Kinds of bills and the money-bill dispute

Detail

What a bill is

• A bill is a draft of a proposed law. It becomes an Act only when three things happen:
• both Houses of Parliament pass it;
• it goes to the President;

• the President gives assent (formal approval) (Art. 111).

• Bills can be sorted in two ways:

• By who moves them: government bills and private members' bills.
• By what they contain: ordinary, money, financial and constitution amendment bills.

Who proposes: government bills

• Government bill: a bill moved by a minister [2].
• How it is made:
• The ministry concerned writes the draft.
• The Legislative Department (Ministry of Law and Justice) checks its legal form.

• The Cabinet approves it.

• The Cabinet decides both what the bill says and when it comes up (NCERT: Class 11 notes that the bureaucracy does much of the drafting).

• Most laws Parliament makes are government bills, because the government has a majority in the Lok Sabha.

Who proposes: private members' bills

• Private member's bill (PMB): a bill moved by an MP who is not a minister. The MP may belong to the ruling party or the Opposition [2].
• How it is handled:
• The MP must give a month's notice before introducing it.
• PMBs are taken up on Friday afternoons, the time kept for private members' business.

• The Committee on Private Members' Bills and Resolutions sorts them and gives them time (covered in Section 10).

• Record:

• Only 14 PMBs have ever become law [4].

• None has passed both Houses since 1970 [4]. The last one was the Supreme Court (Enlargement of Criminal Appellate Jurisdiction) Act, 1970.

• Tiruchi Siva's bill:

• In April 2015 the Rajya Sabha passed his Rights of Transgender Persons Bill, 2014. It was the Rajya Sabha's first PMB passed in more than four decades.
• The Lok Sabha never took it up.

• The government later passed its own law, the Transgender Persons (Protection of Rights) Act, 2019.

• 17th Lok Sabha (2019–24):

• 729 PMBs were introduced. Only the 16th Lok Sabha had more [4].
• Only 2 were discussed [4].
• In the Rajya Sabha over the same period, 705 were introduced and 14 discussed [4].

• 16% of the Lok Sabha PMBs tried to amend the Constitution. The most common subject was home affairs (14%) [4].

• By the Monsoon Session 2025, the Lok Sabha had given no time to private members' business for more than a year (PRS).

• Why PMBs still matter: they raise issues the government ignores and can push it to act. The transgender rights law of 2019 is the example.

Kinds of bills by content: key definitions

• Ordinary bill: any bill that is not a money, financial or constitution amendment bill.
• Money bill (Art. 110): a bill that deals only with the matters in Art. 110(1)(a)–(g). The Rajya Sabha can delay it for only 14 days. The matters are:
• (a) putting on, removing, changing or regulating a tax;
• (b) government borrowing or guarantees;
• (c) keeping the Consolidated Fund (the government's main account) or the Contingency Fund (its emergency fund), and paying money into or out of them;
• (d) appropriation (permission to spend) from the Consolidated Fund;
• (e) declaring any spending to be "charged" (spending that needs no vote of Parliament, such as judges' salaries);
• (f) receiving money into the Consolidated Fund or the public account, or auditing these accounts;
• (g) any matter incidental to (a)–(f).

• The PRS summary: a money bill deals only with "taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India" [3].

• Not money bills (Art. 110(2)): bills that only provide for fines, licence fees or fees for services, and bills about local-body taxes.

• Financial bill, Category I (Art. 117(1)): has some Art. 110 matters plus other matters [3]. Example: the Compensatory Afforestation Fund Bill, 2015 [3].
• Financial bill, Category II (Art. 117(3)): has no Art. 110 matter, but would require spending from the Consolidated Fund if it became law.
• Key rule: every money bill is a financial bill, but not every financial bill is a money bill [3].
• Constitution amendment bill (Art. 368): a bill to change the Constitution. Each House must pass it by a special majority: a majority of the House's total membership and two-thirds of members present and voting [2].

