Money Bill – Procedure of Passing of Money Bill; Difference between Money Bill, Ordinary Bill and Financial Bill

What is a Money Bill?

A Money Bill is a bill that contains provisions for taxes,money-large appropriation of funds etc. Money Bills can be introduced only in the Lok Sabha. Every Bill has to be passed by both the Houses of the Parliament but in case of Money Bill, Lok Sabha is superior to Rajya Sabha.

Under Article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:

(a) the imposition, abolition, remission, alteration or regulation of any tax;

(b) the 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;

(c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawals of moneys from any such Fund;

(d) the appropriation of moneys out of the Consolidated Fund of India;

(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;

(f) the 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; or

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

Further Article 110(2) provides that 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.

Power to decide whether a Bill is a Money Bill or not

Article 110 (3) of the Constitution of India lays down that “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”.  It is the Speaker of the Lok Sabha who decides whether a Bill is a Money Bill or not. Further, once the Speaker has certified a Bill as a Money Bill, its nature cannot be questioned in a court of law, in the Houses of Parliament, or even by the President.

Procedure for Passing of the Money Bills 

A money bill can be introduced / originated only in Lok Sabha {or in legislative assembly in case of bicameral legislature in states}.

A money bill can be introduced only on prior recommendations of the President {or governor in case of state}

Once a money bill is passed in Lok Sabha, it is transmitted to Rajya Sabha for its consideration. But Rajya Sabha has limited powers in this context. It can neither reject nor amend the money bill. It can make only recommendations and has to return the bill with or without recommendations to Lok Sabha in 14 days.

The Lok Sabha may or may not accept the recommendations of Rajya Sabha. Whether or not accepted those recommendations, thus returned bill is considered passed in both houses.

If Rajya Sabha does not return the bill in 14 days, it is deemed to have been passed by both the houses at the expiration of the 14 days in the form in which it was passed by the Lok Sabha.

President can withhold assent to money bill but cannot return it for reconsideration of the Lok Sabha.

Whether there can be a joint sitting of both the Houses in case of Money Bill

There cannot be a joint sitting of both the Houses in case of money bills. This is because opinion of Rajya Sabha is immaterial in this case.

Difference between Money Bill and Ordinary Bill

A Money Bill may only be introduced in Lok Sabha, on the recommendation of the President. However, an Ordinary Bill may be introduced in either House of the Parliament.

A Money Bill must be passed in Lok Sabha by a simple majority of all members present and voting. The Rajya Sabha has no power to reject or amend a Money Bill. However, an Ordinary Bill must be passed by both Houses by a simple majority of all members present and voting.

Difference between Money Bill and Financial Bill

In a general sense, any Bill that relates to revenue or expenditure is a Financial Bill. A Money Bill is a specific kind of Financial Bill. A Bill is deemed to be a Money Bill if it deals only with matters specified in Article 110 (1) (a) to (g). A Money Bill is certified by the Speaker as such. In other words, only those Financial Bills that carry the Speaker’s certification are Money Bills.

While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.  For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.  However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered as a Financial Bill.

Secondly, the procedure for the passage of the two bills varies significantly.  The Rajya Sabha has no power to reject or amend a Money Bill.  However, a Financial Bill must be passed by both Houses of Parliament.

Author: Law Leader

Legal Insight Is Human Right

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