Money Bill- Article 110, Types, Money Bill UPSC Questions

Q: What is the money bill?

A money bill addresses financial issues such as taxation, bills involving public expenditure, governmental financial obligations, or Consolidated Fund of India expenditure. The numerous types of money bills are the Financial bill and Appropriation Bill. The Rajya Sabha can suggest recommendations in the bill but cannot reject the money bill.

What Is Money Bill?

A money bill deals with financial issues such as taxation, bills involving public expenditure, governmental financial obligations, or expenditures from the Consolidated Fund of India. There are various factors that differentiate a normal bill from a money bill. We will discuss the money bill in the upcoming section.

Money Bill In India

Money Bills, in contrast with Ordinary Bills, are presented only in the Lok Sabha on the recommendation of the President, which itself is a must. The money bill in India can be described as:

Money Bill UPSC PDF

The money bill is alluded to as a government bill because of the fact that it was presented in the Lok Sabha on the President's recommendation.
It must be noted that only the Minister begins by introducing government bills.
After the Lok Sabha passes the bill, it is referred to as the Rajya Sabha, which has restricted authority. It does not have the power to deny or alter the bill.
Because there is no potential disagreement, there is no clause for a joint session on money bills.
The bill is certified as a money bill by the Lok Sabha speaker, and his final decision prevails in this regard.
When a bill is approved by both houses, the President must sign it. He can give or confiscate his assent, but he cannot send a bill back for reevaluation.
The bill becomes an act after the President's acceptance and is published in the 'Indian Statute Book'.

Types Of Money Bill

The money bill in India is divided into two types- the Financial Bill and the Appropriation Bill. It is discussed in detail in the section below:

Financial Bill: The Financial Bill is a bill introduced in the Lower House each year, shortly followed by the general budget, that relates to financial matters like legislative changes to tax laws. It is presented to Parliament when the Annual Financial Statement is introduced.
Appropriation Bill: This bill permits allocation from the Consolidated Fund to the relevant grants. When the House approves a grant, this bill sanctions the spending and funds needed to fulfil the grant.

How Is A Bill Established As A Money Bill In India?

There are a number of provisions that lead to a bill being categorised as a money bill. From the imposition of tax to the regulation of money lending by the GOI. The following provisions decide whether a bill is a money bill or not:

Whatever tax is imposed, repealed, remitted, modified, or enforced.
The Government of India regulates the lending of money.
Payments into or withdrawals from the Consolidated Fund of India (CFI) or the Contingency Fund of India (CFI).
Allocation of funds from the Contingency Fund of India (CFI).
Declaration or increment in the magnitude of any CFI-charged expense.
Invoice of funds on behest of the CFI or the Indian public account, safekeeping or transmission of such funds, or audit/inspection of the Union's accounts or any state's accounts.

Article 110 Of the Indian Constitution

Article 110 of the Constitution defines a money bill as a draft proposed, which primarily contains provisions that deal with all or any of the topics stated therein.

Whenever there is a concern about whether a particular bill is a money bill or not, Article 110(3) states that the Speaker's decision is final.
The speaker is not necessarily obligated to refer to anyone when determining what kind of bill is a money bill.
Article 110(4) states that when a bill is presented to the Rajya Sabha and the President of India for his acceptance, an acknowledgement by the Speaker implying that it is a money bill is permitted.

When Is A Bill Not Considered A Money Bill in India?

Article 110 also specifies when a bill is not a money bill. The following are the provisions listed:

Imposition of financial penalties or other monetary sanctions.
Licence fees or charges for the services rendered are demanded or paid.
Any tax placed, eradicated, rebated, altered, or governed for local purposes by a local authority or agency.

Difference Between Money Bill And Financial Bill

Money bills are governed by Article 110 of the Indian Constitution, while Article 117 of the Indian Constitution deals with financial bills. The main points highlighting the difference between money bill and financial bill are explained in detail in the table given below:

Money Bill- The Speaker has the power to decide if a particular bill is a money bill. All money bills are, at the core, Financial Bills. The Rajya Sabha cannot dismiss money bills. Moreover, the Rajya Sabha's guidelines on a money bill are not binding on the Council of States. A money bill must be approved or rejected by the President. A joint sitting of the two Houses of Parliament is not possible.

