Why is it in the News?

The Lower House of Parliament recently passed the Finance Bill moved by Union Finance Minister Nirmala Sitharaman.

Context:

• The Lok Sabha passed the Finance Bill, 2024  by voice vote recently.
• Also, the House passed the Appropriation Bill, granting authorization for government expenditures for four months in the upcoming fiscal year.
  • The Appropriation Bill is a significant legislative measure that empowers the government to utilize public funds allocated in the annual budget.
  • It serves to uphold accountability and transparency by necessitating parliamentary approval for expenditures and prevents unauthorized withdrawals from the Consolidated Fund of India.
• Furthermore, the lower house sanctioned the Rs 1.8 lakh crore budget for the Union Territory of Jammu and Kashmir.

What is a Finance Bill?

• The Finance Bill, classified as a Money Bill under Article 110 of the Constitution, is an annual presentation in the Lok Sabha following the Union Budget announcement.
• It encapsulates the government's fiscal proposals concerning taxation, expenditure, and other financial affairs.
• Through this bill, the government submits its proposals for imposing new taxes, altering the existing tax framework, or extending the current tax structure beyond the approved period to Parliament.
• Accompanied by a Memorandum elucidating its provisions, the Finance Bill is exclusively introduced in the Lok Sabha, though amendments can be recommended by the Rajya Sabha.
• Approval from both houses of Parliament is requisite for the bill to become law, with a mandate for passage within 75 days of its introduction.
• While all Money Bills fall under the category of Financial Bills, not all Financial Bills qualify as Money Bills.
  • For instance, a Finance Bill solely focusing on tax proposals is classified as a Money Bill.
  • Conversely, a Bill addressing taxation or expenditure alongside other subjects is categorized as a Financial Bill.
• Thus, if a Bill entails government expenditure along with other matters, it is designated as a financial bill.

Highlights of the 2024 Finance Bill:

• Stability in Income Tax: With the impending general elections in April-May 2024, the bill prioritizes continuity by retaining the current tax framework for the fiscal year 2024-2025.
• Targeted Relief Measures: Incorporates slight tax concessions tailored to particular sectors or taxpayer groups.
• Promotion of Economic Expansion: Encompasses provisions aimed at fostering infrastructure enhancement, investment stimulation, and streamlining business operations.
• Fiscal Discipline: Pursues fiscal consolidation objectives through proposed strategies to manage expenditures or enhance revenue generation.