Procedural comparison

Bill	Introduced in	President's prior recommendation	Rajya Sabha's power	If the Houses disagree	President's options
Ordinary	Either House	Not needed	Full: can amend or reject	Joint sitting (Art. 108)	Assent, withhold, or return once for reconsideration
Money (Art. 110)	Lok Sabha only (Art. 109(1))	Needed (Art. 117(1))	Can only recommend changes, within 14 days; the Lok Sabha may accept or reject them [2][3]	No joint sitting needed: the Lok Sabha prevails	Assents by convention, because the bill came with his recommendation; cannot return it (Art. 111 proviso) [2]
Financial Cat. I (Art. 117(1))	Lok Sabha only	Needed for introduction	Full: can amend or reject [3]	Joint sitting	Assent, withhold, or return once
Financial Cat. II (Art. 117(3))	Either House	Needed before a House considers it, not for introduction	Full	Joint sitting	Assent, withhold, or return once
Constitution amendment (Art. 368)	Either House	Not needed	Full; special majority in each House	No joint sitting: the bill fails	Must assent (24th Amendment, 1971)

Steps: how a money bill passes

1. The President recommends the bill. It is introduced in the Lok Sabha only [2].
2. The Lok Sabha passes it by a simple majority (more yes votes than no votes among members present and voting).
3. The Speaker certifies it as a money bill. The certificate goes with the bill to the Rajya Sabha (Art. 110(4)).
4. The Rajya Sabha must return it within 14 days, with or without recommendations [2].
5. The Lok Sabha may accept or reject any recommendation [3].
6. If the Rajya Sabha does not return it within 14 days, both Houses are deemed to have passed it (Art. 109(5)) [3].
7. It goes to the President, who assents. He cannot send it back (Art. 111 proviso) [2].

Steps: a joint sitting (Art. 108)

• When it can be called [2]:
• the other House rejects the bill;
• the Houses disagree on amendments; or

• more than six months pass without the other House passing it.

• The President calls the sitting. The Speaker presides.

• The bill passes by a simple majority of members of both Houses present and voting. The Lok Sabha has more members, so it usually wins.
• A joint sitting cannot be used for money bills or constitution amendment bills [2].
• Joint sittings held so far:
• Dowry Prohibition Bill, 1961;
• Banking Service Commission (Repeal) Bill, 1978;
• Prevention of Terrorism Bill, 2002.

Steps: a constitution amendment bill (Art. 368)

1. A minister or a private member introduces it in either House.
2. Each House passes it separately by special majority [2].
3. If it changes federal provisions, at least half of the state legislatures must ratify it by simple majority [2]. Examples of federal provisions: the election of the President, the Seventh Schedule, representation of states in Parliament.
4. The President must assent (24th Amendment, 1971).

The Speaker's certificate

• Art. 110(3): if a question arises whether a bill is a money bill, the Speaker's decision is final [2][3].
• Art. 110(4): the Speaker endorses (signs) a certificate on the bill when it goes to the Rajya Sabha and to the President.
• Art. 122: courts cannot question Parliament's proceedings on the ground of "irregularity of procedure". (Art. 212 says the same for state legislatures; Art. 199 covers state money bills.)
• Why the certificate matters:
• A bill marked "money bill" escapes the Rajya Sabha's veto.
• The Rajya Sabha is the Council of States, so the states lose their say in Parliament.

• The government can pass a law even when it lacks a majority in the Rajya Sabha.

• The central legal question: is the Speaker's certificate open to judicial review (the courts' power to check whether an action is legal)? Or does Art. 110(3) shut out the courts completely [6]?

K.S. Puttaswamy (Aadhaar), 2018

• A five-judge bench upheld the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 as a money bill, by 4:1.
• The majority's reasoning:
• Section 7 of the Act ties subsidies and benefits paid from the Consolidated Fund to Aadhaar. This made it a money-bill matter [6].
• The Act's other provisions were incidental to this core [6].

• So the Act was correctly certified under Art. 110(1) [6].

• Justice D.Y. Chandrachud's dissent:

• The Speaker's certificate can be reviewed by courts. Calling it "final" does not protect an unconstitutional act.

• Passing the Aadhaar Act as a money bill was "a fraud on the Constitution". It took away the Rajya Sabha's role.

• January 2021: the Court dismissed review petitions against the Aadhaar ruling by majority. Justice Chandrachud dissented. He said the review should wait for the larger bench [6].

Rojer Mathew v. South Indian Bank, 2019

• Bench: five judges, November 2019.
• The Finance Act, 2017 was passed as a money bill. Part XIV of it let the Centre make rules on tribunal members' appointments, service conditions and removal.
• What the Court did:
• It struck down the Tribunal, Appellate Tribunal and Other Authorities Rules, 2017. The rules threatened the independence of tribunals.
• It doubted the Aadhaar majority's reading of Art. 110 [6].

• It referred the money-bill question to a seven-judge bench [5][6].

