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What is a Money Bill? What is the process to pass it in the Parliament?

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Published on: August 11,2021 16:15 IST

By Nirupam Deo

Introduction

The Supreme Court of India by 4:1 majority dissolved the Review Petition which challenged the Aadhar Card Verdict. The rationale given for the Judgement was cursory and almost hastened. This brought about a huge outcry by the opposition and the Public.

The Government instituted Insurance and Credit Guarantee Corporation (Amendment) Bill in Rajya Sabha. It is contemplated to be made a part of the Money Bill for sheltered Businesses.

The Deposit Insurance Credit Guarantee Corporation Bill gets passed by the Cabinet. It will allow the depositors of problematic lenders to be accredited to an amount up to 5 Lakhs within a term of 90 days.

This Bill will fall under the dimensions of Money Bill. The Bill has been knotted with anticipation of the betterment of Business in India.

What is a Money Bill?

The Money Bill is introduced in Article 110 of the Constitution of India. It asserts any Bill shall be pronounced as Money Bill if it has following characteristics:

  • The obtrusion, termination, remission, suspension or directing of any tax.
  • The management of the acquisition of money or the giving of any assurance by the government of India, or the modification of the law upsetting any financial obligations undertaken or to be attempted by the government of India.
  • The supervision of the consolidated fund or the contingency fund of India, the expenditure of money into or the departure of money from any such fund.
  • The allowance of money out of the consolidated fund of India.
  • The revelation of any expenditure to be expenditure charged on the consolidated fund of India or the increasing of the quantity of any such expense.
  • The certificate of money on account of the consolidated fund of India or the public account of India or the supervision or question of such money or the audit of the accounts of the union or a state.
  • Any matter secondary to any of the courses specified in sub-clauses (a) to (f) of Article 110.

Thus, Money Bill is a type of Bill which is concerned with expenditure, income and other financial matters of the Government. Money Bill is connected with Borrowings, Taxes, Expenditure of Money, Audits and Accounting, Consolidated and Contingency Fund of India

A Bill shall not be considered to be a Money Bill by explanation only that it furnishes for the imposition of fines or other pecuniary liabilities, or the need or expenditure of fees for licences or fees for assistance provided, or by reason that it provides for the imposition, dissolution, remission, reversal or restriction of any tax by any regional authority or body for local objectives.

What is the consolidated fund of India?

Consolidated Fund of India is the most crucial of all Government accounts. Earnings earned by the Government and payments made by it, eliminating the extraordinary items, are part of the Consolidated Fund.

This fund was comprised under Article 266 (1) of the Constitution of India. All earnings received by the Government by means of Direct Taxes and Indirect Taxes, money leased and certificates from loans given by the Government ebb into the Consolidated Fund of India.

All government expense is made from this account, except outstanding commodities which are fulfilled from the Contingency Fund or the Public Account. Grandly, no money can be relinquished from this fund without the Parliament’s approval.

What is the Contingency fund of India?

The Contingency Fund of India is the crisis fund for the Nation. Composed under Article 267(1) of the Indian Constitution, the Contingency Fund of India is utilized at a time when there is a catastrophe in the nation — a natural calamity, for instance — and money is obliged to deal with it. The Union government has its contingency fund with a oeuvre of Rs 500 crore.

In 2005, the amount of the reserve was raised from Rs 5 crore to Rs 500 crore. States can also opt to retain their Contingency Funds.

The Contingency Fund of the Union government is at the disposal of the President of India, who discharges the reserves at the petition of the Union Cabinet, which later gets clearance from Parliament. Parliament approval is crucial.

After the crisis has been handled with, the reserve is repaid to its full quantity of Rs 500 crore. This needed money comes from the Consolidated Fund of India.

What are the Characteristics of a Money Bill?

  • It deals with taxation, expenditure and credits of the union government, consolidated funds etc.
  • It are often introduced in Lok Sabha only.
  • Prior recommendation by the President is mandatory.
  • Only a minister is competent to introduce and pass the cash Bill.
  • A money Bill has got to be certified by the Speaker.
  • Rajya Sabha cannot amend the Bill. It can only recommend amendments.
  • Within 14 days, Rajya Sabha has got to return the Bill to Lok Sabha.
  • The absolute powers are vested in Lok Sabha.
  • No provisions regarding Joint Committee.
  • Money Bill may be a subset of monetary Bill.

