What are Money Bills?

Money Bills are those that are classified under Article 110 (1)  of the Constitution of India. Every Money Bill is essentially a financial bill but not every financial bill is a money bill.

Money Bills: Legislative Provisions

The provisions defining a Money Bill include:

• The imposition, abolition, remission, alteration or regulation of any tax.
• The custody of the contingency fund or the consolidated fund, the payment or withdrawal of  money from such Fund.
• Appropriation of money out of the Consolidated Fund of India.

Before any legislation is passed in India, it has to be proposed before the two houses of Parliament – the Lok Sabha and the Rajya Sabha for approval before it is sent to the President of India for ratification. 

What if the leaders in Parliament face uncertainty whether the Bill in question is a Money Bill or not? In such cases, whatever the Speaker of the Lok Sabha decides is considered final. The Bill must be endorsed by a certificate from the Speaker before it is sent to the Rajya Sabha or presented to the President for approval.

Money Bills: How are they Passed?

All Money Bills are supposed to be introduced only in the Lok Sabha. For a Money Bill to be introduced, the President’s assent is mandatory. Once the Lok Sabha passes a Money Bill, it is forwarded to the Rajya Sabha for recommendations. The Rajya Sabha must return the Bill in not more than 14 days with its recommendations. If the Rajya Sabha fails to do so, the Bill is considered to have been passed by both Houses.

The Lok Sabha has the authority to accept or reject any or all the recommendations of the Rajya Sabha. If the recommendation/s of the Rajya Sabha are accepted, the Bill is said to have been passed by both Houses after being amended by the Rajya Sabha and then accepted by the Lok Sabha.

Complicated as it sounds, this process has been followed since the time of Independence to pass Money Bills. Contrarily, if the recommendations of the Rajya Sabha are rejected, the Bill is supposed to have passed by both Houses as it was passed by the Lok Sabha. The Bill is then presented before the President who gives or refuses his assent. Usually, the President is expected to ratify the Bill that has been passed by the Indian Parliament because the presidential signature represents the ‘sovereign stamp.’