Passage of Money Bill as per Constitution of Nepal, 2072
In the context of the Nepalese constitution, a “Money Bill” is a legislative category that includes a specific type called a “Finance Bill.” Money Bills pertain to financial matters, such as taxation, government revenues, expenditure, borrowing, and other related fiscal obligations. A Finance Bill is a subtype of Money Bill that specifically addresses financial issues, particularly concerning taxation, government spending, fiscal policies, and other financial regulations. These bills are introduced in the House of Representatives and follow the same legislative procedures as other Money Bills. Money Bills contain proposals for new taxes, amendments to existing tax laws, government expenditure, borrowing, and other financial measures. To become law, Money Bills must pass both houses of the Federal Parliament and receive the President’s assent.
The Constitution of Nepal, 2072, outlines the legislative procedures for a Finance Bill to become a Finance Act, and the process for other types of Money Bills is also the same. First, a Finance Bill must be introduced in the House of Representatives, and only the government can introduce it as a government bill, reflecting the government’s policy and agenda. This approach centralizes control and coordination over national finance matters, ensuring consistency in fiscal policies. Subsequently, the bill undergoes thorough discussions and debates in the House of Representatives to align with government objectives.
If the Finance Bill is passed in the House of Representatives, it is transmitted to the National Assembly for further consideration. The National Assembly can offer non-binding suggestions within fifteen days. The House of Representatives may choose to incorporate these suggestions or reject them. If the National Assembly does not return the Finance Bill within the timeframe, the House of Representatives can present it to the President for assent. The Finance Bill, with or without suggested amendments, is then presented to the President for approval, and it becomes a Finance Act once the President assents to it. This process ensures comprehensive scrutiny and discussion of financial priorities while upholding government accountability to the parliament and the public.
Unlike other bills that are presented in the Federal Parliament that get passed as bills, Money Bill follows the aforementioned process that is unique to money and finance related matters. Constitution of Nepal, 2072 specifies the powers of the Federal Parliament, the introduction of Bills (with a special provision on Money Bills), the passage of Bills between the House of Representatives and the National Assembly, withdrawal of Bills, and the process of presidential assent for Bills to become Acts. These procedures are in accordance with the constitutional framework, establishing the legal process for legislative matters in Nepal under Part 9 of the Constitution of Nepal, 2072.
Some restrictions/provisions specific to Money Bill as per Constitution
Let’s refer to the specific texts from the Constitution of Nepal, 2015, that provides limitations on the discussion and amendment of Money Bills in the Federal Parliament. Here are the relevant excerpts and explanation:
Introduction of Bills
Article 110(1) states: “A Bill may, subject to this Constitution, be introduced in any House of the Federal Parliament. Provided that a Money Bill shall be introduced only in the House of Representatives.”
Article 110(2) further specifies: “A Money Bill and a Bill concerning a security body including the Nepal Army, Nepal Police and Armed Police Force, Nepal shall be introduced only as a Government Bill.”
> These clauses establish that Money Bills must originate in the House of Representatives and that they should be introduced only as government bills, limiting the scope of private members to initiate such bills.
Decision by the Speaker
Article 110(4) states: “If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker thereon shall be final.”
> This clause reinforces the Speaker’s ultimate authority to decide whether a Bill qualifies as a Money Bill, which is significant for resolving disputes or uncertainties in this regard.
Exclusivity of the House of Representatives
Article 111(2) explains the role of the National Assembly in relation to Money Bills: “A Money Bill passed by the House of Representatives shall be transmitted to the National Assembly. The National Assembly shall, after deliberations on such a Bill, send back the Bill to the House of Representatives within fifteen days from the date of receipt of the Bill, with suggestions, if any.”
> This provision emphasizes that the National Assembly’s role is to provide suggestions, and these suggestions are non-binding. The final authority for amending Money Bills remains with the House of Representatives.
These constitutional provisions, as described in the provided texts, clearly demonstrate the limitations on the discussion and amendment of Money Bills within the Federal Parliament of Nepal. Money Bills must originate in the House of Representatives, can only be introduced as government bills, and the National Assembly’s role is primarily to provide non-binding suggestions. The final say on Money Bills rests with the House of Representatives and, in cases of ambiguity on whether the bill is a “Money Bill” or not, the Speaker’s decision is considered to be final.
Types of Money Bills in Nepal
Appropriation Bill (बिनियोजन विधयेक)
Article 120 of the Constitution of Nepal, 2072
An appropriation bill is a legislative document that grants legal approval for a government to spend public funds during a fiscal year. It outlines the detailed allocation of money to various government activities and programs, from operating expenses to major investments. This bill is subject to parliamentary approval and provides binding legal authority for government spending, ensuring fiscal accountability and transparency. It plays a crucial role in the financial management and governance of a country by allowing for the systematic allocation of public funds in accordance with democratic oversight.
