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Insights into Editorial: Name Of The Bill

Insights into Editorial: Name Of The Bill

16 April 2016

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Government’s recent move to introduce Aadhaar Bill as Money Bill had come under sharp criticism and was sharply objected by many, including few legal experts. This was seen as move to bypass the upper house. In this context, it would be instructive to see why some bills are labelled as money bills and require only the Lower House to pass them.

First of all, why do we need a second house?

The purpose of the second House is to be a revising chamber. Any legislation must be passed by each House by a simple majority. This provides a check on hasty decisions.

Why have exceptions for money bill?

Following the procedure in the British parliament, our Constitution makes an exception for money bills.

  • The British parliament, over the centuries, built up checks against the monarch’s power. It required all government expenditure to be sanctioned by parliament. It also forbade new taxes unless parliament provided for them by law.
  • Parliament could stop any expenditure plans of the government and bring it to a standstill. In such a case, the government cannot function and would be expected to resign.
  • Given that the government requires the confidence of the Lower House, the corollary is that only the Lower House should have decision-making powers on such bills. In other words, money bills are an exception to the rule that bills need to be passed by each House.

Limits on the usage of money bill:

Our Constitution specifies six conditions for any bill to be a money bill, and states that the bill should have only these features, or any item incidental to it. The six conditions are related to:

  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.

Also, Erskine May’s Parliamentary Practice says the following:

“A bill which contains any of the enumerated matters and nothing besides is indisputably a ‘money bill’. If it contains any other matters, then, unless these are ‘subordinate matters incidental to’ any of the matters so contained in the bill, the bill is not a money bill. Further, if the main object of a bill is to create a new charge on the Consolidated Fund or on money provided by Parliament, the bill will not be certified if it is apparent that the primary purpose of the new charge is not purely financial.”

In this context, does the Aadhaar bill fit the money bill criteria?

The bill provides for a mechanism to identify a person using biometrics, and states that this could be used for providing subsidies or government services. However, it also allows the Aadhaar system to be used for other purposes. Therefore, it seems to contain matters other than those that are incidental to expenditure from the Consolidated Fund. That is, it does not seem to fit the requirement of “only” the matters listed.

Who has the authority to certify a bill as a money bill?

In the Indian context, speaker has the authority to certify a bill as a money bill. The speaker makes this decision on his/her own unlike the House of Commons where two senior members must be consulted before the speaker gives the certificate.

Can the speaker’s decision be challenged?

The Constitution says the decision of the speaker shall be final. However, there are several instances in which Parliament’s decisions have been subjected to judicial review. These include decisions made by speakers under the anti-defection law.

  • Also, in a recent judgment, a Constitution bench of the Supreme Court decided that the privilege of legislatures was subject to judicial review.


Though the bill has been passed, this issue needs debate as it sets a precedent. The question is whether aadhaar bill can be certified as a money bill, which will enable Lok Sabha to go ahead without the concurrence of the Rajya Sabha. Perhaps it may help if the Lok Sabha creates a consultative mechanism before the speaker certifies a bill as a money bill.