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Archive for August, 2012

Implementation hiccups in the Food Safety and Standards Act, 2006

August 28th, 2012 No comments

The implementation of the Food Safety and Standards Act, 2006 has run into rough weather.  The Act consolidates eight laws[1] governing the food sector and establishes the Food Safety and Standards Authority (FSSA) as the regulator.  It requires all food business operators (including small businesses and street vendors) to obtain a licence or registration.  The Regulations under FSSA related to procedure for obtaining a licence or registration was notified on August 1, 2011.  According to the Regulations, all food business operators had to get a licence or registration within one year of the notification.  Due to opposition from several food business operators (see here and here), the FSSA has now extended the deadline for getting a licence or registration by another six months (till February 2013).  However, some of the key concerns regarding the law have not yet been addressed.

Key issues related to the Bill raised by PRS (for more details see Legislative Brief)

  • The organised as well as the unorganised food sectors are required to follow the same food law.  The unorganised sector, such as street vendors, might have difficulty in adhering to the law, for example, with regard to specifications on ingredients, traceability and recall procedures.
  • The Bill does not require any specific standards for potable water (which is usually provided by local authorities).  It is the responsibility of the person preparing or manufacturing food to ensure that he uses water of requisite quality even when tap water does not meet the required safety standards.
  • The Bill excludes plants prior to harvesting and animal feed from its purview.  Thus, it does not control the entry of pesticides and antibiotics into the food at its source.
  • The power to suspend the license of any food operator is given to a local level officer.  This offers scope for harassment and corruption.

Other issues referred to in the media

  • The Act requires a food business operator to get different licenses if articles of food are manufactured or sold at different premises.  Newspapers reported that this provision was challenged in the Madras High Court but a stay order on the Act and its Rules was refused.
  • According to media reports, two hotel associations in Karnataka had challenged certain sections of the Act and Rules in the Karnataka High Court related to requirement of technical person for supervision of production process and requirement of a laboratory on the premises of food operators.  The court stayed these provisions for three months (till October 2012).
  • News papers reported that the Supreme Court is examining the question whether liquor is a food.

[1].  (a) The Prevention of Food Adulteration Act, 1954.  (b) The Fruit Products Order, 1955.  (c) The Meat Food Products Order, 1973. (d)  The Vegetable Oil Products (Control) Order, 1947.  (e) The Edible Oils Packaging (Regulation) Order, 1998. (f) The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967. (g) The Milk and Milk Products Order, 1992. (h) Any other order issued under the Essential Commodities Act, 1955, relating to food.

Maharashtra passes Bill to regulate property transactions

August 22nd, 2012 2 comments

(Authored by Anil Nair)

The Maharashtra Legislative Assembly recently passed the Maharashtra Housing (Regulation and Development) Bill.  This is the first such Bill to be passed by any state, which sets up a housing regulator to regulate property transactions.  The Bill seeks to set up a Housing Regulatory Authority to provide for relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats.

According to news reports, the government felt that existing laws were not effective in protecting the interests of the flat purchasers and allowed the promoters to avoid statutory obligations imposed on them.  The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 did not provide for an effective implementing arm for its various statutory provisions, as the buyers could only approach consumer forum or civil court for acts of omission or commission regarding its provisions.

The current Bill passed by the Maharashtra Assembly proposes to repeal the 1963 Act.  As per the Statement of Objects and Reasons of the Bill, the Regulatory Authority will strive to encourage growth and promotion of a healthy, transparent, efficient and competitive real estate market.  The Bill specifies several conditions to be fulfilled by the developer to further transparency and fairness.  All projects proposing to develop more than four flats or of land area exceeding 250 square meters have to submit and update details of the project on the website of the Housing Regulatory Authority.  Developers would be required to disclose detailed information regarding the project including:

  • building-wise time schedule of completion of each phase of the project,
  • time schedule for connecting the project with the municipal services such as sewerage, water supply, electricity, drainage etc.,
  • nature of fixtures and fittings with regard to the flooring and sanitary fittings including the brand or the price range if the items are unbranded.

