Articles 198 and 199: Special Procedure and Definition of State Money Bills

Articles 198 and 199 of the Constitution of India govern the special legislative procedure for State Money Bills and define which proposals qualify as Money Bills. They appear in Part VI, Chapter III, dealing with State Legislatures. These rules are especially important in a State with both a Legislative Assembly and a Legislative Council: the elected Assembly has the decisive role, while the Council can recommend changes within a limited period.

Article 198: Special procedure in respect of Money Bills

Clause (1) - Introduction: A Money Bill shall not be introduced in a Legislative Council. It must originate in the Legislative Assembly.

Clause (2) - Recommendations: After the Legislative Assembly passes a Money Bill in a State having a Legislative Council, the Bill is sent to the Council. The Council must return it within 14 days of receipt with any recommendations. The Assembly may accept or reject any or all recommendations.

Clause (3) - Accepted recommendations: If the Assembly accepts any Council recommendations, the Bill is deemed passed by both Houses with only those recommended amendments accepted by the Assembly.

Clause (4) - Rejected recommendations: If the Assembly accepts none, the Bill is deemed passed by both Houses in the form originally passed by the Assembly.

Clause (5) - No return within 14 days: If the Council fails to return the Bill within that period, the Bill is deemed passed by both Houses when the 14 days expire, in the form passed by the Assembly.

Article 199: Definition of Money Bills

Clause (1) provides that a Bill is a Money Bill only if it contains provisions dealing exclusively with one or more of the following specified subjects:

1. (a) Taxation: Imposition, abolition, remission, alteration or regulation of any tax.
2. (b) State borrowing and guarantees: Regulation of State borrowing or guarantees, or amendment of laws concerning the State's financial obligations.
3. (c) State funds: Custody of the State Consolidated Fund or Contingency Fund, or payment into or withdrawal from those funds.
4. (d) Appropriation: Appropriation of money out of the Consolidated Fund of the State.
5. (e) Charged expenditure: Declaring expenditure to be charged on the Consolidated Fund of the State, or increasing such expenditure.
6. (f) Receipts and custody: Receipt of money on account of the Consolidated Fund or public account of the State, or custody or issue of that money.
7. (g) Incidental matters: Matters incidental to those specified in sub-clauses (a) through (f).

What does not by itself make a Bill a Money Bill?

Clause (2) clarifies that a Bill is not a Money Bill merely because it imposes fines or other monetary penalties, requires licence fees or fees for services, or regulates taxes imposed by a local authority or body for local purposes. Its actual provisions must satisfy clause (1).

Who decides whether a Bill is a Money Bill?

Clause (3) provides that, where a State has a Legislative Council, the Speaker of its Legislative Assembly decides any question whether a Bill introduced in the State Legislature is a Money Bill; the constitutional text describes that decision as final. This does not necessarily exclude constitutional judicial review in an appropriate case.

Speaker's certificate

Clause (4) requires the Speaker's signed certificate stating that the Bill is a Money Bill when it is transmitted to the Legislative Council under Article 198 and when presented to the Governor for assent under Article 200.

How the State Money Bill procedure works

1. A qualifying Money Bill is introduced and passed in the Legislative Assembly, subject to applicable constitutional requirements including Article 207.
2. In a bicameral State, the Bill is transmitted to the Legislative Council for recommendations.
3. The Council may return recommendations within 14 days, but cannot compel the Assembly to adopt them.
4. The Bill is deemed passed in the form determined under Article 198, including automatic deemed passage if the Council does not return it in time.
5. The Bill is presented to the Governor under Article 200, with the Speaker's certificate where required.

Related constitutional provisions

Article 196 covers the introduction and passage of State Bills generally. Article 197 limits the Council's powers concerning Bills other than Money Bills and expressly excludes Money Bills. Article 200 concerns the Governor's assent; its reconsideration proviso is limited to Bills that are not Money Bills. Article 207 provides special rules for certain financial Bills, including the Governor's recommendation where constitutionally required. At the Union level, Articles 109 and 110 contain corresponding provisions for parliamentary Money Bills.

Frequently asked questions

Can a Legislative Council reject a Money Bill?

The Council cannot permanently block it. Its constitutional role is to return recommendations within 14 days; the Assembly may reject them.

What happens if the Council does not respond?

The Money Bill is deemed passed by both Houses after 14 days, unchanged from the form passed by the Assembly.

Does every financial Bill qualify as a Money Bill?

No. Article 199(1) requires that its provisions deal only with the listed subjects. Financial implications alone do not suffice.

Official constitutional sources

Read the Constitution of India (Legislative Department, Government of India), the Constitution on India Code and the official Constitution collection for authoritative text and subsequent updates.