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Q37 (IAS/2023) Polity & Governance › Parliament › Money and finance bills Official Key

With reference to Finance Bill and Money Bill in the Indian Parliament, consider the following statements : 1. When the Lok Sabha transmits Finance Bill to the Rajya Sabha, it can amend or reject the Bill. 2. When the Lok Sabha transmits Money Bill to the Rajya Sabha, it cannot amend or reject the Bill, it can only make recommendations. 3. In the case of disagreement between the Lok Sabha and the Rajya Sabha, there is no joint sitting for Money Bill, but a joint sitting becomes necessary for Finance Bill. How many of the above statements are correct?

Result
Your answer: —  ·  Correct: B
Explanation

The correct answer is Option 2 because only two out of the three statements are legally accurate under the Constitution of India.

  • Statement 1 is correct: Under Article 117, "Finance Bills (Category I & II)" are treated as Ordinary Bills regarding the powers of the Rajya Sabha. Unlike a Money Bill, the Rajya Sabha has the power to amend or reject a Finance Bill.
  • Statement 2 is correct: According to Article 109, a Money Bill (Article 110) must be returned by the Rajya Sabha within 14 days. The Rajya Sabha cannot amend or reject it; it can only suggest recommendations which the Lok Sabha may or may not accept.
  • Statement 3 is incorrect: While it is true that there is no joint sitting for a Money Bill, a joint sitting for a Finance Bill is not "necessary" or mandatory. It is a provision available under Article 108 to resolve a deadlock, but it is not a requirement for the bill's passage.

Thus, with statements 1 and 2 being correct, Only two statements are right.

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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. With reference to Finance Bill and Money Bill in the Indian Parliament, consider the following statements : 1. When the Lok Sabha transm…
At a glance
Origin: From standard books Fairness: High fairness Books / CA: 10/10 · 0/10