Failure to give possession of the flat on the agreed date would require repayment of the full amount paid by the buyer with interest.  The Authority would also be empowered to penalise the developer up to an amount of one crore rupees for non-compliance with provisions in the Bill.  Among other initiatives to assist the real estate industry, the Housing Regulatory Authority would promote rating of projects and of promoters, by the association of promoters, to improve the confidence level of investors and consumers through self-regulation. The full text of the Bill is available on the Government of Maharashtra website.

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CAG Performance Audit on the Allocation of Coal Blocks

August 17th, 2012 No comments

The Comptroller and Auditor General (CAG) released a Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production, on August 17, 2012.  Some of the main findings and recommendations of the report are highlighted below:

  • There were no criteria for allocating coal blocks for captive mining till 1993.  The process of bringing in transparency and objectivity began in January 2004.  However, the process has experienced delays and had yet to materialise as of February 2012.
  • In the intervening period, 194 coal blocks with geological reserves of 44,440 million tonnes were allocated to private and government parties until March 31, 2011.  The report finds that the benefit to private allottees has been estimated at Rs 1.86 lakh crore for Opencast mines.  The report states that the government could have tapped some of this financial benefit by expediting the decision on competitive bidding for allocation of coal blocks.
  • The rate of increase in production of coal by Coal India Limited (CIL) during the 11th Plan period remained below the target set by the Planning Commission.  Capacity addition projects were delayed due to the lack of coordination of government agencies involved in statutory clearances and land acquisition.  There were mismatches in excavation and transportation capacities of mines, and suboptimal use of Heavy Earth Moving Machinery.
  • The CAG recommends that Ministry of Coal (MOC) should work out modalities to implement the procedure of allocation of coal blocks for captive mining through competitive bidding.
  • The CAG recommends that the MOC should constitute an empowered group along the lines of Foreign Investment Promotion Board as a single window mechanism for granting clearances, with representatives from central nodal ministries and state governments.

A one-page summary of the main findings and recommendations can be accessed here.  The full report can be accessed on the CAG website.

Constitutionality of Parliamentary Secretaries

August 9th, 2012 No comments

(Authored by Anil Nair)

Many states in the Indian Union have instituted the post of Parliamentary Secretary.  A Parliament Secretary often holds the rank of Minister of State and has the same entitlements and is assigned to a government department.  Manipur, HP, Mizoram, Assam, Rajasthan, Punjab, Goa are some of the states where MLAs have been appointed Parliament Secretaries by the Government.

PILs filed in various High Courts on the matter have argued that the appointment of Parliament Secretaries is ultra vires the 91st Amendment of the Indian Constitution which introduced Article 164 (1A) to the Constitution.  Article 164 (1A) provides for limiting the number of ministers in the state cabinets.  The total number of ministers including the Chief Minister, has to be within 15 per cent of the total number of members of the legislative assembly of the state.  Article 164 (1A) was inserted in the Constitution on the recommendation of the National Commission for Review of the Working of the Constitution headed by former Chief Justice of India, M.N. Venkatachaliah on misuse and drainage of public money to put a ban on over-sized cabinet.

Various High Courts have deemed the appointment of Parliamentary Secretaries unconstitutional and have ruled against such appointments often in the past.

In 2009, in the case of Adv. Aires Rodrigues vs The State of Goa and others (as cited in Anami Narayan Roy vs. Union of India), a Division Bench of the Bombay High Court discussed the impact of arbitrary State action relating to appointment of Parliament Secretaries in Goa.  It held that appointing Parliamentary Secretaries of the rank and status of a Cabinet Minister is in violation to Article 164 (1A) of the Constitution and set aside the appointment of two Parliamentary Secretaries in the state government.

In 2005, in Citizen Rights Protection Forum vs Union of India and Others (decided on 18 August, 2005), the Himachal Pradesh High Court quashed the appointment of Chief Parliamentary Secretaries and Parliament Secretaries.  It held that ‘(Parliamentary Secretaries) are usurpers of public office since their appointments did not owe their origin to any constitutional or legal provision, they having been appointed by person(s) not vested with the power of appointment’.

Recently, newspapers have reported that the Rajasthan High Court issued notices to thirteen Parliamentary Secretaries in a petition challenging their appointments.

