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Highlights of this Issue

GDP grows at 7.1% in the second quarter of 2018-19

GDP growth increased from 6.3% in the second quarter of 2017-18 to 7.1% in the second quarter of 2018-19.  Gross Value Added grew by 6.9% year-on-year. 

Revised GDP data for the period 2004-11, with the base year as 2011-12, released

The GDP back-series was completed using new methodology.  It indicates that growth in this period was lower than previously estimated.

Industrial production grew by 5.2% (year-on-year) in the second quarter of 2018-19

The Index of Industrial Production grew by 5.2% year-on-year in the second quarter of 2018-19.  Electricity saw the highest increase of 7.5%, followed by an increase of 5.5% in manufacturing, and 1% in mining.

Companies (Amendment) Ordinance, 2018 promulgated

Changes introduced include re-categorization of 16 compoundable offences as civil penalties, and for certain companies, a shift in the approving authority for changes in financial year from NCLT to central government.

Comments invited on draft amendments to Companies Act, 2013

These include provisions related to issuance of dematerialized shares for private companies, and requiring a company to spend its unspent corporate social responsibility funds within three years.

Cabinet approves the Allied and Healthcare Professions Bill, 2018

The Bill aims to regulate and standardise the education and practice of allied and healthcare professionals such as physiotherapists and nutritionists.  It also sets up an Allied and Healthcare Council of India.

Cabinet approves mechanism for sale of enemy shares

The Ministry of Finance has been authorised to sell enemy shares that are vested in the central government.  Proceeds from the sale are to be deposited as disinvestment proceeds in the government account.

Cabinet approves leasing out six airports through PPP

The airports will be leased for operation, management and development through a PPP Appraisal Committee.  These airports are Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram, and Mangaluru. 

TRAI releases consultation paper on regulation of over-the-top services

Key observations relate to regulatory differences between OTT service providers and telecom service providers and alternative approaches for their regulation. 

Report on standardization of exclusions in the health insurance released

Recommendations focus on reduction in the number of exclusions that can be included in health insurance contracts.  The report also defines specific areas of exclusion and proposes a new definition of pre-existing diseases. 

Committee of Experts releases report on audit firms and their networks

Recommendations include empowering the National Financial Reporting Authority to publish their audit inspection reports, and impose penalties on international networks with whom Indian audit firms have a membership.  

 

Macroeconomic Development

GDP grows at 7.1% in the second quarter of 2018-19

Ahita Paul (ahita@prsindia.org)

The Gross Domestic Product (GDP) (at constant 2011-12 prices) of the country grew at 7.1% during the second quarter of 2018-19, over the corresponding period a year ago.[1]  This was higher than the 6.3% growth in the second quarter of 2017-18.  The quarterly trend of GDP growth is shown in Figure 1.

Figure 1: GDP growth (in %, year-on-year)

Sources: MOSPI; PRS.

GDP growth across economic sectors is measured in terms of Gross Value Added (GVA).  The growth rate of combined GVA by all sectors increased from 6.1% in the second quarter of 2017-18 to 6.9% in the second quarter of 2018-19.  The GVA by all sectors grew in this quarter compared to the second quarter of 2017-18, except for the mining and quarrying sector, where it decreased by 2.4%.  Table 1 shows the details on sectoral GVA growth, year-on-year.

Table 1: Gross Value Added across sectors in Q2 2018-19 (growth in %, year-on-year)

Sector

Q2

2017-18

Q1

2018-19

Q2

2018-19

Agriculture

2.6%

5.3%

3.8%

Mining

6.9%

0.1%

-2.4%

Manufacturing

7.1%

13.5%

7.4%

Electricity

7.7%

7.3%

9.2%

Construction

3.1%

8.7%

7.8%

Services

6.8%

7.3%

7.5%

GVA

6.1%

8.0%

6.9%

GDP

6.3%

8.2%

7.1%

Note: GVA is GDP without taxes and subsidies, at basic prices (2011-12 base year).

Source: MOSPI; PRS.

Revised GDP data for the period 2004-11, with the base year as 2011-12, released

Suyash Tiwari (suyash@prsindia.org)

The Ministry of Statistics and Programme Implementation released the GDP (at constant 2011-12 prices) data for the years 2004-05 to 2010-11.[2]  The base year for national accounts was revised from 2004-05 to 2011-12 in January 2015.[3]  Consequently, the methodology to calculate GDP was revised as per the recommendations of the United Nations System of National Accounts, 2008.  The back-series data has been calculated using this revised methodology.  The calculations also take into account improved coverage of economic activities in some sectors, sector-specific Consumer Price Indices, and latest data sources.[4]

Figure 2 shows the year-on-year growth rate of GDP (at constant prices) for the period 2005-12 with base years as 2004-05 and 2011-12.

Figure 2: Revised back-series data of GDP growth rate (year-on-year, at constant prices)

Sources: MOSPI; PRS.

Figure 3 shows the average share of primary, secondary and tertiary sectors in the total Gross Value Added (at current prices) during 2004-12.

Figure 3: Average share of sectors in GVA (at current prices) during the period 2004-12

Source: MOSPI; PRS.

As per the revised data, the share of primary (includes agriculture, mining, forestry) and secondary (includes manufacturing, construction and power generation) sectors in total GVA has increased.  The share of tertiary sector (includes economic activities related to financial services, trade, transport, communication, and public administration) has decreased.  These changes can be attributed to changes in data sources.

Industrial production grew by 5.2% (year-on-year) in the second quarter of 2018-19

Ahita Paul (ahita@prsindia.org)

The Index of Industrial Production (IIP) grew by 5.2% in the second quarter (July-September) of 2018-19, as compared to the same period in 2017-18.[5]  Electricity saw the highest increase of 7.5%, followed by an increase of 5.5% in manufacturing, and 1% in mining.  Figure shows the year-on-year growth in industrial production, overall and across sectors, for the second quarter of 2018-19.

Figure 4: Growth in IIP in the second quarter of 2018-19 (year-on-year)

Sources: MOSPI; PRS

 

Corporate Affairs

Companies (Amendment) Ordinance, 2018 promulgated

Roshni Sinha (roshni@prsindia.org)

The Companies (Amendment) Ordinance, 2018 was promulgated on November 2, 2018.[6]  It amends several provisions in the Companies Act, 2013 relating to penalties, among others. 

  • Re-categorisation of certain Offences: The 2013 Act contains 81 compoundable offences punishable with fine or fine or imprisonment, or both.  These offences are heard by courts.  The Ordinance re-categorizes 16 of these offences as civil defaults, where adjudicating officers (appointed by central government) may now levy penalties instead.  These offences include: (i) issuance of shares at a discount, and, (ii) failure to file annual return.
     
  • Commencement of business: The Ordinance states that a company may not commence business, unless it: (i) files a declaration within 180 days of incorporation, confirming that every subscriber to the Memorandum of the company has paid the value of shares agreed to be taken by him, and (ii) files a verification of its registered address with the Registrar of Companies within 30 days of incorporation.  If a company fails to comply with these provisions and is found not to be carrying out any business, its name may be struck off the Register of Companies. 
     
  • Change in approving authority: Under the Act, change in period of financial year for a company associated with a foreign company, has to be approved by the National Company Law Tribunal.  Similarly, any alteration in the incorporation document of a public company which has the effect of converting it to a private company, must be approved by the Tribunal.  Under the Ordinance, these powers have been transferred to central government. 
     
  • Compounding: Under the Act, a regional director can compound (settle) offences with penalty of up to five lakh rupees.  The Ordinance increases the limit to Rs 25 lakh.  

A PRS summary of the Ordinance is available here.

Comments invited on draft amendments to Companies Act, 2013

The Ministry of Corporate Affairs issued a notice inviting comments on draft amendments to the Companies Act, 2013.[7]  The Ministry stated that the amendments are in pursuance to the recommendations made by the “Committee to review the offences under the Companies Act, 2013”, to strengthen the corporate governance and enforcement framework under the 2013 Act.  Key draft amendments include:

  • Independent Director (ID): Under the Act, the remuneration of an ID or transactions of an ID with the company should not exceed 10% of his total income in the last two financial years.  The draft Amendments additionally state that the total monetary relationship of an ID with the company along with its group companies should not exceed 25% of his total income.  Of this, his income for services provided to the company should not exceed 10% of his total income.
     
  • Issuance of dematerialised shares: Under the Act, certain classes of public companies are required to issue shares in dematerialized form only.  These amendments propose that this provision would not be limited to public companies and may be extended to other classes of companies.  
     
  • Significant beneficial ownership: If a person holds beneficial interest of at least 25% shares in a company or exercises significant influence or control over the company, he is required to make a declaration of his interest.  As per the draft amendment, the Company is required to: (i) identify if an individual is a significant beneficial owner of shares in the Company, and (ii) require him to comply with the provisions of the Act.  A Company failing to do so may be punished with a fine between ten lakh and fifty lakh rupees, along with a fine of Rs 1,000 for every day of default.
     
  • Charitable companies: Under the Act, a not-for-profit charitable company could convert itself to any other kind of company after following certain rules.  This provision has been deleted.
     
  • Corporate Social Responsibility: Under the Act, companies having: (i) net worth of Rs 500 crore or more, or (ii) turnover of Rs 1,000 crore or more, or (iii) a net profit of five crore rupees or more, in the previous financial year, is required to spent 2% of its average net profits in the last three financial years, towards its corporate social responsibility policy.  If it does not spend this amount, it has to disclose the reasons in its Annual Statement of Accounts.

The draft Amendments require any unspent funds to be transferred to an Unspent corporate social responsibility account.  This amount must be spent within three years from the date of transfer.

Committee of Experts releases report on audit firms and their networks

The Committee of Experts (Chair: Mr. Anurag Agarwal) submitted its report to the Ministry of Corporate Affairs presenting its findings and recommendations on regulating audit firms and their networks.[8]  Key recommendations include:

  • Audit Structures in India: The Committee observed that there are three types of structures used by audit networks operating in India: (i) domestic networks of firms set up by Chartered Accountants (CA) registered with the Institute of Chartered Accountants of India, (ii) international networks where domestic CA firms tie up with entities outside India through a membership agreement, and (iii) international networks where domestic CA firms tie up with Indian member firms of an international entity, through sub-licensing. 
     
  • Oversight of audit profession: The Committee noted that the National Financial Reporting Authority (NFRA) must be empowered to publish their audit inspection results.  It noted that loss of reputation, from an adverse report, can be an effective deterrent for audit firms to build better internal checks and balances.  The Committee also noted that there are benefits of having multiple Self-Regulatory Organisations in the audit profession.  It can generate competition among them which can help the development of the profession.
     
  • Legal regime of liability: The Committee noted that the current regime of liability of individual auditors and audit firms is adequate.  On network liability, it recommended that NFRA should be empowered by law to impose monetary penalties on international networks with whom Indian audit firms have entered into membership, if there is an audit failure or fraud.  The penalty on such international network/entity should be up to five times the amount of penalty imposed on the audit firm.  
     
  • Providing non-audit services: The Committee noted that audit firms across jurisdictions often provide services as part of one common network.  It recommended permitting firms to provide non-audit services to an auditee company or its holding or subsidiary company, subject to certain conditions.  These include: (i) if the auditor is part of an international network, capping fee from non-audit services to 50% of audit fee earned by the network from that auditee company or its holding or subsidiary companies in a financial year, and (ii) the auditor must disclose the audit and non-audit fees earned by its network to the NFRA.   

A PRS summary of the report is available here.

Comments invited on the Competition Act, 2002

The Ministry of Corporate Affairs issued a notice inviting comments on the Competition Act, 2002.[9]  The Ministry had constituted a Competition Law Review Committee to review the 2002 Act in view of the changing business environment.  The Committee will also look at international best practices in the field of competition law, including anti-trust laws, merger guidelines and cross-border competition issues.  It will also examine other regulatory regimes, institutional mechanism, and government policies which overlap with the Act.

Committee constituted for finalising Business Responsibility Reporting Format for listed and unlisted companies

A committee has been constituted to finalise the Business Responsibility Reporting Format for listed and unlisted companies.[10]  This Report describes the initiatives taken by a company from an environmental, social and governance perspective.  The requirement for the Report is based on the recommendations contained in the National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business, 2011 (NVGs) issued by the Ministry of Corporate Affairs (MCA).[11]  The NVGs lay down basic requirements for businesses to function in a responsible manner. 

Based on the recommendations in the NVGs, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandated certain listed companies to submit a Business Responsibility Report every year, in the format specified by SEBI.[12]  The NVGs were updated in 2018.[13]  The Committee has been constituted to finalise the format of the Report, based on the updated NVGs.  The Committee is required to submit its report within six weeks.

The Committee will be chaired by the Joint Secretary, MCA and will include eight other members including: (i) Joint Secretary, Policy in the MCA or his nominee, (ii) Representative of SEBI, and (iv) President of Institute of Company Secretary of India. 

Report on transparency audit of public authorities released

Zarka Shabir (zarka@prsindia.org)

A report on a transparency audit of public authorities was presented to the Central Information Commission (CIC) on November 12, 2018.[14]  The report examined proactive disclosures made under Article 4 of the Right to Information Act (RTI Act).  Article 4 stipulates that disclosures made by public authorities (i) enable citizens to access information without having to take recourse under provisions of the RTI Act, and (ii) promote transparency and accountability in the functioning of government.

As a part of its findings, the report found that, out of the 838 public authorities audited, over 85% did not disclose information related to (i) budget and programming, (ii) publicity and public interface, and (iii) e-governance.  The report also observed that while most public authorities had taken transparency-related measures, vital information was missing on official websites.  Specifically, the report found that websites did not disclose information on:

  • Decision making processes and information related to consultations with the public on major policy decisions.
     
  • Minutes of meetings of various boards and committees.
     
  • Discretionary and non-discretionary grants.
     
  • Details of the beneficiaries of a subsidy.
     
  • Sources and methods of funding political parties or identification of donors.
     
  • RTI applications and appeals received and their responses.

Based on these findings, the report recommended that website audits of public authorities be conducted regularly.  The report also suggested that CIC and the Department of Personnel Training set up a separate unit and use a predetermined methodology for website monitoring that includes: (i) a web-based mechanism to track updates, (ii) audit oversight by a central authority, and (iii) utilization of nodal officers to ensure compliance.

 

Health and Family Welfare

Cabinet approves the Allied and Healthcare Professions Bill, 2018

Gayatri Mann (gayatri@prsindia.org)

The Union Cabinet approved the Allied and Healthcare Professions Bill, 2018 to regulate and standardise the education and practice of allied and healthcare professionals.[15]  Allied health professionals include individuals involved with the delivery of health services, with expertise in therapeutic, diagnostic, curative and preventive interventions.[16]   These include physiotherapists, nutritionists, and lab technologists.  Currently, there is no comprehensive regulatory framework education and training of allied and healthcare professionals.

The Bill provides for setting up of an Allied and Healthcare Council of India and corresponding State Allied and Healthcare Councils to: (i) frame policies and standards, (ii) regulate professional conduct, (iii) create and maintain registers of professionals, and (iv) lay down provisions for common entry and exit examination.

A copy of the Bill is not available in the public domain.

Report on standardization of exclusions in the health insurance released

Zarka Shabir (zarka@prsindia.org)

The Insurance Regulatory and Development Authority of India (IRDA) had constituted a Working Group on ‘Standardization of Health Insurance Contracts’ in July 2018.[17]  The Group was tasked with reviewing existing exclusions (conditions or claims not covered by a policy) in health insurance contracts and presenting recommendations that lead to their standardization.  The Group submitted its report in November 2018.  Key observations and recommendations of the Group include:

  • Reduction in the number of exclusions: The Group stated that denying coverage for diseases, contracted after an individual has been insured, defeats the purpose of health insurance and leads to a loss of confidence in the healthcare sector.  To reduce the overall number of exclusions, the Group made the following recommendations:
     
  • All health conditions contracted after policy inception, other than those that are not covered under the policy or listed as permanent exclusions, should be covered.
     
  • Permanent exclusions may only be incorporated within a policy if: (a) they are pre-existing (b) if they are later incorporated into the policy with the consent of the insured.
     
  • No exclusions pertaining to any pre-approved advancements in technology or treatment be permitted.
     
  • Areas of exclusion: The Group noted that developments in the health sector are often dynamic and rapidly-changing.  Hence, it suggested that the list of exclusions that are included in contracts be reviewed regularly.  It presented a list of 17 conditions, such as epilepsy, chronic liver disease and pancreatic disease, that may be incorporated as permanent exclusions.  The Group also recommended that the list of permanent exclusions allowed at the time of underwriting be reviewed on a yearly basis by a committee set up by IRDA.
     
  • A Health Technology Assessment Committee be formed to examine and approve the inclusion of advancements in medical technology and treatments.

A PRS summary of the report is available here.

 

Finance

Ahita Paul (ahita@prsindia.org)

Cabinet approves mechanism for sale of enemy shares

The Union Cabinet approved the mechanism for sale of enemy shares, under the Enemy Property Act, 1968.[18]  The central government had designated some properties belonging to nationals of Pakistan and China as ‘enemy properties’ during the 1962, 1965, and 1971 conflicts.  It vested these properties in the Custodian of Enemy Property for India (CEPI).  A total of 6.5 crore shares, in 966 companies, belonging to 20,323 shareholders are currently under the custody of the CEPI.

The Enemy Property (Amendment and Validation) Act, 2017 authorised the sale of enemy properties by the CEPI, or any other authority or department on the directions of the central government.

The Department of Investment and Public Asset Management, Ministry of Finance, has been authorised to sell these enemy shares.  Proceeds from the sale are to be deposited as disinvestment proceeds in the government account maintained by the Ministry of Finance.  The process for selling these shares is to be approved by the Alternative Mechanism, chaired by the Minister of Finance and also comprising of the Minister of Road Transport and Highways and the Minister of Home Affairs.

 

Transport

Prachee Mishra (prachee@prsindia.org)

Cabinet approves leasing out six airports through PPP

The Union Cabinet gave in-principle approval for leasing out six airports for operation, management and development under public private partnership (PPP) through a Public Private Partnership Appraisal Committee (PPPAC).[19]  These airports are currently operated by the Airports Authority of India.  These airports are Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru.  Currently, five airports are being managed under the PPP model.  These are Delhi, Mumbai, Bangalore, Hyderabad, and Cochin.

The Union Cabinet also approved the constitution of an empowered group of secretaries to decide on any issue falling beyond the scope of PPPAC.  The group will be headed by CEO, NITI Aayog, and will include Secretary, Ministry of Civil Aviation, Secretary, Department of Economic Affairs, and Secretary, Department of Expenditure.

Strategic disinvestment of 100% of government’s equity in DCIL approved

The Cabinet Committee on Economic Affairs gave in-principle approval for the strategic disinvestment of 100% of central government’s shares in the Dredging Corporation of India Ltd (DCIL).[20]  The shares will be sold to a consortium of four ports -Vishakhapatnam Port Trust, Paradeep Port Trust, Jawahar Lal Nehru Port Trust, and Kandla Port Trust.

DCIL is a mini public sector undertaking engaged in the business of dredging for Indian seaports exclusively.  Dredging means clearing the bed of a harbour, river, or other water body with a dredge.  Currently, the central government holds 73.44% shares in DCIL. 

 

Information Technology

Vinayak Krishnan (vinayak@prsindia.org)

TRAI releases consultation paper on regulation of cver-the-top services    

The Telecom Regulatory Authority of India (TRAI) invited public feedback on a consultation paper on the regulatory framework for over-the-top (OTT) communication service providers.[21]  These are providers that offer information and communication technology services, but neither operate networks nor lease network capacity from a network provider.  OTT service providers rely on the internet to provide services.  Key observations made by TRAI include:

  • Economic aspects: TRAI noted that growth in OTT services and data traffic, could also lead to growth in business for Telecom Service Providers (TSPs).  To cater to the growing demand of data, TSPs may be required to invest in telecom infrastructure.  However, TSPs incur license fees and have to meet regulatory obligations, while OTT service providers do not have these obligations.  TRAI raised the issue of whether regulatory imbalances could impact investment in telecom networks. 
     
  • Current regulatory framework: TSPs are regulated by a number of laws including the Indian Telegraph Act, 1885, the TRAI Act, 1997, rules framed by the government and TRAI, and terms of the license agreement between TSPs and the government. 
     
  • TRAI observed that while OTT entities may provide the same services as TSPs, they do not require a license or permission from any regulatory body or TSPs. Further, they are not bound by any regulatory obligations to address consumer concerns such as quality of service, or unsolicited communication.  TRAI stated that these concerns are currently being addressed through self-regulation or markets.
     
  • Data protection: OTT services store, and transfer data of citizens and companies across different countries.  TRAI noted that this creates ambiguity regarding data protection norms.  Countries are unsure if their citizens data is adequately protected when it is hosted in other countries. 
     
  • Changes in regulation: TRAI suggested various alternatives approaches for the regulation of OTT services and TSPs.  These include: (i) subjecting OTT services to licensing and registration obligations, (ii) relaxing the regulatory regime for TSPs, or (iii) allowing the issues to be resolved through market forces.  

 

Human Resource Development

Gayatri Mann (gayatri@prsindia.org)

Cabinet approves setting up of Central Tribal University in Andhra Pradesh

The Union Cabinet approved an amendment to the Central Universities Act, 2009 for setting up

of a Central Tribal University in Andhra Pradesh.[22]  The Central Tribal University will be set up in the Vizianagaram district of Andhra Pradesh.  Further, an amount of Rs 420 has been allocated for the first phase expenditure towards establishment of the university.

 

Earth Sciences

Suyash Tiwari (suyash@prsindia.org)

CCEA approves continuation of the umbrella scheme ACROSS

The Cabinet Committee on Economic Affairs (CCEA) approved the continuation of the umbrella scheme Atmosphere and Climate Research-Modelling Observing Systems and Services (ACROSS) for the period 2017-20 at an estimated cost of Rs 1,450 crore.[23]  The ACROSS scheme consists of nine sub-schemes which address different aspects of weather and climate services, including cyclone warnings, storm surges, heat waves, and thunderstorms, among others.  The scheme aims to improve weather and climate forecasts through sustained observations, research and development, and adoption of effective dissemination and communication strategies.

 

External Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Vice-President visits Zimababwe

The Vice-President Mr. Venkaiah Naidu visited Zimbabwe.[24]  India and Zimbabwe signed six agreements for cooperation in various areas including: (i) arts, culture, and heritage, (ii) medicine and homeopathy, and (iii) geology, mining, and mineral resources.[25]   

President visits Vietnam and Australia

The President Mr. Ram Nath Kovind visited Vietnam and Australia.[26]  Nine agreements were signed with the two countries.  Details of these are as follows:

  • Vietnam: India and Vietnam signed four agreements.  These include agreements related to: (i) cooperation in the field of communications, and (ii) cooperation between Confederation of Indian Industry and the Vietnam Chamber of Commerce and Industry.[27] 
     
  • Australia: India and Australia signed five agreements in various sectors including: (i) cooperation in the area of disability, (ii) facilitating bilateral investment, (iii) collaboration in science and innovation, as well as (iv) cooperation in agricultural research and innovation.[28]

 

[1] “Press Note on Estimates of Gross Domestic Product for the second quarter (July-September) of 2018-19”, Ministry of Statistics and Programme Implementation, November 30, 2018, http://www.mospi.gov.in/sites/default/files/press_release/PRESS_NOTE-Q2_2018-19%2030.11.2018.pdf.

[2] “Press Note on National Accounts Statistics Back-Series 2004-05 to 2011-12”, Ministry of Statistics and Programme Implementation, November 28, 2018, http://www.mospi.gov.in/sites/default/files/press_release/Press-Note-28Nov2018.pdf.

[3] “New Series Estimates of National Income, Consumption Expenditure, Saving and Capital Formation (Base year 2011- 12)”, Press Information Bureau, Ministry of Statistics and Programme Implementation, January 30, 2015.

[4] Data sources include the Ministry of Corporate Affairs’ MCA-21 database, and results of latest surveys on consumption, employment and enterprises.  These surveys include the unorganised enterprise survey of the NSS 67th round, 2010-11, the Employment and Unemployment Survey of NSS 68th round, 2011-12, the Annual Survey of Industries, among others.

[5] “Quick Estimates of Index of Industrial Production and Use Based Index for the Month of September, 2018 (Base 2011- 12=100)”, Press Release, Ministry of Statistics and Programme Implementation, November 12, 2018, http://www.mospi.gov.in/sites/default/files/press_release/Press%20Note%20Sep%2718.pdf.

[6] The Companies (Amendment) Ordinance, 2018, http://www.prsindia.org/sites/default/files/bill_files/Companies%20Amendment%20Ordinance%202018.pdf.

[7] Notice Inviting Comments, Amendments in the Companies Act, 2013, Ministry of Corporate Affairs, 2018, http://www.mca.gov.in/Ministry/pdf/NoticeAmendmentsCA2013_05112018.pdf

[8] “Findings and Recommendations on Regulating Audit Firms And the Networks” Committee of Experts, Ministry of Corporate Affairs, October 25, 2018, http://www.mca.gov.in/Ministry/pdf/2018_CommitteeExperts_Report_08112018.pdf.

[9] Invitation for public comments on the Competition Act, 2002, Ministry of Corporate Affairs, 2018, http://www.mca.gov.in/Ministry/pdf/InvitingComments_16112018.pdf.

[10] Constitution of Committee for finalising the Business Responsibility Reporting (BRR) Format for Listed and Unlisted Companies, Ministry of Corporate Affairs, November 14, 2018, http://www.mca.gov.in/Ministry/pdf/NewandUpdateConstitutionOfCommitte_15112018.pdf.

[11] National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business, 2011, http://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf.

[12] SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, https://www.sebi.gov.in/sebi_data/attachdocs/1441284401427.pdf.

[13] National Voluntary Guidelines on the Social, Environmental and Economic Responsibilities of Business, 2018, http://www.mca.gov.in/Ministry/pdf/DraftNationalGuidelines2018_20062018.pdf.

