Polity Notes 26

Financial Bill

Financial Bills are those bills that deal with fiscal matters, i.e., revenue or expenditure. However, they are distinct from Money Bills. The Constitution of India, under Article 117, provides for two types of Financial Bills.

Financial Bill (I) - Article 117(1)
- Definition: A Financial Bill (I) is a bill that contains provisions related not only to any or all the matters specified in Article 110 (which defines a Money Bill) but also other matters of general legislation. For instance, a bill that imposes a new tax (a matter under Article 110) but also creates a new regulatory body to administer that tax (a matter of general legislation) would be a Financial Bill (I).
- Similarities with Money Bill:
  1. Introduction in Lok Sabha: As per Article 117(1), it can only be introduced in the Lok Sabha. The Rajya Sabha has no power to initiate such a bill. This is based on the principle of “no taxation without representation,” where the directly elected house has primary control over the nation’s finances.
  2. President’s Recommendation: It cannot be introduced except on the recommendation of the President of India. This provision acts as a check, ensuring that the executive branch, which is responsible for managing the country’s finances, has vetted the bill’s financial implications before its introduction.
- Differences from Money Bill (Similarities with Ordinary Bill):
  1. Role of Rajya Sabha: Unlike a Money Bill, which the Rajya Sabha can only discuss and return with recommendations within 14 days, a Financial Bill (I) can be amended or rejected by the Rajya Sabha. The upper house possesses substantive powers over this bill.
  2. Joint Sitting: In case of a deadlock or disagreement between the Lok Sabha and Rajya Sabha, the President can summon a joint sitting of both Houses under Article 108 to resolve the impasse. This provision is not available for Money Bills.
  3. Presidential Assent: When the bill is presented to the President after being passed by both houses (or in a joint sitting), the President has three options under Article 111:
    - Give assent to the bill.
    - Withhold assent to the bill (Absolute Veto).
    - Return the bill for reconsideration of the Houses (Suspensive Veto).
Financial Bill (II) - Article 117(3)
- Definition: A Financial Bill (II) is a bill that contains provisions involving expenditure from the Consolidated Fund of India but does not include any of the matters specified in Article 110. It is essentially an ordinary bill which has financial implications in terms of expenditure. For example, a bill for the reorganisation of states which involves expenditure for setting up new administrative infrastructure would be a Financial Bill (II).
- Legislative Procedure:
  1. Treatment as an Ordinary Bill: For the most part, it is governed by the same legislative procedures as an ordinary bill. It can be introduced in either House of Parliament (Lok Sabha or Rajya Sabha).
  2. Special Feature (President’s Recommendation for Consideration): The key distinction lies in a special provision under Article 117(3). While the President’s recommendation is not required for its introduction, it is required for the consideration and passing of the bill. This means a House cannot pass the bill unless the President has recommended its consideration. This ensures executive oversight on any proposal that draws money from the public exchequer.

President of India

The President of India is the head of the Indian state, the first citizen of India, and the Supreme Commander of the Indian Armed Forces. The office was created as a symbol of the unity, integrity, and solidarity of the nation.

