Eleanor Finch
Money Bills are a type of legislation in India that deals with financial matters such as taxation, public expenditure, and public debt. They are defined in Article 110 of the Indian Constitution, which outlines the conditions under which a bill can be considered a Money Bill. These bills are introduced in the Lok Sabha and require the President's approval. The Rajya Sabha does not have the authority to reject or amend Money Bills but can make non-binding recommendations for changes. The Speaker of the Lok Sabha has the authority to certify a bill as a Money Bill, and their decision is final. The classification of certain bills as Money Bills has been controversial, with concerns raised about the potential bypassing of Rajya Sabha scrutiny and the inclusion of non-financial clauses.
| Characteristics | Values |
|---|---|
| Definition | A Money Bill is a draft law introduced in the Lok Sabha. |
| Introduction | A Money Bill shall be introduced only in the Lok Sabha. |
| Approval | The President's approval is required before introducing a Money Bill in Lok Sabha. |
| Recommendation | The Rajya Sabha has only 14 days to provide its recommendations on such a Bill. |
| Scrutiny | The Rajya Sabha does not have the authority to reject a Money Bill. |
| Certification | The Speaker of the Lok Sabha has the authority to certify a bill as a Money Bill. |
| Constitution | Article 110 of the Indian Constitution defines Money Bill. |
| Types of Bills | Money Bill, Financial Bill, Ordinary Bill, and Constitution Amendment Bill. |
| Concerns | The bypassing of Rajya Sabha scrutiny potentially results in a deficit of comprehensive deliberation and thorough examination of proposed statutes. |
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What You'll Learn
Money Bills and the Indian Bicameral Legislature
The Indian Constitution defines a Money Bill in Article 110, which also outlines the conditions under which a bill cannot be considered a money bill. Money Bills are a type of financial bill, but not all financial bills are Money Bills. Money Bills are concerned with financial matters like taxation, public expenditure, and public debt. They are introduced in the Lok Sabha and require the President's prior approval.
The Rajya Sabha, the upper house of the Indian Parliament, has a limited role in the Money Bill process. It cannot reject or amend a Money Bill, and only has 14 days to provide non-binding recommendations for changes. This has led to concerns about the potential bypassing of the Rajya Sabha's scrutiny and the erosion of India's bicameral legislature, as the intended equilibrium between the two houses may be compromised.
The Speaker of the Lok Sabha has the authority to certify a bill as a Money Bill, and this decision is final and binding for both houses. However, there have been allegations of a partisan role by the Speaker in the certification process, and concerns about the potential misuse of this constitutional power.
The classification of certain bills as Money Bills has been controversial, with petitions challenging the government's use of the Money Bill route for passing amendments. The Aadhaar Act of 2016 and the Finance Act of 2017 are notable examples, where the inclusion of non-financial clauses in Money Bills has been criticised as a potential misapplication of this specialised legislative mechanism.
The judiciary is tasked with reconciling respect for parliamentary procedures with ensuring constitutional compliance, and a seven-judge Supreme Court bench is expected to provide clarity on the interpretation of Article 110 and the extent of the Money Bill provision.
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The role of the Rajya Sabha
The Rajya Sabha, the upper house of the Indian Parliament, plays a limited role in the passage of Money Bills. A Money Bill is a draft law introduced in the Lok Sabha, the lower house of Parliament, that deals with financial matters such as taxation, government borrowing, and expenditure.
The Rajya Sabha does not have the authority to initiate, amend, or reject a Money Bill. Its role is relegated to making non-binding recommendations, which the Lok Sabha can choose to accept or reject. The Rajya Sabha must return the Bill to the Lok Sabha within 14 days; if it fails to do so, the Bill is deemed to have been passed by both houses. This advisory role of the Rajya Sabha has been criticised for curtailing its legislative function and potentially undermining democratic representation.
The final authority to determine whether a Bill qualifies as a Money Bill rests with the Speaker of the Lok Sabha, as outlined in Article 110 of the Indian Constitution. This classification is significant because it allows the Bill to bypass the Rajya Sabha's scrutiny, as seen in the case of the Aadhaar Act in 2016.
While the Rajya Sabha's role in Money Bills is restricted, it does have the authority to deal with other types of financial bills, such as Financial Bills (I) outlined in Article 117(1) of the Indian Constitution. In such cases, the Rajya Sabha can choose to reject or propose amendments to the Bill.
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Money Bills and taxation
Money Bills are a crucial aspect of India's governance and financial management. They are defined in Article 110 of the Indian Constitution, which also outlines the conditions under which a bill cannot be considered a Money Bill. These bills are concerned with financial matters, including taxation and public expenditure. They empower the Union government to impose, abolish, or alter taxes, thereby directly influencing revenue collection and taxation policies.
The Indian Parliament is authorised by the Constitution to pass four types of bills: Money Bills, Financial Bills, Ordinary Bills, and Constitution Amendment Bills. Money Bills are a type of Financial Bill, but not all Financial Bills are Money Bills. The difference lies in their scope and the procedures for their passage. While Money Bills exclusively deal with matters related to taxes, revenues, or expenditures, Financial Bills may cover other matters in addition to taxation and expenditure.