This is a non-negotiable 'Sitter' from the core of Indian Polity. It relies entirely on the classic distinction between Article 110 (Money Bill) and Article 117 (Finance Bill). If you missed this, you aren't failing because of tough questions, you are failing because of poor revision of standard texts like Laxmikanth.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
In the Indian Parliament, can the Rajya Sabha amend or reject a Finance Bill transmitted to it by the Lok Sabha?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
Presence: 5/5
“After a money bill is passed by the Lok Sabha, it is transmitted to the Rajya Sabha for its consideration. The Rajya Sabha has restricted powers with regard to a money bill. It cannot reject or amend a money bill. It can only make recommendations. It must return the bill to the Lok Sabha within 14 days, whether with or without recommendations. The Lok Sabha can either accept or reject all or any of the recommendations of the Rajya Sabha. If the Lok Sabha accepts any recommendation, the bill is then deemed to have been passed by both the Houses in the modified form.”
Why this source?
  • Defines the Rajya Sabha's restricted powers regarding a money bill: it cannot reject or amend a money bill.
  • Explains Rajya Sabha can only make recommendations and Lok Sabha decides whether to accept them (so Rajya Sabha lacks final amending/rejecting power).
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Finance Bill > p. 149
Presence: 5/5
“Appropriation and Finance Bills are Money Bills. These bills are sent to the Rajya Sabha for passing but it is on the Lok Sabha whether to accept any recommendations of the Rajya Sabha or not. Whether Lok Sabha accepts the recommendations of the Rajya Sabha or not the Bills are deemed to be passed by both the houses. During the Budget, to change direct taxes, amendment in the particular Act is required through the Finance Act.”
Why this source?
  • States that Appropriation and Finance Bills are Money Bills.
  • Allows application of money-bill rules (limiting Rajya Sabha) to Finance Bills by categorization.
Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > Special Powers of Rajya Sabha > p. 110
Presence: 5/5
“Powers exercised only by the Lok Sabha: Then, there are powers that only the Lok Sabha exercises. The Rajya Sabha cannot initiate, reject or amend money bills. The Council of Ministers is responsible to the Lok Sabha and not Rajya Sabha. Therefore, Rajya Sabha can criticise the government but cannot remove it. Can you explain why? The Rajya Sabha is elected by the MLAs and not directly by the people. Therefore, the Constitution stopped short of giving certain powers to the Rajya Sabha. In a democratic form as adopted by our Constitution, the people are the final authority. By this logic, the representatives, directly elected by the people, should have the crucial powers of removing a government and controlling the finances.”
Why this source?
  • Reiterates that the Rajya Sabha cannot initiate, reject or amend money bills.
  • Highlights the constitutional rationale that financial control rests with the Lok Sabha, reinforcing the restriction.
Statement 2
In the Indian Parliament, does the Rajya Sabha have no power to amend or reject a Money Bill transmitted by the Lok Sabha and only the power to make recommendations on it?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
Presence: 5/5
“After a money bill is passed by the Lok Sabha, it is transmitted to the Rajya Sabha for its consideration. The Rajya Sabha has restricted powers with regard to a money bill. It cannot reject or amend a money bill. It can only make recommendations. It must return the bill to the Lok Sabha within 14 days, whether with or without recommendations. The Lok Sabha can either accept or reject all or any of the recommendations of the Rajya Sabha. If the Lok Sabha accepts any recommendation, the bill is then deemed to have been passed by both the Houses in the modified form.”
Why this source?
  • Explicitly states Rajya Sabha has restricted powers: cannot reject or amend a Money Bill and can only make recommendations.
  • Specifies the Rajya Sabha must return the bill within 14 days and that Lok Sabha may accept or reject its recommendations.
Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > HOW DOES THE PARLIAMENT MAKE LAWS? > p. 113
Presence: 5/5
“If it is a money bill, the Rajya Sabha can either approve the bill or suggest changes but cannot reject it. If it takes no action within 14 days the bill is deemed to have been passed. Amendments to the bill, suggested by Rajya Sabha, may or may not be accepted by the Lok Sabha.”
Why this source?
  • Directly says Rajya Sabha can approve or suggest changes but cannot reject a Money Bill.
  • Notes that suggested amendments may or may not be accepted by the Lok Sabha, implying only recommendatory power.
Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > Special Powers of Rajya Sabha > p. 110
Presence: 5/5
“Powers exercised only by the Lok Sabha: Then, there are powers that only the Lok Sabha exercises. The Rajya Sabha cannot initiate, reject or amend money bills. The Council of Ministers is responsible to the Lok Sabha and not Rajya Sabha. Therefore, Rajya Sabha can criticise the government but cannot remove it. Can you explain why? The Rajya Sabha is elected by the MLAs and not directly by the people. Therefore, the Constitution stopped short of giving certain powers to the Rajya Sabha. In a democratic form as adopted by our Constitution, the people are the final authority. By this logic, the representatives, directly elected by the people, should have the crucial powers of removing a government and controlling the finances.”
Why this source?
  • Affirms Rajya Sabha cannot initiate, reject or amend money bills, reinforcing its limited role.
  • Connects the restriction to the Lok Sabha's exclusive financial powers and responsibility of the Council of Ministers to Lok Sabha.
Statement 3
In the Indian Parliament, is there no provision for a joint sitting of both Houses in case of disagreement over a Money Bill?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > JOINT SITTING OF TWO HOUSES > p. 250
Presence: 5/5
“In the above three situations, the President can summon both the Houses to meet in a joint sitting for the purpose of deliberating and voting on the bill. It must be noted here that the provision of joint sitting is applicable to ordinary bills or financial bills only and not to money bills or Constitutional amendment bills. In the case of a money bill, the Lok Sabha has overriding powers, while a Constitutional amendment bill must be passed by each House separately. In reckoning the period of six months, no account can be taken of any period during which the other House (to which the bill has been sent) is prorogued or adjourned for more than four consecutive days.”
