Article 117 of Constitution of India

Article 117 of the Constitution of India is a vital provision dealing with the special procedures applicable to financial Bills in the Parliament. Financial Bills are those that concern the country’s finances such as taxation, borrowing, expenditure, and appropriation of funds. 

Given the importance of money and financial matters in governance, the Constitution carves out a distinct procedure to ensure executive oversight and parliamentary control. This article explores the meaning, scope, and implications of Article 117, explaining its provisions clearly and systematically.

Constitutional Context of Financial Bills

In India’s parliamentary democracy, financial matters require special treatment because they affect the nation’s resources and the common citizen directly. The Constitution distinguishes between three types of financial legislation:

• Money Bills (Article 110): These deal exclusively with certain matters like imposition or abolition of taxes, appropriation of funds, loans, and guarantees.
• Financial Bills (Article 117): These include Money Bills and also other Bills related to finances that may not qualify as Money Bills but deal with expenditure or revenue.
• Ordinary Bills: Bills not dealing with finances or money.

This distinction recognises the primacy of the Lok Sabha—the directly elected house—in financial legislation, with the Rajya Sabha playing a more limited role in such matters.

Text and Structure of Article 117

Article 117 is divided into three clauses:

• Clause (1) governs Bills or amendments relating to matters listed in Article 110(1)(a) to (f).
• Clause (2) explains what is not covered as a financial Bill.
• Clause (3) deals with Bills involving expenditure from the Consolidated Fund of India.

The article reads as follows:

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 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 or amendment shall not be deemed to make provision for any of the matters aforesaid 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.

(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.

Clause (1): President’s Recommendation and Lok Sabha Exclusivity

Clause (1) of Article 117 refers to Bills or amendments concerning the financial matters specified in Article 110(1)(a) to (f). These matters broadly include:

• Imposition, abolition, remission or alteration of taxes
• Borrowing by the government
• Appropriation of funds from the Consolidated Fund of India
• Declaration of expenditure charged on the Consolidated Fund
• Receipt and custody of funds
• Audit of accounts of the Union and States

The clause mandates two key requirements:

• Such Bills or amendments cannot be introduced or moved without the recommendation of the President.
• These Bills cannot be introduced in the Rajya Sabha (Council of States); they must be introduced only in the Lok Sabha.

Exception: Amendments that reduce or abolish any tax do not require the President’s recommendation.

This clause reinforces the supremacy of the Lok Sabha in financial legislation, reflecting the house’s direct electoral mandate. It also ensures that the executive, represented by the President, has control over when such financial Bills are introduced, preventing unauthorised fiscal measures. 

Clause (2): What Does Not Constitute a Financial Bill

Clause (2) provides important clarifications to avoid an overly broad application of the financial Bill procedure. It states that a Bill or amendment will not be treated as a financial Bill merely because it:

• Imposes fines or other pecuniary penalties.
• Demands or provides for fees for licences or services rendered.
• Provides for the imposition, abolition, remission, alteration, or regulation of any tax by any local authority or body for local purposes.

This clause ensures that minor regulatory or local fiscal matters are dealt with under the ordinary legislative procedure and are not subjected to the special, more restrictive financial Bill process.

Clause (3): Bills Involving Expenditure from the Consolidated Fund

Clause (3) extends the President’s recommendation requirement to any Bill which, upon enactment, would involve expenditure from the Consolidated Fund of India.

The important aspects of this clause are:

• No Bill involving such expenditure can be passed by either House without the President’s recommendation.
• This applies even if the Bill is not a Money Bill or a financial Bill as per Clause (1).

This clause safeguards public funds by ensuring that all Bills authorising expenditure require the executive’s prior approval, maintaining fiscal discipline and parliamentary accountability.

Legislative Procedure for Financial Bills

The procedure for financial Bills under Article 117 can be summarised as follows:

• Introduction: Financial Bills are introduced only in the Lok Sabha and only after the President’s recommendation.
• Passage: After introduction, these Bills follow the ordinary legislative process except for some restrictions on the Rajya Sabha’s powers, especially in the case of Money Bills.
• Role of Rajya Sabha: The Rajya Sabha may recommend amendments to financial Bills (other than Money Bills), but the Lok Sabha may accept or reject them.
• Joint Sitting: If there is disagreement between the two Houses on a financial Bill (other than a Money Bill), the President may summon a joint sitting under Article 108 to resolve the deadlock.
• Presidential Assent: After passage by both Houses, the Bill is presented to the President for assent, who may give assent, withhold assent, or return the Bill for reconsideration (except Money Bills, which cannot be returned).

Categories of Financial Bills

Financial Bills fall into two categories:

• Category I Financial Bills: These contain provisions specified in Article 110(1)(a) to (f). They are hybrid in nature, possessing characteristics of both Money Bills and ordinary Bills. These Bills can only be introduced in the Lok Sabha with the President’s recommendation, and the Rajya Sabha’s role is limited to recommending amendments.
• Category II Financial Bills: These Bills do not include matters in Article 110 but involve expenditure from the Consolidated Fund of India. While such Bills also require the President’s recommendation, they are treated more like ordinary Bills in terms of the Rajya Sabha’s powers.

Conclusion

Article 117 of the Constitution of India provides a robust framework for handling financial legislation. By reserving the initiation of financial Bills to the Lok Sabha with the President’s prior recommendation, it preserves the democratic and executive balance essential for fiscal governance.

The clarity brought by Article 117 regarding what constitutes a financial Bill and the special procedures it entails safeguards the country’s public finances from arbitrary legislative action. At the same time, it allows sufficient parliamentary scrutiny to maintain transparency and accountability.