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Data Protection Bill & the Politics of Labels: There’s More Than Meets the Eye

There was no need to introduce it under Article 117(1) as it does not have the characteristics of a money bill.

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Recently the introduction of the Digital Personal Data Protection (DPDP) Bill, 2023 as a financial bill made news because of the speculation that it paves the way for the Speaker to certify it as a 'money bill' which will foreclose any possibilities of Rajya Sabha amending the bill.

What wasn't 'newsy' was that eight other bills introduced by the government in the Monsoon Session so far have also been categorised as 'financial bills'. This doesn’t include the numerous private member bills introduced in the Lok Sabha on 3 August 2023, several of which were branded the same.

What also didn’t make headlines was that a bill introduced in the Rajya Sabha in 2021 and cleared on 1 August 2023 was categorised as a financial bill as well.
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What do we make of these developments? For this, we need to go back to the basics.

Stages a New Bill Undergoes in the Parliament

Firstly, every bill goes through three main stages– introduction, consideration, and voting. An ordinary bill, even if it amends the Constitution, can be introduced in either House of the Parliament and must be considered and voted upon by both houses.

Each House has equal powers to amend such a bill. The same applies to every private member bill categorised as an ordinary bill. The process, however, differs when it comes to financial bills and money bills. We'll find that out later in the piece.

But, pertinent here to note is that while an ordinary bill can be introduced and considered by Parliament without the President's recommendation, financial bills, depending on which category they fall in, require the President's recommendation for their introduction or consideration or both. This itself indicates how the decision to categorise a bill as a financial bill needs to be carefully considered.

Money Bill vs Financial Bill

Article 117 of the Constitution deals with financial bills and divides them into two categories – ones which have the characteristics of a money bill, and second, which, after they become operational, will require some expenditure to be made from the Consolidated Fund of India.

A money bill is defined under Article 110 and can include bills which 'only' impose, abolish, regulate any tax or regulate how government borrows or spends money or deal with certain mandatory expenditures of the government and matters 'incidental’ to these, etc. For the complete list, please refer to the Article 110 of the Constitution.

Thus, for instance, a bill which imposes a new ‘green tax’ on our income to deal with climate change would have the characteristics of a money bill and a bill which sets up a new University for which some expenditure from the Consolidated Fund of India will be required, will fall under the second category of financial bills.

Article 110 also gives the Speaker the power to decide whether or not a financial bill which has the characteristics of a money bill is actually a money bill or not and the decision of the Speaker in this regard will be final.

What is important to note is that Article 117 not only differentiates between the two kinds of financial bills but also provides for two special procedures for both and the consequences for which differ depending on which kind of financial bill it is. The table below explains the differences:
There was no need to introduce it under Article 117(1) as it does not have the characteristics of a money bill.

Financial bills and their consequences.

Source: Author 

Thus, not every financial bill is a money bill, but every money bill is a financial bill – which is a classic principle taught in law schools as well!

Now, we look at the recommendation received from the President on the DPDP Bill.

Speaker’s Constitutional Powers Wrt Money Bills

As can be seen, the President has recommended introducing DPDP Bill under Article 117(1) and considering it under Article 117(3) which means that the Speaker is empowered to certify it as a money bill after it has been passed by Lok Sabha. Will the Speaker do so? It is anybody’s guess.

The Minister for Information Technology Ashwini Vaishnav while introducing the Bill on 3 August 2023, stated on the floor of Lok Sabha that "it is a general bill, not a money bill", But as Kaul and Shakdher note on pg. 588 of their seminal book ‘Practice and Procedure of Parliament’, not only is the Speaker alone empowered to certify a bill as a money bill, he can do so without consulting anyone.

In fact, the powers of the Speaker in this matter seem to be so extensive that Kaul and Shakdher, on pg 593 provides a precedent from 1956 where a Bill was certified as a money bill by the Speaker even though it wasn’t introduced under Article 117(1).

So, can the Speaker certify the DPDP Bill as a money bill despite the Minister’s statement that it is not a money bill? There is nothing in the Constitution preventing him from doing so!
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Whether he actually does so, remains to be seen.

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DPDP Could Have Been a Financial Bill

The question that still lingers is – if it was a general bill, as the Minister claims, why was it introduced under Article 117(1)?

The DPDP Bill provides for setting up of a Data Protection Board of India and for its functioning, it is estimated that about Rs 25 crore rupees are needed as an initial expense and then Rs.10 crore annually from the Consolidated Fund of India.

Now, it must be noted that the DPDP doesn’t 'only' set up a Board but also provides for many other things.

Since DPDP Bill envisages expenditure from the Consolidated Fund of India, it could have been categorised as a financial bill, only requiring President’s recommendation for consideration under Article 117(3).
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There was no need to introduce it under Article 117(1) as it does not have the characteristics of a money bill. Then this entire controversy could have been averted. But introducing it under Article 117(1) must legitimately raise eyebrows.

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To further solidify this point, let’s look at the two other bills.

On 1 August 2023, Rajya Sabha cleared the Mediation Bill, which was introduced in Rajya Sabha in December 2021 and categorised as a financial bill. It is a standalone bill providing for the promotion and regulation of mediation in the country and among other things, provides for the setting up of a Mediation Council of India and a Mediation Fund, which would receive monies provided by the Central government among other sources like fees for mediation services, etc.

After being passed by Rajya Sabha, it went to Lok Sabha along with a recommendation from the President to consider it under Article 117(3).

On 4 August 2023, the Anusandhan National Research Foundation Bill, 2023 was introduced in Lok Sabha and categorised as a financial bill. After its introduction, Lok Sabha received a recommendation from the President to consider it under Article 117(3).

The Financial Memorandum attached to the bill says that the Central government will be making funds available to the Foundation for its functioning and will require recurring and non-recurring expenditures to the tune of Rs 14,000 crores over five years from the Consolidated Fund of India.

Response From the Opposition

Like the DPDP bill, both the above bills provide for the setting up of bodies and envisage expenditure from the Consolidated Fund of India. Neither was introduced under Article 117(1) and both will be considered as financial bills under Article 117(3).

When the DPDP Bill was being introduced in Lok Sabha, it faced stiff opposition. MPs questioned the wide exemptions to the government machinery in the bill as well as the amendment to the RTI Act.
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The bill was termed 'unconstitutional' for contradicting the right to privacy and violative of the right to information. Demands were made for it to be sent to a Standing Committee again for review.

Though it has comfortable numbers in Lok Sabha, the government may be wary of the opposition managing to send the bill to a Select Committee or get some amendments through in Rajya Sabha.

While the government does its political calculations, it seems to have played safe by introducing the bill under Article 117(1) and kept the door open for the Speaker to certify it as a money bill later and thus, curtail Rajya Sabha’s powers.

(Maansi Verma is a lawyer and founder of Maadhyam, an initiative enabling critical citizen engagement with Parliament and law-making. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)

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