Legislative Procedure in State Legislatures: From Bills to Financial Management

The legislative procedure in state legislatures is guided by specific constitutional provisions. Ordinary bills can originate in either House, while Money Bills can only be introduced in the Legislative Assembly. The Governor plays a key role in the legislative process, including giving assent or reserving bills for the President’s consideration. Financial matters are handled through a detailed procedure outlined in Articles 202 to 207, ensuring proper budgetary and financial management within the state.

From Bills to Acts: The Legislative Process in State Legislatures

Legislative Process for Ordinary Bills in State Legislature

• Origin of Ordinary Bills: As per Article 196 of the Constitution, except for the Money Bill and the Financial Bill (Article 198 and 207 respectively), an ordinary bill can originate in either House of the state legislature (in case of a bicameral legislature). 
• Introduction of Ordinary Bills: Such a bill can be introduced either by a minister or by any other member. 

Transfer of Bills from Assembly to Council

In the second House following options are available –

• Passing of Bills by the Legislative Council: A Bill shall be deemed to have been passed by the Houses of the Legislature of a State, when the State legislative Council passes the bill without any amendments or the assembly accepts the amendments suggested by the council. 
  • It is transferred for the assent of the Governor. 
• Rejection and Resubmission of Bills: When the assembly rejects the amendments suggested by the council or the council rejects the Bill altogether or the council does not take any action for three months, then the assembly may pass the bill again and transmit the same to the council.
• Final Decision on Bills: If the council rejects the bill again or passes the bill with amendments not acceptable to the assembly or does not pass the bill within one month, then the bill is deemed to have been passed by both the Houses in the form in which it was passed by the assembly for the second time. 
• Power Dynamics Between Assembly and Council: Therefore, the ultimate power of passing an ordinary bill is vested in the assembly. 
  • At the most, the council can detain or delay the bill for a period of four months–three months in the first instance and one month in the second instance. 
• Absence of Joint Sitting Mechanism: The Constitution does not provide for the mechanism of joint sitting of both the Houses to resolve the disagreement between the two Houses over a bill (like in case of Parliament). 

Transfer of Bills from Council to Assembly 

• Transfer of Bills from Council to Assembly: When a bill, which has originated in the council and was sent to the assembly, is rejected by the assembly, the bill ends and becomes dead. 
• Significance of the Legislative Council: Thus, the council has been given much lesser significance, position and authority than that of the Rajya Sabha at the Centre. 

Assent to Bills  (Article 200)

• Governor’s Discretion on Bill Assent: The Bill after getting assent of both Houses is then sent to the Governor. It then comes under the discretion of the Governor whether to give: 
  • Assent to the Bill (If he/she gives his/her assent, the bill becomes an Act and is placed on the Statute Book.)
  • Withhold his assent (the bill ends and does not become an Act.)
  • Return the bill for reconsideration of the House or Houses (if the bill is passed by the House or both the Houses again, with or without amendments, and presented to the Governor for his assent, the Governor must give his assent to the bill. Thus, the Governor enjoys only a suspensive veto. )
  • Reserve the bill for the consideration of the President. 

Bills Reserved for President’s consideration (Article 201)

• Reservation of Bill for Presidential Consideration: When a Bill is reserved for consideration of the President, he/she may either give his assent to the bill or withhold his assent to the bill or return the bill for reconsideration of the House or Houses of the state legislature. 
• Direction to the Governor: The President may direct the Governor to return the Bill (except money Bill) to the House or the Houses of the Legislature.
• Reconsideration of Returned Bill: 
  • Reconsideration Period: When a Bill is returned by the President, the House or Houses shall reconsider it within a period of six months from the date of receipt of such message.
  • Subsequent Passage of the Bill: If the Bill is again passed by the House or Houses, with or without amendments, it shall be presented again to the President for his consideration.
  • Obligation of the President: It should be noted that the Constitution does not specify whether it is obligatory for the President to give his assent to such a bill or not.

