Gajendra Singh Godara
Sep 12, 2025
12
mins read
A Money Bill is a special category of legislation defined under Article 110 of the Indian Constitution, dealing exclusively with financial matters such as taxation, government borrowing, and appropriations from the Consolidated Fund of India. Its certification by the Speaker and exclusive handling in the Lok Sabha underscore India’s financial governance.
In 2024–25, the Supreme Court agreed to set up a special bench to examine petitions challenging the classification of laws like the Aadhaar Act and amendments to PMLA as money bills. Parliamentary discussions have criticized the “money bill route” as a way to bypass Rajya Sabha scrutiny.
For more information on how Money Bill is defined under Article 110 of the Indian Constitution, check our blog on the Indian Constitution Articles Explained for UPSC.
Table of content
A Money Bill is defined exclusively by Article 110. Clause (1) of Article 110 lists specific financial subjects, and a bill must contain only these matters to qualify as a Money Bill. Key provisions include:
The imposition, abolition, remission, alteration, or regulation of any tax.
The regulation of the borrowing of money or the giving of any guarantee by the Government of India.
The custody of the Consolidated Fund or the Contingency Fund of India, the payment of money into or the withdrawal of money from any such fund.
The appropriation of money out of the Consolidated Fund of India.
The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure.
The receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money.
Any matter incidental to any of the matters specified above.
Importantly, Article 110(2) provides exceptions: a bill is not deemed a Money Bill solely because it imposes fines, fees, or local levies.
A Money Bill follows a special legislative process:
Introduction: It can only be introduced in the Lok Sabha, with the President’s prior recommendation. It cannot originate in the Rajya Sabha. (Article 117(1) and parliamentary practice require this recommendation.)
Speaker’s Certification: Once passed by the Lok Sabha, the Speaker certifies it as a Money Bill. The Speaker’s decision is final.
Role of Rajya Sabha: The Rajya Sabha can neither amend nor reject a Money Bill; it can only return it with or without recommendations. The RS has 14 days to do so. If it fails to return the bill in 14 days, the bill is deemed passed by both Houses in the form originally approved by the Lok Sabha.
Lok Sabha Approval: The Lok Sabha then considers any RS recommendations and may accept or reject them. The final form of the bill, as decided by the Lok Sabha, is what proceeds for presidential assent.
President’s Assent: The President may give assent to the Money Bill or withhold assent, but cannot return it for reconsideration. Once the President signs, the Money Bill becomes law.
The unique legislative path of a Money Bill highlights the primacy of the Lok Sabha in financial matters, an aspect also covered in detail in our blog on Sessions of Parliament in India, Constitutional Provisions, Types, Adjournment, Prorogation & Lapsing of Bills
If a bill provides for:
Imposition of fines/pecuniary penalties,
Payment of fees for licences or services rendered
Imposition, abolition, alteration, regulation of tax by local authorities or for local purposes.
Note: If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker is final.
Understanding Money Bill vs Finance Bill (and Finance Bill vs Money Bill) is a common UPSC question. Major differences include:
Constitutional Provision: Money Bills are defined in Article 110; Finance Bills (non-Money) are covered by Article 117.
Scope of Content: A Money Bill must contain only the matters in Article 110. A Finance Bill (Budget-related bill) may cover taxation or expenditure but can include items beyond Article 110 (if so, it isn’t a Money Bill).
Introduction: Both require the President's recommendation. However, Money Bills are introduced only in the Lok Sabha. Finance Bills typically originate in Lok Sabha after budget presentation, but RS can also introduce some finance-related bills (subject to President’s rec).
Speaker’s Role: Money Bills require the Speaker’s certificate. Finance Bills do not require such certification and follow ordinary or special financial bill procedures.
Rajya Sabha Powers: For Money Bills, RS can only recommend changes (which LS may accept or reject). For Finance Bills, RS has full powers: it can amend or reject them. Disagreements can be resolved by a joint sitting (except Money Bills).
Time Limit: Money Bills lapse if RS does not return within 14 days. Ordinary Finance Bills have no such limit (RS can delay up to six months or trigger a joint sitting).
President’s Assent: The President cannot return a Money Bill for reconsideration. In contrast, non-Money Finance Bills can be returned for reconsideration.
Examples: The Appropriation Bill and the main Finance Bill (budget) are Money Bills. But if extra clauses are added (making it beyond Article 110), it becomes a normal Finance Bill (requiring RS passage).
“In short, all Money Bills are financial bills, but not all financial bills are Money Bills”.
Two key concepts tied to money bills are the Consolidated Fund of India and the Contingency Fund:
Consolidated Fund of India (CFI)
Article 266(1) states that all revenues (taxes, loans, etc.) of the Government of India form the CFI.
Crucially, Article 266(3) mandates that no money can be withdrawn from the CFI except by law. Thus, appropriation of funds via Money Bills is required for all government spending.
