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Money Bill in the Indian Constitution

Understanding the Money Bill in India

What is a Money Bill?

In the Indian parliamentary system, a Money Bill is a specific type of legislation that deals exclusively with financial matters. These include taxation, government borrowing, expenditure from the Consolidated Fund of India, and related financial subjects. The definition and scope of a Money Bill are outlined in Article 110 of the Indian Constitution.

Money Bill - Definition under Article 110:

Article 110 of the Constitution of India defines a Money Bill. According to this article:

“A Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:”

  1. Imposition, abolition, remission, alteration, or regulation of any tax.

  2. Regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India.

  3. Custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such fund.

  4. Appropriation of moneys out of the Consolidated Fund of India.

  5. Declaration of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure.

  6. Receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money, or the audit of the accounts of the Union or of a State.

  7. Any matter incidental to any of the matters specified in sub-clauses (a) to (f).

It is important to note that a bill is not deemed to be a Money Bill merely because it includes provisions for the imposition of fines, penalties, or fees for licenses or services rendered, or because it involves taxation by local authorities for local purposes. 


Legislative Procedure for Money Bills

The legislative process for Money Bills is distinct from that of other bills:

  1. Introduction: A Money Bill can only be introduced in the Lok Sabha and only on the recommendation of the President of India. 

  2. Role of the Rajya Sabha: After passing the Lok Sabha, the Money Bill is transmitted to the Rajya Sabha for its recommendations. The Rajya Sabha must return the bill with its recommendations within 14 days. The Lok Sabha may choose to accept or reject any or all of these recommendations. If the Rajya Sabha does not return the bill within 14 days, it is deemed to have been passed by both Houses in the form passed by the Lok Sabha. 

  3. Presidential Assent: After the bill has been passed by both Houses (or deemed to have been passed), it is presented to the President, who may either give assent or withhold it. However, the President cannot return a Money Bill to the Parliament for reconsideration.


What is Not a Money Bill?

A bill is not considered a Money Bill if it includes provisions related to:

  • Imposition of fines or other pecuniary penalties.

  • Payment of fees for licenses or services rendered.

  • Taxation by local authorities for local purposes.

Even if a bill contains financial elements, if it includes non-financial provisions, it may be classified as a Financial Bill, not a Money Bill.


Significance of Money Bills

Money Bills are crucial because they deal with the financial functioning of the government. They ensure that the elected representatives in the Lok Sabha have the primary say in financial matters, reflecting the principle that the government is accountable to the people.

Certification by the Speaker

The determination of whether a bill qualifies as a Money Bill is made by the Speaker of the Lok Sabha. Article 110(3) states:

“If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.”

Furthermore, Article 110(4) mandates that when a Money Bill is transmitted to the Rajya Sabha or presented to the President for assent, it must bear the Speaker's certificate stating that it is a Money Bill. This certification is conclusive and not subject to judicial review. 

Significance and Rationale

The special procedure for Money Bills underscores the primacy of the Lok Sabha in financial matters, reflecting the principle that the elected representatives of the people should have the decisive voice in taxation and public expenditure. This mechanism ensures that financial legislation is not unduly delayed or obstructed, facilitating efficient governance.

Controversies and Judicial Interpretations

The classification of certain bills as Money Bills has been a subject of debate and judicial scrutiny. A notable instance is the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, which was passed as a Money Bill. Critics argued that the bill contained provisions beyond the scope of Article 110, thereby bypassing the Rajya Sabha's role.

In the case of Justice K.S. Puttaswamy (Retd.) v. Union of India, the Supreme Court upheld the classification of the Aadhaar Act as a Money Bill. However, in his dissenting opinion, Justice D.Y. Chandrachud emphasized that the Speaker's certification is not immune from judicial review and that misclassification of bills undermines the bicameral legislative process.

Comparison with Financial Bills

It is essential to distinguish Money Bills from Financial Bills, which are categorized under Article 117:

  • Financial Bill (I): Contains provisions related to taxation and other matters; requires the President's recommendation and can be introduced only in the Lok Sabha.

  • Financial Bill (II): Deals with expenditure from the Consolidated Fund of India but does not include taxation provisions; can be introduced in either House and does not require the President's recommendation.

Unlike Money Bills, Financial Bills require approval from both Houses and are subject to amendment by the Rajya Sabha. 

Conclusion

The concept of the Money Bill, as enshrined in Article 110 of the Indian Constitution, plays a pivotal role in the financial administration of the country. By vesting exclusive powers in the Lok Sabha for the passage of such bills, the Constitution ensures that the elected representatives have the final say in financial matters. However, the potential for misclassification and the consequent circumvention of the Rajya Sabha's role necessitate vigilant adherence to constitutional provisions and judicial oversight to uphold the integrity of the legislative process.

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