Why this source?
  • Explicitly states joint sitting applies to ordinary or financial bills only and not to money bills.
  • Notes that in the case of a money bill the Lok Sabha has overriding powers, implying no joint-sitting remedy.
Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > INTRODUCTION TO THE CONSTITUTION OF INDIA CHAP. 12 > p. 256
Presence: 5/5
“In case of disagreement over a Money Bill, thus, the lower House has the power to override the wishes of the upper Houses, ie, the Council of States. (B) As regards all other Bills (including "Financial Bills"), the machinery provided by the Constitution for resolving a disagreement between the two Houses of Parliament is an joint sitting of the two Houses [Article 108].”
Why this source?
  • Affirms that when there is disagreement over a Money Bill the lower House can override the upper House.
  • Contrasts Money Bills with all other bills for which a joint sitting (Article 108) is the deadlock-resolution mechanism.
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > JOINT SITTING OF TWO HOUSES > p. 250
Presence: 5/5
“In the above three situations, the President can summon both the Houses to meet in a joint sitting for the purpose of deliberating and voting on the bill. It must be noted here that the provision of joint sitting is applicable only to ordinary bills or financial bills, not to money bills or Constitutional amendment bills. In the case of a money bill, the Lok Sabha has overriding powers, while a Constitutional amendment bill must be passed by each House separately. In reckoning the period of six months, no account can be taken of any period during which the other House (to which the bill has been sent) is prorogued or adjourned for more than four consecutive days.”
Why this source?
  • Restates that the provision of joint sitting is applicable only to ordinary or financial bills and not to money bills.
  • Reinforces the exclusion of money bills from the joint-sitting procedure.
Statement 4
In the Indian Parliament, can a joint sitting of both Houses be convened in case of disagreement between the Lok Sabha and the Rajya Sabha over a Finance Bill (other than a Money Bill)?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > HOW DOES THE PARLIAMENT MAKE LAWS? > p. 113
Presence: 5/5
“This is the second stage in the law making process. In the third and final stage, the bill is voted upon. If a non-money bill is passed by one House, it is sent to the other House where it goes through exactly the same procedure. As you know, a bill has to be passed by both Houses for enactment. If there is disagreement between the two Houses on the proposed bill, attempt is made to resolve it through Joint Session of Parliament. In the few instances when joint sessions of the parliament were called to resolve a deadlock, the decision has always gone in favour of the Lok Sabha.”
Why this source?
  • Explicitly states that when there is disagreement on a non-money (ordinary) bill, an attempt is made to resolve it through a Joint Session of Parliament.
  • Connects the class of bill (non-money) to the availability of the joint-sitting mechanism for resolving deadlocks.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
Presence: 4/5
“If the Lok Sabha does not accept any recommendation, the bill is then deemed to have passed by both the Houses in the form originally passed by the Lok Sabha without any change. If the Rajya Sabha does not return the bill to the Lok Sabha within 14 days, the bill is deemed to have been passed by both the Houses in the form originally passed by the Lok Sabha. Thus, the Lok Sabha has more powers than Rajya Sabha with regard to a money bill. On the other hand, both the Houses have equal powers with regard to an ordinary bill.”
Why this source?
  • Describes the special, restrictive procedure for Money Bills — Rajya Sabha cannot reject and the bill is deemed passed if not returned — implying Money Bills are treated differently from ordinary/finance bills.
  • By contrasting Money Bills with ordinary bills, it supports the inference that non-money Finance Bills follow ordinary-bill procedures (including joint sitting).
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > JOINT SITTING OF TWO HOUSES > p. 250
Presence: 4/5
“If the bill (under dispute) has already lapsed due to the dissolution of the Lok Sabha, no joint sitting can be summoned. But, the joint sitting can be held if the Lok Sabha is dissolved after the President has notified his/ her intention to summon such a sitting (as the bill does not lapse in this case). After the President notifies his/ her intention to summon a joint sitting of the two Houses, none of the Houses can proceed further with the bill. The Speaker of Lok Sabha presides over a joint sitting of the two Houses and the Deputy Speaker, in his/her absence.”
Why this source?
  • Sets out procedural aspects of summoning a joint sitting and that the Speaker of Lok Sabha presides, showing the existence and use of a joint-sitting mechanism for disputed bills.
  • Supports that a formal joint-sitting process exists as the institutional remedy for legislative disagreement.
Pattern takeaway: UPSC loves the 'Grey Areas' of classification. They test the procedural nuances (like Joint Sitting applicability) rather than just the definition. The pattern is to contrast the 'Super-Power' of Lok Sabha (Money Bill) with the 'Federal Check' of Rajya Sabha (Finance Bill).
How you should have studied
  1. [THE VERDICT]: Sitter. Directly solvable from the 'Distinction between Money Bill and Finance Bill' table in Laxmikanth (Chapter 22/23).
  2. [THE CONCEPTUAL TRIGGER]: Legislative Procedure > Financial Legislation > The specific powers of Rajya Sabha vs Lok Sabha.
  3. [THE HORIZONTAL EXPANSION]: Memorize the Trinity: Money Bill (Art 110), Finance Bill Type I (Art 117[1]), and Finance Bill Type II (Art 117[3]). Key differences: Introduction (LS only vs Either House), President's Recommendation (Required vs Not always), Joint Sitting (No vs Yes).
  4. [THE STRATEGIC METACOGNITION]: Do not just read definitions. Create a 3-column comparison table for Ordinary, Money, and Finance Bills covering: 1. Introduction House, 2. President's Prior Rec, 3. RS Powers, 4. Joint Sitting, 5. President's Veto.
Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Finance Bills are Money Bills
💡 The insight

