Parliament – Sessions, Procedures, Motions, Committees etc

Legal Conundrum: What constitutes a Money Bill?


From UPSC perspective, the following things are important :

Prelims level: Money Bill

Mains level: Legislative bypass created by Money Bills

Money Bill


  • Against the backdrop of significant judicial pronouncements, including recent decisions on the electoral bond scheme and the Aadhaar Act, the Supreme Court grapples with a pivotal question: the delineation of a money Bill.

Why discuss this?

  • The ongoing examination before a seven-judge constitution bench highlights the crucial need to define the scope of a money Bill and its broader implications.
  • This issue carries substantial weight for legislative efficiency and constitutional adherence.

What are Money Bills?

About A financial legislation exclusively dealing with revenue, taxation, government expenditures, and borrowing.
Constitutional Basis
  • Article 110(1): Specifies matters related to taxation, borrowing, and appropriation of funds.
  • Article 110(3): Grants the Speaker of the Lok Sabha the final decision on whether a bill qualifies as a Money Bill.
  • Introduction in Lok Sabha with the President’s recommendation.
  • Consideration and passage in Lok Sabha.
  • Transmission to Rajya Sabha for recommendations (no amendments).
  • Return to Lok Sabha for consideration of recommendations.
  • Acceptance or rejection of recommendations by Lok Sabha.
  • Assent by the President without the power to return for reconsideration.
Criteria for a Money Bill
  • Imposition, abolition, or regulation of taxes.
  • Regulation of borrowing or giving guarantees by the Government of India.
  • Custody of the Consolidated Fund or the Contingency Fund of India.
  • Appropriation of money from the Consolidated Fund of India.
  • Declaration of any expenditure as expenditure charged on the Consolidated Fund of India.
  • Receipt of money into or out of the Consolidated Fund of India or the public account of India.
  • Any matter incidental to the specified criteria.
Decision Authority Speaker of the Lok Sabha has the final decision on whether a bill qualifies as a Money Bill.
President’s Role President can either accept or reject a Money Bill but cannot return it for reconsideration.
Joint Sitting No provision for Joint sitting for the passage such Bill.


Key Legal Precedents

[1] Prevention of Money Laundering Act (PMLA) Amendments:

  • Amendments introduced since 2015 to the PMLA expanded the Enforcement Directorate’s powers, triggering concerns over their passage as Money Bills.
  • Critics argue that such significant alterations should have undergone standard parliamentary scrutiny involving both houses.

[2] Finance Act of 2017:

  • The Finance Act of 2017, designated as a Money Bill, attracted scrutiny for purportedly aiming to reshape appointments to 19 crucial judicial tribunals.
  • Allegations surfaced suggesting a deliberate manoeuvre to enhance executive authority over these tribunals by categorizing the Act as a Money Bill.
  • Additionally, changes within the Act relaxed qualifications and experience prerequisites for staffing these pivotal judicial entities, raising concerns of dilution.

[3] Aadhaar Act, 2016:

  • The Supreme Court’s 2018 ruling upheld the validity of the Aadhaar Act as a Money Bill, despite lingering legal and procedural uncertainties.
  • The government’s argument hinged on the Act’s nexus to subsidies disbursed from the Consolidated Fund of India, justifying its classification as a Money Bill.
  • However, the verdict prompted calls for a comprehensive reevaluation, reflecting lingering doubts over the Act’s classification and its implications for parliamentary oversight.

Legal Implications  

  • Parliamentary Bypass: By categorizing crucial amendments as Money Bills, the standard legislative process involving both houses of Parliament is bypassed, limiting comprehensive scrutiny and deliberation.
  • Eroding Rajya Sabha Scrutiny: Critics argue that such amendments, which often encompass far-reaching implications, should undergo thorough examination and debate in both the Lok Sabha and the Rajya Sabha.
  • Hasty Lawmaking: Designating important legislations as Money Bills undermines the role of the Rajya Sabha, curtailing its authority in the lawmaking process.
  • Against Democratic-Ethos: This erosion of parliamentary oversight raises concerns about the equitable distribution of legislative power and the preservation of democratic principles.
  • Lack of Judicial Scrutiny: The judiciary plays a crucial role in adjudicating the legality and constitutional conformity of categorizing amendments as Money Bills.

Future Prospects

  • Impending Legal Clarity: The anticipated verdict by the seven-judge bench holds the potential to reshape legislative dynamics, potentially paving the way for renewed challenges against contentious enactments.
  • Judicial Review: The judiciary’s vigilance in scrutinizing the validity of money Bills underscores its commitment to upholding constitutional principles and safeguarding legislative integrity.
  • Democratic Accountability: The evolving jurisprudence surrounding money Bills epitomizes the judiciary’s role in navigating complex constitutional nuances, ensuring robust legislative frameworks and institutional accountability.


  • As the legal saga unfolds, the apex court’s forthcoming pronouncement holds profound implications for India’s legislative landscape and institutional accountability, heralding a new chapter in the nation’s constitutional journey.

Try this PYQ:

Q. Regarding the Money Bill, which of the following statements is not correct? (CSP 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.

(c) A Money Bill is concerned with the appropriation of money out of 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.


Post your answers here.
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