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Insights into Editorial: Show Me The Money

Insights into Editorial: Show Me The Money 

12 March 2016

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The Lok Sabha has cuccessfully passed the Aadhaar Bill that aims to ensure targeted services to intended beneficiaries by assigning them unique identity numbers. These numbers will be given to each person who has stayed in India for 182 days in the year preceding the date of application.

  • The government, having seen the fate of the Goods and Services Tax (GST) Bill, chose to package the legislation as a money bill to ensure that it was not blocked by the Rajya Sabha, where the ruling NDA is short of a majority. The bill will now go to the Rajya Sabha, which can deliberate on it and suggest amendments.

How government defends this move?

The government, citing Section 110 of the Constitution, says any bill which facilitated the payment of moneys into or withdrawals of money from the Contingency Fund of India was a money bill.

Why such move?

In all democratic parliaments, as in India, the Lower House alone has the power to grant money to the executive. A bill that deals with such matters is called a money bill. A money bill cannot be passed or rejected by the Rajya Sabha, which can keep such a bill for only 14 days, after which it will be deemed to have been passed by both Houses. Hence, such route is often preferred by the governments.

What the law says?

As per Article 110(1), a bill that contains only provisions dealing with the following qualifies as a money bill:

  1. The imposition, abolition, remission, alteration or regulation of any tax.
  2. Regulation of borrowing or the giving of any guarantee by the government of India, or undertaking financial obligation by the government.
  3. The custody of the Consolidated Fund of India (CFI) or the Contingency Fund of India, the payment of moneys into or withdrawal from them.
  4. The appropriation of moneys out of the CFI.
  5. Declaring any expenditure as a charged expenditure on the CFI.
  6. The receipt of money on account of the CFI or the public account of India or the ambit of accounts of the Union or of a state.
  7. Any matter incidental to the above issues.

Does Aadhar Bill deal with any of the above mentioned provisions?

According to few experts, Aadhaar bill does not deal with imposition, abolition, alteration, etc, of tax; nor does it deal with the regulation of borrowing or giving a guarantee by the government or an amendment in respect of any financial obligation to be undertaken by the government.

  • This bill also does not deal with the custody of the CFI, etc. The moneys paid into or withdrawn from such funds are incidental.
  • Besides, the bill is not an appropriation bill that appropriates money from the CFI. It does not deal with declaring any expenditure as a charge on that fund.
  • Further, it does not deal with the receipt of money on account of the CFI or the public account, or the custody or issue of such money, or the audit of the accounts of the Union or states.

Why Aadhaar bill cannot be a money bill?

The object of the Aadhaar bill is to create a right to obtain a unique identity number, regulate the enrolment process to collect demographic and biometric information, and create a statutory authority for regulating and supervising the process. It also specifies offences and penalties.

  • Thus, the obvious purpose of the bill is to deal with all aspects relating to the unique identity number of Indian residents, which will be used for multiple purposes.
  • Also, clause 4(3) states that the Aadhaar number may be accepted as proof for “any purpose”, not merely for the payment of subsidy or other monetary benefits.
  • Therefore, the above analysis clearly shows that the Aadhaar bill is not a money bill. Subtle attempts have been made to give it the appearance of a money bill by referring to the CFI in certain clauses. But this does not alter the character of the bill, which does not deal with the CFI.
  • Further, subsidies, subventions, etc, are not a part of this bill. The Aadhaar bill does not make any provision for subsidies or other government benefits or specify beneficiaries.

Where does it fit then?

The Aadhaar bill comes under the category of financial bills under Article 117, which would inter alia involve expenditure from the CFI.

  • The Constitution stipulates that such bills be considered only after the president has recommended their consideration. However, such bills can be introduced in either House and, as per Article 107(2), need to be passed by both Houses.


In this case, prima facie it appears that the government has taken the money bill route to bypass the upper house. This move is even backed by the speaker of the Lok Sabha, whose decision is final on the question of whether a bill is a money bill. However, this constitutional provision cannot be seen as a convenient tool to deal with an inconvenient second chamber. The Constitution reposes faith in the speaker’s fairness and objectivity. Article 110(1) provides the touchstone of the decision to be taken by the speaker under Article 110(3). Any decision actuated by extraneous considerations can’t be a proper decision under Article 110(3). The speaker’s decision needs to be in conformity with the constitutional provisions. If not, it is no decision under the Constitution.