[14] “Transparency Audit of Disclosures u/s 4 of Right to Information Act by the Public Authorities”, Central Information Commission, November 12, 2018, https://cic.gov.in/sites/default/files/Transparency%20Audit%

20of%20Disclosures%20Under%20Section%204%20of%20the%20RTI%20Act%20by%20the%20Public%20authorities.pdf

[15] Cabinet approves the Allied and Healthcare Professions Bill, 2018 for regulation and standardisation of education and services by allied and healthcare professionals”, Press Information Bureau, Ministry of Health and Family Welfare, November 22, 2018.

[16] Allied and Healthcare Professionals Database, Ministry of Health and Family Welfare, https://a2hp.mohfw.gov.in/.

[17] “Report of the working group for standardization of exclusions in health insurance contracts”, Insurance Regulatory and Development Authority, November, 2018, https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo36....

[18] “Cabinet approves Laying down procedure and mechanism for sale of enemy shares”, Press Information Bureau, Cabinet, November 8, 2018.

[19] “Cabinet approves leasing out six airports - Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru through PPP”, Press Information Bureau, Cabinet, November 8, 2018. 

[20] “Cabinet approves strategic disinvestment of 100% Govt. of India’s equity in the Dredging Corporation of India Ltd. (DCIL)”, Press Information Bureau, Cabinet Committee on Economic Affairs, November 8, 2018. 

[21] “Consultation paper on Regulatory Framework for Over-The-Top (OTT) communication services”, Telecom Regulatory Authority of India, November 12, 2018, https://www.trai.gov.in/sites/default/files/CPOTT12112018_0.pdf.     

[22] “Cabinet approves Amendment to the Central Universities Act, 2009 for setting up of Central Tribal University in Andhra Pradesh”, Cabinet, November 8, 2018.

[23] “Cabinet approves: i) Implementation of the umbrella scheme "Atmosphere & Climate Research-Modelling Observing Systems & Services"; ii) Sub-schemes to continue during 2017-20; and iii) National Facility for Airborne Research(NFAR) to be set up”, Press Information Bureau, Cabinet Committee on Economic Affairs, November 22, 2018.

[24] “Visit of Vice-President to Botswana, Zimbabwe and Malawi (October 31-November 5, 2018)”, Ministry of External Affairs, October 30, 2018, https://mea.gov.in/outoging-visit-detail.htm?30551/Visit+of+Vice+President+to+Botswana+Zimbabwe+and+Malawi+October+31November+5+2018.  

[25] “Documents signed during the visit of Vice President to Zimbabwe”, Ministry of External Affairs, November 3, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30564/Documents_signed_during_the_visit_of_Vice_President_to_Zimbabwe_November_03_2018.  

[26] “State Visit of President to Vietnam and Australia (November 18-24, 2018)”, Ministry of External Affairs, November 16, 2018, https://mea.gov.in/outoging-visit-detail.htm?30603/State+Visit+of+President+to+Vietnam+and+Australia+November+1824+2018.  

[27] “List of documents signed during the visit of President to Vietnam”, Ministry of External Affairs, November 20, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30613/List_of_documents_signed_during_the_visit_of_President_to_Vietnam_November_20_2018.

[28] “List of documents exchanged during the visit of President to Australia”, Ministry of External Affairs, November 22, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30619/List_of_documents_exchanged_during_the_visit_of_President_to_Australia.  

 

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

Highlights of this Issue

Subjects identified by Standing Committees for examination in 2018-19

Various Departmentally Related Standing Committees of Parliament have identified subjects that they will examine, in detail, during 2018-19.

 Retail inflation at 3.9% in Q2 of 2018-19

Consumer Price Index inflation decreased marginally from 4.2% in July 2018 to 3.8% in September 2018.  Food inflation decreased from 1.3% to 0.5% during the quarter.

Repo and reverse repo rates remain unchanged

The Monetary Policy Committee kept the repo and reverse repo rates unchanged at 6.5% and 6.25% respectively.  The RBI changed the stance of its monetary policy from “neutral” to “calibrated tightening”.

Draft amendments to Sports Broadcasting Signals Act, 2007 released for feedback

The draft amendments propose that broadcasters must share signals of sporting events of national importance with Prasar Bharti and networks where it is mandatory to show Doordarshan Channels.

 Draft River Basin Management Bill, 2018 released for consultation

The Bill proposes to establish 13 River Basin Authorities to facilitate coordination between states for development of inter-state rivers.  It also seeks to repeal the River Boards Act, 1956.

Draft Cape Town Convention Bill, 2018 released

The draft Bill seeks to implement the Cape Town Convention, and Protocol, 2001.  The Convention/Protocol seeks to achieve efficient financing of high value aircraft and equipment, to make operations cost effective and affordable.

 Ministry of Civil Aviation released the Digi Yatri policy

The policy introduces a Digi Yatra system with a digital ID backed by a government issued identity like Aadhaar, and passport.  Creation and use of the Digi Yatra ID by a passenger will be completely voluntary.

 Draft National Policy on Electronics 2018 released

Key objectives of the policy include: (i) promoting manufacturing of electronics to achieve turnover of USD 400 billion by 2025, (ii) improving ease of doing business, and (iii) encouraging research and innovation.

 Insolvency Law Committee submits report on cross-border insolvency

The Committee provided recommendations on adoption of the UNCITRAL Model Law on Cross-Border Insolvency, 1997 for cross-border insolvency proceedings.  The amendments will only apply to corporate debtors.

 CCI releases note on ‘Making Markets Work for Affordable Healthcare’

The Competition Commission of India released a policy note on issues in the pharmaceutical and healthcare sector which may restrict competition and consumer choice.

 CCEA approves Minimum Support Prices for Rabi crops for the 2019-20 season

MSPs have been notified for Wheat, Barley, Gram, Masoor, Rapeseed and Mustard, and Safflower for the 2019-20 Rabi marketing season.  The MSP for wheat has been increased by 6% and fixed at Rs 1,840 per quintal.

 Committees constituted to examine various issues

These issues include: (i) sexual harassment of women at the workplace, (ii) framing of a draft National Road Safety Code, and (iii) review of guidelines granting authorisation to oil companies for marketing of transportation fuels.

 

Parliament

Suyash Tiwari (suyash@prsindia.org)

Standing Committees identify subjects for examination for 2018-19

Various Departmentally Related Standing Committees of the Parliament have identified subjects for detailed examination in the year 2018-19.  The subjects chosen by these Committees are listed in the Annexure.

 

Macroeconomic Development

Ahita Paul (ahita@prsindia.org)

Retail inflation at 3.9% in the second quarter of 2018-19

The Consumer Price Index (CPI) inflation (base year: 2011-12, year-on-year) marginally decreased from 4.2% in July 2018 to 3.8% in September 2018.[1]  Food inflation decreased from 1.3% in July 2018 to 0.5% in September 2018.1

The Wholesale Price Index (WPI) inflation (base year: 2011-12, year-on-year) decreased slightly from 5.3% in July 2018 to 5.1% in September 2018.[2]  Trends in inflation during the second quarter of 2018-19 are shown in Figure 1.

Figure 1: Inflation trends in Q2 2018-19 (% change, year-on-year)

Sources: Ministry of Statistics and Program Implementation; Ministry of Commerce and Industry; PRS.

Repo and reverse repo rate remain unchanged at 6.5% and 6.25% respectively

The Monetary Policy Committee (MPC) released its Fourth Bi-Monthly Monetary Policy Statement of 2018-19.[3]  The policy repo rate (the rate at which the Reserve Bank of India (RBI) lends money to banks) remained unchanged at 6.5%.  Other decisions of the MPC include:

  • The reverse repo rate (the rate at which the RBI borrows money from banks) remained unchanged at 6.25%.
  • The marginal standing facility rate (the rate at which banks can borrow additional money) remained unchanged at 6.75%.
  • The bank rate (the rate at which the RBI buys or rediscounts bills of exchange) remained unchanged at 6.75%.

The RBI changed the stance of its monetary policy from “neutral” to “calibrated tightening”, indicating a focus on a contractionary monetary policy to curb inflation rates.

 

Finance

Ahita Paul (ahita@prsindia.org)

RBI releases guidelines on inter-operability of prepaid payment instruments

The Reserve Bank of India (RBI) released operational guidelines to facilitate transfer of funds between different prepaid payment instruments (such as wallets and prepaid cards).[4]  This inter-operability is to be facilitated for KYC-compliant instruments through (i) the Unified Payments Interface (UPI) for wallets, and (ii) authorised card networks for cards.

Inter-operability will be enabled in three phases: (i) between different wallets, (ii) between wallets and bank accounts, and (iii) between cards.

 

Information and Broadcasting

Vinayak Krishnan (vinayak@prsindia.org)

Draft amendments to Sports Broadcasting Signals Act, 2007 released for feedback

The Ministry of Information and Broadcasting has released draft amendments to the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007 for feedback.[5]  According to the Act, no television or radio broadcasting service provider can broadcast sporting events of national importance, unless it simultaneously shares the broadcasting signal with Prasar Bharti.

Under the Cable Television Networks (Regulation) Act, 1995, it is mandatory for networks to carry DD National and DD Sports.5  However, the Sports Broadcasting Signals Act, 2007, enables Prasar Bharti to re-transmit signals of important national sporting events only on Doordarshan’s own terrestrial or Direct-to-Home networks.  Therefore, viewers who do not have access to Doordarshan’s networks are unable to watch these sporting events or must watch them on highly priced sports channels.5

The draft amendments propose that in addition to Prasar Bharti, the broadcasters must share signals for these events with other networks where it is mandatory to broadcast Doordarshan Channels.  According to the Ministry, this will allow larger number of viewers to access such sporting events.5

 

Water Resources

Roopal Suhag (roopal@prsindia.org)

Draft River Basin Management Bill, 2018 released for consultation

The Ministry of Water Resources, River Development, and Ganga Rejuvenation released the draft River Basin Management Bill, 2018.[6]  The Bill proposes to establish 13 River Basin Authorities to facilitate coordination between states for development of inter-state rivers.  It also seeks to repeal the River Boards Act, 1956.  Key features of the draft Bill are:

  • River Basin Authorities: The central government shall establish a River Basin Authority for development, management, and regulation of waters of an inter-state river basin.  Every River Basin Authority shall consist of a Governing Council and an Executive Board.
  • River Basin Master Plan: Every River Basin Authority shall ensure that a River Basin Master Plan for river basin development, management, and regulation is prepared for the inter-state river basin under its jurisdiction.  The Plan shall include analysis of the river basin characteristics, environmental needs, assessment of the effects of existing legislation, among others.
  • Executive Board: The Executive Board will comprise the Chairman and administrative secretaries of the concerned state governments from the departments of water resources, agriculture, drinking water and sanitation, and disaster management.  The Board will also have part-time experts.
  • Functions of the Executive Board: The functions of the Executive Board will include to: (i) formulate a River Basin Master Plan for the inter-state river basin, (ii) prepare schemes for irrigation, water supply, and flood management, and (iii) maintain and update a database on water resources of the basin.
  • Governing Council: The Governing Council shall consist of: (i) Chief Ministers of basin states, (ii) Minister in charge of water resources from each basin state, and (iii) Chairman of the Executive Board.
  • Functions of the Governing Council: The functions of the Council include to: (i) approve the River Basin Master Plan, (ii) enable basin states to come to an agreement for implementation of the river basin master plan, (iii) resolve conflicts among states, and (iv) review and give clearance to new water resources projects.

The Ministry is seeking comments on the draft Bill till November 5, 2018.

 

Transport

Prachee Mishra (prachee@prsindia.org)

Draft Cape Town Convention Bill, 2018 released

The Ministry of Civil Aviation released the draft Cape Town Convention Bill, 2018.[7]  The draft Bill seeks to implement the Cape Town Convention (Convention on International Interests in Mobile Equipment), and Protocol (Protocol to the Convention on Matters Specific to Aircraft Equipment) in India.  The Cape Town Convention/Protocol were adopted in Cape Town in November, 2001.  India became a party to the Convention/Protocol in July, 2008.

The Convention/Protocol primarily seeks to achieve efficient financing of high value mobile equipment, like airframes, helicopters and engines, in order to make the operations cost effective and affordable.  Objectives of the Convention/Protocol include:

  • Creating an international interest in aircraft objects which will be recognised in all contracting states;
  • Establishing an electronic international registry for registration of international interests, and providing information related to interests in a particular aircraft;
  • Providing certain basic default remedies for creditors, to provide them with speedy interim relief; and
  • Creating a legal regime which is applicable universally and administers justice to both parties in case of a dispute.

Need for the legislation:  Certain provisions of the Convention/ Protocol are in conflict with certain provisions of other laws such as the Civil Procedure Code, 2008, the Specific Relief Act, 1963, the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016.  Further, international financial institutions are not giving due weightage to accession to the Convention/Protocol by any country unless it is accompanied by an implementing law.  For example, OECD provides 10% discount in the processing fee of a loan to acquire aircraft to airlines of any country that has enacted a law implementing the Convention/Protocol.

Comments on the draft Bill are invited within 30 days from the date of its publication (i.e., 6th November, 2018).

Ministry of Civil Aviation released the Digi Yatri policy

The Ministry of Civil Aviation released the Digi Yatri Policy.[8]  The policy seeks to deliver a seamless, paperless and hassle-free experience to all passengers across all check-points at Indian airports.  Key features of the policy include:

  • Objectives: Objectives of the policy include: (i) enhancing passenger experience and providing a simple and easy experience to all air travellers, (ii) achieving better throughput using digital framework (such as biometric security solutions), (iii) reducing cost operations by removing redundancies at checkpoints, and (iv) introducing a Digi Yatra system with a digital ID backed by a government issued identity like Aadhaar, and passport.
  • Applicability: The new process will cater to all passengers (Indian nationals with or without a Digi Yatra ID, and foreigners) at any airport in India.
  • Digi Yatra platform: The Digi Yatra platform (with all the digital IDs) will be built by a joint venture company (JVC) or a special purpose vehicle (SPV).  The JVC/SPV will be established by the Airports Authority of India (with a minority stake) and all private airport operators.  The JVC/SPV will obtain a local Authentication User Agency license from UIDAI.
  • The Digi Yatra ID platform will offer passenger services such as enrolment, authentication, and consented profile sharing. It will be an ID only platform, and provide an authentication service that airports may implement according to their own solution architecture.
  • Passenger consent: Creation and use of the Digi Yatra ID by a passenger will be completely voluntary.  The platform will strictly take consent from the passenger for sharing of face data for the airport checkpoint clearance only.  Additional consent may be obtained if the passenger wants to avail any value added services from the Digi Yatra ecosystem partners.
  • Airports may not create profile of users, or use this authentication for marketing without explicit user consent for marketing purpose. Such consent will be taken separately during registration of Digi Yatra customers.  In case the airport does take marketing consent from a user, this consent must be logged with the Digi Yatra platform.  A one click opt-out link must be made available to users directly, as well as through the Digi Yatra platform.

Revised norms for protecting data regarding airline incidents released

The Director General of Civil Aviation (DGCA) provides norms for the reporting and investigation of airline incidents.[9]  The objective of such reporting and investigation is to: (i) enable assessment of safety implications of each occurrence, including previous similar occurrences, so that any necessary action is initiated to prevent similar occurrences in future, and (ii) ensure dissemination of such information.  The DGCA released revised norms for the protection of data (cockpit voice recordings, images) with regard to airline incidents and investigations.  The revised norms provide that:

  • The operator (airline) will ensure that any cockpit voice recordings and airborne images are protected from any inappropriate use and not disclosed to the public.
  • The Chief of Flight Safety of the operator will incorporate the procedure for such data protection in their flight safety manual.

Committee to frame a draft National Road Safety Code formed

The Group of Transport Ministers of States had decided to frame a comprehensive road safety policy on April 19, 2018.10  Following this decision, the Ministry of Road Transport and Highways has constituted a Committee to frame a draft National Road Safety Code with the objective to reduce fatalities and road accidents.[10]  The Committee will also suggest: (i) measures to improve the infrastructure to assist road accident victims, and (ii) strategies for road safety advocacy programmes.

The Committee will comprise five members.  These are transport commissioners of the states of Kerala, Meghalaya, Jharkhand, and Delhi, and the Deputy Secretary (road safety) as the Convener.  The Committee may co-opt any other member of the state or an expert.

The Committee will submit its report and draft policy within three months.  The draft policy will then be presented to the Group of Transport Ministers for their consideration.

Location tracking and emergency buttons mandated for all new public service vehicles

The Ministry of Road Transport and Highways has mandated vehicle location tracking (VLT) with emergency buttons for all new public service vehicles (such as taxis and public buses) registered on or after January 1, 2019.[11]  Auto-rickshaws and e-rickshaws have been exempted from this rule.  The VLT device manufacturers would assist in providing the back end services for monitoring.

With regard to older public service vehicles (those registered up to December 31, 2018), the respective state/UT governments will notify the date by which these vehicles have to install these devices and emergency buttons.  State/UT governments also have to ensure the execution of the rule, and the functional status of these VLT devices.

The details of each VLT device will be uploaded on the VAHAN database by the device manufacturer.  The vehicle owners will have to ensure that the VLT devices installed in their vehicles are in working condition.  They will also regularly send required data to the backend system through cellular connectivity.

The state governments or VLT manufacturers, or any other agency authorised by the state government, will set up command and control centres.  These centres will provide an interface to various stakeholders such as (i) the state emergency response centre, (ii) the Regional Transport Offices, (iii) the Ministry of Road Transport and Highways and its designated agencies, and (iv) device manufacturers and their authorised dealers.

 

 

Cabinet approves IRSDC as nodal agency for railway station redevelopment

The Union Cabinet approved the Indian Railway Stations Development Corporation Limited (IRSDC) as the nodal agency and the main project development agency for redevelopment of railway stations.[12]  The lease tenure period for such projects will be 99 years.  IRSDC will prepare the overall strategic plan and business plans for redevelopment of individual or a group of stations.  Upon approval of business plans by the Ministry of Railways, IRSDC or other project development agencies will take up the work of station redevelopment.

The Indian Railways, Rail Land Development Authority, or IRSDC will plan and develop Railway land.  This will be done in consultation with urban local bodies, local development authorities or other union territories, to transfer land on free hold basis to Indian Railways.

The Union Cabinet had approved the development of certain categories of stations by Zonal Railways on June 24, 2015.  However, insufficient interest was shown by bidders on such projects, and issues such as multiple sub leasing were raised.  Allowing a specialized executing agency (IRSDC) for such projects seeks to address these issues.

Indian Railways rationalises freight and passenger fares

The Indian Railways has rationalised: (i) the flexi-fare scheme, and (ii) freight fares.[13],[14]  The changes in fares include:

Flexi-fare scheme:  Flexi-fare will be discontinued in trains with average monthly occupancy less than 50% throughout the previous year.  It will also be discontinued in lean traffic period of three months, in trains with average monthly occupancy between 50-75% throughout the previous year.  Certain discounts in flexi-fares have also been introduced in less patronised classes (such as 2A, 3A, and CC) to increase their occupancy.

The flexi-fare scheme was launched on September 9, 2016.  These changes have been introduced based on the recommendations of a committee that was set up to review the scheme, recommendations of the CAG, and representation from passengers.

Freight rates:  Indian Railways has rationalised its freight rates to ensure additional revenue generation across the network.  An additional revenue of Rs 3,344 crore is expected from such rationalisation.  This revenue will be utilised to improve passenger amenities.  This rationalisation will result in an 8.75% increase in freight rates for major commodities such as coal, iron and steel, iron ore, and raw materials for steel plants.  In addition, the haulage charge of containers has been increased by 5% and the freight rates of other small goods have been increased by 8.75%.  Freight rates have not been increased for goods such as food grains, flours, pulses, fertilizers, salt, and sugar, cement, petroleum, and diesel.

 

Information Technology

Vinayak Krishnan (vinayak@prsindia.org)

Draft National Policy on Electronics 2018 released

The Ministry of Electronics and Information Technology released a draft National Policy on Electronics 2018.[15]  The draft policy aims to position India as a global hub for Electronics System Design and Manufacturing (ESDM), by enabling the industry to compete globally.  Key features of the draft policy include:

  • Objectives: Key objectives of the draft policy include: (i) promoting manufacturing of ESDM to achieve a turnover of USD 400 billion by 2025, (ii) improving ease of doing business for ESDM industry, and (iii) encouraging research and innovation in all sub-sectors of electronics.
  • Promoting Competition: The draft policy seeks to create a competitive ESDM sector by incentivizing domestic manufacturing.  This will be achieved by: (i) providing direct tax benefits for setting up new manufacturing units or expanding existing units in the electronic manufacturing sector, (ii) promoting manufacture of electronic goods covered under the Information Technology Agreement of WTO, and (iii) exempting import duty on capital equipment not manufactured in India.
  • Schemes for manufacturing: The Modified Special Incentive Package Scheme was launched in 2012 to compensate for disadvantages in domestic manufacturing.  The scheme provides for capital subsidy of 25% for electronics industry in non-SEZ areas and 20% in SEZ areas.  The draft policy proposes replacing this scheme with schemes that are easier to implement such as interest subsidy and credit default guarantee.
  • Standards: A standards setting body will be established in the Ministry of Electronics and Information Technology.  Further, an institutional mechanism will be set up for mandating compliance with standards for electronic products.
  • Export promotion: The draft policy aims to promote export of electronics by: (i) increasing rate of duty drawback for electronics, (ii) permitting duty free import of second hand capital goods, and (iii) entering into Free Trade Agreements with economies such as EU, and Africa.

 

Corporate Affairs

Roshni Sinha (roshni@prsindia.org)

Insolvency Law Committee submits report on cross-border insolvency

The Insolvency Law Committee (Chair: Mr. Injeti Srinivas) submitted it report recommending amendments to the cross-border insolvency provisions in the Insolvency and Bankruptcy Code, 2016.[16]  The Committee proposed a draft ‘Part Z’ in the Code, based on an analysis of the UNCITRAL Model Law on Cross-Border Insolvency, 1997.  The Model Law provides a legal framework that states may adopt in their domestic legislation to deal with cross-border insolvency issues.  Key recommendations of the Committee include:

  • Applicability: The Committee recommended that the draft Part Z should be extended to corporate debtors only, including foreign companies.
  • Duplicity of regimes: The Committee noted that currently the Companies Act, 2013 contains provisions to deal with insolvency of foreign companies.  It observed that once cross-border insolvency provisions are introduced in the Code, it will result in a dual regime to handle insolvency of foreign companies.  It recommended that the Ministry of Corporate Affairs undertake a study of such provisions of the 2013 Act to analyse the efficacy of retaining them.
  • Reciprocity: The Committee recommended adoption of the Model Law on a reciprocity basis initially.  Reciprocity means that a domestic court will recognise and enforce a foreign court’s judgment only if the foreign country has adopted similar legislation to the domestic country.
  • Centre of Main Interests (COMI): The Model Law provides that if domestic courts determine that the debtor has its COMI in a foreign country, such foreign proceedings will be recognised as the main proceedings.  This recognition will result in certain automatic relief, such as allowing foreign representatives greater powers in handling the debtor’s estate.  A list of indicative factors comprising COMI may be inserted through rule-making powers.  Such factors may include location of the debtor’s books and records, location of financing, etc.
  • Public policy considerations: Part Z provides that the National Company Law Tribunal may refuse to take action under Part Z if it is contrary to public policy.  The Committee recommended that in proceedings where the Tribunal is of the opinion that a violation of public policy may be involved, a notice must be issued to the central government to provide its submissions.  If the Tribunal does not issue a notice, the central government may be empowered to apply to it directly.

For a PRS report summary, please see here.

National Financial Reporting Authority constituted

The Ministry of Corporate Affairs constituted the National Financial Reporting Authority (NFRA).[17]  The Union Cabinet had approved its establishment earlier this year.[18]  The NFRA is established as an independent regulator for auditors.  Its powers to investigate chartered accountants and their firms will extend to listed companies, and large unlisted companies (threshold will be notified).

Expert Committee submits report on regulating audit firms

An Expert Committee submitted its report to the government on “Regulating Audit Firms and Networks”.[19]  The Committee was constituted in April, 2018 pursuant to the directions of the Supreme Court.  The report examined the legal regime of auditors and recommended measures to promote development of the audit profession in India.  The Committee consisted of: (i) Joint Secretary, Ministry of Corporate Affairs, (ii) Additional Secretary, Department of Commerce, and (iii) Joint Secretary, Department of Industrial Policy and Promotion.

The Committee scrutinised the networking arrangements adopted by the big four audit firms to understand their legal structure and method of operation.  The Committee also addressed issues concerning conflict of interest and transparency arising out of non-audit services provided by auditors and their network, and recommended necessary checks and balances.  In addition, the report also dealt with issues of concentration of market power in the audit services market.

Further, the Committee found the establishment of the National Financial Reporting Authority (NFRA) as a necessary institutional reform, which would align the Indian audit landscape with the global position on having an independent regulator for auditors.  The NFRA is established as an independent regulator for auditors.  The Committee recommended measures to further strengthen the operation of NFRA to address contemporary challenges in relation to auditors, audit firms and networks operating in India.  The report also dealt with issues concerning advertising, multi-disciplinary practice firms, and branding, and suggested measures to rationalise the existing laws.

 

Health and Family Welfare

Gayatri Mann (gayatri@prsindia.org)

Competition Commission of India releases note on affordable healthcare

The Competition Commission of India released a policy note on ‘Making Markets Work for Affordable Healthcare’.[20]  The note examines issues in the pharmaceutical and healthcare sector which may restrict competition and consumer choice.  Key observations and recommendations of the Commission include:

  • Role of intermediaries: The Commission observed that drug companies in India charge unreasonably high trade margins which contribute to high drug prices.  Further, self-regulation by trade associations also contributes towards high margins as they control the entire drug distribution system which reduce competition.  The Commission recommended the use of electronic trading of drugs to induce price competition among retailers.
  • Branded generic drugs: In India, the pharmaceutical market is dominated by branded generic drugs which limit the price competition induced by generic drugs.  Whereas, worldwide, generic drugs are a key competitive force against branded drugs which are marketed at monopoly prices.
  • In India, branded drugs enjoy a price premium due to perceived quality assurance. The Commission recommended that the regulatory framework should ensure consistent application of quality control measures, in order to address issues of quality perception.
  • Vertical arrangements in healthcare services: The Commission noted that in-house pharmacies of super speciality hospitals are insulated from competition as patients are not typically allowed to purchase any product from outside.  Therefore, it recommended that hospitals should allow consumers to buy standardised consumables from the open market.  Further, the Commission noted that there is no regulatory framework that governs portability of patient data, treatment record, and diagnostic reports between hospitals.
  • Regulation and competition: Due to multiplicity of regulators in the pharmaceutical sector, the implementation of regulations is not uniform.  This has resulted in multiple standards of same products and different levels of regulatory compliance.  The Commission recommended that a mechanism to harmonise the processes followed by state licensing authorities could be developed.