Finance Bill (आर्थिक विधयेक)
A finance bill is a specific type of legislative proposal that focuses on financial matters, particularly related to taxation, duties, fiscal and other financial regulations. It is introduced in a legislative body, such as a parliament, and outlines proposals for new taxes, changes to existing tax laws and other financial measures. The finance bill is a crucial component of a country’s budgetary process, as it provides the legal framework for the government’s financial activities for a specific fiscal year. It must be approved by the legislative body to become law, shaping a nation’s financial policies and revenue collection.
National Debt Issue Bill (राष्ट्र ऋण उठाउने विधयेक)
A National Debt Issue Bill is a type of legislation that authorizes a government to raise funds by issuing debt securities, such as government bonds or treasury bills, to finance various national projects, expenses, or budget deficits. This bill outlines the terms and conditions of the debt issuance, including the amount to be borrowed, the maturity date, and the interest rates. It is a critical financial tool that allows governments to manage their financial obligations, and it must be approved by the legislature to authorize the government’s borrowing activities. The bill helps governments secure the necessary funding to support public initiatives and maintain financial stability.
Account Bill (पेश्की खर्च विधयेक)
Article 122 of the Constitution of Nepal, 2072
An account bill, often referred to as an advance expense bill, is a legislative measure that provides funds to cover government expenses when the main appropriation bill is still under consideration and has not yet been passed. It allows the government to access funds in advance to meet essential financial obligations, ensuring that key services and operations continue uninterrupted.
An Account Bill provision allows a government to incur a portion of its estimated expenses for a financial year in advance while an Appropriation Bill is being considered. However, this Vote on Account Bill can only be introduced after the revenue and expenditure estimates have been presented as required by Article 119. The amount spent under this provision cannot exceed one-third of the estimated expenditures for the year. The expenses incurred through the Vote on Account are subsequently included in the State Appropriation Bill, ensuring financial continuity during the budget approval process.
Credit Bill (उधारो खर्च विधयेक)
Article 123 of the Constitution of Nepal, 2072
Credit Bill bill is a legislative provision that allows the Minister for Finance in the Government of Nepal to present a statement of expenditures to the House of Representatives without specifying all the usual details, especially during emergencies caused by natural disasters, external threats, internal disturbances, or other critical situations where providing exhaustive financial information may be impractical or detrimental to national security and interests. It enables the government to secure necessary funds quickly to address pressing issues without the usual budgetary details.
Order under Samayik Kar Asuli Ain, 2012 (सामयिक कर असुल ऐन, २०१२ अनुसारको आदेश)
This is not exactly a Money Bill per se. The “Samayik Kar Asuli Ain, 2012 (1955 AD)” is a historic legislative enactment from the reign of King Mahendra, which remains in effect today. This law empowers the Government of Nepal to issue “Notified Orders” in the Nepal Gazette, allowing the application or increase of customs duty, excise duty, or other taxes when necessary for the public interest. These orders become law from the specified date and remain in effect for a certain duration. They cease to be law when incorporated into regular legislation, when the government decides not to apply them, or after six months from publication. If amended and resulting in a lower rate, excess amounts charged are refunded; if the new law has a higher rate, it applies from its enforcement date. The interpretation of “apply,” “increase,” and “date specified” in recent applications has been generous and flexible, allowing for various changes in tax laws, even retrospective amendments. For more details see: When exactly does the Finance Bill become Finance Act?
Budget Speech (बजेट वक्तब्य)
A budget speech is a significant address made by the government’s Finance Minister or equivalent official when presenting the annual budget to the parliament. It serves to outline the government’s fiscal policies, revenue and expenditure plans, economic priorities, and financial goals for the upcoming year. The speech often provides a comprehensive overview of the country’s economic health, proposed tax measures, spending priorities, and strategies for economic growth and development. It plays a crucial role in informing both parliament and the public about the government’s financial plans and sets the stage for debates and discussions on the budget’s various components.
The budget speech, while important and influential, is typically considered a political statement rather than a legally binding document. It outlines the government’s fiscal intentions, priorities, and proposals for the upcoming year but doesn’t have the force of law on its own. The legal aspect of the budget is usually contained in the actual budget documents, including the Appropriation Bill and Finance Bill, which, when passed by the parliament, become legally binding and determine government expenditures and tax policies. The budget speech is more about communicating the government’s economic and financial vision, gaining political support, and informing parliament and the public about its plans. It can be a powerful tool for shaping public opinion and building consensus but doesn’t, by itself, establish legal obligations or appropriations. The legally binding aspects of the budget are enshrined in the associated legislation that the parliament debates and approves.
