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Q31 (IAS/2018) Polity & Governance › Parliament › Money and finance bills Official Key

Regarding Money Bill, which of the following statements is not correct ?

Result
Your answer: —  ·  Correct: C
Explanation

The correct answer is option C because it is the only **incorrect** statement about Money Bills.

Article 110 of the Constitution deals with the definition of money bills, stating that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the specified matters.[1] These matters include: the imposition, abolition, remission, alteration or regulation of any tax[1] (making option A correct), the custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund[1] (making option B correct), and the regulation of the borrowing of money by the Union government[1] (making option D correct).

However, Article 110 does **not** include the appropriation of moneys out of the Contingency Fund of India as a matter that makes a bill a Money Bill. Appropriation from the Consolidated Fund of India requires a law of Appropriation[2], but this is distinct from Money Bill provisions. Therefore, option C is the incorrect statement, making it the correct answer to this question.

Sources
  1. [1] Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
  2. [2] Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 261
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Q. Regarding Money Bill, which of the following statements is not correct ? [A] A bill shall be deemed to be a Money Bill if it contains on…
At a glance
Origin: From standard books Fairness: High fairness Books / CA: 10/10 · 0/10
Statement 1
Does Article 110 of the Constitution of India state that a bill is a Money Bill if it contains only provisions relating to the imposition, abolition, remission, alteration or regulation of any tax?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
Presence: 5/5
“Article 110 of the Constitution deals with the definition of money bills. It states that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the following matters: • 1. The imposition, abolition, remission, alteration or regulation of any tax;• 2. The regulation of the borrowing of money by the Union government;• 3. The custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund;• 4.”
Why this source?
  • Explicitly says Article 110 gives definition of Money Bills and uses the word 'only'.
  • Item (1) in the listed matters is the imposition, abolition, remission, alteration or regulation of any tax — matching the statement.
Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 254
Presence: 5/5
“Money Bill and generally speaking, a Financial Bill may be said to be a ny Financial Bill. Bill which relates to revenue or expenditure. But it is in a technical sense that the expression is used in the Constitution. l. The definition of a "Money Bill" is given in Article I 10 and no Bill is a Money Bill unless it satisfies the requirements of this Article. [t lays down that a Bill is a Mo ney Bill if it contains only provisions dealing with all or any of the six matters specified in that Article or matters incidental thereto.”
Why this source?
  • Confirms the technical definition in Article 110: a Bill is a Money Bill if it contains 'only' provisions dealing with the six matters specified.
  • Reinforces that taxation clauses fall within those specified matters and must be 'only' provisions to qualify.
Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 255
Presence: 4/5
“Shortly speaking, thus, only those Financial Bills are Money Bills which bear the certificate of the Speaker as such. II. Financial Bills which do not receive the Speaker's certificate are of two classes. These are dealt with in Article 117 of the Constitution. (i) To the first class belongs a Bill which contains any of the matters specified in Article 110 but does not consist solely of those matters, for example; a Bill which contains a taxation clause, but does not deal solely with taxation [Article 117(1)]. (ii) An ordinary Bill which contains provisions involving expenditure from the Consolidated Fund is a Financial Bill of the second class [Article 117(3)]. (iii) III.”
Why this source?
  • Clarifies the 'only'/'solely' requirement by contrasting Money Bills with Financial Bills that include taxation plus other matters (thus not Money Bills).
  • Mentions Speaker's certification as the determiner of Money Bill status, supporting the formal application of Article 110.
Statement 2
Does Article 110 of the Constitution of India include custody of the Consolidated Fund of India or the Contingency Fund of India among matters that make a bill a Money Bill?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 247
Presence: 5/5
“Article 110 of the Constitution deals with the definition of money bills. It states that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the following matters: • 1. The imposition, abolition, remission, alteration or regulation of any tax;• 2. The regulation of the borrowing of money by the Union government;• 3. The custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund;• 4.”
Why this source?
  • Explicitly describes Article 110 as the definition of money bills and lists 'custody of the Consolidated Fund of India or the contingency fund of India' as one of the specified matters (item 3).
  • Direct textual statement linking custody/contingency funds to matters that make a bill a Money Bill.
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
Presence: 5/5
“Article 110 of the Constitution deals with the definition of money bills. It states that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the following matters: • 1. The imposition, abolition, remission, alteration or regulation of any tax;• 2. The regulation of the borrowing of money by the Union government;• 3. The custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund;• 4.”
Why this source?
  • Independent source (same author/edition) reiterates Article 110's list and includes custody of the Consolidated Fund/Contingency Fund as a Money Bill matter.
  • Reinforces and duplicates the direct listing found in evidence_index 1, increasing reliability.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Financial Bills > p. 249
Presence: 4/5
“Financial Bills (II) A financial bill (II) contains provisions involving expenditure from the Consolidated Fund of India, but does not include any of the matters mentioned in Article 110. It is treated as an ordinary bill and in all respects, it is governed by the same legislative procedure which 'is applicable to an ordinary bill”
Why this source?
  • Distinguishes Financial Bill (II) as involving expenditure from the Consolidated Fund but explicitly states it does not include matters mentioned in Article 110.
  • Supports the interpretation that matters in Article 110 (including custody of funds) are a distinct category defining Money Bills.
Statement 3
Does Article 110 of the Constitution of India include appropriation of moneys out of the Contingency Fund of India among matters that make a bill a Money Bill?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
Presence: 5/5