 

Agriculture

Suyash Tiwari (suyash@prsindia.org)

CCEA approves Minimum Support Prices for Rabi crops for 2019-20 marketing season

The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSPs) for Rabi crops for the 2019-20 marketing season.[21]  Table 1 shows the change in MSPs for the Rabi crops as compared to the 2018-19 marketing season.

Table 1: MSPs notified for Rabi crops for the 2019-20 marketing season (in Rs/quintal)

Crop

2018-19

2019-20

Change

Wheat

1,735

1,840

6.1 %

Barley

1,410

1,440

2.1 %

Gram

4,400

4,620

5.0 %

Masoor

4,250

4,475

5.3 %

Rapeseed and Mustard

4,000

4,200

5.0 %

Safflower

4,100

4,945

20.6 %

Sources: Press Information Bureau; PRS.

CCEA approves creation of Fisheries and Aquaculture Infrastructure Development Fund

The Cabinet Committee on Economic Affairs approved the creation of Fisheries and Aquaculture Infrastructure Development Fund.[22]  The Fund will provide concessional finance for investment in fisheries development to (i) state and union territory governments and entities, (ii) cooperatives, and (iii) entrepreneurs, among others.  The loans will be provided for a period of five years from 2018-19 to 2022-23 with repayments to be made over a period of 12 years.

The fund is estimated to be worth Rs 7,522 crore, funded by the following sources: (i) Rs 5,266 crore from the Nodal Loaning Entities (NLEs), (ii) Rs 1,317 crore through contribution from beneficiaries, and (iii) Rs 939 crore through budgetary support from the central government.  NLEs consist of NABARD, National Cooperatives Development Corporation, and all the scheduled banks.

 

Women and Child Development

Gayatri Mann (gayatri@prsindia.org)

Group of Ministers constituted to examine matters related to sexual harassment of women at the workplace

The government constituted a Group of Ministers (Chair: Mr. Rajnath Singh, Minister of Home Affairs) to address issues of sexual harassment of women at the workplace.[23]  In addition to the chairperson, the Group comprises Union Ministries of: (i) Defence, (ii) Women and Child Development, and (iii) Road Transport and Highways.  The Group of Ministers will examine the existing legal and institutional framework for dealing with matters of sexual harassment of women at the workplace.  Further, it will recommend the necessary action required for effective implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.  The Group of Ministers will submit their recommendations on measures required to strengthen safety of women within three months.

 

Petroleum and Natural Gas

Suyash Tiwari (suyash@prsindia.org)

Expert Committee constituted to review the guidelines granting authorisation to oil companies to market fuels

The Ministry of Petroleum and Natural Gas has constituted an Expert Committee to review the existing guidelines for granting authorisation to oil companies for marketing of transportation fuels.[24]  These transportation fuels are motor spirit (commonly known as petrol), high speed diesel, and aviation turbine fuel.  As per the existing guidelines, companies investing or proposing to invest at least Rs 2,000 crore in exploration and production, refining, pipelines, or terminals are eligible to get authorisation for marketing of such fuels.

The Terms of Reference of the Committee are:

  • Reviewing the existing system and extent of private sector participation in the retail marketing of major transportation fuels.
  • Identifying entry barriers, if any, for the expansion of retail outlets for private marketing companies.
  • Assessing the need to further liberalise the existing guidelines for authorisation of private sector marketing companies.
  • Making specific recommendations on the nature of amendments, if required.

The Committee includes the following members: (i) Dr. Kirit Parikh, (ii) Mr. G. C. Chaturvedi, former Secretary, Petroleum, (iii) Mr. M. A. Pathan, former Chairman, Indian Oil Corporation, (iv) Director, Indian Institute of Management, Ahmedabad, and (v) Joint Secretary (Marketing).  The Committee is required to submit its report within two months.

 

Skill Development

Gayatri Mann (gayatri@prsindia.org)

Cabinet approves merger of National Council for Vocational Training and National Skill Development Agency

The Union Cabinet approved the establishment of the National Council for Vocational Education and Training, which seeks to regulate skill development and vocation training.[25]  It subsumes two existing regulatory institutions: (i) the National Council for Vocational Training, and (ii) the National Skill Development Agency.  Functions of the Council will include: (i) recognition and regulation of entities engaged in vocational education and training, and (ii) approval of qualifications developed by awarding bodies and Sector Skill Councils.

 

Home Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Ministry of Home Affairs issues notification on grant of citizenship

The Ministry of Home Affairs issued a notification under the Citizenship Act, 1955.   Under the Act, the central government can register a person as a citizen or grant a certificate of naturalisation, on receipt of an application.  The notification delegates these powers to the District Collector or Secretary of the Home Department, in case of persons belonging to minority communities in Afghanistan, Pakistan, and Bangladesh.  These include Hindus, Sikhs, Buddhists, Jains, Parsis, and Christians.  The notification is applicable to such individuals residing in the states of Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, and Union Territory of Delhi.

 

External Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Presidents of Russia and Uzbekistan visit India

The Presidents of Russia and Uzbekistan visited India.[26],[27]  Key agreements signed with the two countries are mentioned below:

  • Russia:  India and Russia signed eight agreements for cooperation in various sectors including: (i) railways, (ii) fertilizers, and (iii) micro, small and medium industries.[28]

  • Uzbekistan: India and Uzbekistan signed 17 agreements for cooperation in various areas including: (i) tourism, (ii) agriculture and allied sectors, (iii) health and medical science, and (iv) illicit drug trafficking.[29]

Prime Minister visits Japan

The Prime Minister, Mr. Narendra Modi, visited Japan.[30]  India and Japan signed 32 agreements for cooperation in various areas including: (i) exchange of information in maritime domain awareness, (ii) artificial intelligence technologies, (iii) primary healthcare, (iv) developing food processing industry, (v) renewable energy, (vi) environment protection, and (vii) electronics.[31]

 

Annexure

The subjects identified by various Parliamentary Standing Committees for examination in the year 2018-19 are given in Table 2.

Table 2: Subjects identified by the Parliamentary Standing Committees for examination in 2018-19

Agriculture

Department of Agriculture, Co-operation and Farmers Welfare

1.        Production and Availability of Certified Seeds in the Country.

2.        GM crops – Prospects and Challenges.

3.        Agriculture Marketing and Role of Weekly Gramin Haats.

4.        Impact of Mining Activities on Agriculture and Allied Sectors.

5.        Implementation of Pradhan Mantri Krishi Sinchayi Yojana (PMKSY) – A Review.

6.        Functioning of Agricultural Credit System in the Country.

7.        Directorate of Plant Protection, Quarantine and Storage – A Performance Review.

8.        Multidimensional Contribution of Krishi Vigyan Kendra and Agricultural Technology Management Agency for Training, Extension and Experimentation.

9.        Doubling Farmers Income by 2022.

10.     Role of Primary Agriculture Cooperative Societies (PACS) in Comprehensive Development of Agriculture in the Country – An Evaluation.

11.     Participation of Farmers in Formulation, Implementation, Monitoring and Evaluation of Schemes for the Agriculture Sector in the Country.

12.     Pradhan Mantri Fasal Bima Yojana – An Evaluation.

13.     Production and Availability of Oil Seeds and Pulses in the Country.

14.     International Cooperation in Agriculture Sector – A Review.

Department of Agricultural Research and Education

1.        Awareness and Training on Intellectual Property Laws and Intellectual Portfolio Management in ICAR Institutes.

2.        Research Collaborations and Coordination by Indian Council of Agricultural Research with International and National Research Agencies.

3.        Contribution of ICAR Institutes in Development of High Yielding Varieties of Rice – A Performance Review.

4.        Research Initiatives for Development of Agriculture and Allied Sectors in Coastal and Island Regions in the Country.

5.        National Dairy Research Institute, Karnal – A Performance Review.

Department of Animal Husbandry, Dairying and Fisheries

1.        Role of National Dairy Development Board for Protection and Development of Indigenous Cattle Breeds.

2.        Safeguarding Deep Sea Fisheries from External Exploitation.

3.        Status of Veterinary Services and Availability of Animal Vaccine in the Country.

4.        Ensuring Quality of Milk and Consumer Grievance Redressal Mechanism in Dairy Sector.

5.        Implementation of National Scheme on Welfare of Fishermen – An Evaluation.

Ministry of Food Processing Industries

1.        Research and Development Initiatives and Achievements in Food Processing Sector.

2.        Scheme for Creation/Expansion of Food Processing Preservation Capacities – An Evaluation.

Chemicals and Fertilizers

Department of Chemicals and Petrochemicals

1.        Demand and Availability of Petrochemicals including imports and exports.

2.        Setting up of Plastic Parks.

3.        Insecticides – Promotion and development including its safe usage.

Department of Fertilizers

1.        Administration of Fertilizers (Movement Control) Order, 1973.

2.        Role of public, cooperative and private sectors in production and distribution of fertilizers.

3.        Fertilizer Education Projects.

Department of Pharmaceuticals

1.        Pricing of Drugs with special reference to Drug (Prices Control) Order 2013.

2.        Promotion of Medical Device Industry.

3.        Review of Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP).

Coal and Steel

Ministry of Coal

1.        Land Acquisition and issues of Rehabilitation and Resettlement in Coal/Lignite Mining Areas.

2.        Development of Transport Infrastructure for Evacuation of Coal from Coalfield Areas.

3.        Implementation of Information Technology and Vigilance Activities to curb Illegal Coal Mining and Theft of Coal.

4.        Coal Conservation, research and development in Coal Sector.

5.        Compliance of Environmental Norms by Coal/Lignite Companies.

6.        Skill Development in Coal Sector.

7.        Performance of Coal Controller's office.

8.        Production of Lignite – Projections and Planning.

9.        CSR activities of Coal/Lignite Companies.

10.     Pricing of Coal and issues related to Coal Royalty.

11.     Modernisation of infrastructure and Inventory/Stock maintained by coal companies.

12.     Non-utilisation of allocated/leased out coal blocks by Public/Private Sector Companies.

13.     Safety and security in Coal/Lignite sector including overburden management.

14.     Role and responsibilities of Coal India Ltd. in respect of its subsidiary companies and exploration of Coal reserves in North Eastern regions.

15.     Issues related to quality of Coal including sampling methodology.

16.     Need for Clean Coal Technology including commercialisation of Coal Bed Methane.

Ministry of Mines

1.        Self-Reliance in Minerals and Mineral based products.

2.        Mineral Exploration Activities in the North Eastern States of the Country.

3.        Development of Aluminium and Copper Industries in India.

4.        Organisational Structure and Performance of Geological Survey of India (GSI) – A Review.

5.        Organisational Structure and Performance of Indian Bureau of Mines (IBM) – A Review.

6.        CSR Activities by PSUs under Ministry of Mines.

7.        Illegal Mining of Iron Ore, Manganese and Bauxite in the Country.

8.        Implementation of District Mineral Foundation and Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKY).

Ministry of Steel

1.        Safety Management and Practices in Steel PSUs.

2.        The Indian Steel Sector: Development and Potential.

3.        Development of Manganese Ore Industry in India.

4.        CSR Activities in Steel PSUs.

5.        Modernisation and Expansion Plans of Steel Sector.

6.        Skill Development in Steel Sector.

7.        Development of Leased Out Iron Ore Mines and optimum capacity utilisation.

8.        Promotion of Steel Usage.

9.        Physical and Financial Performance of Steel Sector Companies.

10.     Status of Integrated Steel Plants of NMDC Ltd.

Commerce

1.        Impact of Floods on Plantation Sector in Kerala and Karnataka.

2.        Import of Crude Oil: Effect on Trade and Industry.

Defence

1.        Provision of all-weather road connectivity under Border Roads Organisation (BRO) and other agencies up to International borders as well as the strategic areas including approach roads – An appraisal.

2.        Grievances Redressal Mechanism in Defence Services.

3.        Provision and Monitoring of quality of Ration and Livery items to the Defence Forces, especially in border areas.

4.        Assessment of the major Research & Development initiatives including by way of private participation leading to innovation and Import substitution during the last ten years.

5.        Accidents involving Defence Assets – A Critical Review.

6.        Eco-Task Force System – Measures to strengthen including raising of additional Territorial Army Battalions.

7.        New Unified Structure pertaining to Cyber Space, Space and Special Operations.

8.        Make in India with special reference to Micro, Small and Medium Enterprises(MSMEs).

9.        Critical Review of National Cadet Corps.

Energy

Ministry of Power

1.        Role of Regulators in the Electricity Sector – An Evaluation.

2.        Energy Audit – An Evaluation.

3.        Integrated Power Development Scheme – An Evaluation.

4.        Functioning of POSOCO in Grid management.

5.        Development of the Power Sector.

6.        Evaluation of Power Transmission System – Performance Efficiency in Matching Evacuation Demands.

7.        Review of Power Tariff Policy – Making Electricity Affordable.

8.        Contribution of Central Electricity Authority in the balanced development of the Electricity Sector.

9.        Operations of Load Dispatch Centres and Power Exchanges.

10.     Performance of Power Plants of Thermal and Hydro Sectors.

11.     Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY).

12.     Saubhagya – Pradhan Mantri Sahaj Bijli Har Ghar Yojana.

13.     Role and Significance of UDAY in financial turnaround of Discoms.

14.     Hydro Power.

15.     Stressed/Non-Performing Assets in Gas based Power Plants.

16.     Carbon Footprints of Power Generation in India.

Ministry of New and Renewable Energy

1.        Role of PSUs/Institutions under MNRE in Development of Renewable Energy.

2.        Grid Connectivity – Grid connection for Renewable Energy including Captive Renewable Power Plants.

3.        Action Plan for achievement of 175 GW Renewable Energy Target.

4.        Measures to make distribution/marketing of Renewable Energy affordable and effective.

5.        Need for long term Renewable Energy Policy and Legal Reforms.

6.        Research, Design and Development in Renewable Energy Sector.

7.        Tidal Power Development in India.

8.        Renewable Energy – Potential and Harnessing.

9.        Evaluation of the role of Renewable Energy in the Electricity Sector.

10.     Reasons for lack of manufacturing base for Renewable Components/Equipment.

11.     Financial constraints in the Renewable Energy Sector.

12.     Evaluation of Wind Energy in India.

External Affairs

1.        Issues relating to migrant workers including appropriate legislative framework and skill development initiatives for prospective emigrants.

2.        Performance of Passport Issuance System including issuance of e-passports.

3.        India-USA Relations – a critical review.

4.        India-Sri Lanka relations – Trade and Security including issues of fishermen.

5.        India’s Extended Neighbourhood: From Look East to Act East.

6.        India’s position in the ongoing Climate Change Negotiations.

7.        India’s engagement with the African countries.

8.        India’s strengthening ties with Japan: possibilities ahead.

9.        India and International Law, including its Extradition Treaties with foreign countries, asylum issues, international cyber-security and issues of financial crimes.

10.     Indo-Pak Relations in view of new regime in Pakistan.

11.     India-Bangladesh Relations in post-elections era in Bangladesh.

12.     Progress in restructuring and strengthening of IFS Cadre.

Finance

1.        Impending Reforms relating to Reserve Bank of India (RBI) and Resolution of Non-Performing Assets/Stressed Assets in Banks/Financial Institutions including critical appraisal of implementation of Insolvency and Bankruptcy Code.

2.        Status of unaccounted income/wealth both inside and outside the country – A critical analysis.

3.        Insurance Sector in India – A Review, including performance appraisal of Life Insurance Corporation of India (LIC) and evaluation of Crop and Health Insurance Schemes.

4.        Impact of Influx of Global MNCs into country's Financial Technology Space.

5.        State of Indian Economy: Pitfalls and Challenges.

6.        Central Assistance for disaster management and relief.

7.        Demonetisation of Indian Currency notes of Rs. 500 and Rs. 1000 and ramifications thereof.

8.        Role of banks, cooperatives and NABARD in addressing issues concerning agricultural/rural credit.

9.        Road map for Comprehensive Tax Reforms in India – including measures to increase tax-GDP ratio.

10.     Corporate Governance in India – Issues and Challenges.

11.     Issues relating to CSR compliance.

12.     Implementation of SC and ST sub-plans/component.

13.     Growth and Regulation of Micro Finance Sector in India and role of SIDBI/MUDRA.

Food, Consumer Affairs and Public Distribution

Department of Food and Public Distribution

1.        Procurement, storage and distribution of food grains.

2.        Payment of sugarcane arrears to sugarcane farmers.

3.        Functioning of Warehousing Development and Regulatory Authority (WDRA).

4.        Quality Control Cells (QCCs).

5.        Construction of Godowns by FCI.

6.        Food subsidy and its utilisation.

7.        Development/Promotion of Sugar Industry.

8.        Edible Oils.

Department of Consumer Affairs

1.        Programmes for Consumer Protection.

2.        Regulation of Packaged Commodities.

3.        Problem of supply and distribution of adulterated milk and measures taken to check it.

4.        Mechanism of Price Monitoring System.

5.        Price rise of Essential Commodities – Causes & Effects.

6.        BIS – Hallmarking & Jewellery.

7.        Initiatives in the North-East in the field of Consumer Rights Protection.

8.        Regulation of Weights and Measures.

Health and Family Welfare

Ministry of Health and Family Welfare

1.        Functioning of AIIMS-like Institutions.

2.        Medical Devices: Regulation & Control.

3.        Affordability of Cancer and Duchenne Muscular Dystrophy (DMD) treatment.

4.        Promotion of Generic Drugs.

5.        Manufacturing and availability of vaccines for Universal Immunisation Programme.

6.        Functioning of Autonomous Bodies/PSUs under Ministry of Health & Family Welfare.

7.        Right to Health.

8.        Implementation of Ayushman Bharat.

Ministry of AYUSH

1.        Quality Control and Standardisation of Ayurvedic, Siddha, Unani and Homoeopathy Drugs.

Home Affairs

1.        Worsening Traffic Management in Delhi.

2.        Implementation of Article 371-J pertaining to special status of Hyderabad-Karnataka region.

3.        Administration and development of UT of Andaman & Nicobar Islands.

4.        Crimes against SC, ST, minorities, women, children and increasing mob lynching incidents.

5.        Police encounters across the country.

Information Technology

Ministry of Information and Broadcasting

1.        Review of functioning of Prasar Bharati Organisation.

2.        Ethical standards in media coverage.

3.        Film Industry: Problems and Challenges.

4.        Review of the Licensing Guidelines for TV News Channels and Publications.

5.        Review of uplinking and downlinking guidelines for Media Channels.

6.        Review of functioning of Central Board of Film Certification (CBFC).

Ministry of Electronics and Information Technology

1.        Digital India Programme.

2.        Review of National Digital Literacy Mission (NDLM) – Problems and Challenges.

3.        Citizens’ data security and privacy.

4.        Digital Payment and Online Security measures for data Protection.

5.        Review of functioning of Unique Identification Authority of India (UIDAI).

Department of Posts

1.        Real Estate Management in the Department of Posts.

2.        Setting up of Post Bank of India as a payments Bank – Scope, Objectives and Framework.

3.        Department of Posts in e-Commerce – Initiatives and Challenges.

Department of Telecommunications

1.        Review of functioning of Telecom Regulatory Authority of India (TRAI).

2.        Plan for enhancing the performance of MTNL and BSNL.

3.        Review of the functioning of Bharat Broadband Network Limited (BBNL).

4.        Setting up of Public Wi-Fi Networks.

Labour

Ministry of Labour and Employment

1.        Review of ILO Conventions binding on India and the measures taken by the Government to implement them.

2.        Working conditions and welfare of Mine workers, and review of working of Directorate General of Mines Safety (DGMS).

3.        Deployment of Contract/Casual Workers/ Sanitation workers for perennial nature of jobs in Government/PSU offices/Establishments, including at Railway Stations.

4.        Status and Welfare Measures for Workers employed by the Agencies/Companies providing outsourced services.

5.        Welfare of Tea, Coffee, Rubber Plantation Workers.

6.        Employees Provident Fund Organisation – Functioning, Coverage of Establishments, Recovery of Arrears including Administration of Provident Funds Act, 1925 and All Other PF Related Acts.

7.        Welfare of workers of Un-Organised Sector, including traditional occupations.

8.        Implementation of Social Security and Welfare/ Protection Schemes for Domestic workers/ Drivers/ Maids/ Housekeeping workers/ Agricultural labourers.

9.        Review/Functioning of Central Board for Workers Education.

10.     Review of Centrally Sponsored Schemes implemented by the Ministry of Labour and Employment.

11.     Review of National Policy on Child Labour.

12.     Identification and Rehabilitation of Bonded Labour.

13.     Status of and Welfare Measures for Security Guards deployed in various Organisations by Security Agencies.

14.     Implementation of Social Security and Welfare/ Protection Scheme for Construction Workers deployed in various Construction Activities/Infrastructure Projects/Real Estate.

15.     Compliance with the prescribed provisions of deduction and deposit of PF and ESI by the Employers.

16.     Review and Expansion of Present Categories of Scheduled Employment.

17.     Examination and review of Service Conditions of Workers/Journalists Engaged in Print and Electronic Media.

18.     Social Security and Welfare/Protection Scheme for Workers Engaged by NGOs.

19.     Review/Status and Implementation of Labour Laws.

20.     Safety, Security, Protection & Welfare of TV/ Broadcasting/Digital Entertainment/ Advertisement Industry Workers.

21.     Scheduled/Non-Scheduled/Test Flying Air Operators/Maintenance, Repair and Overhaul (MRO) companies/Air Ports Operators - Safety, Social Security Measures and norms for their Workers/Employees especially in the context of those who are associated with flying the Aircraft in Civil Aviation Sector.

22.     Status of implementation of Social Security Measures for Workers in IT Sector like BPOs/Call Centres and Telecom Sector such as those Employed for Work Associated with Mobile Towers, etc.

23.     Review of Central Government Gazette Notification for Minimum Wages in Scheduled Employment Sector – Status, Implementation, Programme and Scope for Expansion.

Ministry of Textiles

1.        Development and promotion of Jute Industry.

2.        Skill Development vis-à-vis Manufacturing and Upgradation in Textiles Sector.

3.        Review of various Welfare Schemes of the Ministry of Textiles.

4.        Status, Performance & Challenges before Indian Textile Industry.

5.        Development of Cotton Sector.

6.        Review of Schemes/Programmes of Central Silk Board in Development and Promotion of Silk Industry.

7.        Functioning of NTC vis-à-vis Revival/Relocation/ Status/Upgradation/Modernisation of NTC Mills and future course of action of closed NTC Mills.

8.        Status/Performance of Handloom Sector.

9.        Reforms and Status of Powerloom Sector.

10.     Review of Share of Textile Sector in India's Export Basket.

11.     Review of performance of Marketing Agencies of Handloom and Handicraft.

Ministry of Skill Development and Entrepreneurship

1.        Pradhan Mantri Kaushal Vikas Yojana.

2.        National Skills Qualifications Framework.

3.        Review of functioning of Directorate General of Training.

4.        Functioning of National Skill Development Corporation (NSDC).

Petroleum and Natural Gas

1.        Energy Security with specific reference to Hydrocarbon Resources and Electric Vehicles.

2.        Allotment of Retail Outlets and LPG Distributorships.

3.        Pricing, Marketing and Supply of Petroleum Products including Natural Gas.

4.        Oil Refineries – A Review.

5.        Litigations involving Oil PSUs.

6.        Contract Management and Transparency in Procurement Procedures in Oil PSUs.

7.        CSR activities of oil PSUs.

8.        A Review of Performance of Petroleum Sector related Installations and Organisation under the jurisdiction of the Ministry of Petroleum and Natural Gas.

Railways

1.        Human Resource Management in Indian Railways.

2.        Passenger Amenities including Modernisation of Railway Stations.

3.        National Projects and Strategic Lines of Indian Railways.

4.        Expansion of Rail Network.

5.        Last Mile Port Connectivity with Indian Railways.

6.        Introduction of High Speed Trains.

7.        Dedicated Freight Corridor Projects of Indian Railways.

8.        Passenger Reservation System of Indian Railways.

9.        Digitalisation in Indian Railways.

10.     Corporate Social Responsibilities (CSR) related activities of PSUs of Indian Railways.

11.     Sub-urban Train Services of Indian Railways.

12.     National Rail Vikas Yojna – A Review.

13.     Performance of Production Units of Indian Railways.

14.     Protection and Usage of Surplus Railway Land.

15.     Safety measures in Railway Operations.

16.     Reconstitution and Restructuring of Railway Zones.

17.     Maintenance of Bridges in Indian Railways: A Review.

18.     Infrastructural Needs of Indian Railways.

19.     Scrap Disposal in Indian Railways including need to contain leakages.

20.     Accounting system in Indian Railways.

Rural Development

Department of Rural Development

1.        Review of Pradhan Mantri Awaas Yojana (Gramin).

2.        Saansad Adarsh Gram Yojana (SAGY).

3.        Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) 'Aajeevika'.

4.        Impact of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on employment and empowerment of rural population.

5.        Review of Performance of rural road connectivity under PMGSY in the country including North Eastern States and the States affected by natural calamities.

