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Understanding Money Bills in India: A Comprehensive Overview



  Oct 25, 2023

Money Bills in India: An Overview



Definition:

As per Article 110 of the Constitution, a bill is considered a money bill if it pertains “only” to matters outlined in Article 110(1)(a) to (g). These matters include topics like taxation, government borrowings, and appropriation of funds from the Consolidated Fund of India.

Introduction:

To become law, a bill typically requires the endorsement of both houses of Parliament. However, a money bill is an exception.

Key Characteristics of a Money Bill:

1. Lok Sabha Introduction: A money bill can only be introduced in the Lok Sabha. Prior recommendation of the President is necessary for introduction.

2. Rajya Sabha’s Limited Role: The Rajya Sabha cannot modify or reject a money bill. It can only recommend changes, leaving the Lok Sabha with the final say on accepting or declining these suggestions.

3. Disputes and Resolution: Should a conflict arise regarding the classification of a bill as a money bill, the decision of the Lok Sabha speaker is conclusive. However, a 2018 Supreme Court judgment highlighted that this decision is open to judicial review.

4. Inclusion of Incidental Matters: Article 110(1)(g) states that matters incidental to the issues highlighted in Articles 110(1)(a)-(f) can also be categorized as part of a money bill. This clause has been leveraged by the government to introduce legislation such as the Aadhaar Act, 2016.

5. Recent Amendments: Recent modifications to the Prevention of Money Laundering Act, 2002, were presented as money bills, emphasizing the broad scope and application of Article 110(1)(g).

Implications:

Labeling a bill as a money bill allows it to bypass potential hurdles in the Rajya Sabha, giving the Lok Sabha and, by extension, the ruling party or coalition, significant legislative power.

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