“Article 110 of the Constitution deals with the definition of money bills. It states that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the following matters: • 1. The imposition, abolition, remission, alteration or regulation of any tax;• 2. The regulation of the borrowing of money by the Union government;• 3. The custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund;• 4.”
Why this source?
  • Directly quotes Article 110's list and includes 'custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund', not the word 'appropriation'.
  • Shows the specific formulation of matters that make a bill a Money Bill, enabling comparison with the term 'appropriation'.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Constitutional Provisions > p. 251
Presence: 4/5
“f r 11 r The Constitution of India contains the following provisions with regard to the enactment of budget' 1. The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of estimated receipts and expenditure of the Government of India for that year (Article 112). • 2. No demand for a grant shall be made except on the recommendation of the President (Article 113). • 3. No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law (Article 114). • 4. No money bill imposing tax shall be introduced in the Parliament except on the recommendation of the President, and such a bill shall not be introduced in the Rajya Sabha (Article 117). • 5.”
Why this source?
  • States 'No money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law (Article 114)', linking 'appropriation' specifically to the Consolidated Fund.
  • Implicates that appropriation (as a constitutional term) is tied to the Consolidated Fund and Article 114, not described under Article 110 for the Contingency Fund.
Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 261
Presence: 4/5
“No money out of the Consolidated Fund of India (or of a State) shall be appropriated except in accordance with a law of Appropriation. The procedure for the passing of an Appropriation Acthas been already noted. Contingency Fund of (c) Article 267 of the Constitution empowers Parliament and the Legislature of a State to create a "Contingency Fund" for India or for a State, as the case may be: The "Contingency Fund" for India has been constituted by the Contingency Fund of India Act. 1950. The Fund will be at the disposal of the executive to enable advances to be made.”
Why this source?
  • Explains the Contingency Fund is constituted to enable advances at the executive's disposal, describing its distinct purpose from appropriation.
  • Supports the view that payments/advances from Contingency Fund are executive actions rather than statutory 'appropriations' governed like Consolidated Fund withdrawals.
Statement 4
Does Article 110 of the Constitution of India list regulation of the borrowing of money or giving of any guarantee by the Government of India as a matter that makes a bill a Money Bill?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
Presence: 5/5
“Article 110 of the Constitution deals with the definition of money bills. It states that a bill is deemed to be a money bill if it contains 'only' provisions dealing with all or any of the following matters: • 1. The imposition, abolition, remission, alteration or regulation of any tax;• 2. The regulation of the borrowing of money by the Union government;• 3. The custody of the Consolidated Fund of India or the contingency fund of India, the payment of moneys into or the withdrawal of money from any such fund;• 4.”
Why this source?
  • Snippet explicitly states Article 110 defines money bills and includes 'the regulation of the borrowing of money by the Union government' as one of the matters.
  • Direct citation to Article 110's list shows borrowing regulation is a ground for a bill being deemed a Money Bill.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Financial Bills > p. 249
Presence: 4/5
“These are also certified by the Speaker of Lok Sabha as money bills. The financial bills (I) and (II), on the other hand, have been dealt with in Article 117 of the Constitution. Financial Bills (I) A financial bill (I) is a bill that contains not only any or all the matters mentioned in Article 110, but also other matters of general legislation. For instance, a bill that contains a borrowing clause, but does not exclusively deal with borrowing. can either give his/ her assent to the bilI or withhold his/ her assent to the bill or return the bill for reconsideration of the Houses.”
Why this source?
  • Explains that a bill containing a borrowing clause is treated in the context of matters mentioned in Article 110.
  • Shows the practical legislative relevance of a borrowing clause to money/financial bill classification.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 15: Centre-State Relations > I Borrowing by the Centre and the States > p. 156
Presence: 3/5
“[I Borrowing by the Centre and the States The Constitution makes the following provisions with regard to the borrowing powers of (the Centre and the states: • The Central government can borrow either within India or outside upon the security of the Consolidated Fund of India, or can give guarantees, but both within the limits fixed by the Parliament. So far, no such law has been enacted by the Parliament. • Similarly, a state government can borrow within India (and not abroad) upon the security of the Consolidated Fund of the State or can give guarantees, but both within the limits fixed by the legislature of that state.”
Why this source?
  • States the Constitution permits the Central government to borrow or give guarantees, linking 'giving of any guarantee' to governmental fiscal powers (relevant to the statement's second part).
  • Relevant to the question because it shows 'giving guarantees' is a recognised government power, though this snippet does not state it is listed in Article 110.
Pattern takeaway: UPSC Polity questions often hinge on swapping specific nouns within a legal definition. They will mix features of the Consolidated Fund with the Contingency Fund. Always map the specific verb (Appropriate vs. Advance vs. Custody) to the specific noun (Fund).
How you should have studied
  1. [THE VERDICT]: Sitter. Direct lift from Laxmikanth, Chapter 'Parliament' > 'Money Bill'. If you missed this, your static revision is dangerously loose.
  2. [THE CONCEPTUAL TRIGGER]: The constitutional definition of Money Bill (Article 110) vs. Financial Bills (Article 117).
  3. [THE HORIZONTAL EXPANSION]: Memorize the 6 clauses of Art 110: (a) Tax, (b) Borrowing, (c) Custody of CFI/Contingency, (d) Appropriation from CFI (NOT Contingency), (e) Declaring expenditure charged on CFI. Also memorize Art 110(2) exclusions: Fines, penalties, license fees, and local body taxes.
  4. [THE STRATEGIC METACOGNITION]: Focus on the verbs. 'Custody' applies to both funds. 'Appropriation' (Article 114) applies ONLY to the Consolidated Fund. The Contingency Fund operates on 'advances' by the Executive (Article 267), not legislative appropriation.
Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Article 110 — Definition of Money Bill (taxation clause)
💡 The insight