Money Bills

• Introduction of Money Bill: The procedure to pass a Money Bill is quite different from the Ordinary Bill. 
  • Its procedure is given in Article 198 of the Constitution. 
• Origination in the Lower House: According to this Article of the Constitution of India, the Money Bill can ‘only’ be introduced in the Lower House i.e., in the Legislative Assembly. Procedure related to the money Bill is as follows:
  • Money Bill in Assembly: Every such bill is considered a government bill and can be introduced only by a minister.
    • After the Money Bill is passed by the Legislative Assembly, then this bill would be forwarded to the Legislative Council for its recommendations. 
  • Money Bill in Council: The Bill should be returned to the assembly within fourteen days from the date of receiving the bills. 
    • It cannot reject or amend, but can only recommend changes in the Money Bill. 
    • If the legislative council does not return the bill to the legislative assembly within 14 days, the bill is deemed to have been passed by both Houses.
    • The assembly can either accept the recommendation or can deny any recommendations according to the discretion of the assembly. 

• Bill for the assent of the Governor: When a Money Bill is presented to the governor, he may either give his assent, withhold his assent or reserve the bill for Presidential assent but cannot return the bill for reconsideration of the state legislature. 
  • Normally, the Governor gives his assent to a money bill as it is introduced in the state legislature with his prior permission. 

• When a money bill is reserved for consideration of the President: The President may either give his assent to the bill or withhold his assent to the bill but cannot return the bill for reconsideration of the state legislature. 

Procedure in Financial Matters (Articles 202 to 207)

The State Legislature of every state follows a special procedure in the matters related to finance. These procedures are given in Article 202 to Article 207 of the Indian Constitution. The procedure which is mentioned in these articles are as follows: 

• Article 202 (Annual Financial Statement or Budget): It is the duty of the Governor to lay down the estimated receipts and expenditure of the State for that year. 
  • It is known as the Annual Financial Statement. 
  • The term budget is nowhere used in the Constitution.
• Article 203 (Procedure in the legislature related to estimates): 
• Expenditure from the Consolidated Fund: The estimates that relate to expenditure charged from the Consolidated Fund of a State should not be submitted to a vote of the Legislative Assembly. 
• Discussion by the State Legislature: But it can only be discussed by the state legislature. 
• Demand for Grants: Demand for a grant can be made only on the recommendation of the Governor.
• Article 204 (Appropriation Bill): After making the grants under Article 203, the assembly shall introduce a bill that will provide for the appropriation out of the Consolidated Fund of the State for the matters related to which demand for grant and expenditure charged on the Consolidated Fund of the State has been approved by the assembly.
• Article 205 (Supplement, Additional or excess grants): 
  • Supplementary Grant: It is granted when the amount authorised by the State Legislature through the appropriation act for a particular service for the current financial year is found to be insufficient for that year. 
  • Additional Grant: It is granted when a need has arisen during the current financial year for additional expenditure upon some new service not contemplated in the budget for that year.
  • Excess Grant: It is granted when money has been spent on any service during a financial year in excess of the amount granted for that service in the budget for that year. 
• Article 206 (Vote on Accounts, Votes of Credit or Exceptional Credits): 
  • Vote on Accounts: To overcome the challenge of financial need till appropriation Bill is passed on demand of grants, the Constitution has authorised the State Assembly  to make any grant in advance in respect to the estimated expenditure. 
    • This provision is known as the ‘vote on account’. 
    • It is passed (or granted) after the general discussion on budget is over. 
  • Vote of Credit: It is granted for meeting an unexpected demand upon the resources of the State, when on account of the magnitude or the indefinite character of the service, the demand cannot be stated.  
    • It is like a blank cheque given to the Executive.
  • Exceptional Grant: It is granted for a special purpose and forms no part of the current service of any financial year. 
• Article 207 (Special Provisions related to Financial Bills): A Financial Bill should not be introduced in the Legislative Council and can only be introduced or moved in the Legislative Assembly with the recommendation of the Governor.

Conclusion

Understanding the legislative procedures in state legislatures is crucial for grasping how laws and financial policies are formulated and enacted at the state level. 

• The role of the Governor, the distinction between ordinary and Money Bills, and the special financial procedures ensure a structured and balanced legislative process. 
• These mechanisms uphold the integrity and functionality of state governance, ensuring laws and financial decisions are made systematically.

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