WEBINAR 7: INDIA & SRI LANKA - Bicameralism and the Rule of Law: Reining in the Abuse of Money Bills in Legislative Procedure
Gaurav MUKHERJEE
23 November 2020
Parliamentary democracies engage in the exercise of deliberation during the process of law-making through their institutions. While the design of parliaments varies across countries, a number of them – including India – incorporate an upper house of federal parliament with differences in modes of representation and power from the popularly elected lower house. The upper house is intended to represent a wider range of interests than the lower house, including those of sub-national political units, and can act as a check against the majoritarian tendencies of the lower house. In the Indian constitutional system, both the Rajya Sabha (Indian Upper House) and the Lok Sabha (Indian Lower House) can initiate legislation, while also being able to make recommendations to the other in respect of such legislation.
However, the power of the Rajya Sabha is severely curtailed in respect of ‘money bills’ – legislation that only contains provisions related to taxation, borrowing of money by the government, and expenditure from or receipt to the Consolidated Fund of India. ‘Money bills’ can only be initiated in the Lok Sabha and it remains free to reject any recommendations from the Rajya Sabha pertaining to such bills. Initially intended to give the government of the day a degree of latitude in the field of government finances, the strict textual conditions which circumscribe the classification of laws as ‘money bills’ have been increasingly interpreted in a perverse way so as to ensure that any law on which the government wishes to avoid Rajya Sabha scrutiny is deemed a ‘money bill’. The proliferating classification of ordinary laws which have little to do with government finances in order to evade parliamentary scrutiny has serious deleterious consequences for federalism and the bicameral system of government, citizens’ fundamental rights, and the rule of law.
In this post, I explore this issue in four parts. In the first part, I discuss an instance where legislation having few financial implications, but consequences for the fundamental rights of citizens, was classified as a ‘money bill’ by the Lok Sabha and certified as such by the Speaker. The second part fuses a normative claim about the role of bicameralism in parliamentary democracies with a descriptive argument about the gap between this role and the structural factors that constrain its capacity to perform it under conditions of majoritarian parliamentarism. The third part of this post argues that the rise in the use of ‘money bills’ to avoid Rajya Sabha scrutiny is enabled by the failure of the three veto points which are designed to curb its abuse. In the fourth part, I discuss three ideas to engage the abuse of money bills in the legislative procedure.
The Abuse of Money Bills: The Aadhaar Case
On 11 March 2016, the Lok Sabha passed the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 as a ‘money bill’. The law provides the legal infrastructure for a system of biometric identification aimed at better delivery of public services, benefits, and subsidies to targeted beneficiaries while avoiding welfare fraud. The law as it then stood generated a polarizing public debate: those in favour argued that it could ensure better delivery of public goods and services, while critics pointed to concerns regarding Aadhaar’s privacy implications, its unimpressive record at curbing ‘duplicate’ or ‘ghost’ beneficiaries, the opacity surrounding its mandatory nature, as well as lingering questions about its linkages to services like banking and mobile telephony.
In order to engage with these concerns, several recommendations were put forth by both a bi-partisan standing committee on finance and the Rajya Sabha. These suggestions were summarily rejected by the Lok Sabha and the law was passed as a ‘money bill’; a clear instance of legislation having deleterious implications for fundamental rights of citizens as well as states’ rights being rushed through using an exceptional mechanism to bypass parliamentary debate and scrutiny.
Bicameralism under Conditions of Majoritarian Parliamentarism
The classification of ordinary laws as money bills to bypass scrutiny in the upper house has serious consequences for the shared exercise of democratic deliberation, parliamentary oversight of the executive, and the rule of law. The bicameral design of parliamentary systems is intended to serve at least three functions, all of which are collectively eroded when there is a bypass of the Rajya Sabha in the process of law-making.