6.        National Social Assistance Programme (NSAP).

7.        National Rurban Mission (NRUM).

Ministry of Drinking Water and Sanitation

1.        Availability of Drinking Water in drought prone areas of the country.

2.        Contamination of underground water resources in the country.

3.        Review of Swachh Bharat Mission (Gramin) – SBM(G) for attaining ODF status in Northern States of the country.

Department of Land Resources

1.        Digital India Land Record Modernisation Programme.

Ministry of Panchayati Raj

1.        Rashtriya Gram Swaraj Abhiyan.

Science & Technology, Environment and Forests

1.        Status of Forest in India.

2.        Pollution in major rivers of the Country.

3.        Functioning of CSIR laboratories including R&D Promotion Activities.

4.        Role of CPCB and coordination with other Ministries/Departments/SPCBs in controlling pollution.

5.        Coastal Regulation Zone (CRZ) Policy and related matters.

Social Justice and Empowerment

1.        Priority Sector lending by Banks to SCs, STs, OBCs, Persons with Disabilities and the Minorities.

2.        Grants-in-aid to NGOs working for social welfare and evaluation of their functioning.

Department of Social Justice and Empowerment

1.        Assessment of the working of scheme of Special Central Assistance to Scheduled Castes Sub-Plan (SCA to SCSP).

2.        Babu Jagjivan Ram Chhatrawas Yojana for SC boys and girls.

3.        Review of the Self Employment Scheme for the Rehabilitation of Manual Scavengers (SRMS).

Department of Empowerment of Persons with Disabilities

1.        Review/functioning of Rehabilitation Council of India (RCI).

2.        Assessment of Scheme for Implementation of Persons with Disabilities Act (SIPDA).

3.        Review of the functioning of National Institutes established for different types of disabilities.

Ministry of Tribal Affairs

1.        Development of Particularly Vulnerable Tribal Groups (PVTGs).

2.        Implementation of Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 vis-à-vis displacement of tribals.

3.        Assessment of the working of Tribal Sub-Plan (TSP).

Ministry of Minority Affairs

1.        Review of the functioning of the National Minorities Development and Finance Corporation (NMDFC).

2.        Implementation of Prime Minister's New 15-Point Programme for the Welfare of Minorities.

3.        Status of implementation of Sachar Committee recommendations, findings/suggestions of Kundu Committee and working of Assessment and Monitoring Authority (AMA) for the Socio-Religious Groups (SRGs).

Urban Development

1.        Solid Waste Management including Hazardous Waste, Medical Waste and E-waste.

2.        Development of Smart Cities.

3.        Pradhan Mantri Awas Yojana - Urban (PMAY-U).

4.        Rainwater Harvesting in Metropolitan Cities.

5.        Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and Heritage Cities Development and Augmentation Yojana (HRIDAY).

6.        Delay in Phase IV of Delhi Metro.

Water Resources

1.        Conservation, Development, Management and Abatement of pollution in River Ganga and its Tributaries.

2.        Review of Major and Medium Irrigation Projects in India along with the Status and Progress of Participatory Irrigation Management (PIM) and Water Users Associations (WUAs).

3.        Micro Irrigation – New approach towards Conservation and Management of Water with special emphasis on Drip Irrigation / Sprinklers.

4.        Review of Inter-Linking of Rivers with reference to Irrigation, Drinking Water, Flood Control and Soil Erosion, etc.

5.        Flood Management in the Country and evolving a Decision Support System for release of water from the Dams.

6.        Maintenance and Creation of Water Bodies – Role of the (I) Government and Local Bodies; and (II) Industries under Corporate Social Responsibility (CSR).

7.        Change in Water Consumption Pattern with rise in population of the country with special emphasis on Drinking Water scarcity and challenges in future.

8.        Rain Water Harvesting in India.

9.        Review of the Working of National Projects Construction Corporation Limited (NPCC).

Sources: Various issues of Bulletin-II, Lok Sabha; PRS.

 

 

[1]“Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the month of September 2018”, Press Release, Ministry of Statistics and Programme Implementation, October 12, 2018, http://www.mospi.gov.in/sites/default/files/press_release/CPI_PR_12oct18f.pdf.

[2] “Index Numbers of Wholesale Price in India (Base: 2011-12=100): Review for the month of September, 2018”, Press Information Bureau, Ministry of Commerce and Industry, October 15, 2018.

[3] “Fourth Bi-Monthly Policy Statement 2018-19”, Press Release, Reserve Bank of India, October 5, 2018, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR795F23744EF408341E18684D24B464FADDF.PDF.

[4] “Prepaid Payment Instruments (PPIs) – Guidelines for Interoperability”, DPSS.CO.PD.No.808/02.14.006/2018-19, Reserve Bank of India, October 16, 2018, https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI61724025FD07FE407D8796EC6C97A17A8E.PDF.

[5] “Feedback/comments on Draft Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) (Amendment) Bill, 2018”, Ministry of Information and Broadcasting, October 17, 2018, https://mib.gov.in/sites/default/files/Noticedated17october2018onwebsite.pdf.  

[6] Circulation of Draft River Basin Management Bill, 2018 for Public Consultation, Ministry of Water Resources, River Development, and Ganga Rejuvenation, http://mowr.gov.in/sites/default/files/RBM_DraftBill.pdf.

[7] “Proposal for enactment of the Cape Town Convention Act, 2018 for implementation of the Cape Town Convention/Cape Town Protocol in India”, AV.11012/1/2014-A (Vol.I), Ministry of Civil Aviation, October 8, 2018, www.civilaviation.gov.in/sites/default/files/Cape%20Town.pdf.

[8] “Digi-Yatra – Reimagining Air Travel in India”, Ministry of Civil Aviation, August 9, 2018, www.civilaviation.gov.in/sites/default/files/Digi%20Yatra%20Policy%2009%20Aug%2018.pdf.

[9] “Notification of Incidents and Investigation thereof.”, F. No.A.15011/2//2016/-AS(Pt.), Office of the Director General of Civil Aviation, http://dgca.nic.in/cars/D5C-C1.pdf.

[10] No. RT-19021/3/2018-T, Ministry of Road Transport and Highways (Transport Section), http://morth.nic.in/showfile.asp?lid=3370.

[11] “Vehicle Location Tracking Devices and Emergency Buttons Mandatory for all New Public Service Vehicles Registered After 1st January 2019”, Press Information Bureau, Ministry of Road Transport and Highways, October 31, 2018.

[12] “Cabinet approves Redevelopment of Railway Stations by IRSDC as Nodal Agency, through simplified procedures and longer lease tenure”, Press Information Bureau, Ministry of Railways, October 3, 2018. 

[13] “Rationalisation of Flexi Fare Scheme”, Press Information Bureau, Ministry of Railways, October 31, 2018.

[14] “To Improve Passenger Amenities Railways Increases Freight Rates”, Press Information Bureau, Ministry of Railways, October 31, 2018.

[15] Draft National Policy on Electronics 2018, Ministry of Electronics and Information Technology, October 10, 2018, http://meity.gov.in/writereaddata/files/Draft_NPE_2018_10thOct2018.pdf.  

[16] Report of Insolvency Law Committee on Cross Border Insolvency, Ministry of Corporate Affairs, October, 2018, http://www.mca.gov.in/Ministry/pdf/CrossBorderInsolvencyReport_22102018.pdf.

[17] S.O. 5099(E), Ministry of Corporate Affair, October 1, 2018, file:///C:/Users/user%206/Downloads/190358%20(2).pdf.

[18] “Cabinet approves Establishment of National Financial Reporting Authority”, Press Information Bureau, Cabinet, March 1, 2018.

[19] “Committee of Experts submits its report on Regulating audit firms and the Networks”, Press Information Bureau, Ministry of Corporate Affairs, October 31, 2018.

 

[20] “Making Markets Work for Affordable Healthcare”, Press Release, Competition Commission of India, October 24, 2018, https://www.cci.gov.in/sites/default/files/press_release/PressRelease.pdf.

[21] “Cabinet approves enhanced Minimum Support

Prices (MSP) for Rabi Crops of 2018-19 Season to

be marketed in 2019-20 Season.”, Press Information Bureau, Cabinet Committee on Economic Affairs, October 3, 2018.

[22] “Creation of Fisheries and Aquaculture Infrastructure Development Fund (FIDF)”, Press Information Bureau, Cabinet Committee on Economic Affairs, October 24, 2018.

[23] Government constitutes GoM to strengthen legal & institutional frameworks to deal with & prevent sexual harassment at workplace”, Press Information Bureau, Ministry of Women and Child Development, October 24, 2018.

[24] No. M-12029(11)/2/2018-OMC-PNG, Ministry of Petroleum and Natural Gas, October 5, 2018, http://petroleum.nic.in/sites/default/files/petrlatest.pdf.

[25] “Cabinet approves merger of National Council for Vocational Training, NCVT and National Skill Development Agency, NSDA to establish National Council for Vocational Education and Training”, Press Information Bureau, Ministry of Skill Development and Entrepreneurship, October 10, 2018.

[26] “State Visit of H.E. Shavkat Mirziyoyev, President of the Republic of Uzbekistan to India (September 30- October 01, 2018)”, Ministry of External Affairs, September 28, 2018, https://www.mea.gov.in/incoming-visit-detail.htm?30443/State+Visit+of+HE+Shavkat+Mirziyoyev+President+of+the+Republic+of+Uzbekistan+to+India+September+30++October+01+2018

[27] “Visit of President of the Russian Federation, H.E. Vladimir V. Putin to India (October 04-05, 2018)”, Ministry of External Affairs, September 28, 2018, https://www.mea.gov.in/incoming-visit-detail.htm?30444/Visit+of+President+of+the+Russian+Federation+HE+Mr+Vladimir+V+Putin+to+India+October+0405+2018.  

[28] “List of Agreements/MOUs Exchanged between India and Russia during Visit of President of Russia to India”, Ministry of External Affairs, October 5, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30467/List_of_AgreementsMoUs_Exchanged_between_India_and_Russia_during_Visit_of_President_of_Russia_to_India

[29] “List of Documents signed between India and the Republic of Uzbekistan during the State Visit of President of Uzbekistan to India”, Ministry of External Affairs, October 1, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30452/List_of_Documents_signed_between_India_and_the_Republic_of_Uzbekistan_during_the_State_Visit_of_President_of_Uzbekistan_to_India.  

[30] “Transcript of Media Briefing by Foreign Secretary on upcoming visit of Prime Minister to Japan”, Ministry of External Affairs, October 26, 2018, https://www.mea.gov.in/outoging-visit-detail.htm?30534/Transcript+of+Media+Briefing+by+Foreign+Secretary+on+upcoming+visit+of+Prime+Minister+to+Japan

[31] “List of Announcements/Agreements signed between India and Japan during visit of Prime Minister to Japan”, Ministry of External Affairs, October 29, 2018, https://www.mea.gov.in/bilateral-documents.htm?dtl/30542/List_of_AnnouncementsAgreements_signed_between_India_and_Japan_during_visit_of_Prime_Minister_to_Japan.  

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

 

Highlights of this Issue

Current Account Deficit at 2.4% of GDP in Q1 of 2018-19

Current Account Deficit in the first quarter of 2018-19 was USD 15.8 billion (2.4% of Gross Domestic Product), similar to the deficit of USD 15 billion (2.5% of GDP) in the first quarter of 2017-18.

Supreme Court upholds the constitutional validity of the Aadhaar Act 

The Court upheld the passage of the Aadhaar Bill as a Money Bill.  The Court struck down a provision that allowed Aadhaar authentication to be used through contractual arrangement between parties.

Supreme Court de-criminalises homosexuality and adultery 

The court struck down provisions of the Indian Penal Code, 1860, which criminalised adultery and homosexuality.  These provisions were found to violate Article 14 (right to equality) and Article 21 (right to life).

Ordinance to supersede Medical Council of India promulgated 

The Ordinance supersedes the Medical Council of India.  It enables the central government to constitute a Board of Governors, which will exercise the powers of the Council.  A new Council has to be constituted within a year.

Ordinance to criminalise Triple Talaq promulgated 

The Ordinance makes declaration of instant and irrevocable talaq void and illegal and makes it a punishable offence. The wife may claim a subsistence allowance from the husband for herself and her dependent children.

Pradhan Mantri Jan Arogya Yojana launched 

The Scheme aims to provide a cover of Rs five lakh per family per year to about 10.7 crore families belonging to the poor and vulnerable population. This will subsume RSBY and the Senior Citizen Health Insurance Scheme.

Ministry of Power proposes rationalisation of retail tariff 

The proposed principles seek to do away with the current system of different tariff for different categories of consumers.  The pricing should instead be based on load used and energy consumed.

Cabinet approves National Digital Communications Policy, 2018

Key objectives of the policy include: (i) provide broadband connectivity at 50 Mbps to every citizen, (ii) create 4 million additional jobs in the digital communications sector, and (iii) attract investments of USD 100 billion.

Standing Committees submit reports on two subjects

The Standing Committee on Finance submitted a report on challenges in the banking sector.  The Standing Committee on External Affairs submitted a report on Sino-India relations.

Cabinet approves PM-AASHA scheme for procurement of crops from farmers 

Under the scheme, states have the option to adopt mechanisms for procurement of crops from farmers, including: (i) Price Support Scheme, (ii) Price Deficiency Payment Scheme, or (iii) Private Procurement & Stockist Scheme.

Draft India Cooling Action Plan released by the Ministry of Environment 

The Plan provides recommendations to address cooling requirements across sectors over a 20 year period (2017-18 to 2037-38).  By 2037-38, it aims to reduce cooling energy requirements by 25%-40%, among other things.

Two Committees to examine various issues related to companies and competition

They will: (i) review the existing framework and formulate a roadmap for a policy on Corporate Social Responsibility and (iii) review the Competition Act, 2002.

 

Macroeconomic Development

Ahita Paul (ahita@prsindia.org)

Current Account Deficit at 2.4% of GDP in the first quarter of 2018-19

India’s Current Account Deficit (CAD) in the first quarter (April–June) of 2018-19 increased to USD 15.8 billion (2.4% of Gross Domestic Product) from USD 15 billion (2.5% of GDP) in the first quarter of 2017-18.[1]  CAD in the previous quarter, i.e. fourth quarter (January – March) of 2017-18 was USD 13 billion (1.9% of GDP).  The increase in CAD was primarily due to a higher trade deficit (difference between a country’s exports and imports) of USD 45.7 billion in the first quarter of 2018-19 compared to USD 41.9 billion in the same period of the previous year.

The capital account surplus was USD 5.3 billion, decreasing from USD 26.9 billion in the first quarter of 2017-18.  The decrease is primarily due to outflow of USD 8.1 billion of foreign portfolio investment, as compared to an inflow of USD 12.5 billion in the previous year.  Foreign direct investment increased to USD 9.7 billion from USD 7.1 billion in the first quarter of 2017-18.

Further, there was a depletion of USD 11.3 billion in foreign exchange reserves, as compared to an accretion of USD 11.4 billion in the corresponding quarter of the previous year.  Table 1 shows India’s balance of payments in the first quarter of 2018-19.

Table 1: Balance of Payments, Q1 2018-19 (USD billion)

 

Q1

2017-18

Q4

2017-18

Q1

2018-19

Current Account

-15

-13

-15.8

Capital Account

26.9

25

5.3

Errors and Omissions

-0.6

1.3

-0.8

Change in reserves

11.4

13.2

-11.3

Sources: Reserve Bank of India; PRS

 

Law and Justice

Supreme Court reads down some parts of the Aadhaar Act

Ahita Paul (ahita@prsindia.org)

The Supreme Court upheld the constitutional validity of the provisions of the Aadhaar Act, 2016 by a 4:1 majority.[2]  It also upheld the passage of the Aadhaar Bill as a Money Bill in the Lok Sabha.  Further, Section 139AA of the Income Tax Act, 1961, which mandates quoting of Aadhaar number for obtaining a Permanent Account Number (PAN) and for filing income tax returns, was also upheld.

However, certain provisions of the Act were read down.  Section 7 permits the government to require that Aadhaar be used for authenticating the identity of an individual receiving government subsidies or benefits, or paying for government services.  The Court upheld this with the condition that alternate mechanisms be created in case the authentication fails for a genuine beneficiary.

Section 57 allows the use of Aadhaar for establishing identity for other purposes if authorized by any law or through contractual agreement.  The Court said Aadhaar can be used only if there is a law, which establishes the necessity and proportionality of its use.

The court also struck down some provisions.  These include: (i) Section 33(2), which permitted the disclosure of information, including identity and authentication information, in the interest of national security to an officer not below the rank of Joint Secretary to the government, (ii) Section 47, which stated that complaints regarding offences under the Act could be filed in courts only by UIDAI.

Section 33(1) of the Act was read down.  This allowed disclosure of information, including identity and authentication records, if ordered by a court not inferior to that of District Judge.  The Court stated that the individual whose information is being sought should be given the opportunity of being heard.

The Prevention of Money Laundering (Maintenance of Records) Rules, 2005 had mandated linking of bank accounts and other financial instruments, such as mutual funds and insurance policies, with Aadhaar.  The Court declared this unconstitutional, stating that it did not meet the test of proportionality and violated the right to privacy of the individual with regard to his banking details.  On similar considerations, the Court declared the provision of linking mobile phones with Aadhaar as unconstitutional.

Supreme Court de-criminalises homosexuality

Roshni Sinha (roshni@prsindia.org)

The Supreme Court decided a constitutional challenge to Section 377 of the Indian Penal Code, 1860.[3]  Section 377 punishes a person who has intercourse with a man, woman, or animal which is against the ‘order of nature’.  The offence is punishable with imprisonment for life or up to 10 years, and fine.  Under this provision, sexual intercourse between persons of the same gender was criminalised. 

The Court held the provision to be unconstitutional to the extent that it criminalises sexual acts between two consenting adults.  The provision will continue to govern sexual acts against minors, animals, and in respect of non-consenting adults

The Court found the provision to be arbitrary and violative of Article 14 of the Constitution (right to equality) since it distinguished between heterosexual and homosexual adults, solely on the basis of their sexual orientation.  The Court further stated that the provision violates the right to dignity, privacy and sexual autonomy guaranteed to homosexual persons under Article 21 of the Constitution (right to life).  The Court also found the provision to violate Article 19(1)(a) of the Constitution (freedom of speech and expression).

Supreme Court de-criminalises adultery

Roshni Sinha (roshni@prsindia.org)

The Supreme Court decided a constitutional challenge to Section 497 of the Indian Penal Code, 1860, which criminalises adultery.[4]  Section 497 punishes a man who has sexual intercourse with the wife of another man, without his consent.  The offence is punishable with imprisonment of up to five years or a fine, or both.  The petitioners in the case wanted the Court to make the offence gender-neutral. 

The Court held the provision to be unconstitutional and struck it down entirely.  The Court found the provisions to be arbitrary and violative of Article 14 (right to equality) since: (i) it did not apply equally to a married man who had intercourse with another woman; and (ii) it permitted adultery if the husband consented, which indicates that the provision treated the wife as property of the husband.  The Court further found the provision to violate the right to dignity, privacy and sexual autonomy of a woman guaranteed to her under Article 21of the Constitution (right to life).

The Court clarified that adultery may continue to be a ground for divorce. 

Triple Talaq Ordinance promulgated

Roshni Sinha (roshni@prsindia.org)

The Muslim Women (Protection of Rights on Marriage) Ordinance, 2018 was promulgated on September 19, 2018.[5]  Note that the Muslim Women (Protection of Rights on Marriage) Bill, 2017 was introduced and passed in Lok Sabha on December 28, 2017 and is currently pending in Rajya Sabha.[6]  Key features of the Ordinance include:

  • The Ordinance makes all declaration of talaq, including in written or electronic form, to be void (i.e. not enforceable in law) and illegal. It defines talaq as talaq-e-biddat or any other similar form of talaq pronounced by a Muslim man resulting in instant and irrevocable divorce.
  • Offence and penalty: The Ordinance makes declaration of talaq a cognizable offence, attracting up to three years imprisonment with a fine.  (A cognizable offence is one for which a police officer may arrest an accused person without warrant.)  The offence will be cognizable only if information relating to the offence is given by: (i) the married woman (against whom talaq has been declared), or (ii) any person related to her by blood or marriage. 
  • The Ordinance provides that the Magistrate may grant bail to the accused. The bail may be granted only after hearing the woman (against whom talaq has been pronounced), and if the Magistrate is satisfied that there are reasonable grounds for granting bail.
  • The offence may be compounded by the Magistrate upon the request of the woman (against whom talaq has been declared). Compounding refers to the procedure where the two sides agree to stop legal proceedings, and settle the dispute.  The terms and conditions of the compounding will be determined by the Magistrate. 
  • Subsistence allowance and custody: A Muslim woman against whom talaq is declared is entitled to seek subsistence allowance from her husband for herself and for her dependent children.  She is also entitled to seek custody of her minor children.  The amount of the allowance and manner of custody will be determined by the Magistrate.

For a PRS Ordinance summary, see here.

Supreme Court lays down live-streaming of court proceedings 

Roshni Sinha (roshni@prsindia.org)

The Supreme Court has allowed live-streaming of certain cases of constitutional or national importance.[7]  The Court formulated certain model guidelines for the live-stream.  These include:

  • Only a specified category of cases or cases of constitutional and national importance being argued for final hearing before the Constitution Bench may be live streamed as a pilot project. Sensitive cases like matrimonial disputes or sexual assault case shall not be streamed live.  Further, the Court may live-stream oath-taking ceremonies or judicial conferences.
  • The live-stream shall be available on the website of the Supreme Court. The Court shall also maintain archives of all the live-streamed proceedings.
  • There shall be a time gap of two minutes between the proceedings and the streaming. This will allow time for screening sensitive information or any other exchange which should not be streamed.  
  • Prior consent of all parties to the concerned proceedings must be taken before streaming the proceedings. If there is no unanimity between the parties, the Court can decide whether to broadcast the proceedings. 
  • The presiding judge will have the final authority to suspend or prohibit live-streaming of proceedings in a particular case, if he believes the publicity would prejudice the interest of justice.
  • The Supreme Court shall have exclusive copyright over all the material recorded and broadcast in the Court.

Supreme Court lays down guidelines for chargesheeted candidates contesting elections

Roshni Sinha (roshni@prsindia.org)

The Supreme Court set down certain guidelines to be followed by candidates who are contesting elections and have criminal cases pending against them in a court.[8]  These guidelines are:

  • Each contesting candidate shall fill up the form provided by the Election Commission of India. The form must contain all the particulars as required in it.  Further, the form should state the criminal cases pending against the candidate in bold letters.
  • If a candidate is contesting an election on the ticket of a particular party, he is required to inform the party about the criminal cases pending against him.
  • The concerned political party must display the information relating to the criminal antecedents of its candidates on its website.
  • The candidate as well as the concerned political party must issue a declaration in a widely circulated newspaper in the locality about candidate’s criminal antecedents. Such declaration must be made at least thrice after the candidate files his nomination papers.

The Court stated that Parliament should consider enacting a law to ensure that persons facing serious criminal charges do not contest elections. 

Supreme Court allows the entry of women in Sabrimala Temple

Roshni Sinha (roshni@prsindia.org)

A five-judge Constitution Bench of the Supreme Court heard a case challenging the constitutionality of a custom under which women between the ages of 10 to 50 years were denied entry to Lord Ayyappa Temple at Sabarimala, Kerala.[9]  The Court held the practice to be unconstitutional by a 4:1 majority. 

The practice was challenged on the grounds that it violates Articles 14 (right to equality), 15 (prohibition of discrimination based on sex), 17 (abolition of untouchability), 21 (protection of life and personal liberty), and 25 (freedom of religion) of the Constitution.

Supreme Court upholds judgement on reservation in promotions for Scheduled Castes and Scheduled Tribes

Vinayak Krishnan (vinayak@prsindia.org)

The Supreme Court upheld its earlier judgement on reservation in promotion to Scheduled Castes and Scheduled Tribes in public employment.[10]  In its earlier judgement, the Supreme Court held that the government could provide reservation in promotions to Scheduled Castes and Scheduled Tribes, but would have to show the existence of certain reasons.[11]  These reasons include: (i) backwardness, (ii) inadequacy of representation, and (iii) administrative efficiency.  It further stated that the government would have to collect data showing backwardness of Scheduled Castes and Scheduled Tribes. 

The court upheld this judgement, but stated that the government did not have to collect data showing backwardness of the Scheduled Castes and Scheduled Tribes. 

 

Health

Gayatri Mann (gayatri@prsindia.org)

Ordinance to supersede the Medical Council of India promulgated

The Indian Medical Council (Amendment) Ordinance, 2018 was promulgated on September 26, 2018.[12]  It amends the Indian Medical Council Act, 1956.  The Act sets up the Medical Council of India (MCI) which regulates medical education and practice. 

  • Supersession of the MCI: The 1956 Act provides for supersession of the MCI and its reconstitution within a period of three years. The Ordinance amends this provision to provide for the supersession of the MCI for a period of one year.  In the interim period, the central government will constitute a Board of Governors, which will exercise the powers of the MCI. 
  • The Act provides for the Board of Governors to consist of up to seven members, including persons of eminence in medical education, appointed by the central government. The central government will select one of these members as the Chairperson of the Board.  The Ordinance amends this provision to allow for eminent administrators to be selected in the Board. 
  • The Ordinance provides for the Board of Governors to be assisted by a Secretary General appointed by central government.

For a PRS summary of the Ordinance, see here.

Ministry launches Pradhan Mantri Jan Arogya Yojana

The Ministry of Health and Family Welfare launched Pradhan Mantri Jan Arogya Yojana.[13],[14]  The scheme aims to provide a cover of Rs five lakh per family per year to about 10.7 crore families (no cap on family size and age) belonging to poor and vulnerable population.  The scheme will subsume the on-going centrally sponsored schemes, Rashtriya Swasthya Bima Yojana and the Senior Citizen Health Insurance Scheme.  The scheme was approved by the Cabinet in March 2018.  Key features of the scheme are as follows:

  • Benefits: The scheme aims to provide insurance coverage for secondary and tertiary health care. This will include pre and post hospitalisation expenses.  A defined transport allowance per hospitalisation will also be paid to the beneficiary.  A beneficiary under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country.
  • Eligibility: The entitlement under the scheme will be decided on the basis of deprivation criteria in the Socio-Economic Caste Census database. The different categories in rural areas include: (i) families having only one room with kucha walls and kucha roof, (ii) families having no adult member between age 16 to 59 years, and (iii) female headed households with no adult male member between age 16 to 59 years, among others. For urban areas, 11 defined occupational categories are entitled for the benefits under the scheme.
  • Financing: The payments for treatment will be done on package rate (to be defined by the government in advance) basis. The package rates will include all the costs associated with treatment.  States/ UTs will have the flexibility to modify these rates within a limited bandwidth.  For coordination between the centre and states, it is proposed to set up Ayushman Bharat National Health Protection Mission Council chaired by the Union Health and Family Welfare Minister.  The expenditure incurred in premium payment will be shared between central and state governments in specified ratio as per Ministry of Finance guidelines.

