Money Bills


  • In the backdrop of several notable cases, including the decisions to strike down the recent electoral bond scheme earlier this month and upholding the Aadhaar Act in 2018, the Supreme Court has been asked to clarify a key question that what constitutes a money Bill.

What is a Money Bill?

  • Generally it has been argues in recent times that money Bills provide a fast-tracked option for the enactment of laws by Parliament.
  • However, Article 110 of the Indian Constitution deals with money Bills.
  • A bill, which in the opinion of the Lok Sabha Speaker deals with taxation or the appropriation of public funds in the Consolidated Fund of India or the Contingency Fund is considered as a money Bill.
  • In normal sense, both the Lok Sabha and the Rajya Sabhamust pass a Bill before it can become law under Article 107 of the Constitution.
  • However, under Article 109, a Bill which is introduced as a “money Bill” only requires assent from the Lok Sabha and the Rajya Sabha merely has 14 days to consider the Bill and return it with recommendations.
  • The Lok Sabha may either accept or reject the recommendations suggested by the Rajya Sabha and enact the money Bill into law.

Can any Bill be called a money Bill?

  • Article 110 states that a Bill can be designated as a money Bill if it exclusively deals with certain subjects, like taxation, financial obligations of the government of India, the consolidated fund or contingency fund of India, or “any matter incidental” to the subjects listed in the Article.
  • It also states that the Speaker of the Lok Sabha will have the final say on deciding whether a Bill is a money Bill or not.
  • According to the Ministry of Finance, all revenues received, loans raised and all moneys received by the Government in repayment of loans are credited to the Consolidated Fund of India and all expenditures of the Government are incurred from this fund.
  • Likewise, the Contingency Fund enables the Government to meet unforeseen expenditure, which cannot wait for the approval of the Parliament.
  • For meeting such exigencies, advances are made to the executive from the Contingency Fund which are subsequently reported to the Parliament for recoupment of the Contingency fund from the Consolidated Fund of India.
  • The issue has assumed significance because Parliament has recently enacted several ‘Finance Acts’ through the money Bill route which contains amendments to laws such as the Prevention of Money Laundering Act, 2002 (PMLA), the Foreign Contributions (Regulation) Act, 2010, and the Representation of the People Act, 1951.

When have money Bills been challenged in the Supreme Court?

  • The Supreme Court upheld the Aadhaar(Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, as constitutional in September 2018.
  • The petitioners had claimed that parts of the Aadhaar Act were passed as a money Bill, despite containing provisions which were unrelated to the subjects listed under Article 110.
  • Justice Ashok Bhushan, in his concurring judgment, held that the main aim of the Act was to provide subsidies and benefits to the people.
  • Since this involves expenditure from the Consolidated Fund of India, the Aadhar Act was validly passed as a money Bill.
  • However, he also noted that the Speaker’s decision on whether a Bill is a money Bill or not, despite being “final” as per the constitution, can still be subject to judicial review.
  • He said if the court cannot assess whether a money Bill fulfils the conditions of Article 110 following the Speakers’ decision, this would amount to the court “permitting constitutional provisions to be ignored and also to be bye-passed”.
  • However then Justice DY Chandrachud authored a dissenting opinion in the case by holding that the Aadhaar act was unconstitutional.
  • He said on the money Bill question the passage of the Aadhaar Act as a Money Bill is an abuse of the constitutional process.
  • He also pointed out that the Act specifically mentioned that Aadhaar can be used as identification “for any purpose”, which goes beyond the scope of what can be passed through a money Bill under Article 110.
  • Justice Chandrachud also highlighted how passing an ordinary Bill as a money Bill would limit the role of the Rajya Sabha in lawmaking which is a necessary part of ensuring executive accountability.

The post Money Bills appeared first on Vajirao IAS.


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