Article 117 of the Indian Constitution delineates the special procedural requirements for Financial Bills in the Parliament of India. It is a crucial article that distinguishes different types of bills involving financial matters from ordinary legislation and lays down specific conditions, most notably the requirement of the President’s recommendation, for their introduction and passage.
This article ensures that the executive branch, through the President, has oversight over legislative proposals that could impact the Consolidated Fund of India, thereby maintaining fiscal discipline and preventing hasty financial legislation. It is a cornerstone provision defining the legislative process for financial matters alongside Articles 110 (Money Bills) and 112 (Annual Financial Statement).
Original Text
117. Special provisions as to financial Bills.
(1) A Bill or amendment making provision for any of the matters specified in sub-clause (a) to (f) of clause (1) of article 110 shall not be introduced or moved in either House of Parliament except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.
(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.
Note: There appears to be a repetition of clause (2) as (3) in some sources. The correct text has three distinct clauses.
Let’s correct the original text based on reliable sources:
117. Special provisions as to financial Bills.
(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved in either House of Parliament except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill which makes provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110, but does not contain only those matters, shall not be introduced in either House of Parliament except on the recommendation of the President and shall not be introduced in the Council of States.
(3) A Bill which if enacted and brought into operation would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.
Detailed Explanation
Article 117 deals with ‘Financial Bills’, which are broadly categorized into two types based on their provisions and the procedure required by this article:
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Financial Bills under Article 117(1): These are Bills that contain any of the matters specified in Article 110(1)(a) to (f) but are not certified as Money Bills by the Speaker of the Lok Sabha. This means they contain provisions relating to imposing, abolishing, altering, or regulating taxes; regulating borrowing of money or giving of any guarantee by the Government of India; custody of the Consolidated Fund or the Contingency Fund, payment of moneys into or withdrawal of moneys from any such Fund; appropriation of moneys out of the Consolidated Fund; the auditing of the accounts of the Union or of a State; or any matter incidental to any of the matters specified in the preceding sub-clauses. However, they may also contain other general legislative provisions.
- Requirement: Such a Bill or amendment can only be introduced or moved on the recommendation of the President.
- House of Introduction: It cannot be introduced in the Council of States (Rajya Sabha); it must be introduced in the House of the People (Lok Sabha).
- Exception: An amendment proposing the reduction or abolition of any tax does not require the President’s recommendation. This allows members to propose relief measures without executive approval.
- Procedure: Once introduced in Lok Sabha on President’s recommendation, its passage involves the participation of both Houses. However, similar to Money Bills, the Rajya Sabha has limited powers; it can suggest amendments but cannot reject the Bill or amend it unilaterally on matters falling under Article 110(1). Disagreements can potentially lead to a joint sitting, but only for the non-Article 110 matters if any are present.
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Financial Bills under Article 117(3) (often referred to as Financial Bills Category B): These are Bills that, if enacted, would involve expenditure from the Consolidated Fund of India. These Bills do not contain any of the matters specified in Article 110(1) or they contain Article 110(1) matters but are distinct from Bills covered under Article 117(1). The key characteristic is the expenditure implication.
- Requirement: Such a Bill cannot be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill. The recommendation is required at the stage of consideration, not necessarily introduction.
- House of Introduction: Such a Bill can be introduced in either House of Parliament (Lok Sabha or Rajya Sabha).
- Procedure: Once introduced (without Presidential recommendation), it goes through the usual legislative process. However, at the stage when the House is about to consider the Bill for passing (e.g., after the report stage, or before the final vote), the President’s recommendation for consideration is mandatory. Without it, the Bill cannot proceed to be passed. Both Houses have equal powers over such bills, including the power to amend or reject. Disagreements can lead to a joint sitting.
Article 117 thus establishes a layered system of financial legislation, ensuring that bills impacting revenue (Article 110 matters) are initiated with executive backing and primarily in the Lok Sabha, while bills merely involving expenditure from the Consolidated Fund also require executive approval, albeit at a later stage and allowing introduction in either House.
Detailed Notes
- Article 117 deals with Special provisions as to Financial Bills.
- Distinguishes between different types of Financial Bills based on their content and procedural requirements.
- Article 117(1):
- Applies to Bills/amendments containing provisions from Article 110(1)(a) to (f).