Need for the Office of the President
- Upholding Constitutionalism: The President’s office is crucial for maintaining constitutionalism, which implies a government of laws, not of men, and is characterized by limited government. As Dr. B.R. Ambedkar noted in the Constituent Assembly Debates, the President’s role is to be a “constitutional head,” ensuring the government functions within the framework of the Constitution.
- Checks and Balances: The President provides a crucial check on the legislative and executive branches. The power to return a bill for reconsideration (Suspensive Veto) or withhold assent (Pocket Veto) prevents hasty or ill-conceived legislation by the Parliament.
- Embodiment of Separation of Powers: While India follows a parliamentary system with a fusion of executive and legislative powers, the President, as the formal head of the executive, stands separate from the day-to-day politics of the legislature, ensuring an essential, albeit not rigid, separation of powers.
- Pre-emptive Guardian: The judiciary’s role is often described as “post-mortem” – it can strike down a law only after it has been enacted. The President, however, can act pre-emptively by questioning the government’s proposals, seeking information, and advising caution, thereby acting as a custodian of constitutional propriety before a potential violation occurs.
- Discretionary Powers: In certain situations, the President’s discretionary powers are vital for political stability.
  - Appointment of Prime Minister: In a hung Lok Sabha where no party has a clear majority, the President’s discretion in inviting a leader to form the government is critical. This was seen when President Neelam Sanjiva Reddy invited Charan Singh to form a government in 1979.
  - Dismissal of the Council of Ministers: The President can dismiss the Council of Ministers (CoM) if it loses the confidence of the Lok Sabha and refuses to resign.
Key Articles related to the President
- Article 74: Council of Ministers to aid and advise President
  - It states that there shall be a CoM with the Prime Minister as the head to aid and advise the President. The President shall act in accordance with such advice.
  - Historical Context: The 42nd Amendment Act (1976) made the President’s compliance with the CoM’s advice mandatory by replacing the word “may” with “shall.” The 44th Amendment Act (1978) provided a limited check by allowing the President to return the advice once for reconsideration. However, if the CoM sends the advice back (with or without changes), the President is bound to accept it.
- Article 75: Other provisions as to Ministers
  - 75(1): The President appoints the Prime Minister and other ministers on the PM’s advice.
  - 75(2): Ministers hold office during the “pleasure of the President.” In practice, this pleasure is exercised on the advice of the PM. However, it implies the President’s power to dismiss an individual minister or the entire CoM.
  - 75(3): The CoM shall be collectively responsible to the House of the People (Lok Sabha). This is the bedrock of the parliamentary system.
- Article 77: Conduct of business of the Government of India
  - All executive actions of the Government of India are formally taken in the name of the President.
  - It empowers the President to make rules for the convenient transaction of government business and for the allocation of this business among ministers (e.g., the Government of India (Allocation of Business) Rules, 1961).
Veto Powers of the President (Article 111)
- Absolute Veto: This is the power to withhold assent to a bill, causing it to lapse and not become an act.
  - With respect to Private Members’ Bills: It is commonly exercised when a bill is passed by Parliament but the cabinet resigns before the President can give assent, and the new cabinet advises the President not to assent.
  - With respect to State Bills: Under Article 201, when a governor reserves a bill for the consideration of the President, the President can exercise an absolute veto. The President is not bound to any time limit to take a decision.
  - Example: In 1954, President Dr. Rajendra Prasad used an absolute veto on the PEPSU Appropriation Bill. The bill was passed when the President’s Rule was in force in the state, but by the time it reached him for assent, the rule had been revoked.
- Suspensive Veto: The power of the President to return a bill (not a Money Bill) for reconsideration by the Parliament.
  - Historical Context: This power was explicitly clarified and established by the 44th Constitutional Amendment Act, 1978. Before the 42nd Amendment, the constitutional position was ambiguous. The 42nd Amendment (1976) made the CoM’s advice binding, effectively removing any veto power. The 44th Amendment restored a limited form by allowing one instance of returning a bill for reconsideration.
  - If Parliament passes the bill again, with or without amendments, and presents it to the President, the President must give assent.
  - Example: In 2006, President Dr. A.P.J. Abdul Kalam returned the Parliament (Prevention of Disqualification) Amendment Bill, 2006, commonly known as the Office of Profit Bill, for reconsideration.
- Pocket Veto: This is the power to take no action (neither ratify, nor reject, nor return) on a bill for an indefinite period.
  - Constitutional Basis: The Constitution does not prescribe any time limit within which the President has to take a decision on a bill presented for assent. This lacuna provides the basis for the pocket veto.
  - Rationale for No Time Limit: The Constituent Assembly believed that the high office of the President should not be subjected to a constitutional time constraint. It was assumed the President would act reasonably and use this time for deliberation, consultation with experts, and to exercise checks and balances on the legislature.
  - Example: In 1986, President Giani Zail Singh exercised a pocket veto on the Indian Post Office (Amendment) Bill, which was widely criticized for infringing on the right to privacy by allowing the government to intercept mail. The bill was never enacted.