Does the constitution put any limitation in the discussion and amendment of the money bill in the federal parliament?
During the research, I was unable to find any specific constitutional provisions that impose limitations on the discussion and amendment of Money Bills within the Parliament. The prerogative of “Deliberation on Bills” primarily resides with the Parliament. The constitutional framework, as outlined in Part 9, while not exhaustive in its detail, addresses the practice of deliberation by members of the Parliament on proposed bills.
Deliberation (छलफल) in the legislative context includes the submission of proposals for amendments. When lawmakers engage in deliberations on a bill, they may identify aspects of the bill that they believe need modification, improvement, or adjustment. During this process, members of the House of Representatives may examine the suggestions, debate their merits, and decide whether to incorporate them into the Bill or not. Deliberations are an essential part of the legislative process, allowing lawmakers to make informed decisions through discussions, debate and proposing amendments on the content of the Bill before it is presented to the President for assent.
So, can the Parliament “itself” impose limitations on deliberation of the bill?
Constitution of Nepal, 2072, Article 104, grants each house of the Federal Parliament the authority to frame rules for the conduct of its business, including the regulation of procedures. However, these rules are subject to certain constitutional and procedural limitations.
Article 104 of the Constitution: Procedures relating to conduct of business
(1) Each House of the Federal Parliament shall frame rules to conduct its business, maintain order during its meetings and regulate the constitution, functions and procedures of the committees and procedures of the House or its committee. Until such rules are framed, the Federal Parliament shall regulate its procedures on its own.
(2) The conduct of business of the joint sitting of the Federal Parliament, and constitution and proceedings of the joint committee of the Federal Parliament shall be regulated by the rules or procedures approved by the joint sitting of both Houses of the Federal Parliament.
While the parliament can establish its own rules and procedures, including those related to the conduct of business and deliberations on bills, these rules should be consistent with the broader constitutional framework. They must not contravene the fundamental principles, rights, and duties enshrined in the constitution.
In practice, this means that the parliament has the authority to set procedures for conducting its business, which can include rules related to bill deliberation. However, these procedures should not unduly infringe upon the constitutional rights and principles, such as those related to transparency, accountability, and the separation of powers. It’s essential that parliamentary rules and procedures respect the fundamental principles of democracy, the rule of law, and constitutional rights. If any parliamentary rules are believed to unconstitutionally limit deliberations on specific types of bills or infringe upon constitutional principles, they could be subject to judicial review to determine their constitutionality.
Rule 148 of the HoR Regulations and Rule 136 of NA Regulations
Chapter 17 of the House of Representatives Regulations, 2079 outlines the procedures related to Appropriation and Finance Bills.
In the context of the Appropriation Bill procedures described in the Chapter 17 of the House of Representatives Regulations, 2079, members can submit proposals for the reduction of expenses. These proposals can take different forms, and the types of amendments that can be submitted are as follows:
- Reduction to One Rupee: A proposal may be presented to reduce the amount of expenses of a specific title to one rupee. This type of proposal is often seen as a way to express strong disagreement with the policy containing a specific heading of the appropriation.
- Reduction by Specific Amount: Members can propose to reduce the amount of expenses mentioned in a specific title, but not necessarily down to one rupee. This type of proposal focuses on adjusting the budget allocation for that particular title.
- Reduction by a Hundred Rupee: Another type of proposal is to reduce the expenses of a title by a specific amount of one hundred rupees. This type of proposal is often used to express dissatisfaction with certain aspects within the accountability of the Government of Nepal.
The choice of the type of amendment submitted depends on the member’s specific concerns and the degree to which they wish to modify the budget allocation for particular titles within the Appropriation Bill. These proposals aim to enable members to have a say in the allocation of public funds and express their views on budgetary matters.
The procedures relating to the amendment in the Account Bill, Finance Bill or Credit Bill has not yet been laid down by the parliament and has been left to the discretion of the Speaker of the House. Similar provisions to those in HOR Regulations are also provided in the Chapter 16 of the National Assembly Regulations, 2075 – but since the amendment proposed by the National Assembly only has suggestive value to the House of Representatives, we will not discuss the provisions of the National Assembly Regulations, 2075 in detail.
So what is the problem? Why doesn't the Finance Bill ever get amended in Nepal?
Let’s take a look at Rule 149 of the House of Representatives Regulations, 2079: Decision on the proposal for reduction of expenditure:
The Speaker will decide whether the proposal for reduction of expenditure is acceptable or not. If the said proposal is found to be contrary to this regulation, the Speaker may make the necessary amendments and accept the said proposal.
