Food Processing Infrastructure in India

Recently, there have been reports of price crashes and distress sales in case of farm produce, such as tomatoes, mangoes, and garlic.  In some cases, farmers have dumped their produce on roads.  Produce such as fruits and vegetables are perishable and therefore have a short shelf life.  Further, due to inadequate storage facilities and poor food processing infrastructure farmers have limited options but to sell the produce at prevailing market prices.  This can lead to distress sales or roadside discards (in some cases to avoid additional cost of transportation).

Food processing allows raw food to be stored, marketed, or preserved for consumption later.  For instance, raw agricultural produce such as fruits may be processed into juices, jams, and pickles.  Activities such as waxing (for preservation), packaging, labelling, or ripening of produce also form part of the food processing industry.

Between 2001-02 and 2016-17, production of food grains grew annually at 1.7% on average.  Production of horticulture crops surpassed food grains with an average growth rate of 4.8%.  While production has been increasing over the years, surplus produce tends to go waste at various stages such as procurement, storage, and processing due to lack of infrastructure such as cold storages and food processing units.

Source: Horticulture Statistics at a Glance 2017, Union Budget 2018-19; PRS.

Source: Horticulture Statistics at a Glance 2017, Union Budget 2018-19; PRS.

 

Losses high among perishables such as fruits and vegetables

Crop losses ranged between 7-16% among fruits and around 5% among cereals in 2015.  The highest losses were witnessed in case of guava, followed by mango, which are perishable fruits.  Perishables such as fruits and vegetables are more prone to losses as compared to cereals.  Such crop losses can occur during operations such as harvesting, thrashing, grading, drying, packaging, transportation, and storage depending upon the commodity.

It was estimated that the annual value of harvest and post-harvest losses of major agricultural products at the national level was Rs 92,651 crore in 2015.  The Standing Committee on Agriculture (2017) stated that such wastage can be reduced with adequate food processing facilities.

Sources: Annual Report 2016-17, Ministry of Food Processing Industries; PRS.

Sources: Annual Report 2016-17, Ministry of Food Processing Industries; PRS.

 

Inadequate food processing infrastructure

As previously discussed, perishables such as fruits and vegetables are more prone to damages as compared to cereals.  Due to inadequate processing facilities in close proximity, farmers may be unable to hold their produce for a long time.  Hence, they may be forced to sell their produce soon after harvest, irrespective of the prevailing market situations.  Expert committees have recommended that agri-logistics such as cold chain infrastructure and market linkages should be strengthened.

Cold chain infrastructure: Cold chain infrastructure includes processing units, cold storages, and refrigerated vans.  As of 2014, out of a required cold storage capacity of 35 million metric tonnes (MT), almost 90% (31.8 million MT) of the capacity was available (see Table 1).  However, cold storage needs to be coupled with logistical support to facilitate smooth transfer of harvested value from farms to distant locations.  This includes: (i) pack-houses for packaging and preparing fresh produce for long distance transport, (ii) refrigerated transport such as reefer vehicles, and (iii) ripening chambers to ripen raw produce before marketing.  For instance, bananas which are harvested raw may be ripened in these chambers before being marketed.

While there are sufficient cold storages, there are wide gaps in the availability of other associated infrastructure.  This implies that even though almost 90% (32 million tonnes) of cold storage capacity is available, only 15% of the required refrigerated transport exists.  Further, the shortfall in the availability of infrastructure necessary for safe handling of farm produce, like pack-houses and ripening chambers, is over 90%.

Table 1:  Gaps in cold chain infrastructure (2014)

Facility Required Available Gap % gap
Cold storage
(in million MT)

35.1

31.8 3.2

9.3%

Pack-houses

70,080

249 69,831

99.6%

Reefer vehicles

61,826

9,000 52,826

85.4%

Ripening chambers

9,131

812 8,319

91.1%

Source: Standing Committee on Agriculture 2018; PRS.

 

To minimise post-harvest losses, the Standing Committee (2017) recommended that a country-wide integrated cold chain infrastructure network at block and district levels should be created.  It further recommended that a Cold Chain Coordination and Monitoring Committee should be constituted at the district-level.  The Standing Committee also recommended that farmers need to be trained in value addition activities such as sorting, grading, and pre-cooling harvested produce through facilities such as freezers and ripening chambers.

Between 2008 and 2017, 238 cold chain projects were sanctioned under the Scheme for Integrated Cold Chain and Value Addition Infrastructure.  Grants worth Rs 1,775 crore were approved for these projects.  Of this amount, Rs 964 crore (54%) has been released as of January 2018.  Consequently, out of the total projects sanctioned, 114 (48%) are completed.  The remaining 124 projects are currently under implementation.

Transport Facilities:  Currently, majority of food grains and certain quantities of tea, potato, and onion are transported through railways.  The Committee on Doubling Farmers Income had recommended that railways needs to upgrade its logistics to facilitate the transport of fresh produce directly to export hubs.  This includes creation of adjoining facilities for loading and unloading, and distribution to road transport.

Mega Food Parks: The Mega Food Parks scheme was launched in 2008.  It seeks to facilitate setting up of food processing units.  These units are to be located at a central processing centre with infrastructure required for processing, packaging, quality control labs, and trade facilitation centres.

As of March 2018, out of the 42 projects approved, 10 were operational.  The Standing Committee on Agriculture noted certain reasons for delay in implementation of projects under the scheme.  These include: (i) difficulty in getting loans from banks for the project, (ii) delay in obtaining clearances from the state governments and agencies for roads, power, and water at the project site, (iii) lack of special incentives for setting up food processing units in Mega Food Parks, and (iv) unwillingness of the co-promoters in contributing their share of equity.

Further, the Standing Committee stated that as the scheme requires a minimum area of 50 acres, it does not to promote smaller or individual food processing and preservation units.  It recommended that smaller agro-processing clusters near production areas must be promoted.  The Committee on Doubling Farmers Income recommended establishment of processing and value addition units at strategic places.  This includes rural or production areas for pulses, millets, fruits, vegetables, dairy, fisheries, and poultry in public private-partnership mode.

Examining the National Medical Commission Bill, 2017

May 3rd, 2018 Nivedita Rao 3 comments

The National Medical Commission (NMC) Bill, 2017 was introduced in Lok Sabha in December, 2017.  It was examined by the Standing Committee on Health, which submitted its report during Budget Session 2018.  The Bill seeks to regulate medical education and practice in India.  In this post, we analyse the Bill in its current form.