A Money Bill is introduced in the Lok Sabha, the lower house of Parliament, and it requires the prior approval of the President. The Rajya Sabha, the upper house, does not have the authority to reject a Money Bill. It can only suggest revisions, which must be returned to the Lok Sabha within 14 days. After the President's assent, a Money Bill becomes an Act and is published in the Indian Statute Book.
The Speaker of the House of the People plays a crucial role in certifying a bill as a Money Bill, and their decision is final. The Speaker's endorsement is required when transmitting the bill to the Council of States and when presenting it to the President for assent. The passage of the Aadhaar Act in 2016 as a Money Bill raised constitutional questions and sparked discussions about the classification of Money Bills.
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Money Bills and the Consolidated Fund of India
Money bills are a type of legislation that deals with financial matters such as taxation, public expenditure, and public debt. They are defined in Article 110 of the Indian Constitution, which outlines the conditions under which a bill can be considered a money bill. Money bills are crucial for Indian governance as they cover important issues like the Aadhar Bill and the Insolvency and Bankruptcy Bill.
Article 110 specifies that a money bill contains 'only' provisions related to one or more of the following six matters:
- Taxation: This includes the imposition, abolition, remission, alteration, or regulation of any tax.
- Borrowing by the government: It covers the regulation of the government's borrowing of money or the issuance of guarantees.
- Custody of the Consolidated Fund or Contingency Fund: It deals with the management of these funds, including the payment into and withdrawal of money.
- Appropriation from the Consolidated Fund: This involves allocating money from the Consolidated Fund of India for specific purposes.
- Expenditure charged on the Consolidated Fund: It includes declaring certain expenditures to be charged to the Consolidated Fund and increasing the amount of such expenditures.
- Receipt on account of the Consolidated Fund or public account: This relates to the receipt and custody of money into these funds.
The Consolidated Fund of India is the primary fund of the government, and money bills are closely associated with it. The fund is a critical component of India's financial system, and money bills play a crucial role in managing the country's finances.
Money bills follow a specific procedure for passage in Parliament. They can only be introduced in the Lok Sabha (the lower house) and require the President's recommendation. A minister must present and pass a money bill, and the Speaker of the Lok Sabha has the authority to certify it as a money bill. The Rajya Sabha (upper house) does not have the power to reject or amend money bills; instead, it can only provide non-binding recommendations for changes within 14 days. The Lok Sabha can then choose to accept or reject these recommendations. This process highlights the Lok Sabha's greater authority in financial matters.
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The Money Bill controversy
The Indian Constitution, under Article 110, defines a Money Bill as a bill that deals with financial matters like taxation and public expenditure. It is introduced in the Lok Sabha, the lower house of the Parliament, and is concerned with issues such as money receipt and expenditure, tax laws, laws governing government borrowing and expenditure, and the prevention of black money. Although all Money Bills are Financial Bills, not all Financial Bills are Money Bills.
The controversy arose in the case of KS Puttaswamy v Union of India, where the question was whether the Aadhaar Act was rightly passed as a Money Bill. The majority held that it was indeed a Money Bill, while Justice Chandrachud's dissenting judgment disagreed. The dissenting opinion argued that the majority view reduced the Rajya Sabha's role to a nullity, enabling any government with a majority in the Lok Sabha to bypass the Rajya Sabha.
The controversy highlights a crucial constitutional question: whether the Supreme Court can review the Speaker's certificate classifying a bill as a Money Bill. While the Indian Constitution grants the Speaker's decision finality, some commentators argue that it is "final" for the two Houses of Parliament and not the Supreme Court. This interpretation is supported by precedents in India and other countries, such as the Supreme Court of Pakistan, which struck down enactments on the ground that they were not Money Bills.
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Frequently asked questions
A Money Bill is a type of legislation that deals with financial matters such as taxation, public expenditure, and public debt.
Money Bills are defined in Article 110 of the Indian Constitution. They deal 'only' with financial matters and are introduced directly in the Lok Sabha, the lower house of the Parliament. The Rajya Sabha does not have the authority to reject a Money Bill, but it can make non-binding recommendations for changes.
A Money Bill is a draft law introduced in the Lok Sabha. After it is passed by the Lok Sabha, it is transmitted to the Rajya Sabha for consideration. The Rajya Sabha has 14 days to provide its recommendations, which the Lok Sabha can accept or reject. Once the Lok Sabha passes a Money Bill, it becomes an Act and is published in the Indian Statute Book after receiving the President's assent.
There have been controversies over the classification of certain bills as Money Bills, such as the Aadhaar Act and the Finance Act of 2017. Petitions have been filed challenging the government's use of the Money Bill route for passing amendments, arguing that it may violate Article 110 of the Constitution and bypass the Rajya Sabha's scrutiny.