Article 110 explicitly lists the taxation clause (imposition, abolition, remission, alteration or regulation of any tax) as one of the matters that make a bill a Money Bill, provided it contains 'only' such matters.

High-yield for constitutional law and GS II mains/MCQ: knowing the exact grounds that make a bill a Money Bill is frequently tested. It links to budget procedure, finance bills and parliamentary privileges; mastering it helps answer questions on legislative classification and budgetary procedure.

📚 Reading List :
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 254
🔗 Anchor: "Does Article 110 of the Constitution of India state that a bill is a Money Bill ..."
📌 Adjacent topic to master
S1
👉 'Only' vs 'Contains' — Distinguishing Money Bills and Financial Bills (Art.110 vs Art.117)
💡 The insight

References contrast bills that consist solely of Article 110 matters (Money Bills) with bills that include those matters plus other general legislation (Financial Bills per Article 117).

Conceptually vital for UPSC: distinguishes procedural consequences (e.g., Rajya Sabha's limited role). Useful for mains answers on legislative process and for eliminating incorrect MCQ options about bill types.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Financial Bills > p. 249
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 255
🔗 Anchor: "Does Article 110 of the Constitution of India state that a bill is a Money Bill ..."
📌 Adjacent topic to master
S1
👉 Speaker's certificate as determinative of Money Bill status
💡 The insight

Sources state that a bill is treated as a Money Bill when the Speaker certifies it as such — an important procedural detail tied to Article 110's application.

Important procedural nuance for UPSC: knowing who certifies Money Bills and its effect on legislative route (Lok Sabha primacy, Rajya Sabha recommendation role) appears in both MCQs and descriptive questions on parliamentary procedure.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Financial Bills > p. 249
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 255
🔗 Anchor: "Does Article 110 of the Constitution of India state that a bill is a Money Bill ..."
📌 Adjacent topic to master
S2
👉 Article 110 — Definition and listed matters making a Money Bill
💡 The insight

The question centers on whether custody of central funds is among the matters listed in Article 110; references 1 and 2 explicitly list these matters.

