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:
(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) regulation of borrowing by the government;
(c) custody of the Consolidated Fund or Contingency Fund of India, and payments into or withdrawals from these Funds;
(d) appropriation of moneys out of the Consolidated Fund of India;
(e) 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) 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-clauses (a) to (f).
But 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.
Article 110 (3) lays down that “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”. This means that once the Speaker has certified a Bill as a Money Bill, its nature cannot be questioned in a court of law, in the Houses of Parliament, or even by the President.
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.
The procedure to pass a Money Bill in Parliament is a key provision limiting the powers of Rajya Sabha compared to Lok Sabha. Any Bill other than a Money Bill cannot become law unless both Houses agree to it — with or without amendments. This is important in the current context of questions being raised over classifying a Bill as a Money Bill allegedly to bypass Rajya Sabha, where the government does not have a majority.
In a general sense, any Bill that relates to revenue or expenditure is a Financial Bill. A Money Bill is a specific kind of Financial Bill, defined very precisely: a Bill is deemed to be a Money Bill if it deals only with matters specified in Article 110 (1) (a) to (g). A Money Bill is certified by the Speaker as such — in other words, only those Financial Bills that carry the Speaker’s certification are Money Bills.
Financial Bills that are not certified by the Speaker are of two kinds: Bills that contain any of the matters specified in Article 110, but do not contain only those matters [Article 117 (1)]; and ordinary Bills that contain provisions involving expenditure from the Consolidated Fund [Article 117 (3)].
A Bill of the first kind, like a Money Bill, can be introduced only in Lok Sabha, and only with the recommendation of the President. But other restrictions that apply to Money Bills do not apply to these Bills. Bills under Article 117 (3)can be introduced in either House, though the President’s recommendation is essential for their consideration, and therefore, passage.