- These are not Money Bills certified by the Speaker, though they contain Money Bill type clauses.
- Requirement: President’s recommendation is mandatory for introduction or moving.
- House of Introduction: Must be introduced only in the Lok Sabha (House of the People).
- Cannot be introduced in the Rajya Sabha (Council of States).
- Proviso: Recommendation not required for amendments reducing or abolishing a tax.
- Rajya Sabha has limited powers over these bills regarding Article 110 matters (similar to Money Bills).
- Often referred to as Financial Bill Category A.
- Article 117(2): [Note: Some sources have an incorrect repetition of (2) as (3). The widely accepted version has three distinct clauses.] This clause in some versions refers to Bills that make provision for any of the Article 110(1) matters but also contain other provisions, and cannot be introduced except on President’s recommendation and only in Lok Sabha. This is essentially a subset of Article 117(1) or an alternative framing reinforcing the same type of bill. For UPSC purposes, understanding the distinction between bills covered by 117(1) (containing 110 matters) and 117(3) (expenditure bills) is key.
- Article 117(3):
- Applies to Bills which, if enacted, would involve expenditure from the Consolidated Fund of India.
- These Bills typically do not contain matters specified in Article 110(1).
- Requirement: President’s recommendation is mandatory for consideration of the Bill by either House.
- The Bill cannot be passed by either House unless the President has recommended its consideration.
- House of Introduction: Can be introduced in either House (Lok Sabha or Rajya Sabha).
- Recommendation is needed before the House proceeds to consider the Bill for passing, not necessarily for introduction.
- Both Houses have equal legislative powers over such Bills (can amend or reject).
- Often referred to as Financial Bill Category B.
- Article 117 ensures executive control over legislative proposals impacting public finances.
- Distinguishes between Money Bills (Art 110, certified by Speaker, introduced only in Lok Sabha, President’s rec for introduction, very limited Rajya Sabha role), Financial Bills Cat A (Art 117(1), contain Art 110 matters but not certified, introduced only in Lok Sabha, President’s rec for introduction, limited Rajya Sabha role on Art 110 matters), and Financial Bills Cat B (Art 117(3), involve expenditure from CFI, can be introduced in either House, President’s rec for consideration, equal powers for both Houses).
- The President’s recommendation under Article 117(1) or 117(3) is a constitutional prerequisite.
Additional Comments
- Article 117 is closely linked to Article 110 (Money Bills) and Article 112 (Annual Financial Statement/Budget).
- Financial Bills are essentially bills that deal with fiscal matters. The key distinction lies in whether they contain only matters listed in Article 110(1) (making them potentially Money Bills) or also contain other matters, or only involve expenditure from the Consolidated Fund.
- A Bill that only contains provisions exclusively from Article 110(1) is a Money Bill, certified by the Speaker, subject to Article 109 procedure (Rajya Sabha minimal role, no joint sitting), and requires President’s recommendation under Article 117(1) for introduction.
- A Bill containing Article 110(1) matters plus other matters is a Financial Bill under Article 117(1). It requires President’s recommendation for introduction and can only be introduced in Lok Sabha. Rajya Sabha has limited powers regarding the Art 110 parts but equal powers for the other parts. Joint sitting is possible only for the non-Art 110 parts.
- A Bill not containing any Article 110(1) matters but involving expenditure from the Consolidated Fund is a Financial Bill under Article 117(3). It can be introduced in either House, requires President’s recommendation for consideration before passing, and both Houses have equal powers. Joint sitting is possible.
- The President’s recommendation signifies the executive’s assent to the introduction or consideration of a bill that has financial implications on the Consolidated Fund of India. This is a mechanism of parliamentary control over executive finance, paradoxically exercised through the executive head.
Summary
Article 117 of the Indian Constitution lays down special procedures for Financial Bills. It mandates that Bills containing provisions similar to those in Article 110(1) must be introduced only in the Lok Sabha and require the President’s recommendation for introduction, except for amendments reducing or abolishing taxes. Additionally, Bills that would involve expenditure from the Consolidated Fund of India, even if they do not contain Article 110(1) matters, cannot be passed by either House unless the President has recommended their consideration. This article creates different categories of financial legislation with varying procedural requirements, ensuring executive oversight on legislative proposals affecting public finances while defining the respective roles of the Lok Sabha and the Rajya Sabha.