How is medical education and practice regulated currently?

The Medical Council of India (MCI) is responsible for regulating medical education and practice.  Over the years, there have been several issues with the functioning of the MCI with respect to its regulatory role, composition, allegations of corruption, and lack of accountability.   For example, MCI is an elected body where its members are elected by medical practitioners themselves, i.e. the regulator is elected by the regulated.  In light of such issues, experts recommended nomination based constitution of the MCI instead of election, and separating the regulation of medical education and medical practice.  They suggested that legislative changes should be brought in to overhaul the functioning of the MCI.

To meet this objective, the Bill repeals the Indian Medical Council Act, 1956 and dissolves the current Medical Council of India (MCI) which regulates medical education and practice.

Who will be a part of the NMC?

The NMC will consist of 25 members, of which at least 17 (68%) will be medical practitioners.  The Standing Committee has noted that the current MCI is non-diverse and consists mostly of doctors who look out for their own self-interest over larger public interest.   In order to reduce the monopoly of doctors, it recommended that the MCI should include diverse stakeholders such as public health experts, social scientists, and health economists.  In other countries, such as the United Kingdom, the General Medical Council (GMC) responsible for regulating medical education and practice consists of 12 medical practitioners and 12 lay members (such as community health members, and administrators from the local government).

How will the issues of medical misconduct be addressed?

The State Medical Council will receive complaints relating to professional or ethical misconduct against a registered doctor.  If the doctor is aggrieved by the decision of the State Medical Council, he may appeal to the Ethics and Medical Registration Board, and further before the NMC.  Appeals against the decision of the NMC will lie before the central government.  It is unclear why the central government is an appellate authority with regard to such matters.

It may be argued that disputes related to ethics and misconduct in medical practice may require judicial expertise.  For example, in the UK, the GMC receives complaints with regard to ethical misconduct and is required to do an initial documentary investigation.  It then forwards the complaint to a Tribunal, which is a judicial body independent of the GMC.  The adjudication and final disciplinary action is decided by the Tribunal.

What will the NMC’s role be in fee regulation of private medical colleges?

In India, the Supreme Court has held that private providers of education have to operate as charitable and not for profit institutions.   Despite this, many private education institutions continue to charge exorbitant fees which makes medical education unaffordable and inaccessible to meritorious students.  Currently, for private unaided medical colleges, the fee structure is decided by a committee set up by state governments under the chairmanship of a retired High Court judge.  The Bill allows the NMC to frame guidelines for determination of fees for up to 40% of seats in private medical colleges and deemed universities.  The question is whether the NMC as a regulator should regulate fees charged by private medical colleges.

A NITI Aayog Committee (2016) was of the opinion that a fee cap would discourage the entry of private colleges, therefore, limiting the expansion of medical education.  It also observed that it is difficult to enforce such a fee cap and could lead medical colleges to continue charging high fees under other pretexts.

Note that the Parliamentary Standing Committee (2018) which examined the Bill has recommended continuing the current system of fee structures being decided by the Committee under the chairmanship of a retired High Court judge.  However, for those private medical colleges and deemed universities, unregulated under the existing mechanism, fee must be regulated for at least 50% of the seats.  The Union Cabinet has approved an Amendment to increase the regulation of fees to 50% of seats.

How will doctors become eligible to practice?

The Bill introduces a National Licentiate Examination for students graduating from medical institutions in order to obtain a licence to practice as a medical professional.

However, the NMC may permit a medical practitioner to perform surgery or practice medicine without qualifying the National Licentiate Examination, in such circumstances and for such period as may be specified by regulations.  The Ministry of Health and Family Welfare has clarified that this exemption is not meant to allow doctors failing the National Licentiate Examination to practice but is intended to allow medical professionals like nurse practitioners and dentists to practice.  It is unclear from the Bill that the term ‘medical practitioner’ includes medical professionals (like nurses) other than MBBS doctors.

Further, the Bill does not specify the validity period of this licence to practice.  In other countries such as the United Kingdom and Australia, a licence to practice needs to be periodically renewed.  For example, in the UK the licence has to be renewed every five years, and in Australia it has to renewed annually.

What are the issues around the bridge course for AYUSH practitioners to prescribe modern medicine?

The debate around AYUSH practitioners prescribing modern medicine

There is a provision in the Bill which states that there may be a bridge course which AYUSH practitioners (practicing Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy) can undertake in order to prescribe certain kinds of modern medicine.  There are differing views on whether AYUSH practitioners should prescribe modern medicines.

Over the years, various committees have recommended a functional integration among various systems of medicine i.e. Ayurveda, modern medicine, and others.  On the other hand, experts state that the bridge course may promote the positioning of AYUSH practitioners as stand-ins for allopathic doctors owing to the shortage of doctors across the country.  This in turn may affect the development of AYUSH systems of medicine as independent systems of medicine.

Moreover, AYUSH doctors do not have to go through any licentiate examination to be registered by the NMC, unlike the other doctors.  Recently, the Union Cabinet has approved an Amendment to remove the provision of the bridge course.

Status of other kinds of medical personnel

As of January 2018, the doctor to population ratio in India was 1:1655 compared to the World Health Organisation standard of 1:1000.  The Ministry of Health and Family Welfare stated that the introduction of the bridge course for AYUSH practitioners under the Bill will help fill in the gaps of availability of medical professionals.

If the purpose of the bridge course is to address shortage of medical professionals, it is unclear why the option to take the bridge course does not apply to other cadres of allopathic medical professionals such as nurses, and dentists.  There are other countries where medical professionals other than doctors are allowed to prescribe allopathic medicine.  For example, Nurse Practitioners in the USA provide a full range of primary, acute, and specialty health care services, including ordering and performing diagnostic tests, and prescribing medications.  For this purpose, Nurse Practitioners must complete a master’s or doctoral degree program, advanced clinical training, and obtain a national certification.

What impacts petroleum prices?

April 25th, 2018 Vatsal Khullar 3 comments

Over the last few days, the retail prices of petrol and diesel have touched an all-time high.  In Delhi, petrol was selling at 74.6/litre on April 25, 2018, while diesel was at 66/litre.

Petroleum products are used as raw materials in various sectors and industries such as transport and petrochemicals.  These products may also be used in factories to operate machinery or generators.  Any fluctuation in the price of petrol and diesel impacts the production and transport costs of various items.  When compared to other neighbouring countries, India has the highest prices for petrol and diesel.

Note: Prices as on April 1, 2018. Prices for India pertain to Delhi. Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.

