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Home / Constitution of India

Constitutional Law

Money Bill

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 23-Oct-2023

Introduction

  • A Money Bill is a financial legislation that contains provisions exclusively related to revenue, taxation, government expenditures, and borrowing.
  • It forms a crucial part of the Union Budget.

Definition of Money Bill

  • Article 110 of the Constitution of India, 1950 (COI) defines money bill. It states that -
    • (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
      • (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 withdrawal 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 clause (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.

Procedure for Money Bill

  • Article 109 of the COI provides for the special procedure in respect of Money Bills. It states that -
    • (1) A Money Bill shall not be introduced in the Council of States (Rajya Sabha).
    • (2) After a Money Bill has been passed by the House of the People (Lok Sabha) it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the house of the People with its recommendations and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States
    • (3) If the House of the People accepts any of the recommendations of the council of States, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the council of States and accepted by the House of the People
    • (4) If the House of the People does not accept any of the recommendations of the council of States, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States
    • (5) If a Money Bill passed by the House of the People and transmitted to the council of States for its recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People
  • President can either accept or reject a money bill but cannot return it for reconsideration.
  • There is no provision for Joint sitting in case of money bills.

Difference between a Money Bill and Financial Bill

Money Bills

Financial Bills
    • Money bills are dealt with under Article 110 of COI.
    • Financial Bills are dealt with under Article 117 of COI.
    • The Speaker has the authority to decide whether a Bill is a money bill or not.
    • The Financial Bills do not need endorsement by the Speaker.
    • All money bills are essentially financial bills in nature.
    • All Financial Bills cannot be regarded to be money bills.
    • The President shall either give or refuse his assent to a money bill.
    • The President may also recommend reconsideration of the Financial Bill and send it back to the House.
    • There is no possibility of the joint sitting of the two Houses of Parliament.
    • The President may order a joint sitting in the event of a deadlock.

Conclusion

It is due to the special nature of the subject matter of the money bills that separate constitutional procedures have been established for the passage of money bills through the Parliament and special privileges have been vested on the House of the elected representatives of the people.