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How Ordinance is different from Bills


This is a relevant topic of this season. As you aware, the Government couldn’t pass bills such as Insurance Bill, Coal Bill etc. in the just concluded winter session of the Parliament. But within the last three weeks the government has approved many Ordinances including Insurance and Coal. In this background, it would be good to understand the basics of legislative process in India


What is an Act?

You would have heard people mentioning that ‘I am a law abiding citizen of this country’, right? This means that there are a set of rules/regulations which are made mandatory by the Government for the benefit of people. Such document which contains the regulation passed by the Parliament of India is called an Act (please note that this is not the legal definition, but for the understanding of the common man I have written this way). Under the Constitution of India, the power to make laws rests with the legislature (in case of Union government it is Lok Sabha + Rajya Sabha + President)


What is a BILL?

Whenever Government wants to implement changes in the existing law or new law to be brought in, they will make a ‘Draft Bill’ (a document containing the details of the proposed changes/new law)

The Government places the draft Bill in the public domain (say in the national portal/website) for the comments from the general public.

After considering the views expressed by the public, the Government may make necessary changes and then place it in the Parliament.

Once the BILL is passed by both the houses of Parliament and assented by the President of India, a Bill becomes an Act.


Ordinances – In case the Government feels that the current laws are to be modified or changed or newly introduced for the benefit of the country and the Parliament is not in Session to pass such laws, then it can issue Ordinances. Ordinance is a temporary law issued by the President of India on the advice of Union Cabinet allowing the government to take immediate legislative action. Ordinances will expire on completion of 6 months from the date of its issue. As per the Constitution, the government can choose Ordinance route to make laws only in exceptional cases.


How Ordinances become the Act? It has to go through the same process like a Bill. As I mentioned above, ordinances are passed when Parliament is not in Session. So, once the Parliament reassembles, the ordinance has to be presented in the Parliament and approval sought. In case, the government fails to get the approval of the Parliament, the ordinance lapses.


Present situation – There are over 8 ordinances passed during the last one month. The government is hoping to get it passed in the Budget session of the Parliament. As the government is in majority in Lok Sabha, getting it passed may not be a problem. However, going by the recent trend and also the fact that the government is not having the majority, it is difficult to get through Rajya Sabha.


What government can do?

Government has 6 weeks from the date of start of next Session of Parliament to get the ordinances approved. What is the guarantee that the opposition will co-operate to pass them? As things stand today, they may not oblige. So, government may even call for Joint session of the Parliament (Lok Sabha + Rajya Sabha together) to pass these ordinances. Both the houses together, the Government has majority. So it can approve these ordinances and thereby we can see these Acts soon!


Will the Government make it? We have to wait for the next 2 months to see the outcome.


Thought for the day


A person who really wants something will find a way; a person who doesn’t will find an excuse.

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]