Role of the President in Holding Constitutionalism: A Historical Perspective

Dr. Rajendra Prasad (1950-1962)
- He asserted the independence of the President’s office. His differences with Prime Minister Jawaharlal Nehru over the Hindu Code Bill are well-documented. Dr. Prasad questioned whether a secular state should reform the personal laws of only one community, advocating for a Uniform Civil Code. Though he eventually gave his assent, his queries forced a national debate.
- He used his veto power on the PEPSU Appropriation Bill (1954), establishing an important precedent for the absolute veto.
Dr. Sarvepalli Radhakrishnan (1962-1967)
- Known as the ‘Philosopher President’, he was an active President. After India’s defeat in the 1962 Sino-Indian War, he was critical of the government’s handling of the situation.
- He demanded access to the Henderson Brooks-Bhagat Report on the war’s failures, arguing that as the Supreme Commander of the Armed Forces, he had a right to be informed.
- He played a crucial role in ensuring accountability by pressuring Defence Minister V.K. Krishna Menon to resign, reminding the government that accountability is the essence of constitutional governance.
Dr. Zakir Hussain and the 1969 Election
- The 1967 Presidential election saw a contest between the Congress candidate, Dr. Zakir Hussain, and the opposition’s candidate, K. Subba Rao (former CJI famous for the Golaknath judgment). Dr. Hussain won but died in office in 1969.
- The 1969 Presidential election was a watershed moment. The Congress party was split between the ‘Syndicate’ (old guard, Congress-O) and Indira Gandhi’s faction (Congress-R). The official Congress candidate was Neelam Sanjiva Reddy, but Indira Gandhi supported the independent candidate, V.V. Giri.
- Indira Gandhi called for a “conscience vote,” effectively asking Congress legislators to defy the party whip (though whips are not formally issued in presidential elections). This led to V.V. Giri’s victory in the second round of counting, a first in India’s history.
V.V. Giri (1969-1974)
- His tenure marked the beginning of the “politicization” of the President’s office. Seen as a President aligned with the PM, he readily promulgated ordinances that were politically controversial but central to Indira Gandhi’s agenda.
- These included ordinances for the abolition of Privy Purses and the nationalization of 14 major commercial banks in 1969. His actions solidified the trend of using ordinances, sometimes seen as bypassing parliamentary debate, and established a PM-centric or “Prime Ministerial” form of government.
Fakhruddin Ali Ahmed (1974-1977)
- His presidency is most remembered for the proclamation of the National Emergency on 25th June 1975.
- He declared the Emergency solely on the advice of Prime Minister Indira Gandhi, without a written recommendation from the Union Cabinet, which was a constitutional convention. This action drew immense criticism.
- The President’s failure to verify whether the cabinet had approved the decision led to the office being labelled a ‘Rubber Stamp’. His tenure is often cited as the low point for the independence and dignity of the office, highlighting the dangers of a pliant President.
- The 39th and 42nd Amendments, passed during the Emergency, further curtailed judicial review and presidential discretion, cementing the PM’s supremacy.
Neelam Sanjiva Reddy (1977-1982)
- Elected unopposed after the Janata Party came to power, he sought to restore dignity to the office.
- In 1979, after the fall of the Morarji Desai government, he exercised his discretion by appointing Charan Singh as PM, with a condition to prove his majority. When the Congress party withdrew support, President Reddy dismissed the government after Charan Singh refused to resign, setting another precedent for presidential action.
- However, in 1980, when Indira Gandhi returned to power, he dissolved nine non-Congress state governments on the cabinet’s advice, an act seen by critics as a partisan move under political pressure.
Giani Zail Singh (1982-1987)
- His tenure was marked by a complex and often strained relationship with Prime Minister Rajiv Gandhi.
- Following Indira Gandhi’s assassination in 1984, he broke convention by swearing in Rajiv Gandhi as PM immediately, without waiting for the Congress Parliamentary Party to formally elect him as leader.
- Relations soured over issues like the government’s handling of the 1984 anti-Sikh riots and the PM’s alleged failure to keep the President informed as required by Article 78.
- His most significant act was the use of the pocket veto on the Indian Post Office (Amendment) Bill, 1986, reasserting presidential authority.

Election of President

The President is elected not directly by the people but by an electoral college, using a system of proportional representation.

Electoral College (Article 54)
- It consists of: a. The elected members of both Houses of Parliament (Lok Sabha and Rajya Sabha). b. The elected members of the Legislative Assemblies of the states. c. The elected members of the Legislative Assemblies of the Union Territories of Delhi and Puducherry (as per the 70th Amendment Act, 1992).
- Note: Nominated members of Parliament and state assemblies, and members of legislative councils, are not part of the electoral college.
System of Proportional Representation by means of the Single Transferable Vote (PRS-STV)
- Objective: To ensure the winning candidate represents an absolute majority of the votes cast, not just a simple plurality.
- Mechanism:
  1. Preferences: Each elector casts a single vote but marks preferences for as many candidates as they wish (1, 2, 3, etc.).
  2. Electoral Quota: To be declared elected, a candidate must secure a minimum number of votes, known as the quota. The formula is: (Total number of valid votes polled / (1+1)) + 1 = 50% + 1.
  3. First Round Counting: Only the first preference votes are counted. If a candidate secures the quota, they are elected.
  4. Transfer of Votes: If no candidate secures the quota, the process of vote transfer begins. The candidate with the fewest first-preference votes is eliminated. Their ballots are then transferred to the remaining candidates based on the second preference marked on them.
  5. Subsequent Rounds: This process of elimination and transfer continues until one candidate secures the required quota.
- The 1969 Election Example: In the presidential election of 1969, no candidate secured the quota in the first round of counting. V.V. Giri won only after the second-preference votes of the eliminated candidates were transferred.

