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Finance Bill

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Finance Bill will be passed in Parliament before March 31: Arun Jaitley

Finance Bill sails through

Parliament

When a piece of legislation is yet to be passed as a law by the Houses of Parliament, it is termed a Bill. A Finance Bill is a Bill that, as the name suggests, concerns the country&#39;s finances &mdash; it could be about taxes, government expenditures, government borrowings, revenues, etc. Since the Union Budget deals with these things, it is passed as a Finance Bill.<br />
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Rule 219 of the Rules of Procedure of Lok Sabha states: &lsquo;Finance Bill&rsquo; means the Bill ordinarily introduced in each year to give effect to the financial proposals of the Government of India for the following financial year and includes a Bill to give effect to supplementary financial proposals for any period.<br />
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There are different kinds of Finance Bills &mdash; the most important of them is the Money Bill. The Money Bill is concretely defined in Article 110. A Money Bill is certified by the Speaker as such &mdash; in other words, only those Financial Bills that carry the Speaker&rsquo;s certification are Money Bills.<br />
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Article 110 states that a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:<br />
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(a) the imposition, abolition, remission, alteration or regulation of any tax;<br />
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(b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;<br />
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(c) the custody of the consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;<br />
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(d) the appropriation of moneys out of the consolidated Fund of India;<br />
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(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;<br />
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(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or<br />
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(g) any matter incidental to any of the matters specified in sub clause (a) to (f)<br />
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A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes<br />
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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<br />
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There shall be endorsement of every Money Bill when it is transmitted to the Council of States under Article 109, and when it is presented to the President for assent under Article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.<br />
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<strong>Read full Finance Bill documents<br />
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<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2022-02/Finance_Bill.pdf" target="_blank">Finance Bill 2022</a></strong>

RELATED BUDGET TERMS

Learn what is meant by Finance Bill, Finance Bill definition and more Finance Bill news here at Business Standard.

What is Finance Bill, Finance Bill Meaning, Finance Bill Definition

What is Finance Bill?

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	The Union Budget not only contains the government&#39;s annual financial statement but also a road map for how the country&#39;s finances will be managed in the next financial year. As such, it is a piece of legislation that has to be vetted by Parliament. Usually, the Union Budget is presented a month or two before the end of the ongoing financial year and is effective from April 1 of the next financial year.</div>
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	Rule 219 of the Rules of Procedure of the Lok Sabha states: &lsquo;Finance Bill&rsquo; means the Bill ordinarily introduced in each year to give effect to the financial proposals of the Government of India for the following financial year and includes a Bill to give effect to supplementary financial proposals for any period.</div>
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Learn what is meant by Effective date of Finance Bill,, Effective date of Finance Bill, definition and more Effective date of Finance Bill, news here at Business Standard.

What is Effective date of Finance Bill, Effective date of Finance Bill Meaning, Effective date of Finance Bill Definition