Article 110 explicitly includes “appropriation of money out of the Consolidated Fund” as a Money Bill item.
Contingency Fund of India
Article 267 allows Parliament to establish a Contingency Fund for unforeseen expenses. This fund (at the President’s disposal) is used for urgent expenditures pending parliamentary approval. Advances from this fund are later “made good” by Parliament.
Article 110(c) covers transactions involving the Contingency Fund. In practice, money used from this fund must be authorized by a Money Bill or the next Appropriation Act.
These provisions underscore that every rupee spent from the government’s main account requires parliamentary sanction. This principle – “no taxation or expenditure without representation” – is why Money Bills exist.
Bypassing the Rajyasabha: Labeling complex laws as Money Bills lets them pass without full Upper House scrutiny, weakening bicameral checks and debate.
Stretching Article 110: A Money Bill must “only” contain matters listed in Article 110 (like taxation, Consolidated Fund, borrowing). Critics say recent budgets and omnibus laws bundled unrelated provisions under the Money Bill tag, prompting constitutional challenges.
Aadhaar and PMLA controversies: The Aadhaar Act (2016) was passed as a Money Bill, which many argued did not fit Article 110; amendments to the PMLA routed through finance/appropriation paths raised similar alarms.
Speaker’s certification concerns: The Speaker’s sole certification power was meant to be a narrow exception, but allegations of partisan use persist; the judiciary has indicated that classification cannot be used to include provisions unrelated to Article 110.
Democratic costs: Overuse or misclassification erodes trust, sets a precedent to sidestep the Upper House, and risks long legal battles that inject uncertainty into key policies—undermining transparency, accountability, and the balance of power intended by the Constitution.
Money Bills are central to India’s financial system and legislative discipline:
Budgetary Authority in Lok Sabha: By design, the Lok Sabha (directly elected house) alone controls money bills. This ensures that taxation and expenditure decisions rest with the people’s representatives.
Fiscal Accountability: Requiring parliamentary (Lok Sabha) approval for all spending enforces transparency and accountability. The narrow definition of Money Bill limits the government from slipping non-budgetary issues into budget legislation.
Efficient Passage of Essential Laws: Money Bills (like Appropriation Bills) have to be passed each year. The short RS review period (14 days) speeds up important financial legislation, which can be critical in budgets.
Checks and Balances: The system includes checks: only financial matters, Speaker’s seal, presidential approval etc. These aim to prevent misuse.
Q. What is the definition of Money Bills under Article 110?
A. A Money Bill is defined in Article 110 of the Indian Constitution. It deals only with matters such as taxation, government borrowing, and expenditure from the Consolidated Fund of India. If any non-financial clause is included, it ceases to be a Money Bill.
Q. What is the difference between a Money Bill and a Financial Bill?
A. A Money Bill is a type of Financial Bill strictly limited to subjects in Article 110. A Financial Bill may cover taxation and expenditure but can include other matters too. Only a Money Bill requires a Speaker's certification and can be introduced only in Lok Sabha.
Q. What has the Supreme Court said about misuse of Money Bills?
A. The Supreme Court has reviewed petitions (including Aadhaar and PMLA cases) questioning whether some laws were wrongly certified as Money Bills. In 2024, it agreed to form a special bench to re-examine such classifications, highlighting concerns of bypassing Rajya Sabha scrutiny.
Prelims
Q. Which of the following statements is correct in respect of a Money Bill in the Parliament? (2024)
Article 109 mentions a special procedure in respect of Money Bills.
A Money Bill shall not be introduced in the Council of States.
The Rajya Sabha can either approve the Bill or suggest changes but cannot reject it.
Amendments to a Money Bill suggested by the Rajya Sabha have to be accepted by the Lok Sabha.
Select the answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1, 3 and 4
Answer: (c)
Q. Regarding the Money Bill, which of the following statements is not correct? (2018)
A bill shall be deemed to be a Money Bill if it contains only provisions relating to the imposition, abolition, remission, alteration or regulation of any tax.
A Money Bill has provisions for the custody of the Consolidated Fund of India or the Contingency Fund of India.
A Money Bill is concerned with the appropriation of money out of the Contingency Fund of India.
A Money Bill deals with the regulation of borrowing of money or giving of any guarantee by the Government of India.
Ans: (c)
Q. What will follow if a Money Bill is substantially amended by the Rajya Sabha? (2013)
The Lok Sabha may still proceed with the Bill, accepting or not accepting the recommendations of the Rajya Sabha.
The Lok Sabha cannot consider the Bill further.
The Lok Sabha may send the Bill to the Rajya Sabha for reconsideration.
The President may call a joint sitting for passing the Bill.
Ans: (a)
The Money Bill is a constitutionally unique instrument ensuring that financial legislation remains under Lok Sabha control. It represents a trade-off: fiscal decisions by majority rule vs. curtailed bicameral debate. Understanding Money Bills thus requires both mastery of the constitution and awareness of recent legal-political debates.
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