Note: Prices as on April 1, 2018. Prices for India pertain to Delhi.
Sources: Petroleum Planning and Analysis Cell, Ministry of Petroleum and Natural Gas; PRS.

How is the price of petrol and diesel fixed?

Historically, the price of petrol and diesel in India was regulated, i.e. the government was involved in the deciding the retail price.  The government deregulated the pricing of petrol in 2010 and diesel in 2014.  This allowed oil marketing companies to determine the price of these products, and revise them every fortnight.

Starting June 16, 2017, prices for petrol and diesel are revised on a daily basis.  This was done to with the idea that daily revision will reduce the volatility in retail prices, and protect the consumer against sharp fluctuations.  The break-up of retail prices of petrol and diesel in Delhi on April 25, 2018 can be found below.  As seen in the table, over 50% of the retail price of petrol comprises central and states taxes and the dealer’s commission.  In case of diesel, this amount is close to 40%.

Table 1: Break-up of petrol and diesel prices in Delhi (on April 25, 2018)

Component

Petrol

Diesel

Rs/litre % of retail price
Rs/litre

% of retail price

Price Charged to Dealers 35.7 48% 38.4 58%
Excise Duty (levied by centre) 19.5 26% 15.3 23%
Dealer Commission 3.6 5% 2.5 4%
VAT (levied by state) 15.9 21% 9.7 15%
Retail Price 74.6 100% 65.9 100%
Source: Price Build-up of Petrol and Diesel at Delhi effective April 25, 2018; Indian Oil Corporation Limited.

 

Does India produce enough petroleum to support domestic consumption?

India imports 84% of the petroleum products consumed in the country.  This implies that any change in the global prices of crude oil has a significant impact on the domestic price of petroleum products.  In 2000-01, net import of petroleum products constituted 75% of the total consumption in the country.  This increased to 95% in 2016-17.  The figure below shows the amount of petroleum products consumed in the country, and the share of imports.

Note: Production is the difference between the total consumption in the country and the net imports. Sources: Petroleum Planning and Analysis Cell; PRS.

Note: Production is the difference between the total consumption in the country and the net imports.
Sources: Petroleum Planning and Analysis Cell; PRS.

What has been the global trend in crude oil prices? How has this impacted prices in India?

Over the last five years, the global price of crude oil (Indian basket) has come down from USD 110 in January 2013 to USD 64 in March 2018, having touched a low of USD 28 in January 2016.

While there has been a 42% drop in the price of global crude over this five-period, the retail price of petrol in India has increased by 8%.  During this period, the retail price of diesel increased by 33%.  The two figures below show the trend in prices of global crude oil and retail price of petrol and diesel in India, over the last five years.

Note: Subsidy indicated in the graphs is notional.  While calculating the subsidy amount, other factors such as cost of domestic inputs will also have to be accounted.  Global Crude Oil Price is for the Indian basket.  Figures reflect average monthly retail price of petrol and diesel in Delhi.
Sources: Petroleum Planning and Analysis Cell; Indian Oil Corporation Limited; PRS.

 

How has the excise duty on petrol and diesel changed over the last few years?

Under the Constitution, the central government has the powers to tax the production of petroleum products, while states have the power to tax their sale.  Petroleum has been kept outside the purview of the Goods and Services Tax (GST), till the GST Council decides.

Over the years, the central government has used taxes to prevent sharp fluctuations in the retail price of diesel and petrol.  In the past, when global crude oil prices have increased, duties have been cut.  Since 2014, as global crude oil prices declined, excise duties have been increased.

Sources: Petroleum Planning and Analysis Cell; PRS.

Sources: Petroleum Planning and Analysis Cell; PRS.

 

As a consequence of the increase in duties, the central government’s revenue from excise on petrol and diesel increased annually at a rate of 46% between 2013-14 and 2016-17.  During the same period, the total sales tax collections of states (from petrol and diesel) increased annually by 9%.  The figure below shows the trend in overall collections of the central and state governments from petroleum (including receipts from taxes, royalties, and dividends).

 

Notes: Data includes tax collections (from cesses, royalties, customs duty, central excise duty, state sales tax, octroi, and entry tax, among others), dividends paid to the government, and profit on oil exploration. Data sources: Petroleum and Planning Analysis Cell; Central Board of Excise and Customs; Indian Oil Corporation Limited; PRS.

Notes: Data includes tax collections (from cesses, royalties, customs duty, central excise duty, state sales tax, octroi, and entry tax, among others), dividends paid to the government, and profit on oil exploration.
Data sources: Petroleum and Planning Analysis Cell; Central Board of Excise and Customs; Indian Oil Corporation Limited; PRS.

 

Explainer: Removal of Judges from Office

April 20th, 2018 Roshni Sinha 3 comments

Today, some Members of Parliament initiated proceedings for the removal of the current Chief Justice of India by submitting a notice to the Chairman of Rajya Sabha.  A judge may be removed from office through a motion adopted by Parliament on grounds of ‘proven misbehaviour or incapacity’.  While the Constitution does not use the word ‘impeachment’, it is colloquially used to refer to the proceedings under Article 124 (for the removal of a Supreme Court judge) and Article 218 (for the removal of a High Court judge).

The Constitution provides that a judge can be removed only by an order of the President, based on a motion passed by both Houses of Parliament.  The procedure for removal of judges is elaborated in the Judges Inquiry Act, 1968.  The Act sets out the following steps for removal from office:

  • Under the Act, an impeachment motion may originate in either House of Parliament. To initiate proceedings: (i) at least 100 members of Lok Sabha may give a signed notice to the Speaker, or (ii) at least 50 members of Rajya Sabha may give a signed notice to the Chairman.  The Speaker or Chairman may consult individuals and examine relevant material related to the notice.  Based on this, he or she may decide to either admit the motion or refuse to admit it.
  • If the motion is admitted, the Speaker or Chairman (who receives it) will constitute a three-member committee to investigate the complaint. It will comprise: (i) a Supreme Court judge; (ii) Chief Justice of a High Court; and (iii) a distinguished jurist.  The committee will frame charges based on which the investigation will be conducted.  A copy of the charges will be forwarded to the judge who can present a written defence.
  • After concluding its investigation, the Committee will submit its report to the Speaker or Chairman, who will then lay the report before the relevant House of Parliament. If the report records a finding of misbehaviour or incapacity, the motion for removal will be taken up for consideration and debated.
  • Once the motion is adopted in both Houses, it is sent to the President, who will issue an order for the removal of the judge.