What are the different types of Money Bill?

Money Bills can be of two types:

  • Appropriation Bill

The Appropriation Bill is mentioned in Article 114 of the Constitution of India.

This approves the Government to use Consolidated Fund for a Financial year. It reads as

114. (1) As soon as could also be after the grants under Article 113 are made by the House of the People, there shall be introduced a Bill to supply for the appropriation out of the Consolidated Fund of India of all moneys required to meet-

(a) the grants so made by the House of the People;

(b) the expenditure charged on the Consolidated Fund of India but not exceeding, in any case, the quantity shown within the statement previously laid before Parliament.

(2) No amendment shall be proposed to any such Bill in either House of Parliament which can have the effect of varying the quantity or altering the destination of any grant so made or of varying the quantity of any expenditure charged on the Consolidated Fund of India, and therefore the decision of the person presiding on whether an amendment is inadmissible under this clause shall be final.

(3) Subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by-law gone by the provisions of this article.”

Thus in any case the Government needs money for a particular Financial Year’s expenditure, it has to go through making Appropriation Bills.

The Appropriation Bill is a key component which lays down the permission to expend the Government Funds. It was enacted for the sole reason of relinquishing money from the Government Funds when the need arises. It doesn’t require the authorization of Rajya Sabha. It deals with the whole expenditure needs of the Government.

  • Finance Bill

A Finance Bill may be a Money Bill as defined in Article 110 of the Constitution.

The proposals of the govt for levy of latest taxes, modification of the prevailing Tax structure or continuance of the prevailing tax structure beyond the amount approved by Parliament are submitted to Parliament through this Bill.

The Finance Bill is amid a Memorandum containing explanations of the provisions included in it. The Finance Bill are often introduced only in Lok Sabha.

However, the Rajya Sabha can recommend amendments to the Bill. The Bill has to be passed by the Parliament within 75 days of its introduction.

The Finance Bill is introduced in Lok Sabha right after the presentation of the Union Budget. This is done to ensure that every type of expenditure that is possible in a particular Financial Year are taken care of. All Finance Bills are Money Bills but all Money Bills aren’t Finance Bills.

What is the Procedure to make a Money Bill an Act?

A Money Bill has to through the following procedure to become an Act:

  • First Reading

This is the first step towards the Money Bill to become an Act. The Money Bill is introduced in the Lower House (Lok Sabha), the Money Bill cannot be introduced into the Higher House (Rajya Sabha).

The main ingredients of the Bill are laid down, the information of which is put in the Official Gazette of India, the public journal. Then this Bill is sent for reading in Rajya Sabha.

  • Second Reading

This is the Second and a Vital step. In this phase, there are two vitals in which the procedure can be subdivided. The reading takes place in Lok Sabha, in the First half the main points are discussed and debated in the Second phase, every clause is read one after another thoroughly, and debate takes place questioning their feasibility.

The same process takes place in Rajya Sabha but they don’t get the privilege to turn it over. They can only recommend amendments if not satisfied which may or may not be taken seriously by the Lok Sabha.

  • Third Reading

In this phase, the voting takes place in Lok Sabha, if the Bill gets a Simple Majority, the Bill gets passed. The same procedure is followed in Rajya Sabha but their approval doesn’t matter.

Finally, the Bill reaches the President, he has to give his assent and the Money Bill becomes an Act.

What is the Role of both the Houses?

Lok Sabha is the lead institution concerned with the making of the Money Bill. A clear Simple Majority is essential for the Bill to get cleared off as an Act in Parliament. It can easily be said that Lok Sabha formulates the Money Bill.

Before the Money Bill is passed, it has to derive approval from the President of India. Then it can be presented in the two houses of the Parliament.

Rajya Sabha has little to no say over the matters of Money Bill. It can surely give reviews and recommendations which could easily be given blind eyes by the Lok Sabha.