 

Corporate Affairs

Roshni Sinha (roshni@prsindia.org)

Issue and transfer of shares by unlisted public companies to be in dematerialised form only  

The Ministry of Corporate Affairs notified the Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018.  The Amendment Rules provide that issue of further shares and transfer of all shares by unlisted public companies may only be in dematerialised form.[15]  The Amendment Rules will take effect from October 2, 2018.

The stated benefits for the dematerialisation are to: (i) eliminate risks associated with physical certificates such as loss, theft, fraud, and mutilation, (ii) improve corporate governance by increasing transparency and preventing mal-practices such as benami shareholding, and back dated issuance of shares, (iii) enable exemption from payment of stamp duty on transfer, and (iv) make transfer or pledge of securities easier.[16]

Unlisted public companies must facilitate the dematerialisation of their securities in coordination with the Depositories and Share Transfer Agents.  Any grievances arising out of the dematerialization of securities will be handled by the Investor Education and Protection Fund Authority.

High Level Committee constituted for corporate social responsibility 

A committee has been constituted to review the existing framework and to formulate a roadmap for a policy on Corporate Social Responsibility (CSR).[17]  Among other things, the Committee will analyse outcomes of CSR activities and suggest measures for effective monitoring and evaluation of CSR by companies. 

The Committee will be chaired by the Secretary, Ministry of Corporate Affairs and will include the following members: (i) Director General, Indian Institute of Corporate Affairs, (ii) Chairman, SEBI, or his representative, (iii) Mr. P.S. Narsimha, Additional Solicitor General, and (iv) Mr. N. Chandrasekharan, Chairman, Tata Sons.  The Committee is required to submit its recommendations to the government within three months of its first meeting.

Committee constituted to review the Competition Act

A committee has been constituted to review the Competition Act, 2002.[18]  The Terms of Reference of the Committee include: (i) examining best practices internationally in relation to anti-trust laws, merger guidelines, and handling of cross-border competition issues, and (ii) studying other regulatory regimes, institutional mechanism, and government policies that overlap with the Act.

The Committee will be chaired by the Secretary, Ministry of Corporate Affairs and will include the following members: (i) Chairperson, Competition Commission of India, (ii) Chairperson, Insolvency and Bankruptcy Board of India, (iii) Shri Aditya Bhattacharjea. Professor of Economics, Delhi School of Economics, and (iv) Joint Secretary (Competition), Ministry of Corporate Affairs.  The Committee is required to submit its recommendations to the government within three months of its first meeting.

 

Finance

Ahita Paul (ahita@prsindia.org)

Cabinet approves continuation of Pradhan Mantri Jan Dhan Yojana

The Union Cabinet approved the continuation of the Pradhan Mantri Jan Dhan Yojana (PMJDY) beyond the previously specified timeline of August 2018.[19]  The coverage of the scheme has been expanded from “every household” to “every adult”.  The existing overdraft limit of Rs 5,000 for Jan Dhan accounts has been increased to Rs 10,000.  Additionally, the age bracket for account holders availing overdraft facility has been increased from 18-60 years to 18-65 years.

Further, accidental insurance cover for holders of RuPay cards has also been increased from one lakh rupees to two lakh rupees.

Standing Committee submits report on issues in the Indian banking sector

The Standing Committee on Finance (Chair: Dr. M. Veerappa Moily) submitted its report on the Banking Sector in India – Issues, Challenges and the Way Forward on August 31, 2018.  Credit and deposit growth in banks have recently been slow.  High volumes of non-performing assets (NPAs) in banks have eroded their capital base, and restricted their ability to lend.  Key observations and recommendations of the Committee include:

  • Lowering of Capital to Risk-weighted Assets Ratio (CRAR) requirement: The Committee noted that the Reserve Bank of India (RBI) requirement of a minimum CRAR of 9%, to prevent banks from becoming highly leveraged, is 1% higher than the Basel III norms for internationally active banks.  This is applicable to all PSBs, even though nine of them do not operate internationally.  The Committee observed that such a high CRAR requirement is impractical for these banks, and a relaxation would (i) release capital of approximately Rs 5.34 lakh crore, (ii) grow loans and generate an additional Rs 50,000 crore of income annually, and (iii) avoid the need for capital infusion in these banks.
  • Performance of the National Company Law Tribunals (NCLT): The Committee noted that resolution of larger NPAs under the Insolvency and Bankruptcy Code (IBC) have been taking much longer than the stipulated time period of 270 days.  It recommended that NCLTs’ resources be increased to enable them to dispose of such cases swiftly. 
  • Further, the Committee observed that several lenders have had to take large ‘haircuts’ (difference between loan amount and the value of the collateral) for some of their loans. It recommended that a reasonable base price should be fixed for bidding so that large ‘haircuts’ can be avoided by creditors in the course of the IBC process in NCLT.
  • Powers of the RBI in case of PSBs: The Committee noted that the RBI had stated that some powers available to the RBI under the Banking Regulation Act, 1949 are not available in the case of PSBs. These include: (i) removing and appointing Chairman and Managing Directors of banks, (ii) superseding the Board of Directors, and (iii) granting licences.  The Committee also noted that the RBI can, however, (i) inspect the bank, (ii) consult with the government on appointing senior bank officials, and (iii) have a nominee on a PSB’s management committee.  In this regard, the Committee recommended that the government should constitute a high powered committee to evaluate the powers of the RBI with respect to PSBs as provided under various statutes.

For a PRS Report Summary, see here.

SEBI working group submits report on KYC requirements and eligibility for Foreign Portfolio Investments

The working group constituted on Know Your Client (KYC) requirements for foreign portfolio investors (Chair: Mr. Harun R. Khan) submitted its report.[20]  The recommendations of the working group were accepted by the board members of Securities and Exchange Board of India (SEBI).[21],[22],[23]  Key recommendations of the working group include:

  • Eligibility criteria for beneficial owners of foreign portfolio investments (FPIs): A circular released by SEBI on April 10, 2018 had clarified that non-resident Indians (NRIs), resident Indians (RIs) and overseas citizens of India (OCIs) cannot be beneficial owners of investing FPIs. Beneficial owners are natural persons who ultimately own or control FPIs. 

The working group recommended that: (i) NRIs, RIs and OCIs should be allowed to be constituents of FPIs if each individual holding is below 25% and their aggregate holding is below 50% of total assets under management of the FPI, and (ii) FPIs could be controlled by NRIs, RIs or OCIs as investment managers provided they are appropriately regulated in their home jurisdiction or set up under Indian laws, and registered with SEBI.  Existing FPIs and new applicants will be given two years to satisfy the new eligibility criteria.

Further, the working group recommended that the criteria for beneficial ownership, as given in the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, should be applicable only for the purpose of KYC, and not for determining eligibility.

  • KYC requirements for FPIs: FPIs are classified into three categories (Category I, II and III) in order of increasing risk.  The group recommended that for identifying beneficial owners of FPIs from ‘high risk jurisdictions’, a lower materiality threshold of 10% should only be applicable to Category II and III FPIs.  Note that the materiality threshold for other FPIs is 25% in case of a company and 15% in case of partnership firms.[24]

Further, the group recommended that KYC review be done yearly for Category II and III FPIs from high risk jurisdictions, and only at the time of continuance of FPI registration for other FPIs.

 

Petroleum and Natural Gas

Suyash Tiwari (suyash@prsindia.org)

CCEA approves an increase in ethanol prices for the supply year 2018-19

The Cabinet Committee on Economic Affairs (CCEA) approved an increase in the prices of ethanol derived out of B heavy molasses and 100% sugarcane juice.[25],[26]  Ethanol is primarily produced from sources such as: (i) sugarcane with 100% sugarcane juice, which has not been used for sugar production, (ii) B heavy molasses, which has been used for sugar production, but still contains some sugar content, (iii) C heavy molasses, which is the end product left after sugar processing, and (iv) damaged foodgrains, among other sources.

Earlier, ethanol was priced at a flat rate irrespective of the mode of manufacture.  In June 2018, the central government had fixed different rates for ethanol manufactured from different sources.  Prices of ethanol derived from sources with more sugar content were fixed at a higher rate to divert sugarcane from sugar processing and thus, prevent excess sugar production.  This would also result in higher availability of ethanol for blending with petrol.  Blending ethanol with petrol helps in reducing vehicle exhaust emissions as well as the petroleum imports.

Due to a subsequent revision in the Fair and Remunerative Price of sugarcane, the ethanol prices have been revised for the ethanol supply year from December 1, 2018 to November 30, 2019.  The revised prices of ethanol are:

  • The price of ethanol derived out of B heavy molasses has been increased from Rs 47.13 per litre to Rs 52.43 per litre.
  • The price of ethanol derived out of 100% sugarcane juice has been increased from Rs 47.13 per litre to Rs 59.13 per litre. This revised price is only for those mills which will divert 100% sugarcane juice for production of ethanol, thereby not producing any sugar.

The price of ethanol derived out of C heavy molasses has been fixed at Rs 43.46 per litre.

Oil marketing companies have been advised to prioritise usage of ethanol derived out of: (i) 100% sugarcane juice, (ii) B heavy molasses, (iii) C heavy molasses, and (iv) damaged food grains and other sources, in that order.

Moreover, the mills which divert sugarcanes with 100% juice and B heavy molasses for ethanol production have been permitted to sell additional sugar (over the limits imposed by the Department of Food and Public Distribution).  Such mills can sell one additional tonne of sugar on producing 600 litres of ethanol.

Cabinet approves policy framework to improve recovery factor of existing hydrocarbon reserves

The Union Cabinet approved a policy framework to promote and incentivise Enhanced Recovery (ER), Improved Recovery (IR), and Unconventional Hydrocarbon (UHC) production methods.[27]  The ER methods include enhanced oil recovery as well as enhanced gas recovery methods.  IR methods comprise of new drilling technologies, and advanced techniques for management and control of reserves, in combination with the ER methods.  UHC production methods include methods for production of shale oil and gas, gas hydrates and heavy oil, among others.  The policy aims to increase the recovery rate of oil and gas from existing hydrocarbon reserves for augmenting their domestic production.

The policy involves: (i) systemic assessment of every field for its ER potential, (ii) appraisal of appropriate ER techniques, and (iii) fiscal incentives to make the required additional investment financially viable.  Prior to commercial implementation of the ER project, mandatory screening of the fields will be done by designated institutions, and a pilot project will be conducted.  Such institutions will be notified by the central government.

The policy will be monitored and implemented by a committee comprising of representatives of the Ministry of Petroleum and Natural Gas, the Directorate General of Hydrocarbons, experts in the upstream sector, and academia.

It will be applicable to all the blocks allocated to oil companies on a contractual basis, as well as to the blocks granted on nomination basis to the national oil companies, namely Oil and Natural Gas Corporation Limited and Oil India Limited.  The policy will be effective for a period of 10 years from the date of notification.

However, the fiscal incentives will be provided for a period of 10 years, from the date of commencement of production using the ER and UHC methods.  In case of IR projects, the fiscal incentives will be available from the date of achievement of the prescribed benchmark.  These incentives will be given in the form of a partial waiver of cess or royalty, and will be applicable to the incremental production realised through this policy.

 

Energy

Prachee Mishra (prachee@prsindia.org)

Draft amendments to Electricity Act, 2003 released

The Ministry of Power released draft amendments to the Electricity Act, 2003.[28]  The proposed amendments seek to segregate the electricity distribution business into two segments: supply and distribution.  Key features of the proposed amendments include:

  • Segregation of distribution and supply: Under the Act, a distribution licensee supplies electricity and maintains the distribution network in an area of supply. The proposed amendments provide for separate licences for maintaining the distribution system (distribution licence) and for the supply of electricity (supply licence).  Further, multiple distribution and supply licences could be awarded for an area of distribution and supply. 
  • Renewable energy: The Act does not define renewable sources of energy. The proposed amendments define renewable energy sources to include hydro, wind, solar, bio-mass, bio-fuel, waste including municipal and solid waste, co-generation from these sources, and other sources as notified by the central government.  The amendments also provide for a National Renewable Energy Policy. 
  • The amendments define Renewable Purchase Obligation as the minimum percentage of electricity from renewable sources that must be procured by obligated entities (such as supply licensees). Renewable Generation Obligation is defined as the renewable energy capacity that must be installed or procured by a coal or lignite based generation station. 
  • Power subsidy: If a state government or any other agency seeks to provide a subsidy to any consumer, it will do so through direct benefit transfer. 
  • Smart grid and metering: The amendments define a smart grid as an electricity network that uses information and communication technology to gather information and act intelligently in an automated manner.  It should help improve the efficiency, reliability, economics, and sustainability of generation, transmission and distribution of electricity.  The amendments also provide that smart meters should be installed at each stage for proper measurement of consumption. 

Comments on the draft are invited within 45 days from the date of its publication (i.e., 22nd October, 2018). 

Note that the Electricity (Amendment) Bill, 2014 which amends the Act is currently pending in Lok Sabha; several provisions of the draft Bill are including in the 2014 Bill.  For a PRS analysis of the 2014 Bill, see here

Ministry of Power proposes rationalisation of retail tariff

The Ministry of Power has proposed amendments to the Tariff Policy, 2016 (for electricity) to simplify the current tariff categories and rationalise retail tariff.[29]  The proposed principles include:

  • Tariff structure: The tariff structure should do away with the concept of different tariff for different categories of consumers.  The price should instead be based on load used and energy consumed.  The state electricity regulatory commissions may create a separate category of tariff for electric vehicle charging stations. 
  • A systematic method can be adopted to revise the consumer load automatically if the average load of the previous year exceeds the sanctioned load. A penalty should be imposed for exceeding the sanctioned load. 
  • Load and consumption categories: A maximum of five load categories may be created such as: (i) 0-2 kW, (ii) 2-5 kW, (iii) 5-10 kW, (iv) 10-25 kW, and (v) >25 kW. For each load bracket, the tariff should be progressive based on consumption.  The consumption slabs should be considered as: (i) 0-200 units, (ii) 201-400 units, (iii) 401-800 units, (iv) 801-1200 units, and (v) >1200 units.
  • Subsidies: Consumers with sanctioned load and unit consumption in lower brackets will be subsidised by consumers in higher load and consumption brackets. 

Changes in domestic duties, taxes can be passed through under ‘change of law’

Currently, under the Tariff Policy, 2016 (for electricity), pass-through of increased costs may be allowed if the duties/taxes are changed after the award of bids, or unless provided otherwise in the Power Purchase Agreement (PPA).[30]  Further, such pass through of increased costs must be approved by the respective central or state regulatory commission. 

The Ministry of Power noted that power generation companies have been unable to get pass-through of changes in cost.  This is mostly due to delays in getting the pass-through costs approved.  Such delays have affected the cash flows of these companies, and are causing stress in the power sector.   

In light of this, the Ministry has issued directions to the Central Electricity Regulatory Commission (CERC) which include:

  • Any changes in domestic duties, levies, cess, and taxes, imposed by the central or state government, which leads to an increase in the cost of power, be passed through to the consumer (unless provided otherwise in the PPA).
  • CERC will only determine the per unit impact of such change in duties/ taxes, which will be passed on.
  • CERC will circulate a draft order for determination of per unit impact to all the states/ beneficiaries on the 14th day of the filing of petition.
  • The impact of such change in law on the tariff will be effective from the date of the change in law.

 

Transport

Prachee Mishra (prachee@prsindia.org)

DGCA releases the National Aviation Safety Plan 2018-22

The Directorate General of Civil Aviation (DGCA) released the National Aviation Safety Plan 2018-22.[31]  The Plan aims to promote continuous improvement of aviation safety in the country.  Key features of the Plan include:

  • State Safety Priorities: These priorities include: (i) airborne conflict, (ii) runway excursions and overruns, (iii) wildlife and bird strikes, (iv) loss of control in flight, and (v) deficient maintenance.  Each State Safety Priority will have safety objectives, proposed desired safety outcomes, safety action plan and a number of Safety Performance Indicators. 
  • Safety objectives: Objectives include reducing: (i) the risk of airborne conflict, (ii) the number of runway excursions, (iii) the number of wildlife (on ground) and bird strikes, (iv) the number of ground collisions between aircrafts, and between aircrafts and vehicles.  Indicators for each objective include the number of incidents, warnings issued, errors, etc.
  • Targets: The desired safety outcome is to reduce number of reported events for each indicator by 3% every year.  The targets are fixed for first two years (2018 and 2019).  In the subsequent years (2020, 2021 & 2022), targets will be fixed based on the performance of the previous year. 
  • State safety risk controls: In addition to safety priorities, key state safety risk controls also must be measured and improved.  The focus of safety priorities for 2018-22 will include: (i) effective state safety oversight, (ii) implementation of service providers’ Safety Management System, (iii) addressing safety concerns raised by International Civil Aviation Organisation and implementing their provisions, and (iv) safe operations of Remotely Piloted Aircraft Systems (commonly known as drones). 

Cabinet approves electrification of remaining un-electrified train lines

The Cabinet Committee on Economic Affairs approved the proposal for electrification of balance un-electrified broad gauge routes of Indian Railways.[32]  These routes comprise 108 sections covering 13,675 route kilometres.  The electrification will cost Rs 12,134.50 crore, and is likely to be completed by 2021-22.  Currently, around two-thirds of freight and more than half of passenger traffic in Indian Railways moves on electrified routes. 

 

Environment

Roopal Suhag (roopal@prsindia.org)

Draft India Cooling Action Plan released

The Ministry of Environment, Forest, and Climate Change released the Draft India Cooling Action Plan (ICAP).[33]  The ICAP provides recommendations to address cooling requirements across sectors, and ways to provide access to sustainable cooling for all over a 20 year period (2017-18 to 2037-38).  The main goals as outlined in the ICAP include:

  • Supporting development of technological solutions in cooling and related areas;
  • Reducing cooling demand across sectors by 20%-25% by 2037-38;
  • Reducing refrigerant demand by 25%-30% by 2037-38;
  • Reducing cooling energy requirements by 25%-40% by 2037-38; and
  • Training and certifying 1,00,000 servicing sector technicians by 2022-23.

To achieve these objectives, the ICAP has prioritised areas to make interventions, which include:

  • Building energy efficiency: This will be achieved through: (i) reducing the cooling load of the building sector through fast-tracked implementation of building energy codes, (ii) adopting adaptive thermal comfort standards, (iii) increasing energy efficiency of room air-conditioners and fans, and (iv) enhancing consumer awareness through eco-labelling of cooling products.
  • Cold Chain and Refrigeration: Steps recommended in this area include: (i) developing programs for retrofitting of existing cold storages to reduce cooling, refrigerant demand and energy consumption and (ii) standardising all design, construction and associated specifications for small, medium and large cold-chain infrastructure components.
  • Research and Development (R&D): Promoting development and commercialisation of low energy-cooling technologies will reduce energy footprint of active cooling.  In addition, a comprehensive R&D innovation ecosystem should be developed through the involvement of institutes of excellence and the private sector.

Cabinet approves continuation of Integrated Development of Wildlife Habitats scheme till 2019-20

The Cabinet Committee on Economic Affairs approved the continuation of the Integrated Development of Wildlife Habitats scheme with an outlay of Rs 1,732 crore till 2019-20.[34]  The scheme aims to foster wildlife conservation in the country.  It has three components: (i) Project Tiger with an outlay of Rs 1,143 crore, (ii) Development of Wildlife Habitats with an outlay of Rs 497 crore, and (iii) Project Elephant with an outlay of Rs 92 crore.

 

Communications

Vinayak Krishnan (vinayak@prsindia.org)

Cabinet approves National Digital Communications Policy, 2018

The Union Cabinet approved the National Digital Communications Policy, 2018.[35],[36]  The policy noted that India’s digital profile is one of the fastest growing in the world and it is estimated that by 2025, India’s digital economy has the potential to reach one trillion USD.  The objective of the policy is to lay out a framework that will enable creation of a vibrant telecom market to strengthen India’s long-term competitiveness.  Key features of the approved policy include:

  • Objectives: Some of the objectives include: (i) provide broadband connectivity at 50 Mbps to every citizen, (ii) create 4 million additional jobs in the digital communications sector, and (iii) attract investments of USD 100 billion in the digital communications sector.
  • National Broadband Missions: A National Broadband Mission will be established to secure universal broadband access.  This will include implementation of: (i) broadband initiatives such as BharatNet and GramNet, and (ii) a Fibre First Initiative to provide fibre connectivity in Tier I, II, and III towns, and rural clusters.
  • Spectrum: New spectrum bands will be identified and made available for deployment and growth of 5G networks.  The policy proposes optimal pricing of spectrum and simplifying the process of obtaining permissions from various agencies.  Further, it proposes to constitute a Spectrum Advisory Team to facilitate the identification of new bands, applications, and measures to promote innovation.
  • Investments: In order to increase investments, the policy proposes to recognise telecom infrastructure as critical and essential infrastructure, similar to roadways and railways.  Further, it proposes to reform the licensing and regulatory regime by: (i) reviewing levies and fees, (ii) rationalising taxes on digital communication equipment, and (iii) reducing license and regulatory requirements. 
  • Data protection: The objectives of the policy include establishing a comprehensive data protection regime for digital communications that safeguards the privacy of individuals.  

TRAI invites comments on draft regulations on Mobile Number Portability

The Telecom Regulatory Authority of India (TRAI) invited feedback on draft regulations on Mobile Number Portability (MNP).[37]  The deadline for submitting comments is October 24, 2018.  MNP is a facility that allows subscribers to maintain their mobile number when they move from one service provider to another service provider. 

MNP is carried out by providing subscribers with a Unique Portability Code (UPC).  In the current framework, the UPC is provided by the service provider whom the subscriber’s number belongs to at the time of requesting porting.  Further, a Mobile Number Portability Service Provider (MNPSP) is supposed to facilitate the process of porting.   

The draft regulations propose that the UPC will be generated and provided to subscribers by the MNPSP, rather than the service provider.  The MNPSP is to provide the UPC after checking from the database of the service provider.  According to TRAI, this will facilitate porting in a more efficient manner.37

TRAI notifies amendments to the Telecommunication Tariff Order, 1999

The Telecom Regulatory Authority of India (TRAI) notified amendments to the Telecommunication Tariff Order, 1999.[38]  The Order relates to fixing of tariffs for various telecommunication services.[39]

The amendment removes certain types of services like radio paging services, telex, and telegraph services from the ambit of the Order.  Further, the Order limits the amount of deposit that can be charged from subscribers at not more than one year of rental charge.  According to the amendments, this limit will not apply to International Subscriber Dialing and International Roaming Services.      

 

Agriculture

Suyash Tiwari (suyash@prsindia.org)

Cabinet approves PM-AASHA scheme for procurement of crops from farmers

The Union Cabinet approved the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) scheme for procurement of crops from farmers.[40]  Under the scheme, states have the option to adopt these procurement mechanisms: (i) Price Support Scheme (PSS), (ii) Price Deficiency Payment Scheme (PDPS), and (iii) Private Procurement & Stockist Scheme (PPSS).

In PSS, physical procurement of pulses, oilseeds, and copra will be done by central nodal agencies, including Food Corporation of India, in coordination with state governments.  The procurement of crops already covered under PSS, i.e. paddy, wheat, coarse grains, cotton, and jute, will continue as per the existing mechanism.  The other two procurement mechanisms have been approved for oilseeds.

PDPS will not involve any physical procurement of crops.  In PDPS, direct payment of the difference between the Minimum Support Prices (MSPs) and the selling/modal prices of the crops will be made to pre-registered farmers in their bank accounts.  Farmers who sell their crops in the notified market yards through a transparent auction process are eligible for the scheme.

States can choose to implement PPSS instead of PSS and PDPS on a pilot basis in selected districts.  In PPSS, selected private agencies will procure crops at MSPs in the notified markets during a specified period.  However, they can procure only when the market prices fall below the MSPs and when they are authorized by the state governments to do so.  Maximum service charges up to 15% of the MSPs will be payable to the private agencies.

Rs 15,053 crore has been approved for implementation of the scheme.  Moreover, an additional guarantee of Rs 16,550 crore has been approved for the procurement agencies.

First advance estimates of production of crops released for Kharif season 2018-19

The Ministry of Agriculture and Farmers Welfare released the first advance estimates of production of foodgrains and commercial crops for the Kharif season 2018-19.[41]

  • Foodgrain production in Kharif 2018-19 is estimated to grow by 0.6% as compared to Kharif 2017-18. The increase is primarily contributed by 1.8% growth in the production of rice.  The production of coarse cereals and pulses is estimated to decrease by 2.2% and 1.3%, respectively.
  • The production of oilseeds is estimated to increase by 5.7% as compared to Kharif 2017-18. While groundnut production is estimated to decrease by 16.1%, the growth in oilseeds stems from a 22.6% increase in the production of soyabean.
  • Production of cotton is estimated to fall by 6.9%, while production of sugarcane is estimated to increase by 1.9% to 384 million tonnes in Kharif 2018-19.

Table 1: First advance estimates of production of crops for the Kharif season 2018-19 (in million tonnes)

Crop

4th advance estimates for Kharif 2017-18

1st advance estimates for Kharif 2018-19

% change over final estimate

Foodgrains

140.7

141.6

0.6%

Cereals

131.4

132.4

0.8%

Rice

97.5

99.2

1.8%

Coarse Cereals

33.9

33.1

-2.2%

Pulses

9.3

9.2

-1.3%

Tur

4.3

4.1

-4.0%

Urad

2.8

2.7

-6.7%

Moong

1.4

1.6

9.7%

Oilseeds

21.0

22.2

5.7%

Soyabean

11.0

13.5

22.6%

Groundnut

7.5

6.3

-16.1%

Cotton*

34.9

32.5

-6.9%

Sugarcane

376.9

383.9

1.9%

*Million bales of 170 kg each.

Sources: Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare; PRS.