Similarly, there have been news reports that the Punjab High Court has asked the state governments in Punjab and Haryana to provide information on appointment of Chief Parliamentary Secretaries in the states.  Punjab and Haryana have appointed 20 and 11 Chief Parliamentary Secretaries respectively. The High Court has ordered the two states to submit details about the entitlements, facilities and powers given to the Chief Parliamentary Secretaries.

New guidelines for the registration of the Pension Fund Managers under the NPS

August 7th, 2012 No comments

Last month, the Pension Fund Regulatory and Development Authority (PFRDA) issued revised guidelines for the registration of the Pension Fund Managers (PFMs).  These guidelines are for the PFMs to manage the National Pension System (NPS) in the non-governmental and private sector.  See here.  The NPS was implemented in 2004 for all government employees and later extended to the private sector in 2009.

The guidelines bring about the following changes in the NPS:

  • No limitation on the number of PFMs – Under the previous system, the number of PFMs was predetermined and bidders would then fill up these slots.  There are seven PFMs in the NPS.
  •  No bidding process – In the earlier system, interested parties had to go through a bidding process to become a PFM.  The lowest bidders would be appointed the PFMs.  However, the new guidelines have done away with the bidding system.  Any player interested in becoming a PFM can now do so by fulfilling certain eligibility criteria laid down by the PFRDA.
  • No uniform fee to be charged by all PFMs – The PFMs earlier had to charge a fixed fee amount, which was uniform for all the PFMs.  The new guidelines states that the PFRDA would lay down an overall ceiling and the PFMs would be at liberty to prescribe their own fee provided it is under this overall ceiling.

Although NPS was made accessible on a voluntary basis to non-government employees and those working in the private sector since 2009, the subscription to the schemes under NPS was lower than expected.  In August 2010, a committee was set up under the chairmanship of Mr. G.N. Bajpai to review the implementation of NPS in the informal sector.  The Committee noted that since NPS was opened to the general public there were only 50,000 private sector subscribers until May 2011.  According to the Committee, the low subscription was due to the low-to-negligible distribution incentive to the PFMs to distribute the different schemes to the subscribers to invest their funds.  The Committee thus recommended that PFRDA should consider revising the structure of the NPS so as to increase subscription.  It suggested making the fee structure dynamic for PFMs.  The Committee had also suggested that there should be some revision in the bidding as well as the selection process for the PFMs to increase competition and thereby incentivise them to distribute the schemes.

These changes, as suggested by the Bajpai Committee and now notified by the PFRDA, are different from the original design of the NPS.  The Old Age Social and Income Security (OASIS) Report of 2000, which had initially suggested the establishment of pension system for the unorganised sector in the country, had recommended a low-cost structure for the pension system.  The Report had stated that the choice of PFMs should be based on a bidding process where the lowest bidder should be made a PFM under the NPS.  The rationale for the auction base for the PFMs was that it would provide a system to the subscribers whereby they could make investments for their old age by paying a minimal fee.  A set uniform fee was meant to eliminate the large marketing expenses which would ultimately get passed on to the subscibers.  In addition, the intent behind keeping the fund managers from the distribution and marketing of the schemes was to prevent any mis-selling (misleading an investor about the characteristics of a product) that may happen.

Recent newspaper reports have raised doubt if these new rules would help in increasing the penetration of the NPS in the markets.  However, the chairman of PFRDA, Mr. Yogesh Agarwal, in a recent interview explained that it was important to bring about changes in the structure of the NPS.  According to him a scheme which was mandatory for the government sector could not be expected to perform as well in the private sector (where it is voluntary) without any changes made to its structure.  He also stated that the NPS should be able to compete with other financial products such as insurance and mutual funds in the market.

See here for the PRS Legislative Brief on the PFRDA Bill, 2011.

Notes:

The seven PFMs are LIC Pension Fund Ltd., UTI Retirement Solutions Ltd., SBI Pension Funds Pvt. Ltd., IDFC Pension Fund Management Co. Ltd., ICICI Prudential Pension Funds Management Co. Ltd., Kotak Mahindra Pension funds Ltd., and Reliance Capital Pension Fund Ltd..

