InvestorQ : What is the difference between Appropriation Bill and Finance Bill?
natasha Samani made post

What is the difference between Appropriation Bill and Finance Bill?

3 years ago

This is a very good and pertinent question. Let’s first understand what these two Bills are and what they entail.

Finance Bill

A Finance Bill, also defined as a Money Bill in Article 110 of the Constitution, is a bill introduced in the Parliament every year to give effect to the financial proposals made by the government for the upcoming financial year. A Finance Bill largely relates to a change in taxes and levies.

A Finance Bill is usually introduced once a year during the Budget presentation.

This means if the Finance Minister proposes some changes to income tax slabs during the budget speech, then that proposal will be introduced in the Parliament as a Finance Bill and will have to be passed by both the houses to come into effect.

Appropriation Bill

Appropriation Bill, also a Money Bill like the Finance Bill, is a bill that authorises the government to withdraw funds from the Consolidated Fund of India to meet the expenses that it could incur for a financial year.

The government tables the Appropriation Bill after it presents the Union Budget in the Parliament. This is because the Budget contains plans to spend on social programmes to uplift various sections of the society. In order to spend on these programmes, the government needs money and it takes the same from the Consolidated Fund of India.

Difference between Appropriation Bill and Finance Bill:

One of the most basic difference between the two bills is that Appropriation Bill deals with the expense side of the Budget, while the Finance Bill deals with the income (or taxes and levies) side of the Budget.

Another major difference between both the bills is that the houses of Parliament can seek amendments to the amounts mentioned in the Finance Bill (with respect to reduction or rejection of taxes or levies), however, no amendment can be moved or passed in case of Appropriation Bill.