Central Transfers to States: Role of the Finance Commission

April 11th, 2018 Gayatri Mann No comments

In November 2017, the 15th Finance Commission (Chair: Mr N. K. Singh) was constituted to give recommendations on the transfer of resources from the centre to states for the five year period between 2020-25.  In recent times, there has been some discussion around the role and mandate of the Commission.  In this context, we explain the role of the Finance Commission.

What is the Finance Commission?

The Finance Commission is a constitutional body formed every five years to give suggestions on centre-state financial relations.  Each Finance Commission is required to make recommendations on: (i) sharing of central taxes with states, (ii) distribution of central grants to states, (iii) measures to improve the finances of states to supplement the resources of panchayats and municipalities, and (iv) any other matter referred to it.

Composition of transfers:  The central taxes devolved to states are untied funds, and states can spend them according to their discretion.  Over the years, tax devolved to states has constituted over 80% of the total central transfers to states (Figure 1).  The centre also provides grants to states and local bodies which must be used for specified purposes.  These grants have ranged between 12% to 19% of the total transfers.

Fig 1Over the years the core mandate of the Commission has remained unchanged, though it has been given the additional responsibility of examining various issues.  For instance, the 12th Finance Commission evaluated the fiscal position of states and offered relief to those that enacted their Fiscal Responsibility and Budget Management laws.  The 13th and the 14th Finance Commission assessed the impact of GST on the economy.  The 13th Finance Commission also incentivised states to increase forest cover by providing additional grants.

15th Finance Commission:  The 15th Finance Commission constituted in November 2017 will recommend central transfers to states.  It has also been mandated to: (i) review the impact of the 14th Finance Commission recommendations on the fiscal position of the centre; (ii) review the debt level of the centre and states, and recommend a roadmap; (iii) study the impact of GST on the economy; and (iv) recommend performance-based incentives for states based on their efforts to control population, promote ease of doing business, and control expenditure on populist measures, among others.

Why is there a need for a Finance Commission?

The Indian federal system allows for the division of power and responsibilities between the centre and states.  Correspondingly, the taxation powers are also broadly divided between the centre and states (Table 1).  State legislatures may devolve some of their taxation powers to local bodies.

Table 1

The centre collects majority of the tax revenue as it enjoys scale economies in the collection of certain taxes.  States have the responsibility of delivering public goods in their areas due to their proximity to local issues and needs.

Sometimes, this leads to states incurring expenditures higher than the revenue generated by them.  Further, due to vast regional disparities some states are unable to raise adequate resources as compared to others.  To address these imbalances, the Finance Commission recommends the extent of central funds to be shared with states.  Prior to 2000, only revenue income tax and union excise duty on certain goods was shared by the centre with states.  A Constitution amendment in 2000 allowed for all central taxes to be shared with states.

Several other federal countries, such as Pakistan, Malaysia, and Australia have similar bodies which recommend the manner in which central funds will be shared with states.

Tax devolution to states

Table 2The 14th Finance Commission considerably increased the devolution of taxes from the centre to states from 32% to 42%.  The Commission had recommended that tax devolution should be the primary source of transfer of funds to states.  This would increase the flow of unconditional transfers and give states more flexibility in their spending.

The share in central taxes is distributed among states based on a formula.   Previous Finance Commissions have considered various factors to determine the criteria such as the population and income needs of states, their area and infrastructure, etc.  Further, the weightage assigned to each criterion has varied with each Finance Commission.

The criteria used by the 11th to 14th Finance Commissions are given in Table 2, along with the weight assigned to them.  State level details of the criteria used by the 14th Finance Commission are given in Table 3.

  • Population is an indicator of the expenditure needs of a state. Over the years, Finance Commissions have used population data of the 1971 Census.  The 14th Finance Commission used the 2011 population data, in addition to the 1971 data.  The 15th Finance Commission has been mandated to use data from the 2011 Census.
  • Area is used as a criterion as a state with larger area has to incur additional administrative costs to deliver services.
  • Income distance is the difference between the per capita income of a state with the average per capita income of all states. States with lower per capita income may be given a higher share to maintain equity among states.
  • Forest cover indicates that states with large forest covers bear the cost of not having area available for other economic activities. Therefore, the rationale is that these states may be given a higher share.

Table 3

Grants-in-Aid

Besides the taxes devolved to states, another source of transfers from the centre to states is grants-in-aid.  As per the recommendations of the 14th Finance Commission, grants-in-aid constitute 12% of the central transfers to states.  The 14th Finance Commission had recommended grants to states for three purposes: (i) disaster relief, (ii) local bodies, and (iii) revenue deficit.

Healthcare Financing: Who is paying?

April 6th, 2018 Nivedita Rao 1 comment

The Union Cabinet recently approved the launch of the National Health Protection Mission which was announced during Budget 2018-19.   The Mission aims to provide a cover of five lakh rupees per family per year to about 10.7 crore families belonging to poor and vulnerable population.  The insurance coverage is targeted for hospitalisation at the secondary and tertiary health care levels. This post explains the healthcare financing scenario in India, which is distributed across the centre, states, and individuals.

How much does India spend on health care financing vis-à-vis other countries?

The public health expenditure in India (total of centre and state governments) has remained constant at approximately 1.3% of the GDP between 2008 and 2015, and increased marginally to 1.4% in 2016-17.  This is less than the world average of 6%.   Note that the National Health Policy, 2017 proposes to increase this to 2.5% of GDP by 2025.

Including the private sector, the total health expenditure as a percentage of GDP is estimated at 3.9%.  Out of the total expenditure, effectively about one-third (30%) is contributed by the public sector.  This contribution is low as compared to other developing and developed countries.  Examples include Brazil (46%), China (56%), Indonesia (39%), USA (48%), and UK (83%) (see Figure 1).

Fig 1

Who pays for healthcare in India? Mostly, it is the consumer out of his own pocket.

Given the public-private split of health care expenditure, it is quite clear that it is the private expenditure which dominates i.e. the individual consumer who bears the cost of her own healthcare.  Let’s look at a further disaggregation of public spending and private spending to understand this.

In 2018-19, the Ministry of Health and Family Welfare received an allocation of Rs 54,600 crore (an increase of 2% over 2017-18).  The National Health Mission (NHM) received the highest allocation at Rs 30,130 crore and constitutes 55% of the total Ministry allocation (see Table 1).  Despite a higher allocation, NHM has seen a decline in the allocation vis-à-vis 2017-18.

