Understanding Money Bill

• Context (TH): In recent years, the government has come under heavy criticism for rushing through Parliament contentious legislations using the Money Bill route. In this light, it is important to understand the concept of Money Bill.

What is a Money Bill?

• Money bills are specific legislation introduced under Article 110 of the Indian Constitution.
• These bills deal primarily with financial matters and taxation.
• These are considered government bills. 
• It can be introduced by a Minister or even a Private Member.

What constitutes a Money Bill?

A Bill is considered a Money Bill if it deals only with the following matters:

• The imposition, abolition, remission, alteration, or regulation of any tax.
• The regulation of:
  • Borrowing of money
  • Giving guarantee by the Government of India
  • Amendment of the law with respect to any financial obligations undertaken/ to be undertaken by GoI.
• Custody of the Consolidated Fund or the Contingency Fund of India. The payment of money into or withdrawal of money from any such Fund
• Appropriation of money out of the Consolidated Fund of India.
• Declaring any expenditure charged on the Consolidated Fund of India or the increasing amount of any such expenditure.
• Receipt of money on account of the Consolidated Fund of India or the public account of India.

What does not constitute a Money Bill?

• If a bill provides for:
  • Imposition of fines/pecuniary penalties,
  • Payment of fees for licences or services rendered
  • Imposition, abolition, alteration, regulation of tax by local authorities or for local purposes.

Procedure for Passage of Money Bill in Parliament

• A Money Bill cannot be introduced in Rajya Sabha. It can only be introduced in Lok Sabha with the prior recommendation of the President.
• The Rajya Sabha cannot reject or amend a money bill. It can only make recommendations. The Lok Sabha can accept/reject all or any of the recommendations of Rajya Sabha.
• When the Lok Sabha passes a Money Bill and sends it to the Rajya Sabha, the Rajya Sabha must return it within 14 days.
• If the Rajya Sabha does not return a Money Bill within 14 days, it is deemed passed by both the Houses.
• A Money Bill cannot be referred to a Joint Committee of the Houses.
• President can either give his assent to the bill or withhold his assent. He cannot return the Money Bill for reconsideration of the Houses.