Effective date of the Finance Bill

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	The Budget speech, delivered by the Union Finance Minister in Parliament, has two sections &mdash; parts A and B.</div>
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	<strong>Part A of the budget speech</strong></div>
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	The first part of the budget speech provides an overview of the economy of the previous and current years, and also gives Budget estimates for the next financial year. Basically, part A covers review of the prevailing economic situation of the country, and is more concerned about the &lsquo;macro&rsquo; aspect of the economy.</div>
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	Part A provides the broad framework of expenditure in details for different sectors, introduces new schemes, and explains the priorities of the government. This segment of the Budget speech also specifies the focus areas of the government.</div>
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	In part A, the finance minister provides a brief overview of total funds raised by the government through taxes or borrowing, and discusses how the money is to be spent on Budget deficit/surplus. It also presents a complete breakdown of the expenditure of each ministry.</div>
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	Essentially, Part A deals with the general economic survey of the country. Fiscal deficit, current account deficit (CAD) and inflation are also discussed in Part A of the Budget speech.</div>
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	<strong>Part B of the Budget speech</strong></div>
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	The second part of the Budget speech highlights the government&rsquo;s tax proposals for the next financial year, and it has a direct bearing on the personal finance of citizens. Part B should also be read with the Finance Act, which is a document containing legal provisions. A reader can understand the provisions by going through the attached Memorandum of Explanations, which gives a broad background of changes.</div>
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	The second section of the speech apprises taxpayers of the state of the economy, the progress the government has made on various developmental measures, and the direction of future policies.</div>
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	While concluding Part B of the Budget speech, the finance minister describes proposals for taxation or discloses variations in the existing taxation system. The &lsquo;Annual Financial Statement&rsquo; is presented at the conclusion of the speech of the finance minister.</div>
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	<strong>Click on the links below to read full Budget speech from recent Union Budgets:</strong></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2014-Jaitley.pdf" target="_blank">Full Budget speech 2014 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2015-Jaitley.pdf" target="_blank">Full Budget speech 2015 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2016-Jaitley.pdf" target="_blank">Full Budget speech 2016 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2017-Jaitley.pdf" target="_blank">Full Budget speech 2017 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2018-Jaitley.pdf" target="_blank">Full Budget speech 2018 of Arun Jaitley</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/InterimBudget2019-Goyal.pdf" target="_blank">Full Interim Budget speech 2019 of Piyush Goyal</a></strong></span></u></div>
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	<u><span style="color:#0000ff;"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-01/Budget2019-Sitharaman.pdf" target="_blank">Full Budget speech 2019 of Nirmala Sitharaman</a></strong></span></u><br />
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	<u><span style="color: rgb(0, 0, 255);"><strong><a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-02/Budget_Speech.pdf" target="_blank">Full Budget speech 2020 of&nbsp;Nirmala Sitharaman</a></strong></span></u><br />
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	<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2021-02/budget_speech.pdf" target="_blank"><u><span style="color: rgb(0, 0, 255);"><strong>Full Budget speech 2021 of&nbsp;Nirmala Sitharaman</strong></span></u></a><br />
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	<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2022-02/Budget_Speech.pdf" target="_blank"><u><span style="color: rgb(0, 0, 255);"><strong>Full Budget speech 2022 of&nbsp;Nirmala Sitharaman</strong></span></u></a><u><span style="color: rgb(0, 0, 255);"><strong></strong></span></u></div>

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What is Budget speech, Budget speech News, Budget News, Budget speech Definition

Budget Speech

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	The Fiscal Responsibility and Budget Management Act (FRBM Act), 2003, establishes financial discipline to reduce fiscal deficit.</div>
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	<strong>When was the FRBM Act enacted? Who introduced it in India?</strong></div>
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	The FRBM Bill was introduced by the then finance minister, Yashwant Sinha, in 2000. The Bill, approved by the Union Cabinet in 2003, became effective from July 5, 2004.</div>
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	<strong>What are the objectives of the FRBM Act?</strong></div>
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	The FRBM Act aims to introduce transparency in India&#39;s fiscal management systems. The Act&rsquo;s long-term objective is for India to achieve fiscal stability and to give the Reserve Bank of India (RBI) flexibility to deal with inflation in India. The FRBM Act was enacted to introduce more equitable distribution of India&#39;s debt over the years.</div>
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	<strong>Key features of the FRBM Act</strong></div>
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	The FRBM Act made it mandatory for the government to place the following along with the Union Budget documents in Parliament annually:</div>
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	<strong>1. </strong>Medium Term Fiscal Policy Statement</div>
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	<strong>2. </strong>Macroeconomic Framework Statement</div>
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	<strong>3. </strong>Fiscal Policy Strategy Statement</div>
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	The FRBM Act proposed that revenue deficit, fiscal deficit, tax revenue and the total outstanding liabilities be projected as a percentage of gross domestic product (GDP) in the medium-term fiscal policy statement.</div>
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	<strong>FRBM Act exemptions</strong></div>
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	On grounds of national security, calamity, etc, the set targets of fiscal deficits and revenue could be exceeded.</div>
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	<strong>How effective has the FRBM Act been?</strong></div>
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	Several years have passed since the FRBM Act was enacted, but the Government of India has not been able to achieve targets set under it. The Act has been amended several times.</div>
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	In 2013, the government introduced a change and introduced the concept of effective revenue deficit. This implies that effective revenue deficit would be equal to revenue deficit minus grants to states for the creation of capital assets. In 2016, a committee under N K Singh was set up to suggest changes to the Act. According to the government, the targets set under FRBM Act previously were too rigid.</div>
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	<strong>N K Singh Committee&#39;s recommendations were as follows:</strong></div>
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	<strong>Targets:</strong> The committee suggested using debt as the primary target for fiscal policy and that the target must be achieved by 2023.</div>
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	<strong>Fiscal Council:</strong> The committee proposed to create an autonomous Fiscal Council with a chairperson and two members appointed by the Centre (not employees of the government at the time of appointment)</div>
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	<strong>Deviations:</strong> The committee suggested that the grounds for the government to deviate from the FRBM Act targets should be clearly specified</div>
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	<strong>Borrowings:</strong> According to the suggestions of the committee, the government must not borrow from the RBI, except when...</div>
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	<strong>a.</strong> the Centre has to meet a temporary shortfall in receipts</div>
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	<strong>b.</strong> RBI subscribes to government securities to finance any deviations</div>
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	<strong>c. </strong>RBI purchases government securities from the secondary market<br />
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	<strong>Read full FRBM documents</strong></div>
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		<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-02/frbm1.pdf" target="_blank">Macro-Economic Framework Statement 2020-21</a></div>
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		<a href="https://bsmedia.business-standard.com/_media/bs/data/general-file-upload/2020-02/frbm2.pdf" target="_blank">Medium Term Fiscal Policy Cum Fiscal Policy Strategy Statement&nbsp; 2020-21</a></div>
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Learn what is FRBM Act, FRBM Act News, FRBM Act Definition and more here at Business Standard.