Finance Bills (including Appropriation Bills) are classified as Money Bills, so rules for Money Bills apply to them.

High-yield: distinguishes procedural treatment of Finance Bills from other legislation; helps answer questions on passage, Speaker's role, and inter-house powers. Connects to budget, appropriation, and legislative procedure topics frequently tested in polity questions.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Finance Bill > p. 149
🔗 Anchor: "In the Indian Parliament, can the Rajya Sabha amend or reject a Finance Bill tra..."
📌 Adjacent topic to master
S1
👉 Rajya Sabha's restricted powers on Money Bills
💡 The insight

Rajya Sabha cannot amend or reject a Money Bill and can only make recommendations to the Lok Sabha.

High-yield: directly tests understanding of bicameral imbalance in financial matters and Lok Sabha supremacy on money issues. Useful for questions on legislative checks, government accountability, and differences between Houses.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
  • Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > Special Powers of Rajya Sabha > p. 110
🔗 Anchor: "In the Indian Parliament, can the Rajya Sabha amend or reject a Finance Bill tra..."
📌 Adjacent topic to master
S1
👉 14-day rule for Rajya Sabha's consideration of Money Bills
💡 The insight

A Money Bill must be returned by the Rajya Sabha within 14 days with or without recommendations, after which Lok Sabha may accept or reject recommendations.

Important procedural detail: often used in MCQs and short-answer questions about time-limits and passage of financial legislation; connects to topics on legislative timelines and Speaker's certification.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
  • Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > HOW DOES THE PARLIAMENT MAKE LAWS? > p. 113
🔗 Anchor: "In the Indian Parliament, can the Rajya Sabha amend or reject a Finance Bill tra..."
📌 Adjacent topic to master
S2
👉 Rajya Sabha's limited role on Money Bills
💡 The insight

Rajya Sabha cannot initiate, amend or reject Money Bills and is limited to making recommendations.

High-yield constitutional concept for questions on parliamentary procedure and the balance of powers between Houses. It links to topics on fiscal control, the money bill certification process, and differences between ordinary, money and finance bills. Mastery enables answering direct-knowledge and comparison-type UPSC questions.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
  • Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > Special Powers of Rajya Sabha > p. 110
🔗 Anchor: "In the Indian Parliament, does the Rajya Sabha have no power to amend or reject ..."
📌 Adjacent topic to master
S2
👉 14-day return period and Lok Sabha's final decision on recommendations
💡 The insight

A Money Bill transmitted to Rajya Sabha must be returned within 14 days and Lok Sabha may accept or reject its recommendations.

Important procedural detail often tested in polity questions and MCQs about legislative timelines and outcomes. It connects to exam items on legislative procedure, presidential assent timing, and joint sittings (or their absence) for money bills.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 248
  • Indian Constitution at Work, Political Science Class XI (NCERT 2025 ed.) > Chapter 5: LEGISLATURE > HOW DOES THE PARLIAMENT MAKE LAWS? > p. 113
🔗 Anchor: "In the Indian Parliament, does the Rajya Sabha have no power to amend or reject ..."
📌 Adjacent topic to master
S2
👉 Initiation and certification of Money Bills
💡 The insight

Money Bills can be introduced only in the Lok Sabha and involve Speaker's certification as a money bill.

