Parliament: Money bills, budget and committees

Under Article 109(4), if the Lok Sabha does not accept any of the recommendations of the Rajya Sabha, the Money Bill is deemed to have been passed by both Houses in the form in which the Lok Sabha passed it, without any of the recommended changes. A joint sitting is not available for Money Bills, because the Lok Sabha's will prevails anyway. The President also has no role in choosing between the Houses' versions. The Rajya Sabha must return a Money Bill within fourteen days, and if it does not, the bill is deemed passed by both Houses in the Lok Sabha's form (Article 109(5)). The Lok Sabha may accept all, some or none of the Rajya Sabha's recommendations. The design reflects the principle that money matters belong to the directly elected House.

Article 110 defines a Money Bill: a bill is a Money Bill if it contains only provisions on the matters listed in clause (1), such as taxes, government borrowing, the custody of the Consolidated and Contingency Funds and appropriation from the Consolidated Fund. Clause (3) makes the Speaker's decision on whether a bill is a Money Bill final, and clause (4) requires his certificate to be endorsed on it. Article 109 lays down the special procedure for passing Money Bills. Article 112 deals with the Annual Financial Statement, that is, the Budget, and Article 117 deals with Financial Bills. Article 109(1) adds that a Money Bill can be introduced only in the Lok Sabha. Article 199 is the matching definition for State Money Bills.

Both statements are correct. Article 110(4) requires the Speaker's certificate that the bill is a Money Bill to be endorsed on it when it is transmitted to the Rajya Sabha and when it is presented to the President. The certificate tells both the Rajya Sabha and the President that the special procedure applies. A Money Bill needs the President's recommendation for introduction and can be introduced only in the Lok Sabha, and every such bill is a government bill introduced only by a minister. Because the certificate is endorsed, the President cannot return a Money Bill for reconsideration.

Statement 1 is correct: Financial Bills are all bills dealing with fiscal matters, and the Money Bill under Article 110 is one narrow category among them. Statement 2 is incorrect: Article 110(1) says a bill is a Money Bill if it contains only provisions dealing with the listed matters. A bill that mixes taxation with other subjects is a Financial Bill (I) under Article 117(1), which the Rajya Sabha can amend or reject. Whether some laws were properly passed as Money Bills has been disputed. For example, the Finance Act, 2017 changed the rules for tribunals, and this was challenged in Rojer Mathew (2019).

Article 110(1) lists the matters that make a bill a Money Bill when it contains only those matters: taxes, government borrowing, custody of the Consolidated and Contingency Funds, appropriation from the Consolidated Fund, charged expenditure, and so on. Article 110(2) then excludes three things: fines or other pecuniary penalties, fees for licences or services, and taxes imposed by a local authority for local purposes. A bill does not become a Money Bill just because it contains one of these. The word 'only' in Article 110(1) is the key: a bill that mixes Money Bill matters with anything else is not a Money Bill. The Speaker's decision under Article 110(3) is final. Whether that decision can be reviewed by courts was referred to a larger bench in Rojer Mathew (2019). Article 199 gives the same definition for State Money Bills.

A Financial Bill (II) under Article 117(3) involves expenditure from the Consolidated Fund but contains none of the Article 110 matters. It is treated as an ordinary bill: it can be introduced in either House, the President's recommendation is not needed for introduction, and the Rajya Sabha can reject or amend it. But neither House can pass it unless the President has recommended to that House the consideration of the bill. A deadlock is resolved by a joint sitting. An Article 117(3) bill is thus closer to an ordinary bill than to a Money Bill; only the recommendation for consideration sets it apart.

Statement 1 is incorrect: Article 110(2) says a bill is not a Money Bill merely because it provides for the imposition, abolition, remission, alteration or regulation of any tax by a local authority or body for local purposes. Statement 2 is correct: Article 110(1)(f) includes the receipt of money on account of the Consolidated Fund or the Public Account, the custody or issue of such money, and the audit of the accounts of the Union or of a State. A bill containing only such provisions is a Money Bill. Taxes of municipalities are dealt with by State law under Article 243X, which is why they are kept out of the Union's Money Bill definition.