Financial Bill- The Speaker's approval is not required for the Financial Bills. All Financial Bills cannot be considered money bills. The Rajya Sabha has the authority to amend or even dismiss a Financial Bill. The President might even advise that the Financial Bill be reassessed and then reverted back to the House. In the event of a tie, the President may call a joint session.

Money Bill UPSC Notes

The money bill UPSC is an important segment of the UPSC syllabus. It is significant to cover the polity of India in the given IAS Exam syllabus. You can look into the polity books for UPSC to refer to the types of money bills, required amendments, and the difference between money and financial bill. You can also refer to the UPSC previous year's question papers to improve your score in the UPSC examination.

Money Bill UPSC Sample Questions

It is of prime essentiality for the candidates to practice well for the questions pertaining to the exam. The candidates must regularly practice the previous year papers to score well in the exam and land the desired job profile.

Question 1: What will follow if the money bill is substantially amended by the Rajya Sabha? [UPSC 2013]

(a) The Lok Sabha may send the bill to the Rajya Sabha for reconsideration

(b) The Lok Sabha may still proceed with the bill, accepting or not accepting the recommendations of the Rajya Sabha

(d) The Lok Sabha cannot consider the bill further

Answer: (b)

Question 2: 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 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.

Answer: (c)

Question 3: A deadlock between the Lok Sabha and the Rajya Sabha calls for a joint sitting of the Parliament during the passage of? [UPSC 2012]

Ordinary Legislation
Money Bill
Constitution Amendment Bill

Select the correct answer using the codes given below:

(a) 1, 2 and 3

(b) 1 only

(d) 1 and 3 only

Answer: (b)

FAQs on Money Bill

What is the money bill?

A money bill addresses financial issues such as taxation, bills involving public expenditure, governmental financial obligations, or Consolidated Fund of India expenditure. The numerous types of money bills are the Financial bill and Appropriation Bill. The Rajya Sabha can suggest recommendations in the bill but cannot reject the money bill.

What distinguishes the money bill in India from the British system?

In the U.K., the Speaker of the House has the ultimate power to choose whether or not a Bill is a money bill, and his ruling is not susceptible to judicial review. In India, however, the Speaker does not have such absolute power.

How is a bill established as a money bill?

There are certain characteristics pertaining to money bill that have been highlighted herein. The following provisions need to met in order to establish a bill as a money bill:

Regardless of whether a tax is imposed, repealed, remitted, modified, or enforced.
The lending of money is regulated by the Government of India.
Into or out of the Consolidated Fund of India (CFI) or the Contingency Fund of India (CFI).
Allocation of funds from India's Contingency Fund (CFI).
Any declaration or increase in the amount of any CFI-charged expense.
Invoicing of funds at the direction of the CFI or the Indian public account, safekeeping or transmission of such funds, or audit/inspection of the Union's or any state's accounts.

When can a bill not be considered a money bill?

Article 110 defines when a bill is not a money bill. The following are the provisions:

Financial penalties or other monetary sanctions are imposed.
Licence fees or charges are demanded or paid for the services rendered.
Any tax imposed, repealed, rebated, changed, or governed by a local authority or agency for local purposes.

Where is a money bill introduced?

A Bill may be presented in any one of the Houses. A Money Bill, on the other hand, can never be introduced in the Rajya Sabha. It should only be presented to the Lok Sabha with the President's prior referral for the introduction.

What is Article 110?

Article 110 of the Indian Constitution characterises a money bill. Money bills address financial difficulties such as government spending and taxation. A Money Bill, generally, does not transform into an Act until it is endorsed by the President of India.

What are the types of money bills?

There are two major types of money bills that have been illustrated here. Following are the types of money bills:

Financial Bill: The Financial Bill is a bill introduced in the Lower House each year, shortly after the general budget, that deals with financial issues such as amendments to tax laws. It is introduced to Parliament along with the Annual Financial Statement.
Appropriation Bill: This bill authorises the allocation of funds from the Consolidated Fund to the appropriate grants. When the House endorses a grant, this bill authorises the expenditures and funds required to carry out the grant.

Money Bill- Meaning, Types, Money Bill UPSC Notes