This provision has given unfettered power to the Speaker to reject the amendment proposed on the Money Bills presented in the Parliament, and unfortunately, every year during the budget approval process, the speaker always makes a decision favoring the government’s interests and there has been no history of the actually successfully making any amendment to the Money Bills presented in the parliament.
This provision vests the Speaker with substantial discretionary authority to appraise and potentially dismiss proposed amendments to Money Bills brought before the Parliament. Regrettably, it has become a recurring practice in Nepal that, during the annual budgetary approval proceedings, the Speaker consistently renders determinations aligning with the government’s agenda or the ruling party. Consequently, our history shows an absence of any instances wherein proposed amendments to Money Bills have been actually affected through legislative process.
The problem in more detail
The Speaker’s authority to accept or reject proposed amendments to the Appropriation Bill does raise certain concerns about the balance of power in the legislative process and its potential impact on the rights of Members of Parliament (MPs). Here’s a critical examination of this issue:
- Potential for Abuse: While the Speaker’s role is essential, there is a risk of potential abuse of power. If the Speaker has unchecked authority to reject or accept amendments, it can lead to biased decision-making that favors the ruling party or government’s interests. This can undermine the democratic principle of a fair and impartial decision-maker.
- Limitation on MPs’ Rights: The ability of MPs to propose and debate amendments is a fundamental aspect of parliamentary democracy. When the Speaker holds disproportionate power in determining the fate of these amendments, it limits the ability of MPs to effectively represent their constituents and influence policy decisions. MPs may become reluctant to propose amendments, knowing that their efforts could be summarily rejected.
- Transparency and Accountability: The Speaker’s decisions should be transparent and based on clear, objective criteria. Any perception of bias or lack of transparency can erode public trust in the legislative process and the accountability of the government to the people.
Members of Parliament (MPs) play a pivotal role in the legislative process, actively engaging in debates, proposing amendments, and representing their constituents’ interests. They participate in detailed discussions, offer diverse perspectives, and serve on committees to review bills and make recommendations. MPs seek input from constituents and interest groups to make informed decisions, making them the voices of the people in Parliament. The Speaker of the Parliament has a distinct but vital role. They ensure parliamentary rules are followed, maintain order, and make rulings on procedural matters. The Speaker remains impartial and appoints committee members and chairs in consultation with party leaders. Their rulings on parliamentary procedures are final, ensuring the smooth and orderly progression of legislative proceedings. In essence, MPs are active participants in debates and decisions, while the Speaker safeguards parliamentary order and procedure.
To address this issue, there should be mechanisms in place to ensure that the Speaker’s powers are not misused. Parliamentary procedures and rules should be designed to provide MPs with a fair opportunity to debate and amend bills. Additionally, parliamentary committees and opposition parties should play an active role in holding the Speaker accountable for their decisions. Striking the right balance between the efficiency of legislative proceedings and the protection of MPs’ rights is crucial. This may involve refining parliamentary rules and procedures to clarify the criteria for accepting or rejecting amendments and ensuring that the process is fair and impartial.
Isn’t this specific rule unconstitutional?
In my view, ideal constitutionalism should encourage a balance between the government’s need to pass budgetary legislation efficiently and the principles of democratic governance, constitutional adherence, and the protection of individual and minority rights. Any limitations on deliberations or amendments in finance bills should be scrutinized to ensure they align with these fundamental constitutional ideals.
In a constitutional system that upholds the ideals of democratic governance, the role of the legislature is central in shaping and scrutinizing budget decisions. Finance bills directly affect the allocation of public funds, which in turn impacts the implementation of government policies and the well-being of citizens. However, when parliamentary proceedings like that of Section 148 of the HoR Regulations, 2079 impose restrictions on the deliberative process and the ability to propose amendments by providing the Speaker with the unfettered right to summarily reject the proposal for amendment of money bills, it can have far-reaching consequences. By limiting the ability of lawmakers to thoroughly scrutinize and modify financial proposals, such restrictions may undermine the legislature’s role as a check on the executive’s fiscal decisions.
Furthermore, transparency and accountability are core principles of constitutionalism. Deliberations and amendments in finance bills contribute to transparency by allowing for open discussions and potential improvements to budget allocations. When these processes are constrained, the parliament’s capacity to hold the executive accountable for its financial decisions is diminished, potentially leading to a lack of transparency and reduced oversight. This not only contradicts the fundamental principles of constitutionalism but also raises concerns about the health of democratic institutions and the equitable distribution of resources. In essence, a critical examination reveals that limitations on deliberations and amendments in finance bills should be carefully weighed against the core principles of constitutionalism, ensuring that the balance of power, transparency, and accountability are upheld.
Let’s trust that these limitations may come under judicial review and intervention some day in the future, safeguarding the principles for an ideal constitutional order.