The first is the representative function of a wider range of interest groups that can influence the legislative agenda which is otherwise dominated by the popularly elected lower house. In India, this is achieved with the Rajya Sabha being indirectly elected through state level elections according to a staggered cycle (thereby being able to represent states’ interests at the federal level). The second is a reactive function, where the Rajya Sabha is competent to vote on and reject all bills originating in the lower house except money bills. The Indian federal parliamentary system also incorporates a mechanism by which the Rajya Sabha may delay legislation or force reconsideration by the Lok Sabha for a limited period of time, failing which there may be a joint session of the two houses to resolve the deadlock.
This however has not happened since 2002, when the provisions of the Prevention of Terrorism Bill had been debated in a joint session. The third is an oversight function which the Rajya Sabha is able to execute through horizontal (referral to select or standing committees), diagonal (questions) and vertical (lower house opposition or committees raising questions to the political executive) institutional routes.
The representative, reactive, and oversight functions of the bicameral system assume greater importance within the political conditions of India, where a single party – the Bharatiya Janata Party (BJP) holds an electoral supermajority in the Lok Sabha. Under ordinary conditions in parliamentary systems, there is a hierarchical relationship between the legislative and executive branches’ executive authority. The latter, comprising an executive head and her cabinet, arises out of the legislative body and is subject to potential dismissal through a no-confidence vote.
However, with the BJP’s electoral supermajority, this hierarchical relationship is inverted, leading to a situation which political scientists call ‘majoritarian parliamentarism’ where legislative authority is subordinated to executive authority, a process that is aided by the increasing fusion of executive, party, and legislature; as well as strict party discipline – enforced by a strong anti-defection law.
The Three Veto Points
In our recent paper, my co-author and I suggest that there are three veto points that exist in the Indian constitutional framework against the abuse of the special status granted to ‘money bills’ in respect of the Lok Sabha. First, there are strict textual conditions contained in article 110(1) of the Indian Constitution which states that a bill shall only be deemed to be a money bill if it contains provisions exclusively dealing with, inter alia, federal taxation, borrowing or expenditure. This is meant to ensure that an ordinary bill ‘shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses’.
The second veto point is that a certification to this effect must be granted by the Speaker of the Lok Sabha, who is considered to be a non-partisan constitutionally designated officer. The partisanship of the Speaker has come under a cloud in the last few years, with rampant misapplication of seemingly neutral rules in favour of the majority party in the Lok Sabha. The finality of the Speaker’s certification of ‘money bills’ in the Indian Constitution owes its origins primarily to section 37 of the Government of India Act, 1935 (modelled on section 1 of the Parliament Act, 1911 of the UK) and article 22 of the Constitution of Ireland, 1937.
Two key differences are important to highlight. First, the UK law contains an explicit bar against judicial review of the certification, stating that it ‘shall not be questioned in any court of law’ and that it shall be conclusive ‘for all purposes’. Such language is not present in the analogous provision in the Indian Constitution. Second, a challenge to the certification of a money bill in the Constitution of Ireland is governed by section 22(2), which sets up a detailed politico-legal process for a final determination. These differences provide a compelling basis to consider the Indian Lok Sabha Speaker’s certification judicially reviewable.
This brings us to the third veto point – the judicial review of such certifications by the Speaker, albeit to a limited extent given the Speaker’s position as a constitutionally designated officer. This veto point was tested in the Puttaswamy case where the constitutionality of the Aadhaar Act was challenged at the Supreme Court of India. One of the issues implicated was its passage as a ‘money bill’ by the Lok Sabha. The Supreme Court upheld the constitutionality of the law by considering substantive issues – like surveillance, data protection, data minimization, purpose, limitation, time period for data retention, data security – prior to considering whether the Speaker’s money bill certification fell within the ambit of the requirements under article 110(1). In addition, the judgment in Puttaswamy did not consider in any detail whether the Speaker’s certification was valid.
