amount of the demand
be reduced to Re. 1” implies that the mover disapproves of the policy underlying the
demand. The member giving notice of such a Cut Motion has to indicate in precise terms
the particulars of the policy which he proposes to discuss. Discussion is confined to the
specific point or points mentioned in the notice and it is open to the member to advocate
an alternative policy.
○ Economy Cut: Where the object of the motion is to affect the economy in the
expenditure, the form of the motion is “That the amount of the demand be reduced by
Rs...(a specified amount)”. The amount suggested for reduction may be either a lump-
sum reduction in the demand or omission or reduction of an item in the demand.
○ Token Cut: Where the object of the motion is to ventilate a specific grievance within the
sphere of responsibility of the Government of India, its form is: “That the amount of the
demand be reduced by Rs. 100”.
■ Both appropriations and finance bills are classified as money bills which do not
require the explicit consent of the Rajya Sabha.
■ The upper house only discusses them and returns the bills.
■ After passing the finance bill, it enters the statute as the Finance Act.
■ Thus, the final Budget gets approved by the Parliament.
Guillotine:
● While guillotine literally is a large,
weighted blade used for executing a
condemned person, in legislative
parlance, to ''guillotine'' means to
bunch together and fast-track the
passage of financial business.
● It is a fairly common procedural
exercise in Lok Sabha during the
Budget Session.
● Once the House is done with these
debates, the Speaker applies the
“guillotine”, and all outstanding
demands for grants are put to vote
at once. This usually happens on the last day earmarked for the discussion on the Budget. The
intention is to ensure timely passage of the Finance Bill, marking the completion of the legislative
exercise with regard to the Budget.
● After the Budget is presented, Parliament goes into recess for about three weeks, during which
the House Standing Committees examine demands for grants for various ministries, and prepare
reports.
● After Parliament reassembles, time is allotted for discussions on the demands for grants of some
ministries.

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Parliament VII – Money Bills & Budget

Financial Bills (I):

Financial Bills (II):

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