• Questions before the larger bench [6]:

• What counts as a money bill under Art. 110?
• How far can courts review the Speaker's certificate?
• Was the Aadhaar ruling on this point correct?

Related disputes

• Finance Act bills since 2015. Non-tax measures have been added to Finance Bills, for example in the Finance Bill, 2017 (PRS).
• PMLA amendments. Changes to the Prevention of Money Laundering Act, 2002 were made through Finance Acts. In Vijay Madanlal Choudhary (2022), a three-judge bench upheld the PMLA's main provisions. It left the money-bill objection to the larger bench.
• Electoral bonds (Association for Democratic Reforms v. Union of India, 15 February 2024, five judges):
• The scheme was created through the Finance Act, 2017, which amended the RBI Act, the Representation of the People Act, the Companies Act and the Income Tax Act.
• The petitioners also challenged the use of the money-bill route. The Court noted that the scope of Art. 110 "has been referred to a seven-Judge Bench and is pending adjudication" [5].
• The petitioners argued their other grounds separately because the general election was near [5].

• The Court struck the scheme down under Art. 19(1)(a): voters have a right to information about political funding. It did not decide the money-bill point.

• Status: the seven-judge reference was still pending in February 2024 [5]. Check for any later hearing or judgment.

Comparison: the UK Parliament Act 1911

• The Speaker of the House of Commons certifies money bills, and that certificate is final. India's Art. 110(3) copies this.
• The House of Lords can delay a money bill by only one month. India's Rajya Sabha gets 14 days.
• For other bills, the Lords can only delay. The 1911 limit was two years, cut to one year by the Parliament Act 1949.

Prelims Hooks

• Art. 110(3): the Lok Sabha Speaker, not the President or the Chairman of the Rajya Sabha, decides finally whether a bill is a money bill.
• Art. 109: the Rajya Sabha must return a money bill within 14 days. Otherwise the bill is deemed passed by both Houses.
• Trap: a joint sitting (Art. 108) cannot be used for money bills or constitution amendment bills. It can be used for ordinary bills and both kinds of financial bill.
• Art. 117(1) vs 117(3): both Category I and money bills need the President's recommendation to be introduced, only in the Lok Sabha. Category II needs it only before consideration, and can start in either House.
• Trap: the Rajya Sabha has full power to amend or reject a financial bill. Only a money bill limits it to recommendations.
• 24th Amendment, 1971: the President must assent to a constitution amendment bill.
• Art. 111 proviso: the President cannot return a money bill for reconsideration.
• Puttaswamy (2018): Aadhaar Act 2016 upheld as a money bill, 4:1. Rojer Mathew (2019): referred the money-bill question to a seven-judge bench.
• Electoral bonds (2024): struck down under Art. 19(1)(a), not on the money-bill ground.
• PMBs: only 14 have ever become law, the last in 1970. In the 17th Lok Sabha, 729 were introduced and 2 discussed.

Mains Points

• Federalism and bicameralism (having two Houses of Parliament):
• Bills with general content are being certified as money bills: Aadhaar 2016, Part XIV of the Finance Act 2017, PMLA amendments.
• This lets the government go around the Council of States.
• It weakens the Rajya Sabha's role in protecting states' interests and in careful second review.

• Justice Chandrachud's "fraud on the Constitution" dissent is the strongest statement of this view.

• Judicial review vs. parliamentary privilege:

• Art. 110(3) and Art. 122 protect the Speaker's decision.
• But courts have reviewed other "final" decisions of Speakers. Example: Kihoto Hollohan (1992), on disqualifications under the Tenth Schedule.
• A middle path: courts check only whether the bill falls within Art. 110(1)(a)–(g), not how the House ran its proceedings.

• The pending seven-judge reference should settle this.

• Reform ideas:

• Give the reasons for the certificate in writing.
• Have the Speaker consult the Rajya Sabha Chairman, or a joint committee, in doubtful cases.
• Read "only" in Art. 110(1) strictly, so that a bill with any non-money matter becomes a Category I financial bill.

• Look at the UK practice, where the Speaker consults senior officials before certifying.

• Decline of private members' business:

• 729 PMBs were introduced and 2 discussed in the 17th Lok Sabha. No PMB has become law since 1970.
• Members other than ministers have lost most of their power to make laws.
• Remedies: protect Friday time for PMBs, have committees examine PMBs, and adopt good PMBs as government bills, as happened with transgender rights in 2019.