High-yield for UPSC polity: knowing the exact items in Article 110 helps answer questions on Money Bills, presidential/Parliamentary procedure, and Rajya Sabha powers. It connects to budgetary procedure, legislative classifications, and constitutional safeguards; study by memorising the enumerated items and practising application-based MCQs.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 247
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
🔗 Anchor: "Does Article 110 of the Constitution of India include custody of the Consolidate..."
📌 Adjacent topic to master
S2
👉 Distinction between Money Bills and Financial (Type II) Bills
💡 The insight

Reference 4 contrasts Financial Bill (II) with Article 110 matters, clarifying that expenditure from the Consolidated Fund alone does not make a bill a Money Bill.

Important for spotting tricky UPSC questions that test fine distinctions (e.g., appropriation vs. Money Bill). Mastering this helps answer questions on legislative procedure, the role of Rajya Sabha, and types of financial legislation; practise with examples classifying bills to build precision.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Financial Bills > p. 249
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Financial Bills > p. 249
🔗 Anchor: "Does Article 110 of the Constitution of India include custody of the Consolidate..."
📌 Adjacent topic to master
S2
👉 Central government funds: Consolidated Fund and Contingency Fund
💡 The insight

Understanding what the Consolidated Fund and Contingency Fund are (their constitutional basis and use) clarifies why custody/payment/withdrawal of these funds are significant in Article 110.

High-yield for budget/finance portions of polity: links Articles on funds, appropriation law, and budgetary controls. Knowledge aids answers on budget process, appropriation acts, and constitutional finance; revise Articles cited and institutional roles.

📚 Reading List :
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Funds > p. 256
  • Introduction to the Constitution of India, D. D. Basu (26th ed.). > Chapter 12: The Union Legislature > p. 261
🔗 Anchor: "Does Article 110 of the Constitution of India include custody of the Consolidate..."
📌 Adjacent topic to master
S3
👉 Scope of Article 110 (Money Bill matters)
💡 The insight

Article 110's enumerated matters determine what makes a bill a Money Bill; the references list the exact items included (e.g., payment into/withdrawal from funds).

High-yield for UPSC: many questions test the definition and scope of Money Bills. Mastering the precise items in Article 110 helps distinguish Money Bills from Financial Bills (II) and ordinary bills, and is useful for constitutional law and parliamentary procedure questions.

📚 Reading List :
  • Laxmikanth, M. Indian Polity. 7th ed., McGraw Hill. > Chapter 23: Parliament > Money Bill. > p. 247
  • Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Money Bill. > p. 247
🔗 Anchor: "Does Article 110 of the Constitution of India include appropriation of moneys ou..."
🌑 The Hidden Trap

The 'Negative List' of Article 110(2): A bill is NOT a Money Bill if it deals with fines, pecuniary penalties, fees for licenses/services, or taxes imposed by local authorities for local purposes. This is the next logical trap.

⚡ Elimination Cheat Code

Etymological Logic: 'Appropriation' means setting aside money by law for a specific purpose (Budget). 'Contingency' means an unforeseen emergency. You cannot pass a law to 'Appropriate' money for an unknown emergency. Therefore, Appropriation relates to the Consolidated Fund; the Contingency Fund uses 'Advances'.

🔗 Mains Connection

GS-II (Parliamentary Supremacy): The definition of a Money Bill is the legal tool that establishes Lok Sabha's supremacy over the Rajya Sabha in financial matters, mirroring the UK House of Commons' privilege.

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SIMILAR QUESTIONS

NDA-II · 2016 · Q97 Relevance score: 5.49

Which one of the following statements about Money Bill is correct ?

CDS-II · 2022 · Q120 Relevance score: 4.73

Which one of the following statements about Money Bill is not correct?

IAS · 2000 · Q59 Relevance score: 4.70

Which one of the following statements about a Money Bill is not correct ?

CAPF · 2014 · Q42 Relevance score: 4.69

Which of the following statements related to Money Bills is not correct ?

CAPF · 2013 · Q84 Relevance score: 4.62

A bill is deemed to be a ‘Money Bill’ if it contains only provisions dealing with 1. the imposition, alteration or regulation of any tax 2. the regulation of the borrowing of money by the government 3. the custody of the Consolidated Fund of India or the Contingency Fund of India 4. the provision for imposition of fines or other penalties, or for the demand or payment of fees for licenses or fees for services rendered Select the correct answer using the code given below.