Using Finance Bill to amend non-financial laws is not proper

Last week, the Lok Sabha passed the Finance Bill, 2017, and it will go to the Rajya Sabha, but as it is a “Money Bill” the Upper House cannot reject it or even force any amendments. The government proposed several additional amendments to the Bill, which in total change over 40 other existing laws. Many of these amendments are to pass legislation in which the issue being addressed is not financial in nature. It is a basic pillar of India’s constitutional set-up that such laws also receive the approval of the Rajya Sabha, but by tacking them on to the Finance Bill, the government has essentially bypassed this necessity. This is another example of the government using the Money Bill provision to avoid scrutiny in the Rajya Sabha, where the ruling Bharatiya Janata Party and its allies do not have a majority. In the past, the government has used this provision to pass, for example, the Aadhaar Act. It now appears that it intends to use this method routinely, which would have severely deleterious consequences not just for the constitutional order but for the legitimacy of these new laws.

The amendments introduced in the Finance Bill, 2017, include several eminently debatable topics. For example, some provisions with respect to corporate financing of political parties have been substantially altered. What this has to do with government financing is far from clear, but it clearly has something to do with electoral reforms, a subject that is far from being the sort of thing a Money Bill is supposed to be addressing. Earlier, companies’ contributions to political parties were limited to 7.5 per cent of their net profit, as averaged over the previous three years. This cap has now been removed. Even worse, the requirement to state the destination of such financing has been ended. In other words, India now has a system of limitless, opaque, corporate political funding in place. Parliament should have debated this extensively, and the Opposition should have had a chance to force amendments, but that was not allowed for.

Another problematic change is to the system of appellate tribunals. The Finance Bill, 2017, has replaced and merged a number of tribunals. For example, the Competition Appellate Tribunal, which judges violations of the Competition Act, 2002, will now be taken over by the National Company Law Appellate Tribunal, which examines matters arising from the Companies Act. Of course, the functions and purposes of these two Acts are not the same, nor are the areas of expertise required. Worse, the new amendments say that the government will henceforth determine the conditions of employment and appointment of tribunal members. This is in spite of the fact that the government is frequently a party to cases before these tribunals. There are obvious problems with this system. Control of quasi-judicial bodies by the executive is a violation of fundamental constitutional principles. Yet, again the government has sent it in as a Money Bill. This not only obviates the role of the Rajya Sabha but also undermines democratic accountability. The decision of the Speaker of the Lok Sabha on what constitutes a Money Bill has hitherto been accepted as final. It would be unfortunate if this pattern of behaviour causes the courts to clash with the Speaker.