Interestingly, in 2017-18, expenditure on NHM is expected to be Rs 4,000 crore more than what had been estimated earlier.  This may indicate a greater capacity to spend than what was earlier allocated.  A similar trend is exhibited at the overall Ministry level where the utilisation of the allocated funds has been over 100% in the last three years.

Table 1State level spending

A NITI Aayog report (2017) noted that low income states with low revenue capacity spend significant lower on social services like health.  Further, differences in the cost of delivering health services have contributed to health disparities among and within states.

Following the 14th Finance Commission recommendations, there has been an increase in the states’ share in central pool of taxes and they were given greater autonomy and flexibility to spend according to their priorities. Despite the enhanced share of states in central taxes, the increase in health budgets by some states has been marginal (see Figure 2).

Fig 2Consumer level spending

If cumulatively 30% of the total health expenditure is incurred by the public sector, the rest of the health expenditure, i.e. approximately 70% is borne by consumers.  Household health expenditures include out of pocket expenditures (95%) and insurance (5%). Out of pocket expenditure dominate and these are the payments made directly by individuals at the point of services which are not covered under any financial protection scheme.  The highest percentage of out of pocket health expenditure (52%) is made towards medicines (see Figure 3).

Fig 3

This is followed by private hospitals (22%), medical and diagnostic labs (10%), and patient transportation, and emergency rescue (6%).  Out of pocket expenditure is typically financed by household revenues (71%) (see Figure 4).

Fig 4

Note that 86% of rural population and 82% of urban population are not covered under any scheme of health expenditure support.   Due to high out of pocket healthcare expenditure, about 7% population is pushed below the poverty threshold every year.

Out of the total number of persons covered under health insurance in India, three-fourths are covered under government sponsored health schemes and the balance one-fourth are covered by private insurers.  With respect to the government sponsored health insurance, more claims have been made in comparison to the premiums collected, i.e., the returns to the government have been negative.

It is in this context that the newly proposed National Health Protection Mission will be implemented.  First, the scheme seeks to provide coverage for hospitalisation at the secondary and tertiary levels of healthcare.  The High Level Expert Group set up by the Planning Commission (2011) recommended that the focus of healthcare provision in the country should be towards providing primary health care.  It observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level.  Note that depending on the level of care required, health institutions in India are broadly classified into three types: primary care (provided at primary health centres), secondary care (provided at district hospitals), and tertiary care institutions (provided at specialised hospitals like AIIMS).

Second, the focus of the Mission seems to be on hospitalisation (including pre and post hospitalisation charges).  However, most of the out of the pocket expenditure made by consumers is actually on buying medicines (52%) as seen in Figure 3.  Further, these purchases are mostly made for patients who do not need hospitalisation.

Status of Drinking Water and Sanitation in rural India

April 2nd, 2018 Roopal Suhag No comments

In Budget Session 2018, Rajya Sabha has planned to examine the working of four ministries.  The Ministry of Drinking Water and Sanitation is one of the ministries listed for discussion.  In this post, we look at the key schemes being implemented by the Ministry and their status.

What are the key functions of the Ministry of Drinking Water and Sanitation?

As per the Constitution, supply of water and sanitation are state subjects which means that states regulate and provide these services.  The Ministry of Drinking Water and Sanitation is primarily responsible for policy planning, funding, and coordination of programs for: (i) safe drinking water; and (ii) sanitation, in rural areas.  From 1999 till 2011, the Ministry operated as a Department under the Ministry of Rural Development.  In 2011, the Department was made an independent Ministry.  Presently, the Ministry oversees the implementation of two key schemes of the government: (i) Swachh Bharat Mission-Gramin (SBM-G), and (ii) National Rural Drinking Water Programme (NRDWP).

How have the finances and spending priorities of the Ministry changed over time?

In the Union Budget 2018-19, the Ministry has been allocated Rs 22,357 crore.  This is a decrease of Rs 1,654 crore (7%) over the revised expenditure of 2017-18.  In 2015-16, the Ministry over-shot its budget by 178%.  Consequently, the allocation in 2016-17 was more than doubled (124%) to Rs 14,009 crore.

In recent years, the priorities of the Ministry have seen a shift (see Figure 1).  The focus has been on providing sanitation facilities in rural areas, mobilising behavioural change to increase usage of toilets, and consequently eliminating open defecation.  However, this has translated into a decrease in the share of allocation towards drinking water (from 87% in 2009-10 to 31% in 2018-19).  In the same period, the share of allocation to rural sanitation has increased from 13% to 69%.Figure 1

What has been the progress under Swacch Bharat Mission- Gramin?

The Swachh Bharat Mission was launched on October 2, 2014 with an aim to achieve universal sanitation coverage, improve cleanliness, and eliminate open defecation in the country by October 2, 2019.

Expenditure on SBM-G:  In 2018-19, Rs 15,343 crore has been allocated towards SBM-G.  The central government allocation to SBM-G for the five year period from 2014-15 to 2018-19 has been estimated to be Rs 1,00,447 crore.  Of this, up to 2018-19, Rs 52,166 crore (52%) has been allocated to the scheme.  This implies that 48% of the funds are still left to be released before October 2019.  Figure 2

Construction of Individual Household Latrines (IHHLs):  For construction of IHHLs, funds are shared between the centre and states in the 60:40 ratio.  Construction of IHHLs account for the largest share of total expenditure under the scheme (97%-98%).  Although the number of toilets constructed each year has increased, the pace of annual growth of constructing these toilets has come down.  In 2015-16, the number of toilets constructed was 156% higher than the previous year.  This could be due to the fact that 2015-16 was the first full year of implementation of the scheme.  The growth in construction of new toilets reduced to 74% in 2016-17, and further to 4% in 2017-18.Table 1

As of February 2018, 78.8% of households in India had a toilet.  This implies that 15 crore toilets have been constructed so far.  However, four crore more toilets need to be construced in the next 20 months for the scheme to achieve its target by 2019.

Open Defecation Free (ODF) villages:  Under SBM-G, a village is ODF when: (i) there are no visible faeces in the village, and (ii) every household as well as public/community institution uses safe technology options for faecal disposal.  After a village declares itself ODF, states are required to carry out verification of the ODF status of such a village.  This includes access to a toilet facility and its usage, and safe disposal of faecal matter through septic tanks.  So far, out of all villages in the country, 72% have been verified as ODF.  This implies that 28% villages are left to be verified as ODF for the scheme to achieve its target by 2019.Table 2

Information, Education and Communication (IEC) activities:  As per the SBM-G guidelines, 8% of funds earmarked for SBM-G in a year should be utilised for IEC activities.  These activities primarily aim to mobilise behavioural change towards the use of toilets among people.  However, allocation towards this component has remained in the 1%-4% range.  In 2017-18, Rs 229 crore is expected to be spent, amounting to 2% of total expenditure.