Prelims Pointers

Financial Bill (I) is defined under Article 117(1); Financial Bill (II) under Article 117(3).
Money Bill is defined under Article 110.
Financial Bill (I): Can be introduced only in Lok Sabha, requires prior recommendation of the President.
Financial Bill (II): Can be introduced in either House, does not require President’s recommendation for introduction but requires it for consideration.
Rajya Sabha can amend or reject a Financial Bill (I) and (II).
A Joint Sitting (Article 108) can be held for a Financial Bill (I) and (II), but not for a Money Bill.
President’s Electoral College (Article 54): Includes elected MPs, elected MLAs of states, and elected MLAs of Delhi & Puducherry.
Nominated members and members of Legislative Councils (MLCs) are not part of the President’s electoral college.
The system of election is Proportional Representation by means of Single Transferable Vote (PRS-STV).
President V.V. Giri was the only President elected through the second round of preference vote counting (1969).
42nd Amendment Act, 1976: Made the advice of the Council of Ministers binding on the President.
44th Amendment Act, 1978: Allowed the President to return the advice for reconsideration once.
Absolute Veto Example: PEPSU Appropriation Bill (1954) by Dr. Rajendra Prasad.
Pocket Veto Example: Indian Post Office (Amendment) Bill (1986) by Giani Zail Singh.
Suspensive Veto Example: Office of Profit Bill (2006) by Dr. A.P.J. Abdul Kalam.
Presidents who died in office: Dr. Zakir Hussain (1969) and Fakhruddin Ali Ahmed (1977).
Charan Singh was the only Prime Minister who did not face the Parliament.
Maximum life of an ordinance is six months and six weeks.
Ordinances (Article 123) can be promulgated only when at least one House of Parliament is not in session.

Mains Insights

Evolution of the Presidential Office:
- The office of the President has evolved from a position of asserted authority to one of compliance, and then to a role of a cautious constitutional guardian.
- Phase 1 (Assertive Phase, 1950-67): Presidents like Dr. Rajendra Prasad and Dr. S. Radhakrishnan engaged in active dialogue and questioning of the executive, shaping constitutional conventions.
- Phase 2 (Compliant Phase, 1969-77): The presidencies of V.V. Giri and Fakhruddin Ali Ahmed saw the office becoming subservient to the Prime Minister, culminating in the “rubber stamp” perception during the Emergency.
- Phase 3 (Resurgent Phase, 1977 onwards): Presidents like N. Sanjiva Reddy, Giani Zail Singh, and later K.R. Narayanan revived the office’s dignity by using discretionary powers and vetoes, especially in the era of coalition politics, where the President’s role as a neutral arbiter became critical.
President as a ‘Rubber Stamp’: Myth or Reality?
- Arguments for ‘Rubber Stamp’: The binding nature of cabinet advice (Art. 74), the Emergency proclamation without cabinet approval, and instances of Presidents readily signing ordinances and dissolving state assemblies on partisan grounds support this view.
- Arguments against ‘Rubber Stamp’: The President’s role is not merely ceremonial. The use of pocket veto (Zail Singh), suspensive veto (Kalam), the power to seek information (Art. 78), and crucial discretionary powers in hung parliaments show that the President is a vital part of the constitutional machinery. The President acts as the “conscience-keeper” of the nation.
- Historiographical View: Scholars like Granville Austin argue that the President’s power is more “moral and psychological” than coercive. The President’s authority lies in persuasion and the ability to caution the government, making the office a “safety valve.”
President-Prime Minister Relationship: A Function of Politics and Personality
- The relationship is not static but is shaped by the political context (single-party majority vs. coalition), the personalities of the two individuals, and their interpretation of the Constitution.
- Cause of Friction:
  1. Constitutional Ambiguity: Debates over the extent of “aid and advise.”
  2. Political Dominance: A PM with a brute majority (like Indira Gandhi or Rajiv Gandhi) tends to dominate, while in a coalition era, the President’s role is enhanced.
  3. Personal Equation: The Nehru-Prasad and Rajiv Gandhi-Zail Singh dynamics show how personality clashes can lead to friction.
- Effect: A harmonious relationship ensures smooth governance. A strained relationship can create constitutional deadlocks and political uncertainty, but it can also serve as a check on executive overreach.
The President and Constitutionalism
- The President is the ultimate defender of the Constitution. This role is performed by:
  1. Ensuring Procedural Correctness: Checking if due process is followed, e.g., verifying if a proclamation of Emergency has cabinet approval (a safeguard added by the 44th Amendment).
  2. Protecting Fundamental Rights: Using the pocket veto on the Post Office Bill was an act to protect the right to privacy.
  3. Upholding Federalism: Scrutinizing the cabinet’s advice to impose President’s Rule (Article 356) in states, as affirmed by the Supreme Court in the S.R. Bommai case (1994).

GS Notes