What is FRBM Act, FRBM Act Definition, FRBM Act News

FRBM Act

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	The Finance Bill is a Money Bill according to the definition in Article 110 of the Indian Constitution. The Finance Bill contains tax proposals of the government explaining new taxes, changes in rates of existing taxes. This Bill, which could be about expenditure, revenues, and government borrowings, is part of the Union Budget and submitted to Parliament for its approval. It is accompanied by the Memorandum Explaining the Provisions in the Finance Bill. As the name suggests, the memorandum explains the provisions of the changes proposed by the Finance Bill.</div>
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	The Finance Bill stipulates changes to the existing taxation structure as proposed by the finance minister in the Union Budget. The accompanying memorandum details all legal amendments required for the proposed changes. For example, Memorandum to the Finance Bill, 2019, included provisions related to direct taxes that sought to amend the Income Tax Act, 1961.</div>
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	Various proposals for amendments are organised under sub-heads in the memorandum. Sub-heads include amendment to tax rates, deepening and widening of tax base, strengthening anti-abuse measures promoting tax incentives, and more.</div>
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	Once approved by the Lok Sabha, the Finance Bill becomes the Finance Act.</div>

Learn What is Memorandum Explaining the Provisions in the Finance Bill and more here at Business Standard.

What is Memorandum Explaining the Provisions in the Finance Bill

Memorandum Explaining the Provisions in the Finance Bill

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	The Annual Financial Statement is a document presented to Parliament every financial year as part of the Budget process, as required under Article 112 of the Constitution of India. The documents consist of receipts and expenditures of the government in the current year, previous year and the Budget year in three separate parts &mdash; Consolidated Fund of India, Contingency Fund of India, and Public Account of India. The government presents a statement of receipts and expenditures for these accounts every year to Parliament.</div>
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	Loans raised by the government, borrowings from the Reserve Bank of India (RBI), and borrowings from foreign governments or institutions are shown under capital receipts, which also show loan recoveries, asset sale, disinvestment, etc.</div>
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	<strong>The difference between Annual Financial Statement and Budget</strong></div>
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	The term Budget is a common word for a number of documents, including the Annual Financial Statement. The other documents in the Budget include Demand for Grants, Appropriation Bill, Finance Bill, Memorandum Explaining the Provisions in the Finance Bill, Macroeconomic Framework Statement, Fiscal Policy Strategy Statement, Medium Term Expenditure Statement, etc.</div>
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	Annual Financial Statement distinguishes the expenditure on revenue account from the expenditure on other accounts, as mandated in the Constitution. Revenue and capital sections together form the Union Budget, so the Annual Financial Statement is basically the Budget of the government.</div>

Learn What is Annual Financial Statement, Annual Financial Statement Definition, Annual Financial Statement News and more here at Business Standard.

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