SC Agrees to List Petitions on Money Bill Route

Syllabus: Government Policies and Intervention, Judiciary

Source: TH

Context: Chief Justice of India D.Y. Chandrachud agreed to list petitions challenging the Money Bill route taken by the Centre. This issue was referred to a seven-judge Bench in 2019 by a five-judge Bench led by Chief Justice Ranjan Gogoi.

Money Bills and Financial Bills:

Any bill related to revenue or expenditure is a Financial Bill.

A Money Bill is a specific type of Finance Bill that deals only with matters specified under Article 110(1) and deals with taxes, borrowing, expenditure, etc. It can only be introduced in the Lok Sabha and must be certified by the Speaker.

All Money bills are Financial bills but all Financial bills are not Money bills

About Article 110:

• Article 110(1): A Bill is deemed to be a Money Bill if it deals only with matters specified in Article 110(1)(a) to (g) — taxation, borrowing by the government, and appropriation of money from the Consolidated Fund of India, among others.

• Article 110(1)(g): Adds that “any matter incidental to any of the matters specified in Articles 110(1)(a)-(f)” can also be a Money Bill.

• Article 110(3): “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.

For a comparison between Money and Finance Bills: Click Here

Recent controversies regarding Money Bill:

Controversies | Details

Circumventing the Rajya Sabha | Passing contentious amendments as a Money Bill allows the government to bypass the Rajya Sabha, undermining the bicameral nature of Parliament.

Reduced Legislative Scrutiny | The Rajya Sabha’s bypass reduces opportunities for comprehensive debate and oversight, diminishing additional scrutiny.

Violation of Article 110 | Concerns exist that certain amendments labelled as Money Bills do not adhere strictly to Article 110, which specifies what constitutes a Money Bill.

Speaker’s Certification | The Speaker of the Lok Sabha certifies a bill as a Money Bill under Article 110, a decision not subject to judicial review, raising concerns about potential misuse to circumvent legislative processes.

Aadhaar Act Controversy | The Aadhaar Act, 2016, classified as a Money Bill, sparked controversy. The Supreme Court upheld its constitutionality, but Justice Chandrachud dissented, calling it an “abuse of the constitutional process”.

Finance Act, 2017 Concerns | The Finance Act, 2017 included amendments unrelated to Article 110 subjects. A five-judge Bench referred the Money Bill aspect to a larger seven-judge Bench in 2019.

PMLA Amendments | Amendments to the PMLA passed as Money Bills gave the Enforcement Directorate extensive powers. The Supreme Court upheld these amendments’ legality but left the Money Bill question to the seven-judge Bench.

Limited Role of Rajya Sabha | Classification as a Money Bill restricts the Rajya Sabha to only recommending changes, without the power to amend or reject the bill.

Potential consequences of misclassifying Money Bills:

• Undermining Bicameralism: Example: The Finance Act of 2017 altered appointments to key judicial tribunals without Rajya Sabha input.

• Erosion of Checks and Balances: Example: Amendments to the Prevention of Money Laundering Act (PMLA) were passed, granting broad powers to the Enforcement Directorate.

• Constitutional Violations: Misclassification may breach Article 110 of the Constitution, which defines Money Bills’ scope.

• Concentration of Executive Power: Example: The Finance Act of 2017 potentially extended executive control over judicial tribunals by altering selection committee compositions.

• Political Manipulation: Encourages the ruling party to misuse the Money Bill route to pass controversial laws without sufficient opposition debate. Example: Critics argue that contentious amendments are dressed up as Money Bills to avoid Rajya Sabha rejection.

• Example: Critics argue that contentious amendments are dressed up as Money Bills to avoid Rajya Sabha rejection.

Conclusion:

Misclassifying Money Bills undermines legislative scrutiny and leads to executive overreach, emphasizing the need for strict adherence to legislative processes to maintain the integrity of governance.

Insta Links:

What are money Bills?

Mains links:

• How does a money bill differ from a financial Bill? Analyze whether the process of classifying a bill as a money bill needs to change. (250 words)

Prelims Link:

Q1. Regarding the Money Bill, which of the following statements is not correct? (UPSC 2018)

(a) A bill shall be deemed to be a Money Bill if it contains only provisions relating to the imposition, abolition, remission, alteration or regulation of any tax.

(b) A Money Bill has provisions for the custody of the Consolidated Fund of India or the Contingency Fund of India.

(d) A Money Bill deals with the regulation of borrowing of money or giving of any guarantee by the Government of India.

Ans: (c)

Q2. What will follow if a Money Bill is substantially amended by the Rajya Sabha? (UPSC 2013)

(a) The Lok Sabha may still proceed with the Bill, accepting or not accepting the recommendations of the Rajya Sabha.

(b) The Lok Sabha cannot consider the Bill further.

(d) The President may call a joint sitting to pass the Bill.

Ans: (a)