What is the implementation status of the National Rural Drinking Water Programme?

The National Rural Drinking Water Programme (NRDWP) aims at assisting states in providing adequate and safe drinking water to the rural population in the country.  In 2018-19, the scheme has been allocated Rs 7,000 crore, accounting for 31% of the Ministry’s finances.Figure 3

Coverage under the scheme:  As of August 2017, 96% of rural habitations have access to safe drinking water.  In 2011, the Ministry came out with a strategic plan for the period 2011-22.  The plan identified certain standards for coverage of habitations with water supply, including targets for per day supply of drinking water.  As of February 2018, 74% habitations are fully covered (receiving 55 litres per capita per day), and 22% habitations are partially covered (receiving less than 55 litres per capita per day).  The Ministry aims to cover 90% rural households with piped water supply and 80% rural households with tap connections by 2022.  The Estimates Committee of Parliament (2015) observed that piped water supply was available to only 47% of rural habitations, out of which only 15% had household tap connections.

Contamination of drinking water:  It has been noted that NRDWP is over-dependant on ground water.  However, ground water is contaminated in over 20 states.  For instance, high arsenic contamination has been found in 68 districts of 10 states.  These states are Haryana, Punjab, Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, West Bengal, Assam, Manipur, and Karnataka.Table 3

Chemical contamination of ground water has also been reported due to deeper drilling for drinking water sources.  It has been recommended that out of the total funds for NRDWP, allocation for water quality monitoring and surveillance should not be less than 5%.  Presently, it is 3% of the total funds.  It has also been suggested that water quality laboratories for water testing should be set up throughout the country.

Internal Security: Examining the Working of the Home Ministry

March 20th, 2018 Vinayak Krishnan 3 comments

Each year during the Budget Session, Rajya Sabha examines the working of certain ministries.  This year it has identified four ministries for discussion, which includes the Ministry of Home Affairs.  In light of this, we analyse some key functions of the Ministry and the challenges in carrying out these functions.

What are the key functions of Ministry of Home Affairs?  

The Ministry of Home Affairs (MHA) is primarily responsible for: (i) maintenance of internal security, (ii) governance issues between the centre and states, and (iii) disaster management.  It also discharges several other key functions that include: (i) border management, (ii) administration of union territories, (iii) implementation of provisions relating to the official languages, and (iv) conducting the population census every ten years.

Under the Constitution, ‘public order’ and ‘police’ are state list subjects.  The MHA assists the state governments by providing them: (i) central armed police forces, and (ii) financial assistance for modernising state police forces, communication equipment, weaponry, mobility, training and other police infrastructure.

What is the role of the central armed police forces?

Table 1The MHA manages seven central police forces: (i) Central Reserve Police Force (CRPF) which assists in internal security and law and order, (ii) Central Industrial Security Force (CISF) which protects vital installations (like airports) and public sector undertakings, (iii) National Security Guards which is a special counter-terrorism force, and (iv) four border guarding forces, namely, Border Security Force (BSF), Indo-Tibetan Border Police (ITBP), Sashastra Seema Bal (SSB) and Assam Rifles (AR).

As of January 2017, the total sanctioned strength of the seven CAPFs was 10. 8 lakhs.  However, 15% of these posts (i.e., about 1.6 lakhs posts) were lying vacant.  The vacancy in the CAPFs has remained above 7% for the last five years (see Table 1).  In 2017, the Sashastra Seema Bal had the highest vacancy (57%).  The CRPF, which accounts for 30% of the total sanctioned strength of the seven CAPFs, had a vacancy of 8%.

How does MHA assist the police forces?

In Union Budget 2018-19, Rs 1,07,573 crore has been allocated to the Ministry of Home Affairs.  The Ministry has estimated to spend 82% of this amount on police.  The remaining allocation is towards grants to Union Territories, and other items including disaster management, rehabilitation of refugees and migrants, and the Union Cabinet.

The MHA has been implementing Modernisation of Police Forces (MPF) scheme since 1969 to supplement the resources of states for modernising their police forces.  Funds from the MPF scheme are utilised for improving police infrastructure through construction of police stations, and provision of modern weaponry, surveillance, and communication equipment.  Some other important objectives under the scheme include upgradation of training infrastructure, police housing, and computerisation.

The scheme has undergone revision over the years.  A total allocation of Rs 11,946 crore was approved for the MPF scheme, for a five-year period between 2012-13 to 2016-17.  Following the recommendations of the 14th Finance Commission (to increase the share of central taxes to states), it was decided that the MPF scheme would be delinked from central government funding from 2015-16 onwards. However, in September 2017, the Union Cabinet approved an outlay of Rs 25,060 crore under the scheme, for the period 2017-18 to 2019-20.  The central government will provide about 75% of this amount, and the states will provide the remaining 25%.

The Comptroller and Auditor General (CAG) has found that weaponry in several state police forces is outdated, and there is a shortage of arms and ammunitions.  An audit of Rajasthan police force (2009-14) found that there was a shortage of 75% in the availability of modern weapons against the state’s requirements.  In case of West Bengal and Gujarat police forces, CAG found a shortage of 71% and 36% respectively.  Further, there has been a persistent problem of underutilisation of modernisation funds by the states.  Figure 1 shows the level of utilisation of modernisation funds by states between 2010-11 and 2016-17.

Figure 1

What are the major internal security challenges in India?

Maintaining internal security of the country is one of the key functions of the MHA.  The major internal security challenges that India faces are: (i) terrorist activities in the country, (ii) cross-border terrorism in Jammu and Kashmir, (iii) Left Wing Extremism in certain areas, and (iv) insurgency in the North-Eastern states.

Between 2015 and 2016, the number of cross-border infiltrations in Jammu and Kashmir increased by almost three times, from 121 to 364.   On the other hand, incidents of insurgency in Left Wing Extremism areas have decreased from 1,048 in 2016 to 908 in 2017.

The Standing Committee on Home Affairs noted in 2017-18 that security forces in Jammu and Kashmir are occupied with law and order incidents, such as stone pelting, which gives militants the time to reorganise and perpetrate terror attacks.  The Committee recommended that the MHA should adopt a multi-pronged strategy that prevents youth from joining militancy, curbs their financing, and simultaneously launch counter-insurgency operations.