 

Cabinet approves Bill to amend law on rape

August 2nd, 2012 No comments

According to a recent press release, the Cabinet has approved a proposal to introduce a Bill in Parliament to amend the Indian Penal Code, 1860 (IPC).  While the draft Bill is currently not available, its highlights are specified in the press release.  As per the press release, the Bill aims to make rape laws gender neutral.  The key features specified are:

  • Substituting the word “rape” with “sexual assault”;
  • Increasing the age of consent 16 to 18 years;
  • Excluding sexual intercourse between a married couple from the definition of rape, where the wife’s consent has not been obtained and the wife is at least 16 years of age.

Present Law

According to section 375 of the IPC, an allegation of rape has to satisfy the following criteria:

  • sexual intercourse between a man with a woman in the following circumstances: (a) against the will of the woman; (b) without her consent; (c) under duress; (d) consent obtained by fraud; (e) consent obtained by reason of unsoundness of mind or intoxication.
  • If the woman is below the age of 16 years, sexual intercourse is deemed to amount to rape.  Even if the woman has consented, it would be considered rape under the law.
  • There is however, an exception to this definition of rape.  Un-consented sexual intercourse between a man and his wife would not amount to rape if the wife is 16 years or older.

This definition of rape does not include use of other body parts or foreign objects by the offender upon the victim’s body.  Such offences are classified as “use of criminal force to outrage the modesty of a woman” (see here) and are punishable with two years imprisonment or fine or both.  Rape, on the other hand, is punishable with imprisonment for seven years to a life term.

Proposals to amend the law on rape

Through an order in 1999, the Supreme Court had directed the Law Commission to review the law on rape (Sakshi vs. Union of India).  The Law Commission had in its 172nd Report, dated March 25, 2000 made recommendations to amend the law to widen the definition of rape.  In its report, the Commission had recommended that rape be substituted by sexual assault as an offence.  Such assault included the use of any object for penetration.  It further recognised that there was an increase in the incidence of sexual assaults against boys.  The Report recommended the widening of the definition of rape to include circumstances where both men and women could be perpetrators and victims of sexual assault.[1]   Amendments to the law on the basis of these recommendations are still awaited.

The High Court of Delhi has recognised the need to amend the laws on rape.  It observed that the law did not adequately safeguard victims against sexual assaults which were included by the Law Commission within the scope of rape.  It was observed that the definition should be widened to include instances of sexual assault which may not satisfy the penile-vaginal penetration required under the existing law.

The 2010 draft Criminal Laws Amendment Bill, released by the Ministry of Home Affairs, attempted to redefine rape.  The draft provisions substitute the offence of rape with “sexual assault”.  Sexual assault is defined as penetration of the vagina, the anus or urethra or mouth of any woman, by a man, with (i) any part of his body; or (ii) any object manipulated by such man under the following circumstances: (a) against the will of the woman; (b) without her consent; (c) under duress; (d) consent obtained by fraud; (e) consent obtained by reason of unsoundness of mind or intoxication; and (f) when the woman is below the age of 18.

Variation between proposals

The existing legal provisions, the Law Commission Report, the 2010 Bill and the recent press release are similar in that they provide an exception to marital rape.  Under the law, un-consented sexual intercourse is not an offence if the wife is above a certain age.  (Under the existing law the wife has to be over 16 years’ of age and as per press release she has to be more than 18 years old.)  This is at variance with the proposal of the National Commission of Women (NCW).   An amendment to the IPC recommended by the NCW deleted the exemption granted to un-consented sex between a man and his wife if she was more than 16 years old.  It therefore criminalised marital rape.

As per the press release, this exemption has been retained in the proposed Bill.  Furthermore, as per the release, while the age of consent for sexual intercourse will be increased to 18 years, for the purpose of marital sex, the age of consent would be 16 years.


[1] Review of Rape Laws, Law Commission of India, 172nd Report, paragraph 3.1.2,  ”375.  Sexual Assault:  Sexual assault means -

(a) penetrating  the  vagina (which term shall include the labia majora), the  anus  or  urethra  of  any person with -

i)      any part of the body of another person or

ii)   an object manipulated by another person except  where  such penetration is carried out for

proper hygienic or medical purposes;

(b) manipulating any  part  of  the  body  of  another person  so  as  to cause penetration of the vagina (which term shall include the labia  majora),  the anus or the urethra of the offender by any part of  the other person’s body;

(c) introducing any part of the penis of a person into the mouth of another person;

(d)    engaging in cunnilingus or fellatio; or

(e) continuing  sexual  assault  as defined in clauses

(a) to (d) above in circumstances falling  under  any  of  the  six following descriptions:

Exception:  Sexual intercourse by a man with his own wife, the wife not being under sixteen  years  of  age,  is  not sexual assault.”

