Q. Consider the following comparison between finance act/ bill and appropriation act/bill:
1. Appropriation act authorizes the payment side of budget whereas Finance act legalizes the income side of the budget.
2. The amendments seeking to reject or reduce a tax cannot be moved in the case of both finance bill and appropriation bill.
3. Appropriation act becomes applicable only after the assent given by president whereas finance act can be implemented without president’s assent.
How many statements given above are correct?
Exp) Option a is the correct answer
An appropriation act is required to provide for the appropriation, out of the Consolidated Fund of India, all money required to meet grants voted by the Lok Sabha and the expenditure charged on the Consolidated Fund of India. Whereas the Finance Bill is introduced to give effect to the financial proposals of the Government of India for the following year. It is subjected to all the conditions applicable to a Money Bill.
Statement 1 is correct. This appropriation act authorizes or legalizes the payments from the Consolidated Fund of India. This means that the government cannot withdraw money from the Consolidated Fund of India till the enactment of the appropriation bill. The Finance Act legalizes the income side of the budget and completes the process of the enactment of the budget.
Statement 2 is incorrect. The amendments seeking to reject or reduce a tax cannot be moved in the case of appropriation bill but can be passed in the case of Finance bill.
Statement 3 is incorrect. Both Appropriation act and finance act becomes applicable only after the assent given by president. According to the Provisional Collection of Taxes Act of 1931, the Finance Bill must be enacted (i.e., passed by the Parliament and assented to by the president) within 75 days