Rajya Sabha can withhold the Bill for 14 days after which it has to give the Bill with or without the recommendation or the Bill is assumed to be passed by both the houses.

The Speaker of the Lok Sabha has the power to classify a Bill as Ordinary or Money Bill. It’s completely on his discretion to decide what type of Bill is to be sought out in the Parliament.

Examples where the procedure for a Money Bill was exploited

  • Aadhar Card Act, 2016 and Aadhar Card Amendment Act, 2018

Aadhar Card Act, 2016 was brought into motion by the NDA led BJP Government in the Year 2016. The motive behind bringing this Act was getting most of the Government Welfare and Schemes availing facility only to be vitiated through the Aadhar Cards. It was categorized as a Money Bill in Lok Sabha due to the blooming majority of the BJP.

Rajya Sabha was rather reluctant to let the Bill pass and become an Act, they didn’t give any response due to which they had to return the Bill after 14 days.

Rajya Sabha was unhappy with the Privacy and Security of the people of India taken so lightly and that it can be misused if everything is linked through Aadhar Cards. Lok Sabha ignored their pleas and passed the Bill anyways.

This matter was taken to the Supreme Court of India but even the Judges were of the view that the Government should not be blamed for a Bona Fide purpose. And hence the Bill became an Act.

The review verdicts have been filed and the case is going on, even now. But the contention of the people is similar, after instances of Breach of Data of Indians through the Aadhar Card the fear is justified.

Eminent Jurists like DY Chandrachud and many other Legal Officers are of Opinion that it is a gross move on the Part of the Government who are compromising the Privacy and identity of the People of India.

The Security, Privacy of Identity are Fundamental Right to Life and Liberty which has been grossly violated by the Present Government

  • Prevention of Money Laundering Act (PMLA)

The Rajya Sabha recently filed a suit against the working government that they have been constantly compromising on the Prevention of Money Laundering Act by making it a Money Bill such that the Rajya Sabha cannot interfere in it (Article 110(1)).

The Rajya Sabha members have hinted at it as a method to clear up the Corruption by covering it up much so it becomes foggy to the scrutinizing eyes. They feel the Government is devising nefarious schemes just because they are in majority and People don’t see what they are doing.

They think whether it be the Prevention of Money Laundering Act or Aadhar Card Act, the government is stopping it to be scrutinized by Rajya Sabha by categorizing everything as Money Bill. The Speaker, Government, Judiciary everyone had a part in it.

  • Conversion of Finance Bill, 2017 into Money Bill

The Finance Bill, 2017 has been converted into Money Bill recently on the grounds of the salary provisions mentioned in it. Upon debates on the topic, the Centre took the view that Speaker can classify a Finance Bill as Money Bill if he feels the need.

The Rajya Sabha doesn’t share the same view and think it is done for curbing the Power of Rajya Sabha by classifying it as Money Bill

  • Anonymous Electoral Bonds

A Petition has recently been filed for making the “anonymous” Electoral Bonds unconstitutional by the Supreme Court of India. An NGO named Association of Democratic Rights initiated it with the contention that it is only done so as the government could take “unlimited donations” for its election and other purposes.

The name shall not be revealed which could easily give a clean pass to all the corrupt people to which a corrupt Government is itself helping so they don’t ever get revealed by giving parts of their money as bribes in the name of “anonymous donation”.

A Three-Judge bench has recently been formed which will review the above issue. They were of opinion that they inserted this provision as Money Bill just to get rid of Rajya Sabha’s decision as they can do whatever they want for their Corrupt ends for the majority they have in Rajya Sabha.

Conclusion

Thus, Money Bill is largely similar to an Ordinary Bill but is quite different in the matters of Power discretion and how the process is to be handled.

The Lok Sabha has quite the say over it which is good since it is the responsibility of the working Government to control the Economy of the Country.

It might be a concern for Lok Sabha, but they are neither the Authority nor are responsible for the fate of the Country’s Economy.

By the cases above it can be well understood that it can be used nefariously by a government to escape the eyes of Rajya Sabha as it practically has no say to Money Bills.

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