The Aadhaar Act, 2016 was passed as a Money Bill, so the Rajya Sabha could only make recommendations. In the 2018 Aadhaar judgment, the majority held that the Act was validly passed as a Money Bill, because its main provision, Section 7, linked Aadhaar to subsidies and benefits paid from the Consolidated Fund. Justice D.Y. Chandrachud dissented, holding that its passage as a Money Bill was a fraud on the Constitution. The Rajya Sabha's recommendations on a Money Bill are never binding, and no special majority applies. The judgment was delivered on 26 September 2018. The majority also struck down Section 57, which had allowed private entities to use Aadhaar.

Statements 1, 2 and 3 are correct (c). Statement 1 is right: Article 109 sets the special procedure for Money Bills. Statement 2 is right: a Money Bill can be introduced only in the Lok Sabha, never in the Council of States, and only on the President's recommendation. Statement 3 is right: the Rajya Sabha must return it within 14 days, with or without recommendations, and cannot reject it. Statement 4 is wrong: the Lok Sabha is free to accept or reject those recommendations.

Notice that Article 110 defines a Money Bill, and the Speaker's certificate is final. The Supreme Court is examining the use of the Money Bill route for laws like Aadhaar. A joint sitting is not possible on a Money Bill.

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Two statements are correct (b). Statement 1 is right: a Finance Bill that is not a Money Bill (an Article 117 bill) goes through the Rajya Sabha like an ordinary Bill, so the Rajya Sabha can amend or reject it. Statement 2 is right: for a Money Bill (Article 110), the Rajya Sabha can only make recommendations within 14 days, which the Lok Sabha may ignore. Statement 3 is wrong: there is indeed no joint sitting for a Money Bill, but for a Finance Bill a joint sitting is possible, not "necessary".

Notice that only the Speaker certifies a Bill as a Money Bill. The use of this route for laws like Aadhaar (2016) was challenged, and a larger bench of the Supreme Court is examining it.

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No statement is correct (d). The Committee on the Welfare of SCs and STs has 30 members. Statement 1 is wrong: the Speaker appoints its Chairperson from among the Lok Sabha members. Statement 2 is wrong: 20 members come from the Lok Sabha and 10 from the Rajya Sabha, the reverse of the statement. Statement 3 is wrong: no Minister at all can be a member. Statement 4 is wrong: the term is one year, not two. So options (a), (b) and (c) fail.

Notice the pattern: like the Estimates and Public Accounts committees, it is a financial-style committee where Ministers are barred. Its job is to examine the work of the National Commissions for SCs and STs and the implementation of safeguards.

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Both statements are treated as correct (c). Statement 1: Article 112 makes the President cause the Annual Financial Statement (the Budget) to be laid before both Houses. In practice the Finance Minister presents it for the Council of Ministers, which the Prime Minister heads; UPSC read statement 1 in that sense. Statement 2 is right: Article 113(3) says no demand for a grant can be made except on the President's recommendation. So options (a), (b) and (d) fail under UPSC's key.

Notice that the word "Budget" is not used in the Constitution. Since 2017, the Budget is presented on 1 February, and the Railway Budget is merged into it. Article 114 covers the Appropriation Bill.

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Statements 1, 2 and 4 are correct (b). Statement 1 is right: the H.N. Sanyal Committee (1963) led to the Contempt of Courts Act, 1971. Statement 2 is right: Article 129 and Article 215 make the Supreme Court and the High Courts courts of record, with power to punish contempt of themselves. Statement 4 is right: Parliament can make laws on contempt, under Entry 77 of the Union List and Entry 14 of the Concurrent List. Statement 3 is wrong: civil and criminal contempt are defined in the 1971 Act, not in the Constitution.

Notice the 2006 amendment, which made truth a defence if in the public interest. Contempt of court is also a ground for restricting free speech under Article 19(2).

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The FRBM Act, 2003 requires it (d). Under Section 3 of the Fiscal Responsibility and Budget Management Act, the government must lay certain statements before Parliament with the Budget. These are the Macro-economic Framework Statement, which assesses growth, the fiscal balance and the external sector, and the Medium-term Fiscal Policy cum Fiscal Policy Strategy Statement. The Medium-term Expenditure Framework Statement is laid in the session after the Budget. It is not just a convention (a). Article 112 (b) requires the Annual Financial Statement, and Article 110 defines Money Bills. Article 113 (c) deals with demands for grants.

Notice the targets: the government set a 4.4% fiscal deficit target for 2025–26, and is shifting to a debt-to-GDP anchor of about 50% by 2031.

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