In relation to Left Wing Extremism, the Standing Committee (2017) observed that police and paramilitary personnel were getting killed because of mine blasts and ambushes.  It recommended that the MHA should make efforts to procure mine-resistant vehicles.  This could be done through import or domestic manufacturing under the ‘Make in India’ programme.

What is the MHA’s role in border management?

India has a land border of over 15,000 kms, which it shares with seven countries (Pakistan, China, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan).  Further, it has a coastline of over 7,500 kms.  The MHA is responsible for: (i) management of international lands and coastal borders, (ii) strengthening of border guarding, and (iii) creation of infrastructure such as roads, fencing, and lighting of borders.

Construction of border outposts is one of the components of infrastructure at border areas.  The Standing Committee on Home Affairs (2017) noted that the proposal to construct 509 outposts along the India-Bangladesh, and India-Pakistan borders had been reduced to 422 outposts in 2016.  It recommended that such a reduction should be reconsidered since 509 outposts would reduce the inter-border outpost distance to 3.5 kms, which is important for the security of the country.

How is coastal security carried out?

Coastal security is jointly carried out by the Indian Navy, Indian Coast Guard, and marine police of coastal states and Union Territories.  The MHA is implementing the Coastal Security Scheme to strengthen the marine police of nine coastal states and four Union Territories by enhancing surveillance, and improve patrolling in coastal areas.  Under this scheme, the Ministry sought to construct coastal police stations, purchase boats, and acquire vehicles for patrolling on land, among other objectives.

The Standing Committee on Home Affairs (2017) observed that the implementation of Phase-II of this scheme within the set time-frame has not been possible.  It also noted that there was lack of coordination between the Indian Navy, the Indian Coast Guard, and the coastal police.  In this context, the Committee recommended that the Director General, Indian Coast Guard, should be the nodal authority for coordinating operations related to coastal security.

Tags:

Indian Railways: Analysing the Budget

March 12th, 2018 Prachee Mishra No comments

Finances of the Railways were presented along with the Union Budget on February 1, 2018 (the Railways Budget was merged with the Union Budget last year).  In the current Budget Session, Lok Sabha is scheduled to discuss the allocation to the Ministry of Railways.  In light of this, we discuss Railways’ finances, and issues that the transporter has been facing with regard to financing.

What are the different sources of revenue for Railways?

Indian Railways has three primary sources of revenue: (i) its own internal resources (revenue from freight and passenger traffic, leasing of railway land, etc.), (ii) budgetary support from the central government, and (iii) extra budgetary resources (such as market borrowings, institutional financing).

Figure 1Railways’ internal revenue for 2018-19 is estimated at Rs 2,01,090 crore which is 7% higher than the revised estimates of 2017-18.  Majority of this revenue comes from traffic (both freight and passenger), and is estimated at Rs 2,00,840 crore.  In the last few years, Railways has been struggling to run its transportation business, and generate its own revenue.  The growth rate of Railways’ earnings from its core business of running freight and passenger trains has been declining.  This is due to a decline in the growth of both freight and passenger traffic (see Figure 1).  Railways is also slowly losing traffic share to other modes of transport such as roads and airlines.  The share of Railways in total freight traffic has declined from 89% in 1950-51 to 30% in 2011-12.

The Committee on Restructuring Railways (2015) had observed that raising revenue for Railways is a challenge because: (i) investment is made in projects that do not have traffic and hence do not generate revenue, (ii) the efficiency improvements do not result in increasing revenue, and (iii) delays in projects results in cost escalation, which makes it difficult to recover costs.  Railways also provides passenger fares that are heavily subsidised, which results in the passenger business facing losses of around Rs 33,000 crore in a year (in 2014-15).  Passenger fares are also cross-subsidised by charging higher rates for freight.  The consequence is that freight rates have been increasing which has resulted in freight traffic moving towards roads.

Figure 2Figure 2 shows the trends in capital outlay over the last decade.  A decline in internal revenue generation has meant that Railways funds its capital expenditure through budgetary support from the central government and external borrowings.  While the support from central government has mostly remained consistent, Railways’ borrowings have been increasing.  Various committees have noted that an increased reliance on borrowings will further exacerbate the financial situation of Railways.

The total proposed capital outlay (or capital expenditure) for 2018-19 is Rs 1,48,528 crore which is a 24% increase from the 2017-18 revised estimates (Rs 1,20,000 crore).  Majority of this capital expenditure will be financed through borrowings (55%), followed by the budgetary support from the central government (37%).  Railways will fund only 8% of its capital expenditure from its own internal resources.

How can Railways raise more money?

The Committee on Restructuring Railways had suggested that Railways can raise more revenue through private participation in the following ways: (i) service and management contracts, (ii) leasing to and from the private sector, (iii) joint ventures, and (iv) private ownership.  However, private participation in Railways has been muted as compared to other sectors such as roads, and airports.

Figure 3One of the key reasons for the failure of private participation in Railways is that policy making, the regulatory function, and operations are all vested within the same organisation, that is, the Ministry of Railways.  Railways’ monopoly also discourages private sector entry into the market.  The Committee on Restructuring Railways had recommended that the three roles must be separated from each other.  It had also recommended setting up an independent regulator for the sector.  The regulator will monitor whether tariffs are market determined and competitive.

Where does Railways spend its money?

The total expenditure for 2018-19 is projected at Rs 1,88,100 crore, which is 4% higher than 2017-18.  Staff wages and pension together comprise more than half of the Railways’ expenditure.  For 2018-19, the expenditure on staff is estimated at Rs 76,452 crore.  Allocation to the Pension Fund is estimated at Rs 47,600 crore.  These constitute about 66% of the Railways’ expenditure in 2018-19.

Railways’ primary expenditure, which is towards the payment of salaries and pension, has been gradually increasing (with a jump of around 15% each year in 2016-17 and 2017-18 due to implementation of the Seventh Pay Commission recommendations).  Further, the pension bill is expected to increase further in the years to come, as about 40% of the Railways staff was above the age of 50 years in 2016-17.

The Committee on Restructuring Railways (2015) had observed that the expenditure on staff is extremely high and unmanageable.  This expense is not under the control of Railways and keeps increasing with each Pay Commission revision.  It has also been observed that employee costs (including pensions) is one of the key components that reduces Railways’ ability to generate surplus, and allocate resources towards operations.

