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?

Updated 11 Apr 2026 · From UPSC Prelims GS Paper I 2015, Q36

Contents16
UPSC Prelims GS2015Indian Polity
  1. A1 only
  2. B1 and 2 only
  3. C2 and 3 only
  4. D1, 2 and 3
Show answer

Answer: (B) 1 and 2 only

As per Laxmikant (Chapter 22 - Parliament, pg 283-286):

Statement 1 is correct:

Under Article 109, a Money Bill can only be introduced in Lok Sabha.

After Lok Sabha passes it, it goes to Rajya Sabha, which has only 14 days to return it with recommendations.

Rajya Sabha CANNOT reject or amend a Money Bill — it can only suggest changes, and Lok Sabha is free to accept or reject those suggestions.

This gives Lok Sabha clear supremacy in financial matters.

Statement 2 is correct:

Demands for Grants are presented only to Lok Sabha and only Lok Sabha can vote on them.

This is because under Article 113, the power to grant or refuse demands for expenditure lies exclusively with Lok Sabha.

Rajya Sabha has no role in this process at all.

Statement 3 is INCORRECT — this is the trap:

While Rajya Sabha cannot vote on Demands for Grants, it CAN discuss the Annual Financial Statement (the Budget).

The Budget is laid before BOTH Houses of Parliament, and both Houses discuss it.

The distinction is: Rajya Sabha can DISCUSS the budget but cannot VOTE on the demands for grants or reject/amend money bills.

Answer: 1 and 2 only.

Key distinction to remember:

Rajya Sabha can DISCUSS the budget, but CANNOT vote on Demands for Grants or reject/amend Money Bills.

Why this was asked

Article 109 gives Lok Sabha exclusive power over Money Bills - Rajya Sabha can only recommend changes within 14 days, with no power to reject or amend them.

The trap is Statement 3: Rajya Sabha can discuss the Annual Financial Statement (Budget) but cannot vote on Demands for Grants - students often confuse discussion rights with voting powers.

Money Bills Under Article 109

Indian Polity Money Bill Article 109

Money Bills: Definition, Procedure & Rajya Sabha's Limited Role

Must know

Money Bills can only be introduced in Lok Sabha under Article 109

Rajya Sabha has 14 days to return Money Bills with recommendations only

Rajya Sabha cannot reject or amend Money Bills - only suggest changes

Good to know

Speaker of Lok Sabha decides whether a bill is a Money Bill

Constitutional Framework

Article 109 establishes Lok Sabha's supremacy in financial matters by restricting Money Bills to the lower house. This ensures the directly elected chamber controls government spending and taxation.

Money Bill Procedure

%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
  s1["`**Introduction in Lok Sabha**
Money Bill introduced only in Lok Sabha with President's recommendation`"]
  s2["`**Lok Sabha Passes**
After discussion and voting, Lok Sabha passes the Money Bill`"]
  s3["`**Transmitted to Rajya Sabha**
Bill sent to Rajya Sabha for recommendations within 14 days`"]
  s4["`**Rajya Sabha's Limited Role**
Can only suggest changes, cannot reject or amend the bill`"]
  s5["`**Back to Lok Sabha**
Lok Sabha may accept or reject Rajya Sabha's recommendations`"]
  s6["`**Presidential Assent**
Bill sent for President's assent after Lok Sabha's final decision`"]
  s1 --> s2
  s2 --> s3
  s3 --> s4
  s4 --> s5
  s5 --> s6

Powers Comparison

Aspect

Lok Sabha

Rajya Sabha

Money Bill Introduction

Exclusive power

No power

Money Bill Amendment

Full power

Cannot amend

Money Bill Rejection

Can reject

Cannot reject

Time Limit

No time limit

14 days only

Final Decision

Binding

Only recommendations

Exam traps

Trap: Rajya Sabha can discuss Money Bills but cannot amend or reject them

Confusion: 14-day limit applies only to Rajya Sabha, not Lok Sabha

Error: Some think Rajya Sabha can delay Money Bills indefinitely - it cannot

Demands for Grants Under Article 113

Indian Polity Demands for Grants Article 113

Demands for Grants: Lok Sabha's Exclusive Voting Power

Must know

Article 113 gives exclusive power to vote on Demands for Grants to Lok Sabha only

Rajya Sabha has no role in voting on government expenditure demands

Good to know

Demands cover all government ministries and departments for the financial year

Constitutional Basis

Article 113 ensures that only the directly elected house controls government spending. This reflects the principle that those who represent taxpayers directly should decide how their money is spent.