 

Food and Public Distribution

Suyash Tiwari (suyash@prsindia.org)

CCEA approves policy to increase sugar exports and clear cane dues of farmers

The Cabinet Committee on Economic Affairs approved a policy to increase sugar exports and clear the cane dues of farmers.[42]  The following measures have been approved under this policy:

  • Facilitation of exports: To increase sugar exports, Rs 1,375 crore has been approved to cover the expenditure incurred by sugar mills on internal transport, freight, and handling, among others.  These export incentives to mills will be capped at the following rates, based on their distance from ports: (i) Rs 1,000/metric tonne (MT) for mills located within 100 kilometres, (ii) Rs 2,500/MT for mills located beyond 100 kilometres in the coastal states, and (iii) Rs 3,000/MT for mills located beyond 100 kilometres in other states.
  • Clearance of dues: A financial assistance of Rs 13.88 per quintal of cane crushed will be provided to help sugar mills clear cane dues of farmers.  Rs 4,163 crore has been approved for this purpose.

Financial assistance under both these measures will be given directly to farmers, and will be settled against the cane dues payable by mills, including arrears.  Subsequent balance, if any, will be provided to the mills.  Also, only those mills that fulfill the conditions as stipulated by the Department of Food and Public Distribution will be eligible for the incentives.

With these measures, the policy aims to improve the liquidity of sugar mills, in light of the excess stock of sugar available with them and an indication of excess production in the upcoming sugar season 2018-19.

 

Water resources

Roopal Suhag (roopal@prsindia.org)

Cabinet approves Rs 3,466 crore for continuation of Dam Rehabilitation and Improvement Project till June 2020

The Cabinet Committee on Economic Affairs approved the revised cost estimate of Rs 3,466 crore for continuation of the Dam Rehabilitation and Improvement Project.[43]  The project has also been granted an extension from July 2018 to June 2020.  Out of Rs 3,466 crore, Rs 2,628 crore will be funded by the World Bank, Rs 747 crore by state governments, and Rs 91 crore by the Central Water Commission.

The project will improve the safety and operational performance of 198 dams in seven states.  Through this, the project aims to mitigate risks to ensure safety of downstream population and property.  The project will also focus on institutional strengthening, including capacity building of officials to increase the effectiveness of Dam Safety Organisations. 

 

Home Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Central government increases contribution to the State Disaster Response Fund

The Government of India decided to enhance its contribution to the State Disaster Response Fund from 75% to 90%, with effect from April 1, 2018.[44]  Under the Disaster Management Act, 2005, the National Disaster Response Fund and State Disaster Response Funds were set up to meet rescue and relief expenditure during any notified disaster.  The central government had till now been contributing 75% for General Category States and 90% for Special Category States of hilly regions.  

 

Labour and Employment

Roshni Sinha (roshni@prsindia.org)

New scheme launched to give cash benefit to unemployed persons insured under the Employees’ State Insurance Act

The Employees’ State Insurance Corporation (ESIC) has approved a scheme called the ‘Atal Bimit Vyakti Kalyan Yojna’.[45]  This scheme will cover persons insured under the Employees’ State Insurance Act, 1948.  The Act applies to establishments having more than 10 workers with monthly wage ceiling of Rs 21,000.

Under the scheme, cash will be paid directly to the bank account of unemployed insured persons, while they search for new employment.  The cash benefit given to an unemployed person will be equivalent to 25% of his average earnings over 90 days.[46]  The government will notify detailed regulations in this regard. 

Further, the ESIC has approved a proposal for reimbursement of Rs 10 per person to employers if they seed the Aadhaar number of their workers and their family members in the ESIC database.  As per the Ministry, this will curtail multiple registrations of the same Insured Persons and enable them to avail the benefits requiring longer contributory conditions.

 

External Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Standing Committee submits report on Sino-India relations

The Standing Committee on External Affairs (Chairperson: Dr Shashi Tharoor) submitted its report on “Sino-India Relations including Doklam, border situation, and cooperation in international organizations” on September 4, 2018.The Committee noted that the government should carry out an in-depth assessment of the relationship between India and China so that national consensus is evolved on how to deal with China.  Key observations and recommendations of the committee include:

  • One Belt One Road Initiative: The One Belt One Road (OBOR) initiative is a Chinese infrastructure project, which includes the China Pakistan Economic Corridor (CPEC).  The Committee noted that CPEC is not acceptable to India as it passes through Pakistan Occupied Kashmir, thereby violating India’s territorial integrity.  The Committee appreciated India’s stand of firmly rejecting the OBOR initiative proposed by China.  It recommended that India should accelerate its own connectivity projects under various initiatives to counter the OBOR Initiative.  Further, the Committee recommended that India could use the Asian Infrastructure Investment Bank and the BRICS Development Bank to fund infrastructure projects and improve connectivity in its neighbourhood.
  • Doklam incident:  The Committee stated that the Chinese intrusion at Doklam (in Bhutan) was a violation of two agreements between China and Bhutan.  These agreements stipulated that there would be no change in the status quo while boundary negotiations were still in progress.  Further, it was also in violation of the 2012 Common Understanding to determine boundary points between India, China and a third country, in consultation with the third country.  The Committee commended the overall handling of the crisis, as it sent signals that India would not accept forceful attempts to change the status quo at any of its boundaries.  However, it expressed concern that Chinese infrastructure close to the tri-junction had not yet been dismantled.
  • Border infrastructure: The Committee observed that infrastructure on the Indo-China border was inadequate and many roads could not withstand military traffic.  Further, there were delays in infrastructure projects due to difficult terrain, delays in environmental clearance, and inadequate infrastructure with the Border Roads Organization (BRO).  The Committee recommended that the government should make concerted efforts to improve border road infrastructure along the Indo-China border.  Further, border roads should be built under the Pradhan Mantri Gram Sadak Yojana scheme, to serve as a back-up for the military in times of emergency.

For a PRS Report Summary, see here.

 

[1] “Developments in India’s Balance of Payments during the first quarter of 2018-19”, Reserve Bank of India, Press Release, September 7, 2018, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR576897D0BAF61DD4A788CFE79EDD3D3CB37.PDF

[2]Justice K. S. Puttaswamy (Retd.) and Anr. vs Union of India and Ors., W. P. (C.) No. 494 of 2012, September 26, 2018, https://www.sci.gov.in/supremecourt/2012/35071/35071_2012_Judgement_26-Sep-2018.pdf

[3]Navtej Singh Johar & Ors. vs. Union of India, Writ Petition (Criminal) No. 76 of 2016, https://www.supremecourtofindia.nic.in/supremecourt/2016/14961/14961_2016_Judgement_06-Sep-2018.pdf.

[4]Joseph Shine vs. Union of India, Writ Petition (Criminal) No. 194 of 2017, https://www.supremecourtofindia.nic.in/supremecourt/2017/32550/32550_2017_Judgement_27-Sep-2018.pdf.

[5]The Muslim Women (Protection of Rights on Marriage) Ordinance, 2018,http://www.prsindia.org/uploads/media/Ordinances/Muslim%20women%20(Triple%20Talaq)%20Ordinance,%202018.pdf.

[6]The Muslim Women (Protection of Rights on Marriage) Bill, 2017, http://www.prsindia.org/uploads/media/Muslim%20Women%20(Protection%20of%20Rights%20on%20Marriage)/Muslim%20Women%20(Protection%20of%20Rights%20on%20Marriage)%20Bill,%202017.pdf.

[7] Swapnil Tripathi vs. Supreme Court of India, Writ Petition (Civil) No. 1232 of 2017, https://www.supremecourtofindia.nic.in/supremecourt/2017/40426/40426_2017_Judgement_26-Sep-2018.pdf.

[8] Public Interest Foundation & Ors. vs. Union of India & Anr., Writ Petition (Civil) No. 536 of 2011, https://www.supremecourtofindia.nic.in/supremecourt/2011/36674/36674_2011_Judgement_25-Sep-2018.pdf.

[9]Indian Young Lawyers Association & Ors. vs. The State of Kerala & Ors., Writ Petition (Civil) No. 373 of 2006, https://www.supremecourtofindia.nic.in/supremecourt/2006/18956/18956_2006_Judgement_28-Sep-2018.pdf.

[10]Jarnail Singh & Others vs Lachhmi Narain Gupta & Others, Special Leave Petition (Civil) No. 30621 of 2011, Supreme Court of India, September 26, 2018, https://www.sci.gov.in/supremecourt/2011/34614/34614_2011_Judgement_26-Sep-2018.pdf.

[11]M Nagaraj & Others vs Union of India & Others, Writ Petition (Civil) 61 of 2002, Supreme Court of India, October 19, 2006, https://indiankanoon.org/doc/102852/.

[12] The Indian Medical Council (Amendment) Bill, 2018, Ministry of Health and Family Welfare, September 26, 2018, https://mohfw.gov.in/sites/default/files/Indian%20Medical%20Council%20%28Amendment%29%20Ordinance%202018.pdf.

[13] “PM launches Ayushman Bharat - PMJAY at Ranchi”, Press Information Bureau, Ministry of Health and Family Welfare, September 23, 2018.

[14]“Cabinet approves Ayushman Bharat – National Health Protection Mission”, Press Information Bureau Cabinet, March 21, 2018.

[15] Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2014,http://www.egazette.nic.in/WriteReadData/2018/189439.pdf. .

[16]‘MCA notifies issue & transfer of all shares in dematerialised form only by all unlisted public companies’, Press Information Bureau, Ministry of Corporate Affairs, September 11, 2018.

[17]‘High Level Committee constituted on Corporate Social Responsibility’, Press Information Bureau, Ministry of Corporate Affairs, September 28, 2018.

[18]‘Government constitutes Competition Law Review Committee to review the Competition Act’, Press Information Bureau, Ministry of Corporate Affairs, September 30, 2018.

[19]“Boost to pro-people and pro-poor initiatives”, Press Information Bureau, Cabinet, September 5, 2017

[20] Interim Report of working group on KYC Requirements for FPIs, Securities and Exchange Board of India, September 8, 2018, https://www.sebi.gov.in/reports/reports/sep-2018/interim-report-of-working-group-on-kyc-requirements-for-fpis_40279.html

[21] SEBI Board Meeting, Securities and Exchange Board of India, September 18, 2018, https://www.sebi.gov.in/media/press-releases/sep-2018/sebi-board-meeting_40347.html

[22] Know Your Client Requirements for Foreign Portfolio Investors (FPIs), Circular No.:  CIR/IMD/FPIC/CIR/P/2018/131, Securities and Exchange Board of India, September 21, 2018, https://www.sebi.gov.in/legal/circulars/sep-2018/know-your-client-requirements-for-foreign-portfolio-investors-fpis-_40408.html

[23] Eligibility conditions for Foreign Portfolio Investors (FPIs), Circular No.:  CIR/IMD/FPIC/CIR/P/2018/132, Securities and Exchange Board of India, September 21, 2018, https://www.sebi.gov.in/legal/circulars/sep-2018/eligibility-conditions-for-foreign-portfolio-investors-fpis-_40409.html

[24] Know Your Client Requirements for Foreign Portfolio Investors (FPIs), Circular No: CIR/IMD/FPIC/CIR/P/2018/64, Securities and Exchange Board of India, April 10, 2018 https://www.sebi.gov.in/legal/circulars/apr-2018/know-your-client-requirements-for-foreign-portfolio-investors-fpis-_38618.html

[25]“Cabinet approves on Fixation/Revision of ethanol price derived from B heavy molasses/ partial sugarcane juice and 100% sugarcane juice under Ethanol Blended Petrol Programme for Ethanol Supply Year 2018-19”, Press Information Bureau, Cabinet Committee on Economic Affairs, September 12, 2018.

[26]No. 1(11)/2018-SP-I, Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, September 18, 2018, http://dfpd.nic.in/writereaddata/Portal/Magazine/Document/1_229_1_Incetivefordiversionofsugar.pdf.

[27]“Cabinet approves Policy Framework to Promote and Incentivize Enhanced Recovery Methods for Oil and Gas”, Press Information Bureau, Cabinet, September 12, 2018.

[28] “Proposed amendment to Electricity Act, 2003 – regarding”, No.42/6/2011/-R&R (Vol-VIII), Ministry of Power, September 7, 2018, https://powermin.nic.in/sites/default/files/webform/notices/Proposed_amendment_to_Elelctricity_Act_%202003.pdf.

[29] “Proposed amendments in Tariff Policy – regarding”, No. 23/02/2018-R&R, Ministry of Power, September 10, 2018, https://powermin.nic.in/sites/default/files/webform/notices/Seeking_comments_on_revised_provision_at_Para.pdf.

[30] No 23/43/2018-R&R, Ministry of Power, August 27, 2018, https://powermin.nic.in/sites/default/files/webform/notices/Direction_to_the_CERC_under_section_107.pdf.

[31] National Aviation Safety Plan 2018-22, Directorate General of Civil Aviation, August 30, 2018, http://www.dgca.gov.in/sms/Safety%20Plan_India.pdf.

[32]“100% Electrification of Broad Gauge Routes of Indian Railways”, Press Information Bureau, Ministry of Railways, September 12, 2018.

[33] “Draft India Cooling Action Plan”, Ministry of Environment, Forest, and Climate Change, September 2018, http://envfor.nic.in/sites/default/files/press-releases/DRAFT-India%20Cooling%20Action%20Plan-Latest%20Version.PDF.

[34]“Cabinet approves continuation of the Centrally Sponsored Umbrella Scheme of Integrated Development of Wildlife Habitats beyond 12th Plan”, Ministry of Environment, Forest, and Climate Change, Press Information Bureau, September 5, 2018.

[35]“Cabinet approves National Digital Communications Policy-2018”, Press Information Bureau, Ministry of Communications,  http://www.pib.nic.in/PressReleseDetail.aspx?PRID=1547370.

[36]National Digital Communications Policy 2018, Ministry of Communication, http://www.dot.gov.in/sites/default/files/EnglishPolicy-NDCP_0.pdf?download=1.

[37] Draft Mobile Number Portability (Seventh Amendment) Regulations, 2018, Telecom Regulatory Authority of India, September 25, 2018, https://www.trai.gov.in/sites/default/files/DRegulation7thAmd25092018_0.pdf

[38] The Telecommunication Tariff (Sixty Fourth Amendment) Order, 2018, Telecom Regulatory Authority of India, September 24, 2018, https://www.trai.gov.in/sites/default/files/TTO64thAmdEng25092018_0.pdf.

[39] The Telecommunication Tariff Order, 1999, Telecom Regulatory Authority of India, March 9, 1999, https://www.trai.gov.in/sites/default/files/Main_Regulations_09_Mar_1999.pdf

[40]“Cabinet approves New Umbrella Scheme ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA)”, Press Information Bureau, Cabinet, September 12, 2018.

[41] First Advance Estimates of Production of Foodgrains and Commercial Crops for 2018-19, Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, September 26, 2018, https://eands.dacnet.nic.in/Advance_Estimate/1st_Adv_Estimates2018-19_Eng.pdf.

[42]“Cabinet approves comprehensive policy to deal

with excess sugar production in the country”, Press Information Bureau, Cabinet Committee on Economic Affairs, September 26, 2018.

[43]“Cabinet approves Revised Cost Estimate of Dam rehabilitation and improvement project”, Ministry of Water Resources, River Development, and Ganga Rejuvenation, Press Information Bureau, September 19, 2018.

[44]“Central government enhances its contribution in the State Disaster Response Fund (SDRF)”, Press Information Bureau, Ministry of Home Affairs, September 27, 2018, 

[45] ‘Atal Bimit Vyakti Kalyan Yojna Rolled Out’, Press Information Bureau, Ministry of Labour & Employment, September 19, 2018.

[46]‘Newly Launched Atal Bimit Vyakti Kalyan Yojna to Benefit More than 3 crore Insured Persons’, Press Information Bureau, Ministry of Labour and Employment, September 26, 2018. 

 

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

Highlights of this Issue

GDP grows at 8.2% in the first quarter of 2018-19

GDP growth rose from 5.6% in the first quarter (April-June) of 2017-18 to 8.2% in the first quarter of 2018-19.  Gross Value Added grew by 8.0%.  All sectors except services and mining saw an increase in growth from last year.

Monsoon session 2018 of Parliament ends; 18 Bills passed

Bills introduced in this session include the Trafficking of Persons Bill and DNA Technology Regulation Bill.  Bills passed include amendments to the Prevention of Corruption Act, and to laws to increase penalty for rape. 

RBI releases Annual Report; shows that 99.3% of demonetised notes were returned

The report stated that demonetised notes, i.e. notes of Rs 500 and Rs 1,000 denominations, worth Rs 15.31 lakh crore were returned to the RBI.  An estimated Rs 11,000 crore worth of these notes have not been returned.

Law Commission released draft report on simultaneous elections

The Commission recommended that simultaneous elections may be conducted in India, through appropriate amendments.  It also recommended that no-confidence motion be replaced with constructive vote of no confidence.

Delhi High Court de-criminalises begging

The court struck down provisions of the Bombay Prevention of Begging Act, 1959 which criminalised begging.  These provisions were found to violate Article 14 (right to equality) and Article 21 (right to life) of the Constitution.

Mahadayi Water Disputes Tribunal gives its final award

The dispute was between Goa, Karnataka, and Maharashtra.  In its award, the tribunal allowed Goa access to 24 Thousand Million Cubic (TMC) feet of water, Karnataka 13.42 TMC feet, and Maharashtra 1.33 TMC feet.

Standing Committees submit reports on various subjects

The subjects include impact of commercial exploitation of water by industries, air pollution in Delhi and NCR, impact of RBI’s revised framework for resolution of stressed power assets, and functioning of FSSAI.

Standing Committee recommends restoration of LoUs and LoCs

The Committee stated that Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) are important sources of cheap, short term credit, and should be restored by the Reserve Bank of India with proper safeguards at the earliest.

CAG submits performance audit reports on the functioning of two schemes

The schemes are National Rural Drinking Water Programme and Pradhan Mantri Swasthya Suraksha Yojana.  The CAG noted deficiencies in financial management and implementation of schemes, and gave recommendations.

Guidelines on civil operation of drones released by DGCA

The guidelines provide details on the: (i) classification of drones based on weight, (ii) identification and permit requirements for such drones and the companies managing these drones, and (iii) operation guidelines. 

Government proposes new system for giving licences to greenfield airports

Concessions will be awarded on a develop, build, finance, operate and transfer (DBFOT) basis, for a period of 40 years.  The proposed bid parameter is the concession fee payable to the concessioning authority. 

TRAI releases recommendations on promoting local equipment manufacturing

These includes recommendations on various issues, such as: (i) institutional mechanism, (ii) resolution of disputes, (iii) testing and certification, and (iv) market access.

 

Parliament

Suyash Tiwari (suyash@prsindia.org)

Monsoon Session 2018 of Parliament concludes

The Monsoon Session of Parliament ended on August 10, 2018.[1]  A no-confidence motion (the first in this Lok Sabha) was discussed.  Rajya Sabha elected a new Deputy Chairman.

Twenty Bills were introduced during the session.  These included the Trafficking of Persons Bill and the DNA Technology Regulation Bill.

Parliament passed 18 Bills.  The Constitution was amended to provide the National Commission of Backward Classes with the status of a constitutional authority.  Other Bills that were passed include the Criminal Law (Amendment) Bill, 2018, which increases the punishment for rape (including death penalty in some cases); the Fugitive Economic Offenders Bill, 2018 that allows confiscation of property of accused persons who have fled the country; and the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Amendment Bill, 2018, which allows arrests of accused by investigating authority without prior approval.  Lok Sabha passed four money Bills that amend the Goods and Services Tax (GST) laws.  The Prevention of Corruption (Amendment) Bill, 2013 was also passed; this Bill makes the giver of a bribe an offender.

Four Bills were withdrawn, including the Financial Resolution and Deposit Insurance Bill, 2017, which provided a structure for monitoring the solvency of financial institutions such as banks and for their resolution.

For more details on legislative business taken up during the Monsoon Session 2018, please see here.  For details on the functioning of Parliament during the session, please see here

Macroeconomic Development

Ahita Paul (ahita@prsindia.org)

GDP grows at 8.2% during the first quarter of 2018-19

The Gross Domestic Product (GDP) (at constant 2011-12 prices) of the country grew at 8.2% during the first quarter of 2018-19, over the corresponding period a year ago.[2]  This was boosted a bit by a low base of 5.6% growth of 5.6% in the first quarter of 2017-18.  The quarterly trend of GDP growth is shown in Figure 1.

Figure 1: GDP growth (in %, year-on-year)

Sources: MOSPI; PRS.

GDP growth across economic sectors is measured in terms of Gross Value Added (GVA).  The growth rate of combined GVA for all sectors increased from 5.6% in the first quarter of 2017-18 to 8% in the first quarter of 2018-19.  The growth rate of GVA increased for all sectors, except for services and mining.  It decreased from 9.5% to 7.3% for services, and from 1.7% to 0.1% for mining.  Table 1 shows details on sectoral GVA growth.

Table 1: Gross Value Added across sectors in Q1 2018-19 (growth in %, year-on-year)

Sector

Q1

2017-18

Q4

2017-18

Q1

2018-19

Agriculture

3.0%

4.5%

5.3%

Mining

1.7%

2.7%

0.1%

Manufacturing

-1.8%

9.1%

13.5%

Electricity

7.1%

7.7%

7.3%

Construction

1.8%

11.5%

8.7%

Services

9.5%

7.7%

7.3%

GVA

5.6%

7.6%

8.0%

GDP

5.6%

7.7%

8.2%

Note: GVA is GDP without taxes and subsidies, at basic prices (2011-12 base year).

Source: MOSPI; PRS.

Policy repo rate increased to 6.5%, reverse repo rate increased to 6.25%

The Monetary Policy Committee (MPC) released its third Bi-Monthly Monetary Policy Statement of 2018-19.[3]  The policy repo rate (the rate at which RBI lends money to banks) was increased from 6.25% to 6.5%.  Other decisions of the MPC include:

  • The reverse repo rate (the rate at which RBI borrows money from banks) was increased from 6% to 6.25%.
     
  • The marginal standing facility rate (the rate at which banks can borrow additional money) and bank rate (the rate at which RBI buys or rediscounts bills of exchange) were increased from 6.5% to 6.75%.

Industrial production grew by 5.2% (year-on-year) in the first quarter of 2018-19

The Index of Industrial Production (IIP) grew by 5.2% in the first quarter (April-June) of 2018-19, as compared to the same period in 2017-18.[4]  Mining saw the highest increase of 5.5%, followed by an increase of 5.3% in manufacturing, and 4.9% in electricity.  Figure 2 shows the year-on-year growth in industrial production, overall and across sectors, for the first quarter of 2018-19.

Figure 2: Growth in IIP in the first quarter of 2018-19 (year-on-year)

Sources: MOSPI; PRS.

Finance

Ahita Paul (ahita@prsindia.org)

RBI releases Annual Report 2017-18; shows 99.3% of demonetised notes returned

The Reserve Bank of India (RBI) released its Annual Report for the year 2017-18.[5]  The report stated that demonetised notes, i.e. notes of Rs 500 and Rs 1,000 denominations which were tendered illegal in November 2016, worth Rs 15.31 lakh crore have been returned to the RBI.  The total value of these notes in circulation as on November 8, 2016, post verification and reconciliation, was Rs 15.42 lakh crore.  This implies that about Rs 11,000 crore worth of these notes have not been returned.

The Financial Resolution and Deposit Insurance Bill, 2017 withdrawn subsequent to the report of the Joint Committee

The Joint Committee on the Financial Resolution and Deposit Insurance Bill, 2017 (Chair: Mr.  Bhupender Yadav) submitted its report on August 1, 2018.[6]  The Bill was introduced in Lok Sabha and subsequently referred to the Joint Committee on August 10, 2017.

A notice of the motion for withdrawal of the Bill, along with a statement of reasons, by the Minister of Finance was referred to the Joint Committee on July 23, 2018.  The statement of reasons for withdrawal of the Bill specified apprehensions raised by stakeholders and the public about several provisions of the Bill, including: (i) use of a bail-in instrument to resolve a failing bank, (ii) adequacy of the deposit insurance cover, and (iii) application of the resolution framework to public sector banks.  The motion stated that these issues would require a comprehensive examination and reconsideration of the Bill.

The Committee considered the notice of the motion for withdrawal, and agreed to the proposal of the government to withdraw the Bill.  Subsequently, the Bill was withdrawn on August 7, 2018.

Four GST Amendment Bills passed by Parliament

The Central Goods and Services Tax (Amendment) Bill, 2018, the Integrated Goods and Services Tax (Amendment) Bill, 2018, the Union Territory Goods and Services Tax (Amendment) Bill, 2018, and the Goods and Services Tax (Compensation to States) Amendment Bill, 2018 were passed by Parliament on August 7, 2018.[7],[8],[9],[10]  The Bills amend four central and state Goods and Services Tax (GST) laws.  Key features of the Bills include:

  • Eligibility for the composition scheme: The CGST Act, 2017 provides for a composition scheme to allow certain taxpayers with an annual turnover of less than one crore rupees to pay GST on their turnover, instead of paying on the value of supply of goods and services. This amount may be increased by the government subject to a maximum limit of Rs 1 crore. The Bill increases this limit to Rs 1.5 crore.
     
  • Compensation Fund:  The GST (Compensation to States) Act allows the central government to levy a compensation cess on the supply of certain goods and services.  The receipts from the levy of cess are deposited to a GST Compensation Fund, which are used to compensate states for any loss in revenue following the implementation of GST.  The Bill inserts a provision specifying that any unutilised amount in the Compensation Fund, at any time during the transition period (as recommended by the GST Council), will be distributed in the following manner: (i) 50% of the amount will be shared between the states in proportion to their base year revenue (2015-16), and (ii) remaining 50% will be part of the centre’s divisible pool of taxes.
     
  • Reverse Charge Mechanism:  Under the Acts, when an unregistered person supplies goods or services to a registered person, the registered person is liable to pay GST on such supply.  The Bills amend this provision to allow the central government, on the recommendation of the GST Council, to notify a class of registered persons who are liable to pay tax on supplies of specified goods and services from an unregistered person.

For more details on the four Bills, please see here, here, here and here.

