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The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha yesterday, as a Money Bill [Clarification: This is as per news reports.*  The text of the Bill does not indicate that it is a Money Bill].  In this context, we briefly outline the various types of Bills in Parliament, and highlight the key differences between Money Bills and Financial Bills. What are the different types of Bills? There are four types of Bills, namely (i) Constitution Amendment Bills; (ii) Money Bills; (iii) Financial Bills; and (iv) Ordinary Bills. What are the features of each of these Bills?

  • Constitution Amendment Bills[i]: These are Bills which seek to amend the Constitution.
  • Money Bills[ii]: A Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India. Bills that only contain provisions that are incidental to these matters would also be regarded as Money Bills.[iii]
  • Financial Bills[iv]: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter is called a Financial Bill. Therefore, if a Bill merely involves expenditure by the government, and addresses other issues, it will be a financial bill.
  • Ordinary Bills[v]: All other Bills are called ordinary bills.

How are these bills passed?

  • Constitution Amendment Bills1: A Constitution Amendment Bill must be passed by both Houses of Parliament. It would require a simple majority of the total membership of that House, and a two thirds majority of all members present and voting.  Further, if the Bill relates to matters like the election of the President and Governor, executive and legislative powers of the centre and states, the judiciary, etc., it must be ratified by at least half of the state legislatures.
  • Money Bills[vi]: A Money Bill may only be introduced in Lok Sabha, on the recommendation of the President. It must be passed in Lok Sabha by a simple majority of all members present and voting.  Following this, it may be sent to the Rajya Sabha for its recommendations, which Lok Sabha may reject if it chooses to.  If such recommendations are not given within 14 days, it will deemed to be passed by Parliament.
  • Financial Bills4: A Financial Bill may only be introduced in Lok Sabha, on the recommendation of the President. The Bill must be passed by both Houses of Parliament, after the President has recommended that it be taken up for consideration in each House.
  • Ordinary Bills5: An Ordinary Bill may be introduced in either House of Parliament. It must be passed by both Houses by a simple majority of all members present and voting.

How is a Money Bill different from a financial bill? While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.  For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.  However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered as a Financial Bill.  The Compensatory Afforestation Fund Bill, 2015, which establishes funds under the Public Account of India and states, was introduced as a Financial Bill.[vii] Secondly, as highlighted above, the procedure for the passage of the two bills varies significantly.  The Rajya Sabha has no power to reject or amend a Money Bill.  However, a Financial Bill must be passed by both Houses of Parliament. Who decides if a Bill is a Money Bill? The Speaker certifies a Bill as a Money Bill, and the Speaker’s decision is final.[viii]  Also, the Constitution states that parliamentary proceedings as well as officers responsible for the conduct of business (such as the Speaker) may not be questioned by any Court.[ix]


  [i]. Article 368, Constitution of India. [ii]. Article 110, Constitution of India. [iii]. Article 110 (1), Constitution of India. [iv]. Article 117, Constitution of India. [v]. Article 107, Constitution of India. [vi]. Article 109, Constitution of India. [vii]. The Compensatory Afforestation Fund Bill, 2015, introduced in Lok Sabha on May 8, 2015, http://www.prsindia.org/billtrack/the-compensatory-afforestations-fund-bill-2015-3782/. [viii]. Article 110 (3), Constitution of India. [ix]. Article 122, Constitution of India. [*Note: See Economic Times, Financial Express, The Hindu Business LineNDTV ,etc.]

Yesterday, the Election Commission announced the dates for the 2019 Lok Sabha elections.  The voting will take place in seven phases between April 11, 2019 to May 19, 2019.  With this announcement, the Model Code of Conduct (MCC) has comes into force.  In this blog, we outline the key features of the MCC. 

What is the Model Code of Conduct and who does it apply to?

The MCC is a set of guidelines issued by the Election Commission to regulate political parties and candidates prior to elections, to ensure free and fair elections. This is in keeping with Article 324 of the Constitution, which gives the Election Commission the power to supervise elections to the Parliament and state legislatures. The MCC is operational from the date that the election schedule is announced till the date that results are announced.  Thus, for the general elections this year, the MCC came into force on March 10, 2019, when the election schedule was announced, and will operate till May 23, 2019, when the final results will be announced. 

