SC to consider setting up bench to hear pleas against passage of laws as money bills

SC to consider setting up bench to hear pleas against passage of laws as money bills

Sub: Polity

Sec: Parliament and legislature

Context:

The Supreme Court on Monday agreed to consider a submission for setting up a constitution bench to hear pleas challenging the validity of passage of laws like the Aadhaar Act as money bills allegedly to bypass the Rajya Sabha.

Earlier, the top court had said it would constitute a seven-judge bench to consider the issue of validity of passage of laws like the Aadhaar Act as a money bill.

The decision was aimed at addressing the controversy around money bills after the government introduced legislations like the Aadhaar Act and even amendments to the Prevention of Money Laundering Act (PMLA) as money bills, apparently to circumvent the Rajya Sabha where it did not have a majority then.

About money bill

A Bill is said to be a Money Bill under Article 110 of the constitution if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India.

Qualification as money bill:

1. Under Article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters:
   the imposition, abolition, remission, alteration or regulation of any tax
2. regulation of borrowing by the government
3. custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds
4. appropriation of moneys out of the Consolidated Fund of India
5. declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure
6. 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
7. any matter incidental to any of the matters specified in sub-clauses (a) to (f).

Power to decide money bill

• The speaker of the Lok Sabha decides if a bill is money bill or not (Art 110 (3)) and his decision in this regard is final.

Power of Rajya Sabha w.r.t Money Bill

• Under Article 109 (1), a Money Bill cannot be introduced in Rajya Sabha.
• Once passed by Lok Sabha, it is sent to Rajya Sabha — along with the Speaker’s certificate that it is a Money Bill — for its recommendations.
• However, Rajya Sabha can neither reject nor amend the Bill, and must return it within 14 days, after which Lok Sabha may choose to accept or reject all or any of its recommendations.
• In either case, the Bill is deemed to have been passed by both Houses.
• Under Article 109(5), if Rajya Sabha fails to return the Bill to Lok Sabha within 14 days, it is deemed to have been passed anyway.

What is Finance Bill:

• In a general sense, any Bill that relates to revenue or expenditure is a financial Bill.
• A money Bill is also a specific type of financial Bill, that must deal only with matters specified in Article 110 (1) (a) to (g).
• Financial bills are responsible for fiscal matters such as government spending or revenue.
• It specifies the amount of money to be spent by the government and the way it is to be spent.
• More specifically, Article 117 of the Constitution deals with the special provisions relating to financial Bills.
• Finance Bills are divided into three categories: the Money Bill, Finance Bill Category I, and Finance Bill Category II.

What is the difference between money Bills and financial Bills:

• Classification Distinction: Money Bills encompass tax-related provisions, while Financial Bills cover various subjects, including taxation and expenditure. The Finance Bill, solely dealing with tax proposals, qualifies as a Money Bill. For e.g The Compensatory Afforestation Fund Bill, 2015, which establishes funds and covers other issues, was introduced as a Financial Bill.
• The procedure for the passage:
  • Money Bill: The Rajya Sabha cannot amend or reject Money Bills. It offers non-binding recommendations within 14 days, but if the Lok Sabha declines them, the Bill passes as is.
  • Financial Bill: It must be approved by both houses.
• Origination and President’s Recommendation:
  • Money Bill: Must be introduced only in the Lok Sabha, and only the Presidential recommendation
  • Financial Bill: An ordinary bill can originate in either house, and the President’s recommendation is not required for tax-related amendments.