Standing Committee submits report on the Chit Funds (Amendment) Bill, 2018

The Standing Committee on Finance (Chair: Dr. M Veerappa Moily) submitted its report on the Chit Funds (Amendment) Bill, 2018 on August 9, 2018.[11]  The Committee endorsed the specific amendments proposed by the Bill, and also suggested further amendments to improve the functioning of chit funds.  Key observations and recommendations of the Committee include:

  • Nomenclature and classification of chit funds: The Act specifies various names which may be used to refer to a chit fund.  These include chit, chit fund, and kuri.  The Bill inserts ‘fraternity fund’ to this list.  The Committee recommended that the list be expanded to include Rotating Savings and Credit Association (ROSCA) Institution.  Further, it noted that chit funds are currently classified as miscellaneous non-banking finance companies (NBFCs) by the Reserve Bank of India.  It recommended that chit funds be classified as NBFC-Chit Funds or NBFC-ROSCA.  This will differentiate chit funds from other NBFCs, and help them play a greater role in enabling financial inclusion.
     
  • Ceiling on aggregate chit amount: Under the Act, ceilings are prescribed for the aggregate chit amount.  The ceiling amount is one lakh rupees when the fund is managed by an individual, and six lakh rupees when managed by a firm.  The Committee noted that the prescribed ceilings make running chit funds unviable.  It recommended that the ceilings be revised upwards to make it more profitable for the foreman.
     
  • Exemptions: Under the Act, a state government may exempt certain chit fund companies from any or all provisions of the Act.  This can be done through a notification, after consultation with the Reserve Bank of India.  The Committee noted that safeguards in the law are rendered ineffective by these exemptions.  It recommended that such discretionary exemptions be done away with.

A PRS summary of the report is available here.

Cabinet approves dilution of government shareholding below 50% in IDBI Bank

The Cabinet approved the reduction in the shareholding of the government in the Industrial Development Bank of India (IDBI) below 50% by dilution.[12]  Further, it also approved the acquisition of controlling stake by Life Insurance Corporation of India (LIC) as a promoter in IDBI bank through: (i) preferential allotment or an open offer of equity, and (ii) relinquishment of government’s management control in IDBI bank.

SEBI Committee submits report on Fair Market Conduct

The Securities and Exchange Board of India (SEBI) had constituted a Committee (Chair: Mr. T. K. Viswanathan) to review the existing legal framework of dealing with market abuse to ensure fair market conduct in the securities market.[13]  The Committee submitted its report on August 8, 2018.  Key recommendations and observations of the Committee include:

Market Manipulation and Fraud:

  • The Committee noted that market manipulation involves indirect role of various persons. It recommended that the definition of “dealing in securities” in the Prevention of Fraudulent and Unfair Trade Practices Regulations be widened to include persons who are assisting in dealing.
     
  • Further, the Committee noted that financial statements fraud, involving the manipulation of books of accounts, is often undertaken to manipulate share prices of listed companies. The Committee deliberated that SEBI, as a regulator of the securities market, has a duty to protect the interest of investors from such frauds.  It recommended that Section 12A of the SEBI Act, 1992, which prohibits manipulative and deceptive devices, should be amended to include a new sub-section which would clarify SEBI’s powers to take steps for misstatement of financial statements.

Surveillance and Investigation:

  • The Committee recommended that each algorithm used for high-frequency trading be allotted a unique identification number. This would help identify algorithms that generate potentially manipulative trades.
     
  • Further, it also recommended that SEBI should seek the power to intercept calls and electronic communication to collect stronger evidence during investigation.
     
  • The Committee noted that SEBI often encounters cases where individuals without the means to commit economic offences have been used as a front for violations of law by actual offenders. The use of front entities enables layering of funds.  To prevent use of such fronts, the Committee recommended that a mechanism may be put in place which requires persons to demonstrate their financial capacity to trade.

SEBI Committee submits report on settlement mechanisms

The Securities and Exchange Board of India (SEBI) had constituted a High Level Committee (Chair: Justice A. R. Dave) to review the Settlement of Administrative and Civil Proceedings Regulations, 2014 and the enforcement mechanism of SEBI.[14]  The Committee submitted its report on August 10, 2018.  Key recommendations of the Committee include:

  • Limitation for filing a settlement application: The Committee expressed the opinion that a more arduous approach should be adopted to ensure that only genuine settlement applications are filed, and the settlement mechanism is not used to delay civil and administrative proceedings. It recommended that no application for settlement should be considered once hearing commences, or after 120 days have passed since its filing with SEBI.
     
  • Reapplication for settlement: The Committee noted that currently, a settlement application for the same alleged default can be filed again, even if the previous application was rejected, in certain exceptional circumstances including the lapse of time since the alleged default. The Committee recommended that an application shall not be filed again under any circumstances, if the previous application was rejected.
     
  • Effect of pending application on specified proceedings: The Committee noted that the present regulatory framework stays any proceedings that may be initiated against the settlement applicant until the application is rejected or withdrawn. It observed that there may be cases where it is necessary to initiate proceedings for issuing interim directions to protect the interest of investors and maintain securities market integrity.  It recommended that the Settlement Regulations be amended to incorporate the same.

Corporate Affairs

The Insolvency and Bankruptcy (Second Amendment) Bill, 2018 passed

Prachee Mishra (prachee@prsindia.org)

The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 was passed by Parliament.[15]  It replaces the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 that was promulgated on June 6, 2018.[16]  The Code provides a time-bound process for resolving insolvency in companies and among individuals.  Key features of the Bill include:  

  • Financial creditors: The Code defines a financial creditor as a person to whom financial debt is owed.  Such debt includes any amount raised that has the commercial effect of a borrowing.  The Bill clarifies that an allottee under a real estate project will be considered a financial creditor.  An allottee includes any person to whom a plot, apartment, or building has been allotted, sold, or transferred by a promoter (real estate developer or development authority).  These allottees will be represented on the committee of creditors by an authorised representative. 
     
  • Applicability of the Code to Micro, Small and Medium Enterprises (MSMEs): The Code prohibits certain persons from bidding for the company in the resolution process.  This includes a person whose account has been classified as a Non-Performing Asset (NPA) for a year, and any guarantor for a defaulting debtor.  The Bill provides that the ineligibility criteria for resolution applicants regarding NPAs and guarantors will not be applicable to persons applying for resolution of MSMEs.  The central government may modify or remove other provisions of the Code while applying them to MSMEs. 
     
  • Voting threshold of committee of creditors: The Code specifies that all decisions of the committee of creditors be taken by a majority of at least 75% of the financial creditors.  The Bill lowers this threshold to 51%.  For certain key decisions, the voting threshold has been reduced from 75% to 66%.  These include: (i) appointment and replacement of the resolution professional, and (ii) approval of the resolution plan. 

For a PRS Bill summary, see here, and for an analysis of the Ordinance, see here.

Committee to review offences under Companies Act, 2013 submits report

Roshni Sinha (roshni@prsindia.org)

The Committee to review the offences under the Companies Act, 2013 (Chair: Mr. Injeti Srinivas), submitted its report.[17]  The Committee reviewed the categorisation of offences under the Act and also made recommendations to improve other corporate compliances.  Key recommendations of the Committee include:

  • In-house adjudication of certain offences: The Committee recommended re-categorisation of 16 offences out of the 81 in the category of compoundable offences (attracting fine or imprisonment or both) to an in-house mechanism where only penalty would be levied by an adjudicating officer. 
     
  • The Committee identified certain offences related to corporate governance. These include offences: (i) which are only technical (such as, non-appointment of key managerial personnel in certain companies), or (ii) where other provisions contain safeguards against the offender benefitting from his default.  For instance, if a director receives compensation beyond the statutory limit, the Act requires the auditor to report the excess amounts.  In all such cases, the default may be rectified by imposing penalties in an in-house mechanism.
     
  • The Committee also identified certain technical offences including: (i) intimation of certain information through forms to the Registrar of Companies (such as failure to file annual returns), or (ii) in relation to the sending of notice to stakeholders (for instance, failure of an officer of the company to give notice of board meeting).
     
  • Ensuring compliance: The Committee also made certain recommendations to ensure compliance with the new in-house mechanism.  These recommendations include: (i) power of adjudicating officer to pass orders directing the defaulter to make good the default. 
     
  • Declogging NCLT: The Committee recommended enlarging the jurisdiction of the Regional Director in respect of compoundable offences from the existing five lakh rupees to 25 lakh rupees.  Further, the Committee recommended vesting the central government with powers to approve alterations in the financial year of a company and cases of conversion of public companies to private companies.

Commerce and Industry

Ahita Paul (ahita@prsindia.org)

Standing Committee submits report on impact of banking misappropriation on trade and industry

The Standing Committee on Commerce (Chair: Mr. Naresh Gujral) submitted its report on ‘Impact of Banking Misappropriation on Trade and Industry’ on August 6, 2018.[18]  Typically, industries have been using different borrowing instruments to finance trade, including Letter of Credit (LC), revolving LCs, Letter of Undertaking (LoU), Letter of Comfort (LoC), among others.  The Committee noted that the banking sector has recently faced misappropriation through frauds of high magnitude.  Consequently, the Reserve Bank of India (RBI) has taken various measures regarding trade finance to curb fraud, which have had deep ramifications on trade and industry.  Key observations and recommendations of the Committee include:

  • Discontinuation of LoUs and LoCs: RBI had discontinued issuance of LoUs and LoCs by banks effective from March 2018.  The Committee observed that LoUs and LoCs had been an effective instrument of raising cheaper, short-term credit in foreign currency.  Further, industrial organisations and federations do not consider LoUs or LoCs to be flawed instruments.  It noted that the discontinuation by RBI was a knee-jerk reaction to the frauds.  It recommended restoration of LoUs and LoCs at the earliest with proper safeguards.
     
  • Impact on MSMEs: The Committee noted that frauds and misappropriation have eroded the capital base of banks, and increased their non-performing assets.  As a result, the RBI has adopted a more cautionary approach towards lending.  This has proved to be a burden for trade and industry, chiefly for micro, small, and medium enterprises (MSMEs).
     
  • The Committee noted that banks extend financing to firms with high credit ratings at concessional rates. Rating agencies assess every firm on the same scale without taking into account their nature and size.  This system has deprived multiple MSMEs of easy access to bank finance.  The Committee recommended that: (i) local uncertainties specific to each industry be taken into consideration by credit rating agencies while rating firms, (ii) the Securities and Exchange Board of India be engaged to take necessary action in issuing credit ratings, and (iii) banks strengthen their credit appraisal frameworks and undertake in-house credit risk appraisals.

A PRS summary of the report is available here.

Home Affairs

Roshni Sinha (roshni@prsindia.org)

Criminal Law (Amendment) Bill, 2018 passed by Parliament

The Criminal Law (Amendment) Bill, 2018 was passed by Parliament.[19]  The Bill replaces the Criminal Law (Amendment) Ordinance, 2018 on April 21, 2018.[20]  It amends certain laws related to rape of minors.  Key features of the Bill include:

Amendments to Indian Penal Code, 1860 (IPC)

  • Enhanced punishment for rape: Under IPC, 1860, the offence of rape is punishable with a rigorous imprisonment of at least seven years up to life imprisonment, along with a fine.  Minimum imprisonment has been increased from seven years to 10 years. 
     
  • New offences: The Bill creates new offences to increase punishment for rape of minor girls.

Table 2: New offences under the IPC, 1860

Age

Offence

IPC, 1860

2018 Bill

Below 12 years

Rape

  • Minimum: 10 years
  • Maximum: life imprisonment
  • Minimum: 20 years
  • Maximum: life imprisonment or death

Gang Rape

  • Minimum: 20 years
  • Maximum: life imprisonment
  • Minimum: life imprisonment
  • Maximum: life imprisonment or death

Below 16 years

Rape

  • Minimum: 10 years
  • Maximum: life imprisonment
  • Minimum: 20 years
  • Maximum: no change

Gang Rape

  • Minimum: 20 years
  • Maximum: life imprisonment
  • Minimum: life imprisonment
  • Maximum: no provision

16 years and above

Rape

  • Minimum: 7 years
  • Maximum: life imprisonment
  • Minimum: 10 years 
  • Maximum: no change

Sources: Indian Penal Code, 1860; The Criminal Law (Amendment) Bill, 2018; PRS.

For a PRS Bill Summary, see here.

Protection of Human Rights (Amendment) Bill, 2018 introduced in Lok Sabha

Vinayak Krishnan (vinayak@prsindia.org)

The Protection of Human Rights (Amendment) Bill, 2018 was introduced in Lok Sabha on August 9, 2018.[21]  The Bill amends the Protection of Human Rights Act, 1993.  The Act provides for a National Human Rights Commission, State Human Rights Commissions, and Human Rights Courts.  Key features of the Bill include:

  • Composition of NHRC: Under the Act, the chairperson of the NHRC is required to be a former Chief Justice of India.  The Bill expands the eligibility to any Judge of the Supreme Court. 
     
  • The Act provides for two persons having knowledge of human rights to be appointed as members of the NHRC. The Bill amends this to allow three such members, of which at least one will be a woman. 
     
  • Under the Act, chairpersons of various commissions such as the National Commission for Scheduled Castes, National Commission for Scheduled Tribes, and National Commission for Women are members of the NHRC.
     
  • The Bill adds the chairpersons of the National Commission for Backward Classes, the National Commission for the Protection of Child Rights, and the Chief Commissioner for Persons with Disabilities as members.
     
  • Term of office: The Act states that the chairperson and members of the NHRC and SHRC will hold office for five years or till the age of seventy years, whichever is earlier.  The Bill reduces the term of office to three years or till the age of seventy years, whichever is earlier.  The Bill also allows for the reappointment of chairpersons of the NHRC and SHRCs.

For a PRS Bill summary, please see here.

Law and Justice

Constitution (One Hundred Twenty-Third Amendment) Bill, 2018 passed by Parliament

Roshni Sinha (roshni@prsindia.org)

The Constitution (123rd Amendment) Bill, 2018, was passed by Parliament.[22]  The Bill gives constitutional status to the National Commission for Backward Classes (NCBC), at par with the National Commission for Scheduled Castes (NCSC) and the National Commission for Scheduled Tribes.  Consequently, it removes the power to examine matters related to backward classes from the purview of NCSC.  Parliament also repealed the National Commission for Backward Classes Act, 1993.[23]

A PRS summary of the Constitution (123rd Amendment) Bill, 2017 is available here. A PRS summary of the National Commission for Backward Classes (Repeal) Bill, 2017 is available here.

Personal Law (Amendment) Bill, 2018 introduced in Lok Sabha

Roshni Sinha (roshni@prsindia.org)

The Personal Laws (Amendment) Bill, 2018 was introduced in Lok Sabha by the Minister for Law and Justice, Mr. Ravi Shankar Prasad on August 10, 2018.[24]  It seeks to amend five Acts. These are: (i) the Divorce Act, 1869, (ii) the Dissolution of Muslim Marriage Act, 1939, (iii) the Special Marriage Act, 1954, (iv) the Hindu Marriage Act, 1955, and (v) the Hindu Adoptions and Maintenance Act, 1956.

These Acts contain provisions related to marriage, divorce, and separation of Hindu and Muslim couples. Each of these Acts prescribe leprosy as a ground for seeking divorce or separation from the spouse.  The Bill seeks to remove this as a ground for divorce or separation.

For more details on the Bill, please see here.

The Commercial Courts (Amendment) Bill, 2018 passed by Parliament

Gayatri Mann (gayatri@prsindia.org)

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018, was passed by Parliament.[25]  The Bill amends the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, and replaces an Ordinance promulgated in May 2018.[26],[27]  The Act enables the creation of commercial divisions in High Courts, and commercial courts at the district level, to adjudicate commercial disputes.  Features of the Bill are:

  • Reduction in pecuniary limits: Under the Act, commercial courts and commercial divisions in high courts can decide disputes with a value of at least one crore rupees.  The Bill reduces this limit to an amount of at least three lakh rupees or a higher value to be notified by the central government.
     
  • Establishment of certain commercial courts: Under the Act, state governments may constitute commercial courts at district judge level, after consulting the concerned High Court.  The Act bars such commercial courts to be constituted in cases where the High Court has the original jurisdiction to hear commercial cases.  The Bill removes this bar and allows states to constitute commercial courts where high courts have ordinary original civil jurisdiction. 

For more details on the Bill, please see here.

Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Bill, 2018 passed by Parliament

Roshni Sinha (roshni@prsindia.org)

The Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Amendment Bill, 2018, was passed by Parliament.[28]  It amends the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989.  The Act prohibits the commission of offences against members of the Scheduled Castes and Scheduled Tribes and establishes special courts for the trial of such offences and the rehabilitation of victims.

  • In 2018, the Supreme Court stated that for persons accused of committing an offence under the Act, approval of the Senior Superintendent of Police will be required before an arrest is made. Further, the Deputy Superintendent of Police may conduct a preliminary enquiry to find out whether there is a prima facie case under the Act.
     
  • The Bill states that the investigating officer will not require the approval of any authority for the arrest of an accused. Further, it provides that a preliminary enquiry will not be required for the registration of a First Information Report against a person accused under the Act.
     
  • The Act states that persons accused of committing an offence under the Act cannot apply for anticipatory bail. The Bill seeks to clarify that this provision will apply despite any judgements or orders of a court that provide otherwise.

For more details on the Bill, please see here.

Arbitration and Conciliation (Amendment) Bill, 2018 passed in Lok Sabha

Roshni Sinha (roshni@prsindia.org)

The Arbitration and Conciliation (Amendment) Bill, 2018 was passed in Lok Sabha.[29]  It seeks to amend the Arbitration and Conciliation Act, 1996.  The Act contains provisions to deal with domestic and international arbitration, and defines the law for conducting conciliation proceedings.  Key features of the Bill are:

  • Arbitration Council of India: The Bill seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.  Its functions include: (i) framing policies for grading arbitral institutions and accrediting arbitrators, (ii) making policies for the establishment, operation and maintenance of uniform professional standards for all alternate dispute redressal matters, and (iii) maintaining a depository of arbitral awards (judgments) made in India and abroad.
     
  • Composition of the ACI: The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court; or (ii) a Judge of a High Court; or (iii) Chief Justice of a High Court; or (iv) an eminent person with expert knowledge in conduct and administration of arbitration.  Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.

For more details on the Bill, please see here.

Delhi High Court de-criminalises begging

Roshni Sinha (roshni@prsindia.org)

The Delhi High Court decided a constitutional challenge to the provisions of the Bombay Prevention of Begging Act, 1959, as extended to the Union Territory of Delhi.  The Court held the Act to be unconstitutional, to the extent that it criminalised begging.[30]  It noted that criminalizing begging violates the most fundamental rights of some of the most vulnerable people in society.  

The Court observed that several provisions of the Act violated Article 14 (right to equality) because it did not distinguish between the different types of begging and further equated begging with homelessness.  The Court also found the criminalisation of begging to be in violation of Article 21 (protection of life and personal liberty) of the Constitution.

Law Commission releases draft report on simultaneous elections

Roshni Sinha (roshni@prsindia.org)

The Law Commission of India released a draft report on simultaneous elections.[31]  It noted that for conducting simultaneous elections to the Lok Sabha and state Legislative Assemblies, amendments will be required to the Constitution.  It recommended three alternatives to synchronise elections in India.

  • Option 1: The Commission recommended advancing or postponing election timings in certain states, such that elections to all state assemblies and Lok Sabha may be held together in 2019.  It noted that election of five states (Andhra Pradesh, Arunachal Pradesh, Odisha, Sikkim, and Telangana) are already due in 2019 along with Lok Sabha elections.  It recommended the following changes to the election timings of other state assemblies:

Assembly elections due before Lok Sabha elections:  For four states (Chhattisgarh, Madhya Pradesh, Mizoram, and Rajasthan) elections are due in the end of 2018 and early January, 2019.  The term of these assemblies may be extended to synchronise it with Lok Sabha elections.  

Assembly elections due immediately after Lok Sabha elections:  If there is political consensus, elections to four assemblies (Haryana, Jharkhand, Maharashtra, and Delhi) can be held with Lok Sabha elections, if the states voluntarily dissolve their assemblies earlier, or by operation of law. 

Assembly elections in remaining states:  For the remaining 16 states and Puducherry, elections may be conducted towards the end of 2021.  The term of these assemblies will be 30 months or till June 2024, whichever is earlier.  Thereafter, elections to Lok Sabha and state assemblies may be held together from 2024.

  • Option 2: If assembly elections can be held in 2019 and 2021 as described above, then the elections may also be conducted twice in five years.  In such a case, elections to 12 states and the NCT of Delhi can be synchronised with the House of the People.  The elections to the remaining 16 states and Puducherry can be synchronised together separately.  In this manner it will be possible to conduct elections only twice in five years. 
     
  • Option 3: If simultaneous elections cannot be conducted, then the Commission recommended that all elections falling due in a calendar year should be conducted together.  The timing of such election should be conducive to all state legislatures involved and the Lok Sabha (if dissolved earlier).   

A PRS summary of the report is available here.

Law Commission submits report on wrongful prosecution

Roshni Sinha (roshni@prsindia.org)

The Law Commission of India submitted its report on ‘Wrongful Prosecution (Miscarriage of Justice): Legal Remedies’ on August 30, 2018.[32]  The report follows a Delhi High Court directive in 2016 where the Commission was asked to examine the remedies for wrongful detention.  The Commission noted that currently there is no legislative framework to provide relief to those who are wrongfully prosecuted.  Key recommendations of the Commission include:

  • Legal framework: The Commission recommended amendments to the Code of Criminal Procedure, 1973 (CrPC), to give compensation in cases of miscarriage of justice resulting in wrongful prosecution of persons.  Miscarriage of justice refers to wrongful or malicious prosecution, regardless of whether it leads to conviction or detention.
     
  • Cause of action: The cause of action (reason) for the claimant to file a compensation claim would be that he was wrongfully prosecuted in a case which ended in his acquittal.  Wrongful prosecution would include: (i) malicious prosecution, i.e. where one files a case against the claimant without belief in his guilt for the crime, and (ii) prosecution without good faith, i.e. where one files a case against the claimant negligently without due care and attention.
     
  • Special Courts: The Commission observed that claims in relation to wrongful compensation should be settled speedily, keeping in mind the interest of the claimant.  Therefore, it recommended setting up of special courts in each district for deciding compensation claims. 
     
  • Nature of proceedings: Further, the accused will be required to prove misconduct which lead to his wrongful prosecution.  The claim will be decided by weighing the “balance of probabilities”, i.e., the claim will be decided in favour of the party whose claims appear more likely to be true.
     
  • Compensation: The Commission observed that it may not be possible at present to lay down a fixed amount of monetary compensation to be paid.  It recommended amendments to the CrPC to include guiding principles to be followed by the court while deciding the amount of compensation.  These include seriousness of the offence, severity of punishment, length of detention, damage to health, harm to reputation, and loss of opportunities. 

A PRS summary of the report is available here.

Law Commission releases consultation paper on sedition

Vinayak Krishnan (vinayak@prsindia.org)

The Law Commission of India released a consultation paper on sedition under the Indian Penal Code, 1860 (IPC), inviting public feedback[33].  Key observations and recommendations of the Commission include:

  • Relevance of the law: The offence of sedition is covered under section 124A of the Indian Penal Code (IPC), 1860.  It punishes anyone who attempts to bring hatred or disaffection towards the government.  The punishment may be life imprisonment and/or fine, or imprisonment up to three years and/or fine.  The Commission noted that the relevance of this section in an independent and democratic nations is the subject of debate.  Though it is argued that this law is from the colonial era, Indian courts have upheld its constitutionality.
     
  • Court judgements: The Commission noted that sedition is not a restriction to freedom and expression under the Constitution.  However, it has remained part of the IPC (Section 124A), and has been considered by the courts on multiple occasions.  Based on these judgements, the Commission stated that unless the words or actions threaten the security of the State, or lead to public disorder, the act does not fall within Section 124A.
     
  • Freedom of expression: The Commission stated that while sedition law is essential to protect national integrity, it should not be misused to curb free speech.  It noted that courts have stated that every criticism does not amount to sedition.  Sedition law should be invoked when the intention behind any act is to: (i) disrupt public order, or (ii) overthrow the government with violent and illegal means.  Further, strong condemnation towards the government or institutions cannot amount to sedition, as no institution embodies the whole country.  Every restriction on free speech and expression must be carefully scrutinised to avoid unwarranted restrictions.
     
  • Sedition and other laws: The Commission recommended that higher standards of proof must be applied to convict a person for sedition.  Further, it stated that if an act does not fall within the ambit of sedition but attracts the provisions of another law, it should be booked under the other law.

Law Commission releases consultation paper on reform in family laws

Roshni Sinha (roshni@prsindia.org)

The Law Commission of India released a consultation paper on ‘Reform of Family Law’ on August 31, 2018. [34]  This was in pursuance to a reference of the Ministry of Law and Justice to examine the feasibility of a Uniform Civil Code.  Key recommendations include:

  • Marriage and Divorce: The Commission suggested that the contribution of a woman to the marital home should entitle her to an equal share in a marriage.  Therefore, it recommended amendments to Hindu, Parsi, and Muslim divorce laws to ensure that all property acquired from income gained after marriage, is divided upon divorce, in the proportion decided by courts.  It further recommended other amendments to personal laws such as, adding ‘irretrievable breakdown of marriage’ as a ground for divorce under Parsi law.  This would allow for a simpler process for divorce.
     
  • Custody and Guardianship: The Commission suggested that the ‘best interest of the child’ must be the guiding rule for custody regardless of any prevailing personal law.  It recommended amendments to all personal laws to ensure the implementation of this principle.  For instance, the Guardians and Wards Act, 1890 (applicable to all religions) provides that the husband will be the guardian of a minor wife.  The Commission noted that the provision treats the minor wife as property of her husband and does not consider the welfare of a minor husband.  It recommended deletion of the clause.
     
  • Adoption and Maintenance: The Commission made certain recommendations to the secular law on adoption, i.e. the Juvenile Justice (Care and Protection of Children) Act, 2015.  It observed that the law is currently inadequate in addressing questions on adoption.  It recommended the term ‘mother and father’ to be replaced with ‘parents’ to enable individuals of all gender identities to avail of the Act. 
     
  • Succession and Inheritance: With respect to succession rights to property, the Commission recommended: (i) abolition of rights in property by birth under Hindu law, (ii) formulation of a consolidated inheritance code for all Muslims (including Shias and Sunnis), and (iii) introduction of a three-class system of succession for Christians, to ensure that property devolves on close relatives, the law is gender-neutral, and there is no differentiation between natural or adopted children.

