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Money Bill: Meaning and Its Constitutional Provisions

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Define Money Bill

A money bill is defined in Article 110 (the Money Bill article) of the Indian Constitution. Taxation, government spending, and other financial issues are addressed in money bills. The bill is vital for Indian politics and governance since it impacts on a number of critical issues, including the Aadhar Bill and the Insolvency and Bankruptcy Bill. 


This article will go through the basics of a Money Bill in India, including its definition and how it differs from a Financial Bill (Articles 117 (1) and 117 (3)). 


What is a Bill?

A bill is a written statute that is tabled in one of the two houses of Parliament only after it has been passed by both houses and has gained the president's assent. Legislative proposals are presented in the form of bills.


Types of Bills in Indian Parliament

The types of bills in the Indian parliament give a clear understanding of the bills. Let us look at different types of bills In the Indian Parliament in this section.


Ordinary Bills

Ordinary bills are concerned with any matter other than financial subjects, according to Articles 107 and 108 of the Indian Constitution. Ordinary bill is introduced in the House of Parliament. A Minister or a Private Member introduces this measure. In the case of an ordinary bill, the President makes no suggestion. Ordinary bills can be changed or rejected by Rajya Sabha, and they can also be delayed for six months.


Under Article 111 of the Indian Constitution, it is given to the President for his approval or assent after being passed by both houses of Parliament. In the case of an ordinary bill, there is a provision for a joint sitting.

 

Money Bills

Money bills are bills that deal with financial issues such as taxation, public spending, and so on. These legislation have provisions that address all or some of the issues listed in Article 110 (the money bill article) of the Indian Constitution. This bill is only being presented in the Lok Sabha. The Minister is the only one who introduces it. Only after the President's recommendation is a money bill introduced.


The Rajya Sabha cannot amend or reject this bill. Rajya Sabha has the power to detain it for a maximum of 14 days. After passing the Lok Sabha, the money bill is sent to the President for his approval. In the case of a money measure, there is no provision for a joint sitting.

 

Financial Bill

Financial bills are those bills that are concerned with financial problems but are not money bills, according to Article 117 of the Indian Constitution. Financial bills are further divided into two categories: Financial bills A and B. Category A bills deal with any of the issues listed in sub-clauses a to f of clause 1 of Article 110 of the Indian Constitution, while Category B bills utilise funds from the Consolidated Fund of India.

 

Constitutional Amendment Bill

The Constitutional Amendment Bill is based on Article 368 of the Indian Constitution, which deals with amendments to the Constitution.

 

Ordinance Replacing Bill

This bill is being introduced in Parliament to replace an ordinance issued by the President under Article 123 of the Indian Constitution, with or without revisions.


Provisions of Money Bill

A Bill is declared to be a Money Bill if it contains solely provisions dealing with all or some of the following matters, as defined by Article 110 of the Constitution:

1. For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:

  • Any tax imposed, abolished, remitted, changed, or regulated in any way.

  • The regulation of the Government of India borrowing money or providing any guarantee, or the revision of the law governing any financial commitments undertaken or to be undertaken by the Government of India.

  • Custody of the Consolidated Fund or the Indian Contingency Fund, as well as the deposit and withdrawal of funds from such funds;

  • Appropriation of funds from the Indian Consolidated Fund.

  • Declaring an expenditure for the Consolidated Fund of India, or increasing the amount of an existing expenditure.

  • The receiving of funds for the Consolidated Fund of India or the public account of India, or the custody or distribution of such funds, or the audit of the Union or a State's accounts.

  • Any matter that is unrelated to any of the matters listed in subclauses (a) to (f).


2. A Bill shall not be deemed to be a Money Bill 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. 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.


4. There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.


The term "incidental" in the Constitution's article 110(1)(g) has broad implications. It is extensive enough to encompass not just tax rates, areas, and fields, but also the entire assessment, appeals, and revisions machinery. Finance Bills that, in addition to tax rates, contain provisions for collection machinery, etc., are certified as Money Bills in this light. A Money Bill, on the other hand, is a bill that seeks to amend or consolidate the law relating to income tax.


The presence of other incidental provisions does not disqualify such Bills from being classified as Money Bills because they primarily aim to impose, abolish, or repeal any tax. Thus, a Money Bill may contain only one section imposing a tax and several additional parts dealing with the scope, method, manner, and other elements of its imposition.


Certification of Money Bills

  • Money bill can be introduced in Lok Sabha. If there is any doubt as to whether a bill is a Money Bill or not, the Speaker's decision is definitive. When making a decision or certifying that a bill is a Money Bill, the Speaker is under no duty to consult anyone. When a Bill is submitted to Rajya Sabha and when it is given to the President for assent, the Speaker must approve and sign a certificate stating that the Bill is a Money Bill.

  • Once given, the Speaker's certificate on a Money Bill is definitive and cannot be contested.

  • A Money Bill cannot be referred to the Houses' Joint Committee.


Some Facts on Money Bill

Some facts on the provisions for money bill in India can be given as follows:

  • As an important note, the Money bill can be introduced in Lok Sabha only. Thus, the lower house has an edge over Rajya Sabha in terms of Money Bill.

  • As per the constitution, prior approval of the President is required to present such a bill.

  • The speaker decides on whether a bill is a money bill or not and certifies it.


Conclusion

Thus, in this article we have discussed the money bill in detail. In simple words the bill defined in Article 110 is called a money bill and it is different from other financial bills that come under Article 117. When Lok Sabha passes the bill and sends it to the Rajya Sabha, it cannot reject or amend the bill and thus in other words, have to accept the bill and then later the bill needs to be sent to the President for his assent after which the bill is considered as passed and becomes an act.

Last updated date: 28th Sep 2023
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FAQs on Money Bill: Meaning and Its Constitutional Provisions

1. How are Money bills passed?

A Money Bill can only be tabled in Lok Sabha if the President recommends it. It must be approved by a simple majority of all Lok Sabha members present and voting. After that, it might be forwarded to the Rajya Sabha for recommendations, which the Lok Sabha could reject if it so desires. If no such recommendations are made within 14 days, Parliament will be regarded to have passed the bill.

2. What is a money bill and an ordinary bill?

A small understanding of the money bill and the ordinary bill can be given as follows:

  • Ordinary Bill (Article 107, Article 108), this bill deals with anything that isn't related to financial subjects.

  • Money Bill (Article 110 - the money bill article) is a bill that deals with financial issues such as taxation, governmental spending, and so on.

3. Explain how a Money Bill is different from a financial bill?

All Money Bills are Financial Bills, but not all Financial Bills are Money Bills. A Money Bill, for example, is a bill that only contains measures connected to tax proposals. A Financial Bill, on the other hand, is a bill that contains provisions linked to taxation or expenditure but also covers other subjects.


The Compensatory Afforestation Fund Bill, 2015, was introduced as a Financial Bill. It establishes money under the Public Account of India and states.


Second, the procedures for passing the two legislation differ greatly. A Money Bill cannot be rejected or amended by the Rajya Sabha. A Financial Bill, on the other hand, must be approved by both Houses of Parliament.