How has the Model Code of Conduct evolved over time? 

According to a Press Information Bureau release, a form of the MCC was first introduced in the state assembly elections in Kerala in 1960.  It was a set of instructions to political parties regarding election meetings, speeches, slogans, etc. In the 1962 general elections to the Lok Sabha, the MCC was circulated to recognised parties, and state governments sought feedback from the parties.  The MCC was largely followed by all parties in the 1962 elections and continued to be followed in subsequent general elections.  In 1979, the Election Commission added a section to regulate the ‘party in power’ and prevent it from gaining an unfair advantage at the time of elections.  In 2013, the Supreme Court directed the Election Commission to include guidelines regarding election manifestos, which it had included in the MCC for the 2014 general elections. 

What are the key provisions of the Model Code of Conduct?

The MCC contains eight provisions dealing with general conduct, meetings, processions, polling day, polling booths, observers, party in power, and election manifestos.  Major provisions of the MCC are outlined below.

  • General Conduct:  Criticism of political parties must be limited to their policies and programmes, past record and work.  Activities such as: (a) using caste and communal feelings to secure votes, (b) criticising candidates on the basis of unverified reports, (c) bribing or intimidation of voters, and (d) organising demonstrations or picketing outside houses of persons to protest against their opinions, are prohibited.
  • Meetings:  Parties must inform the local police authorities of the venue and time of any meeting in time to enable the police to make adequate security arrangements.
  • Processions:  If two or more candidates plan processions along the same route, organisers must establish contact in advance to ensure that the processions do not clash.  Carrying and burning effigies representing members of other political parties is not allowed.
  • Polling day:  All authorised party workers at polling booths should be given identity badges.  These should not contain the party name, symbol or name of the candidate.
  • Polling booths:  Only voters, and those with a valid pass from the Election Commission, will be allowed to enter polling booths.
  • Observers:  The Election Commission will appoint observers to whom any candidates may report problems regarding the conduct of the election.
  • Party in power:  The MCC incorporated certain restrictions in 1979, regulating the conduct of the party in power.  Ministers must not combine official visits with election work or use official machinery for the same.  The party must avoid advertising at the cost of the public exchequer or using official mass media for publicity on achievements to improve chances of victory in the elections.  Ministers and other authorities must not announce any financial grants, or promise any construction of roads, provision of drinking water, etc.   Other parties must be allowed to use public spaces and rest houses and these must not be monopolised by the party in power.
  • Election manifestos:  Added in 2013, these guidelines prohibit parties from making promises that exert an undue influence on voters, and suggest that manifestos also indicate the means to achieve promises.

What changes have been recommended in relation to the MCC since the last general elections?

In 2015, the Law Commission in its report on Electoral Reforms, noted that the MCC prohibits the issue of advertisement at the cost of public exchequer in newspapers/media during the election period.  However, it observed that since the MCC comes into operation only from the date on which the Commission announces elections, the government can release advertisements prior to the announcement of elections.  It noted that this gives an advantage to the ruling party to issue government sponsored advertisements that highlights its achievements, which gives it an undue advantage over other parties and candidates.  Therefore, the Commission recommended that a restriction should be imposed on government-sponsored advertisements for up to six months prior to the date of expiry of the House/Assembly.  However, it stated that an exception may be carved out for advertisements highlighting the government's poverty alleviation programmes or any health related schemes.

Is the Model Code of Conduct legally binding? 

The MCC is not enforceable by law.  However, certain provisions of the MCC may be enforced through invoking corresponding provisions in other statutes such as the Indian Penal Code, 1860, Code of Criminal Procedure, 1973, and Representation of the People Act, 1951. The Election Commission has argued against making the MCC legally binding; stating that elections must be completed within a relatively short time (close to 45 days),  and judicial proceedings typically take longer, therefore it is not feasible to make it enforceable by law. On the other hand, in 2013, the Standing Committee on Personnel, Public Grievances, Law and Justice, recommended making the MCC legally binding.  In a report on electoral reforms, the Standing Committee observed that most provisions of the MCC are already enforceable through corresponding provisions in other statutes, mentioned above.  It recommended that the MCC be made a part of the Representation of the People Act, 1951.

Note that this is an updated version of a previous blog published in 201