Crucial for questions distinguishing Money Bills from Finance Bills and ordinary bills; links to constitutional interpretation, Speaker's authority, and disputes over bill classification. Knowing initiation and certification rules helps answer questions about legislative validity and judicial review limits.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Unequal Status with Lok Sabha > p. 260
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
🔗 Anchor: "In the Indian Parliament, does the Rajya Sabha have no power to amend or reject ..."
📌 Adjacent topic to master
S3
👉 Distinction: Money Bill vs Financial/Ordinary Bill
💡 The insight

Money Bills follow a different procedure and cannot be resolved by a joint sitting, unlike ordinary or financial bills.

High-yield for constitutional law and parliamentary procedure questions; explains why certain bills bypass Rajya Sabha concurrence and links to topics on legislative supremacy and budgetary control. Mastery helps answer questions on bill classification, passage timelines, and conflict-resolution mechanisms.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > JOINT SITTING OF TWO HOUSES > p. 250
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > INTRODUCTION TO THE CONSTITUTION OF INDIA CHAP. 12 > p. 256
🔗 Anchor: "In the Indian Parliament, is there no provision for a joint sitting of both Hous..."
🌑 The Hidden Trap

The 'Finance Bill Type II' (Article 117[3]) is the hidden sibling. Unlike Money Bills and Finance Bill Type I, Type II deals with expenditure from the Consolidated Fund but does NOT include Art 110 matters. Crucially, it can be introduced in the Rajya Sabha and is treated exactly like an Ordinary Bill.

⚡ Elimination Cheat Code

Use 'Government Survival Logic'. A Money Bill stops the government's funding; if blocked, the government falls. Hence, the Rajya Sabha (permanent house) cannot have veto power. A Finance Bill involves general policy + money; blocking it doesn't immediately topple the government, so the federal check (Joint Sitting/RS power) remains intact.

🔗 Mains Connection

Mains GS-2 (Parliamentary Functioning): Link this to the 'Aadhaar Act as Money Bill' controversy. The government used the Money Bill route to bypass the Rajya Sabha's scrutiny. This question tests the theoretical basis of that controversy—why the classification matters for federalism.

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SIMILAR QUESTIONS

CAPF · 2008 · Q35 Relevance score: 5.14

Consider the following statements : 1. No money bill can be introduced in the Parliament without the recommendation of the President of India. 2. The Prime Minister appoints Finance Commission for distribution of taxes between the Union and the States. Which of the statements given above is/are correct ?

IAS · 2015 · Q27 Relevance score: 5.13

Consider the following statements : 1. The Rajya Sabha has no power either to reject or to amend a Money Bill. 2. The Rajya Sabha cannot vote on the Demands for Grants. 3. The Rajya Sabha cannot discuss the Annual Financial Statement. Which of the statements given above is/are correct?

IAS · 2003 · Q88 Relevance score: 5.06

Consider the following statements: 1. The joint sitting of the two houses of the Parliament in India is sanctioned under Article 108 of the Constitution 2. The first joint sitting of Lok Sabha and Rajya Sabha was held in the year 1961 3. The second joint sitting of the two Houses of Indian Parliament was held to pass the Banking Service Commission (Repeal) Bill Which of these statements are correct?

IAS · 2024 · Q94 Relevance score: 4.91

With reference to the Indian Parliament, consider the following statements : 1. A bill pending in the Lok Sabha lapses on its dissolution. 2. A bill passed by the Lok Sabha and pending in the Rajya Sabha lapses on the dissolution of the Lok Sabha. 3. A bill in regard to which the President of India notified his/her intention to summon the Houses to a joint sitting lapses on the dissolution of the Lok Sabha. Which of the statements given above is/are correct ?

CDS-I · 2005 · Q94 Relevance score: 4.76

Which one of the following statements is not correct ?