Article 207: Special Provisions as to Financial Bills

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(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 199 shall not be introduced or moved except on the recommendation of the Governor, and a Bill making such provision shall not be introduced in a Legislative Council:

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 a State shall not be passed by a House of the Legislature of the State unless the Governor has recommended to that House the consideration of the Bill.

Explanations

Article 207 specifies the processes for handling financial Bills in states, emphasizing the role of the Governor and placing restrictions on introducing or amending financial legislation. This article helps ensure that financial matters are introduced responsibly and with proper authority, aligning with state budgetary control.

Clause-by-Clause Explanation

Clause (1): Governor's Recommendation and Legislative Council Restrictions

This clause requires that Bills addressing financial matters (as outlined in Article 199) must have the Governor’s recommendation before introduction or amendment, and may not be introduced in the Legislative Council. This restriction reinforces the Assembly's control over financial decisions, preventing the Council from initiating or influencing financial Bills.

Clause (2): Exceptions to Financial Classification

This clause clarifies that certain matters, such as fines or fees for services, do not qualify a Bill as a financial Bill, ensuring only substantive financial legislation is restricted by Article 207.

Clause (3): Governor’s Final Recommendation for Expenditures

Bills that require spending from the Consolidated Fund must receive the Governor’s recommendation before passage. This safeguard ensures the state’s executive branch assesses all fiscal implications before committing funds.

Real-Life Examples

  • In 2021, the Rajasthan Assembly needed the Governor’s recommendation to pass a Bill on increased healthcare spending from the Consolidated Fund, reflecting Article 207’s emphasis on executive involvement in major expenditures.
  • The Karnataka Legislative Assembly, in introducing a Bill to increase agricultural grants, followed Article 207 procedures to secure the Governor’s approval.

Historical Significance

Article 207 reflects practices from the British Parliamentary system, where financial authority rests with elected representatives, with oversight from the Governor as the executive representative. This system emphasizes responsible state financial governance and aligns with the Constitution’s principles of federal oversight and accountability.

Legislative History

Originally introduced as Article 182 in the Draft Constitution, Article 207 was debated and adopted on June 10, 1949. Dr. B.R. Ambedkar proposed amendments ensuring that the Legislative Council could not introduce or amend financial legislation, and reinforced the Governor's authority in approving such legislation. These provisions were adopted to enhance the Assembly’s control over financial matters, centralizing budgetary decisions within the lower house.

Debates and Deliberations

In Constituent Assembly discussions, members emphasized the need for Assembly control over finances. Dr. Ambedkar argued that the Governor’s recommendation should be essential to ensure accountability in financial Bills, and members agreed that restricting the Legislative Council’s power to introduce financial Bills would streamline fiscal responsibilities.

References

  • The Constitution of India, Article 207, outlining procedures for financial Bills in state legislatures.
  • Constituent Assembly Debates (1949) on the role of the Governor in financial legislation.
  • Journal of Indian Constitutional Law, analysis of Article 207’s implications for state financial governance.

Frequently Asked Questions

  • Why does Article 207 restrict financial Bills to the Assembly? This restriction ensures that financial decisions remain within the elected Assembly, aligning with principles of fiscal accountability.
  • What role does the Governor play under Article 207? The Governor must recommend any Bill that involves spending from the Consolidated Fund before it can be passed by the Assembly, ensuring executive oversight.
  • Are all Bills related to money considered financial Bills under Article 207? No, fines, fees, and other non-substantial monetary matters are not classified as financial Bills under this Article.
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