Right to Education: the story so far

August 1st, 2012 1 comment

In India, children between the age group of 6 and 14 years have the fundamental right to free and compulsory education.  This right is implemented through the Right of Children to Free and Compulsory Education Act, 2009 (RTE Act).  The Act is applicable to all categories of schools (government and private).

According to recent media reports (see here and here), many schools (including government schools) are flouting norms laid down in the RTE Act.  Unaided schools have criticised state government over norms related to religious and linguistic status of minority schools (see here and here).  The government has also faced flak over unclear norms on neighbourhood schools and reimbursement of money to private schools (see here, here and here).

Most Acts ‘delegate’ the power to make rules and regulations for operationalising the law to the executive (Ministry).   We provide an overview of the Rules notified by the state governments.

The central government notified the RTE Rules 2010 on April 9, 2010, which are applicable to all schools under the central government, and in the five Union Territories without legislatures.  Most of the states have notified similar Rules with a few variations.

The Rules define the limits of a neighbourhood and make it mandatory for the local authority to maintain list of children within its jurisdiction.  They also prescribe the composition of the School Management Committee to be formed in government schools.  Private schools shall reserve 25% of the seats for disadvantaged children.  These schools shall be reimbursed for either their tuition charge or the per-student expenditure in government schools, whichever is lower.  All private schools have to be recognised before they can start operation.  Recognition is contingent upon meeting the minimum standard laid down in the Act    Existing private schools have to meet the norms within three years of commencement of the Act.  If they are not compliant after three years, they shall cease to function.  Government schools under the central government have to meet only two conditions: the minimum qualification for teachers and the student-teacher ratio.

For all state government schools and un-adided schools, the power to make rules is delegated to the state government.  The central government circulated Model Rules for the RTE Act to the states.  All state governments, except Goa, have notified the state RTE Rules.  Delhi and Puducherry have also notified them.  Most of the states have notified similar Rules with a few variations.  We list some of the variations.

Andhra Pradesh: The break-up of the 25% quota among the various disadvantaged groups have been included in the Rules.  Scheduled Castes: 10%; Scheduled Tribes: 4%; Orphans, disabled and HIV affected: 5% and children with parents whose annual income is lower than Rs 60,000: 6%.

Rajasthan: Private schools either have to be affiliated with a university or recognised by any officer authorised by the state government.    

Karnataka: In addition to the minimum norms under RTE Act, private schools have to comply with the Karnataka Education Act, 1983.

Gujarat: If an existing recognised school is unable to meet the infrastructure norms it may be given the option of demonstrating that it achieved certain learning outcomes, both in terms of absolute levels and as improvement from previous years.

Uttar Pradesh: The government shall pay per child reimbursement to the school after it gives a list of children with their Unique Identity Number and other details.

Kerala:  The local authority has to maintain a record of all the children (0-14 years) within its jurisdiction.  It shall also maintain the Unique Identity Number of every child, as and when issued by the competent authority, to monitor his enrolment, attendance and learning achievements.

Haryana:  Defines textbooks, uniform and writing material.  It states that Hindi is to be the preferred medium of instruction in all schools. For using other language, permission of Director, Elementary Education Dept is required (to be given within 45 days or deemed to be granted).

West Bengal: The Rules give detailed definition of the appropriate age for each class.  They require schools to be set up in a relatively noise-free and pollution-free area with adequate supply of drinking water and electricity.  Existing schools (which are already recognised or affiliated with a Board) may get the local municipal authorities to provide infrastructural support including relaxation of building rules to comply with the requirements of the Act.

Additional sources

  1. PRS Brief on Right of Children to Free and Compulsory Education Bill, 2008.
  2. PRS Bill Summary on Right of Children to Free and Compulsory Education (Amendment) Bill, 2010.
  3. Accountability Initiative’s Policy Brief on 25% Reservation under the RTE.