Key Features

Ministry-wise presentation: Each ministry presents its expenditure demands separately

Voting mechanism: Lok Sabha can reduce, reject, or approve each demand

No increase power: Parliament cannot increase any demand beyond government's proposal

Guillotine procedure: Unvoted demands are deemed approved at 6 PM on the last day

Cut motions: Members can propose reductions through policy, economy, or token cut motions

Parliamentary Powers on Demands

Power

Lok Sabha

Rajya Sabha

Reason

Vote on Demands

Yes

No

Article 113 - direct representation

Discuss Demands

Yes

No

Exclusive to Lok Sabha

Propose Cut Motions

Yes

No

Voting house only

Reduce Demands

Yes

No

Financial control power

Exam traps

Key distinction: Rajya Sabha cannot even discuss Demands for Grants - completely excluded

Trap: Don't confuse with Annual Financial Statement which both houses can discuss

Error: Parliament cannot increase demands - only reduce, reject, or approve

Annual Financial Statement (Budget)

Indian Polity Annual Financial Statement

Annual Financial Statement: Discussion vs Voting Powers

Must know

Both houses can discuss the Annual Financial Statement (Budget) under Article 112

Key distinction: Discussion ≠ Voting - Rajya Sabha can discuss but not vote

Good to know

Budget laid before both Lok Sabha and Rajya Sabha simultaneously

Constitutional Provision

Article 112 requires the Annual Financial Statement to be laid before both houses. This allows both chambers to debate government's financial policies, even though only Lok Sabha controls spending decisions.

Budget Powers: Discussion vs Decision

Activity

Lok Sabha

Rajya Sabha

Constitutional Basis

Budget Discussion

Yes

Yes

Article 112 - both houses

Vote on Demands

Yes

No

Article 113 - Lok Sabha only

Money Bill Voting

Yes

No

Article 109 - Lok Sabha supremacy

Policy Critique

Yes

Yes

Parliamentary oversight role

Financial Control

Yes

No

Direct representation principle

Rajya Sabha's Role in Budget

Can discuss: Overall budget priorities, policy directions, and government's financial approach

Can debate: Revenue collection methods, deficit levels, and economic implications

Can question: Ministers about budget allocations and policy rationale during discussion

Cannot vote: On any specific demand for expenditure or money bill provisions

Exam traps

Major trap: Statement 3 in this question - Rajya Sabha CAN discuss Annual Financial Statement

Confusion: Discussion rights ≠ Voting rights - separate these concepts clearly

Error: Thinking budget discussion is limited to Lok Sabha only

Financial Supremacy of Lok Sabha

Indian Polity Lok Sabha Rajya Sabha

Why Lok Sabha Has Financial Supremacy: Constitutional Logic

Must know

Direct election gives Lok Sabha exclusive control over taxation and spending

Westminster model principle: those who pay taxes decide how they're spent

Good to know

Rajya Sabha represents states, Lok Sabha represents people directly

Democratic Principle

Financial supremacy flows from direct representation - Lok Sabha members face voters directly for taxation and spending decisions, while Rajya Sabha members are elected by state legislatures.

Lok Sabha's Financial Powers

# Financial Supremacy
## Money Bills
- Exclusive introduction
- Final decision power
- 14-day limit for RS
## Budget Control
- Demands for Grants
- Cut motions
- Appropriation Bills
## Taxation
- New tax proposals
- Tax rate changes
- Revenue measures
## No-Confidence
- Against government
- Financial accountability
- Lok Sabha exclusive

Financial vs Non-Financial Matters

Type of Bill

Lok Sabha Power

Rajya Sabha Power

Reason

Money Bills

Complete control

14-day recommendations only

Direct representation

Financial Bills

Final say in deadlock

Equal initially, then LS wins

Taxation authority

Ordinary Bills

Equal power

Equal power

General legislation

Constitutional Amendments

Equal power

Equal power

Structural changes

Exam traps

Remember: Financial supremacy is limited to money matters - not all legislation

Distinction: Equal powers in ordinary bills, LS supremacy only in financial bills

Principle: Direct election = financial control, indirect election = deliberative role