However, all this may change with a pending 2019 case concerning the constitutional validity of the insertion of legal provisions that altered the number of tribunals under the Finance Act, 2017 (the legislation dealing with the federal budget, which could reasonably be classified as a ‘money bill’). Here, the Supreme Court referred the interpretation, regarding how strictly the provisions of article 110(1) should be read in a Speaker’s certification to that effect, to a constitution bench (of 5 judges). This suggests that we could have a definite precedent on the question soon. The three veto points outlined need to work in tandem for the abuse of the special money bills procedure to be curbed.
Engaging with the Abuse of the Money Bills in Legislative Procedure
Having laid out the weaknesses of the three veto points which are required to work in tandem under conditions of majoritarian parliamentarism in order to ensure the continued accountability of the executive to Parliament, I turn to three ways in which the abuse of the ‘money bill’ procedure may be engaged with.
The first mechanism is the exercise of judicial review which takes seriously the textual conditions that govern whether an ordinary bill may be deemed a money bill. In order for this mechanism to function properly, there needs to be a departure from the approach taken by the Supreme Court in the Puttaswamy case, where the analysis of substantive questions of constitutionality within the Aadhaar legislation were folded into the scrutiny of whether the law fell within the ambit of the enumerated areas for a money bill in article 110(1) of the Indian Constitution.
For the reasons indicated in section III, judicial review should also start with the presumption that the Speaker’s certification of a money bill is subject to scrutiny. The Supreme Court’s willingness to revisit the constitutional validity of the Speaker’s certification of a proposed law as a ‘money bill’ when its content falls outside the scope of the enumerated grounds in article 110(1) is a welcome step in this direction.
The second mechanism is through reform of the office of Presiding Officer of the Lok Sabha. Currently, this role is held by the Speaker, who is selected from among the members of the party holding a majority in the chamber. The role is meant to be non-partisan, but recent instances of partisan behaviour in favour of the ruling party only reinforce the need for change. Some have suggested an arrangement where the majority party and the opposition each appoint an Associate and Deputy Speaker, each of whom would serve terms in charge of the chamber on a rotating basis, changing with each session. In the event the Associate Speaker were incapacitated or unable to serve, the Deputy Speaker would step in.
The third mechanism does not relate directly to the abuse of the money bill procedure but can strengthen the ability of both houses of Parliament to ensure executive accountability. The empirical evidence from India points to a decline in the use of questions, referrals to joint or standing committees. The number of referrals to parliamentary committees, which performs a large part of the deliberative work of the institution, witnessed a precipitous decline from the previous Lok Sabha term to the current. During the term of the 14th Lok Sabha (2014-19), there had been a total of 68 of such referrals, amounting to 71% of the total number of legislation passed in that term, whereas in the 15th Lok Sabha (2019-present), there have been a total of 24, amounting to a mere 25% of the total number.
Concurrently, there has also been a steep reduction in the sheer amount of time which is devoted to debate and discussion of legislation in both houses. A renewed vigour and coordination among political actors could have a significant effect on the ability of Parliament to conduct its crucial work to keep an entrenched, powerful executive in check.
Gaurav Mukherjee is an S.J.D. candidate in Comparative Constitutional Law at the Central European University, Budapest/Vienna. Gaurav's doctoral project concerns the role of the judiciary in facilitating inter-branch dialogue in the adjudication of socioeconomic rights disputes. He is a co-convenor of the International Association of Constitutional Law Research Group on Social Rights. In 2021, Gaurav will be a Visiting Fellow at the Max Planck Institute of Comparative Public Law & International Law, Heidelberg, and he was an Indian Equality Law Visiting Fellow at the University of Melbourne in 2019. In 2018, Gaurav was awarded the Indian Law Review Early Career Prize for Case/Legislative Notes for his article on executive law-making power.
He has worked with organizations like the Hungarian Helsinki Committee and the School of Policy & Governance, Azim Premji University, Bangalore. He has served as a peer reviewer for journals like the International Journal of Human Rights, the Australian Journal of Asian Law and the Indian Law Review. Gaurav is currently the Regional Correspondent for India at the Oxford Human Rights Hub.