What is the allocation towards depreciation of assets?

Railways maintains a Depreciation Reserve Fund (DRF) to finance the costs of new assets replacing the old ones.  In 2018-19, appropriation to the DRF is estimated at Rs 500 crore, 90% lower than 2017-18 (Rs 5,000 crore).  In the last few years, appropriation to the DRF has decreased significantly from Rs 7,775 crore in 2014-15 to Rs 5,000 crore last year.  Provisioning Rs 500 crore towards depreciation might be an extremely small amount considering the scale of infrastructure managed by the Indian Railways, and the requirement to replace old assets to ensure safety.

The Standing Committee on Railways (2015) had observed that appropriation to the DRF is the residual amount after appropriation to the Pension Fund, instead of the actual requirement for maintenance of assets.  Under-provisioning for the DRF has also been observed as one of the reasons behind the decline in track renewals, and procurement of wagons and coaches.

Is there any provision towards safety?

Last year, the Rashtriya Rail Sanraksha Kosh was created to provide for passenger safety.  It was to have a corpus of one lakh crore rupees over a period of five years (Rs 20,000 crore per year).  The central government was to provide a seed amount of Rs 1,000 crore, and the remaining amount would be raised by the Railways from their own revenues or other sources.

As per the revised estimates of 2017-18, no money was allocated towards this fund.  In 2018-19, Rs 5,000 crore has been allocated for it.  With the Railways struggling to meet its expenditure and declining internal revenues, it is unclear how Railways will fund the remaining amount of Rs 95,000 crore for the Rail Sanraksha Kosh.

What happened to the dividend that was waived off last year?

Railways used to pay a return on the budgetary support it received from the government every year, known as dividend.  The rate of this dividend was about 5% in 2015-16.  From 2016-17, the requirement of paying dividend was waived off.  The last dividend amount paid was Rs 8,722 crore in 2015-16.

The Standing Committee on Railways (2017) had noted that part of the benefit from dividend is being utilised to meet the shortfall in the traffic earnings of Railways.  This defeats the purpose of removing the dividend liabilities since they are not being utilised in creating assets or increasing the net revenue of Railways.

Explained: Law on holding an ‘Office of Profit’

February 22nd, 2018 Vibhor Relhan 1 comment

Following the recommendation of the Election Commission (EC), the President disqualified 20 MLAs of the Delhi Legislative Assembly last month for holding an ‘office of profit’. The legislators in question were appointed as parliamentary secretaries to various ministries in the Delhi government. The Delhi High Court is currently hearing a petition filed by the disqualified MLAs against the EC’s recommendation. There have been reports of parliamentary secretaries being appointed in 20 states in the past with court judgments striking down these appointments in several cases. In this context, we discuss the law on holding an ‘office of profit’.

What is the concept of ‘office of profit’?

MPs and MLAs, as members of the legislature, hold the government accountable for its work. The essence of disqualification under the office of profit law is if legislators holds an ‘office of profit’ under the government, they might be susceptible to government influence, and may not discharge their constitutional mandate fairly. The intent is that there should be no conflict between the duties and interests of an elected member. Hence, the office of profit law simply seeks to enforce a basic feature of the Constitution- the principle of separation of power between the legislature and the executive.

According to the definition, what constitutes an ‘office of profit’?

The law does not clearly define what constitutes an office of profit but the definition has evolved over the years with interpretations made in various court judgments. An office of profit has been interpreted to be a position that brings to the office-holder some financial gain, or advantage, or benefit. The amount of such profit is immaterial.

In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment. Several factors are considered in this determination including factors such as: (i) whether the government is the appointing authority, (ii) whether the government has the power to terminate the appointment, (iii) whether the government determines the remuneration, (iv) what is the source of remuneration, and (v) the power that comes with the position.

What does the Constitution say about holding an ‘office of profit’? Can exemptions be granted under the law?

Under the provisions of Article 102 (1) and Article 191 (1) of the Constitution, an MP or an MLA (or an MLC) is barred from holding any office of profit under the central or state government. The articles clarify that “a person shall not be deemed to hold an office of profit under the government of India or the government of any state by reason only that he is a minister”. The Constitution specifies that the number of ministers including the Chief Minister has to be within 15% of the total number of members of the assembly (10% in the case of Delhi, which is a union territory with legislature).

Provisions of Articles 102 and 191 also protect a legislator occupying a government position if the office in question has been made immune to disqualification by law. In the recent past, several state legislatures have enacted laws exempting certain offices from the purview of office of profit.  Parliament has also enacted the Parliament (Prevention of Disqualification) Act, 1959, which has been amended several times to expand the exempted list.

Is there a bar on how many offices can be exempted from the purview of the law?

There is no bar on how many offices can be exempted from the purview of the law.

It was reported in 2015 that all 60 MLAs of the Nagaland Assembly had joined the ruling alliance. The Nagaland Chief Minister appointed 26 legislators as parliamentary secretaries in July 2017. Goa, an assembly of 40 MLAs, exempted more than 50 offices by means of an ordinance issued in June last year. Puducherry, an assembly of 33 MLAs, exempted more than 60 offices by passing an amendment bill in 2009.  In Delhi, the 21 parliamentary secretaries added to the seven ministerial posts would constitute 40% of the 70-member legislature.  In all, 20 states have similar provisions.

This raises an important concern. If a large number of legislators are appointed to such offices, their role in scrutinising the work of the government may be impaired. Thus, this could contravene the spirit of Articles 102 and 191 of the Constitution.

What is the debate around making appointments to the office of parliamentary secretaries?

Interestingly, the appointment of legislators as parliamentary secretaries, in spite of the office being exempted from purview of the office of profit law, has been struck down by courts in several states.

Why has the appointment as a parliamentary secretary been struck down while other offices are allowed to be exempt from the purview of the law? If legislators can be accommodated in positions other than ‘parliamentary secretary’, why do state governments continue to appoint legislators as parliamentary secretaries instead of appointing them to other offices?

These questions have been answered in a Calcutta High Court judgment in 2015 which held that since the position may confer the rank of a junior minister on the legislator, the appointment of MLAs as parliamentary secretaries was an attempt by state governments to bypass the constitutional ceiling on the number of ministers. In 2009, the Bombay High Court also held that appointing parliamentary secretaries of the rank and status of a Cabinet Minister is in violation of Article 164 (1A) of the Constitution.  The Article specifies that the number of ministers including the Chief Minister should not exceed 15% of the total number of members in the assembly.