Science and Technology

The DNA Technology (Use and Application) Regulation Bill, 2018 introduced in Lok Sabha

Vinayak Krishnan (vinayak@prsindia.org)

The DNA Technology (Use and Application) Regulation Bill, 2018 was introduced in Lok Sabha on August 9, 2018.[35]  The Bill provides for regulation of use of DNA technology for establishing the identity of certain persons.  Key features of the Bill include:  

  • Use of DNA Data: Under the Bill, DNA testing is allowed only for matters listed in schedule to the Bill (such as for offences under the Indian Penal Code, 1860, for paternity suits, or in order to identify abandoned children).
     
  • DNA Data Bank: The Bill provides for the establishment of a National DNA Data Bank and regional DNA Data Banks, for every state or two or more states.  The National DNA Data Bank will store DNA profiles received from DNA laboratories and receive DNA data from the regional Banks.  Every Data Bank will be required to maintain indices for the following categories of data: (i) a crime scene index, (ii) a suspects’ or undertrials’ index, (iii) an offenders’ index, (iv) a missing persons’ index, and (v) an unknown deceased persons’ index.
     
  • DNA Regulatory Board: The Bill provides for the establishment of a DNA Regulatory Board, which will supervise the DNA Data Banks and DNA laboratories.  The Secretary, Department of Biotechnology, will be the ex officio Chairperson of the Board.  The Board will comprise an additional 12 members including: (i) an eminent person with at least 25 years experience in biological sciences, as the Vice Chairperson, and (ii) Director General of the National Investigation Agency as well as the Director of the Central Bureau of Investigation or their nominees (of at least the rank of Joint Director).
     
  • Protection of information: Under the Bill, the Board is required to ensure that all information relating to DNA profiles with the Data Banks, laboratories and other persons are kept confidential.  DNA data may only be used for identification of the person.  However, the Bill allows for access to information in the Data Bank for the purpose of a one-time keyboard search.  This search allows for information from a DNA sample to be compared with information in the index without information from the sample being included in the index.

For a PRS summary of the Bill, see here.

UIDAI announces phased rollout of facial recognition in authentication process

Ahita Paul (ahita@prsindia.org)

The Unique Identification Authority of India (UIDAI) announced a phased rollout of facial recognition as an additional mode of Aadhaar authentication on August 17, 2018.[36]  Face recognition, along with earlier modes of authentication including fingerprint and iris scan, will be applicable to telecom service providers (TSPs) starting September 15, 2018.  For authentication agencies other than TSPs, specific guidelines will be issued at a later date.

TSPs should perform two-factor authentication in case the resident provides Aadhaar number: (i) first, using fingerprint or iris, and (ii) second, using face recognition.  UIDAI has mandated that at least 10% of total monthly authentication transactions of TSPs should be performed in this manner.  In case of non-compliance by TSPs, any shortfall in transactions using face authentication will be charged at Rs 0.2 per transaction.

Further, after successful authentication, TSPs are mandated to capture a separate live photo of the resident.  This photo will be used for verifying the photo received in e-KYC before activation of the SIM card. 

CCEA approves Ocean Services, Technology, Observations, Resources Modelling, and Science scheme

Suyash Tiwari (suyash@prsindia.org)

The Cabinet Committee on Economic Affairs approved the umbrella scheme Ocean Services, Technology, Observations, Resources Modelling and Science (O-SMART) of the Ministry of Earth Sciences.[37]  The scheme encompasses 16 sub-projects addressing ocean development activities such as services, technology, resources, observations, and science.  Rs 1,623 crore has been approved for implementation of the scheme during the period 2017-18 to 2019-20. 

During this period, the projects to be undertaken in the scheme include: (i) strengthening of ocean observations, modelling, and services for fishermen, (ii) setting up of a Marine Coastal Observatories for monitoring marine pollution, (iii) setting up of an Ocean Thermal Energy Conversion plant in Kavaratti, and (iv) deep ocean mining technology development using deep mining system and manned submersibles. 

Department of Space announces launch of a human spaceflight programme

Suyash Tiwari (suyash@prsindia.org)

Department of Space announced the launch of Gaganyaan, which is India’s first human spaceflight programme.[38]  Under the programme, two unmanned Gaganyaan missions will be undertaken before sending humans to space.  The manned spaceflight will be launched by 2022.  The total cost of the programme is estimated to be less than Rs 10,000 crore. 

The spacecraft will be launched using the Geosynchronous Satellite Launch Vehicle Mk-III.  It will be placed in a low earth orbit of 300-400 km.  It will carry a three-member crew for a period of five to seven days.  The crew will be selected jointly by the Indian Air Force and the Indian Space Research Organisation, after which they will undergo a training for two to three years. 

Water Resources

Roopal Suhag (roopal@prsindia.org)

Mahadayi Water Disputes Tribunal gives its final award

The Mahadayi Water Disputes Tribunal gave its final award on the water sharing of Mahadayi river between the states of Goa, Karnataka, and Maharashtra.[39]  The tribunal was set up in November 2010 under the Inter-State River Water Disputes Act, 1956.  The Mahadayi river basin drains an area of 2,032 sq. km, of which 1,680 sq. km lies in Goa, 375 sq. km in Karnataka, and remaining 77 sq. km in Maharashtra.  In its award, the tribunal allowed Goa access to 24 Thousand Million Cubic (TMC) feet of water.  Karnataka was allowed access to 13.42 TMC feet (5.4 TMC feet for consumptive use and 8.02 TMC feet for power generation) and Maharashtra was allocated 1.33 TMC feet of water.

Standing Committee submits report on socio-economic impact of commercial exploitation of water by industries

The Standing Committee on Water Resources, River Development and Ganga Rejuvenation (Chair: Mr. Rajiv Pratap Rudy) submitted its report on the ‘Socio-economic impact of commercial exploitation of water by industries’ on August 9, 2018.[40]  Major findings and recommendations made by the Committee include:

  • Exploitation of ground water by packaged drinking water industries:  Of the annual available ground water, 6% (25 Billion Cubic Meter) is utilised for domestic, drinking, and industrial purposes.  Of this, packaged drinking water units/plants extract 0.1% (13.3 Million Cubic Meter) annually.  The Central Ground Water Authority grants permission to these bottling plants to extract ground water subject to specific recharge obligations.  The Committee noted that a large number of licenses have been given in states that already have significant number of ‘over-exploited’ ground water units (areas where ground water extraction is prohibited).  374 units in Tamil Nadu and 111 units in Uttar Pradesh, withdrawing 895 m3/day and 941 m3/day, respectively. 
     
  • Over-dependence on ground water: The Committee noted that the Ministry of Water Resources has not estimated the total quantum of ground water being utilised by the packaged drinking water industries and its consequent effect on the ground water level in the country.  In addition to ground water being extracted by these industries, 85% of drinking water schemes in rural areas are dependent on ground water.  27% of urban households use ground water to meet their water needs.  It observed that packaged drinking water units supplement the efforts of government in providing safe drinking water to public. 
     
  • However, it opined that the demand between demand and supply should primarily be bridged by the government. It reasoned that providing water for consumption is the social responsibility of the government and industries should not be allowed to exploit this sector.  It recommended that packaged water industries should be set up on Public Private Partnership basis to ensure government’s role in utilisation of water in a rational manner and provision of safe water in a cost effective manner.

A PRS Summary of the report is available here.

CAG submits report on National Rural Drinking Water Programme

The Comptroller and Auditor General (CAG) of India submitted its report on ‘National Rural Drinking Water Programme’ on August 7, 2018.[41]  National Rural Drinking Water Programme (NRDWP) was launched in 2009.  It aims to provide safe and adequate water for drinking, cooking and other domestic needs to every rural person on a sustainable basis.  The audit was conducted for the period 2012-17.  Key findings and recommendations of the CAG include:

  • Underperformance of the scheme: By 2017, NRDWP aimed to achieve certain objectives.  However, by December 2017, these objectives were not completely attained.  It aimed to provide all rural habitations, government schools, and anganwadis access to safe drinking water.  Of this, only 44% of rural households and 85% of government schools and anganwadis were provided access.  It also aimed to provide 50% of rural population potable drinking water (55 litres per capita per day) by piped water supply.  Of this, only 18% of rural population was provided potable drinking water.  It also sought to give household connections to 35% of rural households.  Of this, only 17% of rural households were given household connections. 
     
  • Planning and delivery mechanism: The CAG noted deviations from the programme guidelines in the planning and delivery framework established at the centre and states.  21 states had not framed water security plans.  Deficiencies were found in the preparation and scrutiny of annual action plans such as: (i) lack of stakeholder and community participation, (ii) non-inclusion of minimum service level of water in schemes, and (iii) absence of approval of State Level Scheme Sanctioning Committee for schemes included in the plans.  The apex level National Drinking Water and Sanitation Council set up to co-ordinate and ensure convergence remained largely non-functional.  State level agencies important for planning and execution of the programme, such as the State Water and Sanitation Mission, State Technical Agency, and Block Resources Centres were either not set up or were under-performing. 
     
  • The CAG recommended that the Ministry of Drinking Water and Sanitation should review the feasibility and practicality of the planning and delivery mechanisms to ensure that they serve the intended purposes. It also suggested that the water security plans and annual action plans must be prepared with community participation.  This will ensure that schemes are aligned to community requirements and utilise water resources in an optimum and sustainable manner.

A PRS Summary of the report is available here.

Environment

Roopal Suhag (roopal@prsindia.org)

Standing Committee submits report on air pollution in Delhi and NCR

The Standing Committee on Science and Technology, Environment and Forests (Chair: Mr. Anand Sharma) submitted its report on ‘Air Pollution in Delhi and National Capital Region’ on August 7, 2018.[42]  Key findings and recommendations of the Committee include:

  • Measures taken for mitigating air pollution:  The Ministry of Environment, Forest and Climate Change has taken a number of measures during the last three years to bring down the level of PM2.5 and PM10 (air pollutants).  These include: (i) implementing BS-VI fuel standards from April 1, 2018 in Delhi; (ii) launching the National Clean Air Programme for controlling air pollution; (iii) revising standards of SO2 and NO2 for five industrial sectors; and (iv) issuing directions to six regions regarding agriculture crop residue burning in National Capital Region (NCR) states and Punjab.  The government of Delhi has undertaken several measures, including a massive plantation drive in the city to address the problem. 
     
  • The Committee acknowledged the efforts of the Ministry and government of Delhi and recommended that in addition to the ongoing efforts, a robust monitoring system should be evolved to ensure that the National Ambient Air Quality Standards are met in the region.  This would also minimise the negative impact of air pollution on the health of the residents.
     
  • Crop residue burning:  The Committed noted that weak enforcement by the state governments of Haryana, Punjab and Uttar Pradesh in implementing the statutory ban on crop residue burning has worsened air pollution in the region.  It recommended that the Ministry of Environment should work with the Ministry of Agriculture and ensure that the governments of Haryana, Punjab, and Uttar Pradesh implement the laid down guidelines and statutory provisions with regard to crop residue burning. 
     
  • It also suggested that farmers in these states should be provided with practical solutions to replace crop residue burning.  Technological and scientific solutions along with financial assistance should be made available to them to deter them from burning crop residue.

A PRS Summary of the report is available here.

Power

Prachee Mishra (prachee@prsindia.org)

Standing Committee submits report on impact of RBI’s revised framework for resolution of stressed power assets

The Standing Committee on Energy (Chair: Dr. Kambhampati Haribabu) submitted its report on ‘Impact of RBI’s Revised Framework for Resolution of Stressed Assets on Non-Performing Assets (NPAs) in the Electricity Sector’.[43]  Key observations and recommendations of the Committee include:

  • RBI’s new guidelines: Under RBI’s earlier guidelines, an asset was classified as an NPA if the interest or principal instalment of a loan remained overdue for a period of 90 days.  The Committee noted that under the previous framework, failure of an asset to service its debt obligation within the prescribed time was considered to be a symptom of a potential NPA.  Consequently, corrective measures were of various grades such as rectification, restructuring, and recovery.  However, the new guidelines provide that any failure beyond the prescribed duration (between one to 90 days) will immediately invoke resolution.  The Committee noted that this may make revival of a project difficult.  
     
  • The Committee noted that the reasons of stress in each of these sectors are varying. In the power sector, reasons for non-performing loans include: (i) delay in implementation of projects, (ii) non-availability of fuel, (iii) delays in land and environment clearances, and (iv) weak financial health of the power distribution companies.  However, the Committee noted that the new guidelines are same for all sectors, and do not consider the specific problems in the electricity sector.  It recommended that instead of adopting a sector agnostic approach towards stress resolution, more specific and sector friendly approaches should be used. 
     
  • Stressed assets in power sector: The Committee noted that about 66 GW of conventional energy is under various degrees of financial stress.  The debt of certain power producers exceeded Rs 1.8 lakh crore at the end of 2017.  Other issues in resolving stressed assets in the sector include sub-optimal bid outcome, small buyer universe, and weak commercial framework.  For example, a power project in Chhattisgarh, has received an offer of Rs 2,500 crore against a debt of Rs 8,300 crores (a 70% haircut).  It noted that such forced sale will not benefit the economy.  Therefore, it recommended that the RBI should consider the problems in the electricity sector that are causing such stress instead of concentrating on the management of NPA only.

A PRS summary of the report is available here.

Petroleum and Natural Gas

Suyash Tiwari (suyash@prsindia.org)

Cabinet approves policy framework for exploration and exploitation of unconventional hydrocarbons

The Union Cabinet approved the policy framework for exploration and exploitation of unconventional hydrocarbons such as shale oil and gas, and coal bed methane (CBM).[44]  As per the existing contracts, the exploration and exploitation of unconventional hydrocarbons is not allowed, except in case of CBM.  Also, CBM contracts do not allow exploitation of any other hydrocarbon, except CBM.  The approved policy permits contractors to explore and exploit unconventional hydrocarbons in their licensed/leased areas as per their existing contracts.  With the approved policy, 77,296 sq. km. area is estimated to be accessible for exploration and exploitation of conventional and unconventional hydrocarbons.

The approved policy requires contractors to share the profit on production from new discoveries with the government at an additional rate of 10%, over and above the rate specified in their contracts.  However, this will apply only to production sharing contracts and CBM contracts.  This additional rate will not be applicable for the blocks granted to the national oil companies, namely Oil and Natural Gas Corporation Limited and Oil India Limited, on nomination basis. 

For this purpose, ring-fencing of operations has been provided.  Under this, the cost incurred on exploration, development, and production for new discoveries will be recorded separately.  Further, the commercial and techno-economic viability of new discoveries will be established on a standalone basis. 

The policy will not apply to blocks where the contractor has already applied for termination of contract or to blocks under termination, arbitration or legal proceedings. 

Transport

Prachee Mishra (prachee@prsindia.org)

DGCA released guidelines for civilian operation of drones

The Director General of Civil Aviation (DGCA) released the requirements for operation of civil Remotely Piloted Aircraft Systems (RPAS), commonly known as drones.[45]  These guidelines will be effective from December 1, 2018.  Key features of the guidelines include:

  • Definition: Remotely piloted aircraft (RPA) is an unmanned aircraft, which is piloted from a remote pilot station.  A RPA, its associated remote pilot stations, command and control links and any other components forms a Remotely Piloted Aircraft System (RPAS).
     
  • Classification: The RPAs will be classified on the basis of their maximum take-off weight, as follows: (i) nano (less than or equal to 250 gm), (ii) micro (between 250 gm and 2 kg), (iii) small (between 2 kg and 25 kg), (iv) medium (between 25 kg and 150 kg), and (v) large (greater than 150 kg). 
     
  • Identification requirements: All civil RPAs will be required to obtain a unique identification number (UIN) from DGCA.  A UIN will be granted if the RPAS is wholly owned by: (i) an Indian citizen, or (ii) the central or state governments, or their companies, or (iii) a company that is registered and has its principal business in India, and its substantial ownership is vested in Indian nationals, or (iv) a company that is registered in India and has leased the RPAS to any other eligible organisations.  RPAS exempted from requiring a UIN include: (i) nano RPAs intended to fly up to 50 feet in uncontrolled airspace or enclosed premises for commercial, recreational or research purposes, and (ii) RPAs owned or operated by central intelligence agencies. 
     
  • Permit requirements: All civil RPA operators will require an unmanned aircraft operator permit, to be issued by DGCA.  Entities exempted from requiring these permits include: (i) nano RPA operating below 50 ft, or micro RPA operating below 200 ft, in uncontrolled airspace or indoor operations, and (ii) RPA owned and operated by government security agencies. 
     
  • Operations: RPA operators will prepare standard operating procedures containing information such as: (i) take-off/landing, (ii) collision avoidance, and (iii) local airspace restrictions.  RPAs must be operated only during daylight.  All RPA operators, except nano, must inform the local police authority before commencing operations.  Before entering the controlled airspace, the remote pilot must establish contact with the air traffic control. 

IRDAI notifies mandatory long-term third party insurance for new vehicles

The Insurance Regulatory and Development Authority of India (IRDAI) notified mandatory long-term third party insurance cover for new vehicles.[46]  As per the notification, all general insurers will provide only: (i) three year third party insurance covers for new cars, and (ii) five-year third party insurance cover for new two-wheelers.  The premium will be collected for the entire term (three years or five years as the case may be) at the time of sale of insurance but would be recognised on a yearly basis. 

This gives effect to the Supreme Court order from July 20, 2018, which mandated the time period for third party insurance cover for new vehicles.  The new insurance policy will be applicable from September 1, 2018.  

Proposed transaction structure for greenfield airports released

The Ministry of Civil Aviation released the proposed transaction structure for greenfield airports.[47]  The guiding principles of the proposed transaction structure are affordability, sustainability and predictability.  Key features of the proposed transaction structure include:

  • Scope of concession: The concession (or contract) will be awarded on a develop, build, finance, operate and transfer (DBFOT) basis. 
     
  • Concession period: A concession period of 40 years has been proposed.  This will help investors recover capital investment and address traffic fluctuations.
     
  • Bid parameter: Currently, share of gross revenue of the airport operator, that is shared with the concessioning authority, is used as the bid parameter in greenfield projects.  However, there have been challenges in monitoring and finalising such gross revenue.  The proposed bid parameter is the concession fee payable to the concessioning authority (in rupees per passenger).  Further, the concessionaires will also pay an administrative fee to the authority.  For 2018-19, this fee is proposed to be Rs 20/passenger.  The annual change in fee will be indexed to 50% of inflation in the previous year.
     
  • Tariff structure: Currently, airport tariff is determined on a cost-plus basis.  Under the proposed structure, the tariff will be pre-determined at the beginning of the concession period on the basis of Maximum Blended Aeronautical Yield (MBAY) rupees per passenger.  The MBAY for greenfield airports for 2018-19 is proposed to be Rs 400/ passenger. 
     
  • MBAY will cover revenue accruing to the concessionaire from all services that are critical to aviation activities, and where the concessionaire exercises significant market power. These include: (i) landing, housing and parking charges levied on all aircraft, (ii) revenue from cargo, ground handling agencies, and inflight catering, and (iii) passenger service fee.

Comments on the proposed structure are invited till September 14, 2018. 

Draft International Air Connectivity Scheme released

The Ministry of Civil Aviation released the draft International Air Connectivity (IAC) Scheme – UDAN (International).[48]  The draft scheme seeks to assist state governments as they try to facilitate air connectivity between their respective states and international destinations.  Assistance will be provided through financial support (subsidy) to airlines to meet the gap, if any, between the cost of airline operations and the expected revenues on such routes.  

Key features of the draft scheme include:

  • Guiding principles: The key guiding principles will include: (i) operationalising the scheme only for those states which demonstrate their commitment to implement and provide the requisite support for promoting operations under the scheme; and (ii) encouraging sustainability of operations in the long term so that the connectivity established is not perpetually dependent on the subsidy. 
     
  • Identification of IAC routes: Each state government, as per its priorities and the scheme objectives, will identify the list of routes to be connected under the scheme. 
     
  • Financial support: The concerned state governments will provide financial support to selected airlines in the form of subsidy for operations on IAC routes.  Certain concessions will also be provided by the central government and the Airports Authority of India.  Subsidies provided by the state governments and AAI will be provided for a period of three years from the date of commencement of IAC flight operations. 
     
  • Implementing agency: The Ministry of Civil Aviation, in consultation with state governments, may designate any entity, as the implementing agency under this scheme.  This agency will be responsible for undertaking activities to support the state governments.  A state government may also be designated as the implementing agency, and such agency can be different across states.  The agency will undertake the bidding processes under the scheme, and manage the funds under the scheme.

Housing and Urban Affairs

The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017 passed by Parliament

Prachee Mishra (prachee@prsindia.org)

The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017 was passed by Parliament.[49]  The Bill was introduced in Lok Sabha on July 18, 2017.  It amends the Requisitioning and Acquisition of Immovable Property Act, 1952.  The Act provides for the central government to requisition property for its own purpose, which further must be a public purpose.  Under certain conditions it can also acquire such property.  Features of the Bill are:

  • Retrospective application: The Bill will be deemed to have come into force on March 14, 1952, the date of the enactment of the Act. 
     
  • Re-issue of notice: Under the Act, when acquiring a requisitioned property, the central government has to issue a notification with regard to such an acquisition.  Before issuing such a notice, the government has to provide the property owner (or any person interested in the property), an opportunity to be heard.  The property owner at such hearing has to provide reasons for why the property should not be acquired. 
     
  • The Bill provides that the government may re-issue the acquisition notice to the property owner (or a person interested in the property) to give them adequate opportunity for a hearing. This re-issue would be irrespective of any past court orders or judgments setting aside any past notices for acquisition.  However, the re-issue of notice will not apply to cases where the compensation has already been awarded and accepted by the claimants. 
     
  • Interest payable on compensation: In cases where a notice has been re-issued, the property owner (or a person interested in the property) will be entitled to an interest on the compensation payable to them.  The interest will be calculated for the period from when the first notice was issued till the date of the final payment of compensation.  This interest will be the same as the annual rate of interest, prevalent at any relevant time, on the domestic fixed deposit offered by the State Bank of India. 

For a PRS summary of the Bill, see here

Ease of Living Index 2018 released

Roopal Suhag (roopal@prsindia.org)

The Ministry of Housing and Urban Affairs launched the Ease of Living Index 2018.[50]  The Index captures the quality of life in cities and seeks to: (i) drive an evidence-based approach for future interventions and investments to deliver ease of living outcomes; (ii) catalyse actions to improve the quality of life in Indian cities; (iii) track broader development outcomes, including the Sustainable Development Goals; and (iv) serve as a basis for dialogue with citizens and urban decision-makers on key strengths and areas demanding improvement in cities. 

The Index has ranked 111 cities in 35 states/ union territories on 78 indicators in 15 categories.  Each of these 15 categories falls within one of these following four pillars: (i) institutional, (ii) social, (iii) economic, and (iv) physical.  The different categories include: (i) assured water supply, (ii) economy and employment, (iii) education, (iv) governance, (v) health; (vi) mixed land use and compactness, (vii) solid waste management; and (viii) transportation and mobility.  The cities ranked under the Index have population more than 1 million, and fall within the category of smart cities and capital cities.  Pune in Maharashtra topped the ranking.

The four pillars under the Index also act as sub-indexes.  In addition to a main rank, each city has also been given a rank for each of these sub-indexes.  The physical sub-index has the maximum weightage of 45 points, followed by social and institutional (25 points each) and economic (5 points).  To gather data for the Index, a data entry portal and a monitoring dashboard for real time update on progress was established.[51]  The cities submitted data on more than 50,000 points. Secondary audit of 10,000 documents, physical audit of 14,000 units and survey of more than 60,000 citizens was completed before the Index was finalised.

Health

Gayatri Mann (gayatri@prsindia.org)

The Homoeopathy Central Council (Amendment) Bill, 2018 passed by Parliament

The Homoeopathy Central Council (Amendment) Bill, 2018 was passed by Parliament.[52]  It amends the Homoeopathy Central Council Act, 1973 and replaces the Homoeopathy Central Council (Amendment) Ordinance, 2018 that was promulgated on May 18, 2018.[53],[54]   The 1973 Act sets up the Central Council of Homoeopathy which regulates homoeopathic education and practice.  Key features of the Bill include:

  • Supersession of the Central Council: The Bill amends the 1973 Act to provide for the supersession of the Central Council.  The Central Council will be reconstituted within one year from the date of its supersession.  In the interim period, the central government will constitute a Board of Governors, which will exercise the powers of the Central Council.
     
  • The Board of Governors will consist of up to seven members including: (i) persons of eminence in the field of homoeopathy education, and (ii) eminent administrators, appointed by the central government. The central government will select one of these members as the Chairperson of the Board. 
     
  • Permission for existing homoeopathy colleges: The Bill states that: (i) if any person has established a homoeopathy medical college, or (ii) if an established homoeopathy medical college has opened new courses or increased its admission capacity before the passage of the Bill, it will have to seek permission from the central government within one year.  If the person or homoeopathy medical college fails to seek such permission, then any medical qualification granted to a student from such medical college will not be recognised under the Act.

For more details on the Bill, please see here.

Juvenile Justice (Care and Protection of Children) Amendment Bill, 2018 introduced

The Juvenile Justice (Care and Protection of Children) Amendment Bill, 2018, was introduced in Lok Sabha.[55]  The Bill amends the Juvenile Justice (Care and Protection of Children) Act, 2015.  The Act contains provisions related to children in conflict with law and children in need of care and protection.  The Bill seeks to make certain changes to the provisions related to the adoption of children. 

  • Adoption under the 2015 Act: The Act provides for the adoption of children by prospective adoptive parents from India and abroad.  On the acceptance of the child by prospective adoptive parents, a specialised adoption agency files an application in a civil court to obtain the adoption order.  The adoption order issued by the court establishes that the child belongs to the adoptive parents.  The Bill provides that instead of the court, the District Magistrate will issue such adoption orders.
     
  • In cases where a person living abroad intends to adopt a child from his relative in India, he is required to obtain an adoption order from the court. In such cases, the Bill replaces the court with the District Magistrate as the authority to issue adoption orders.
     
  • Transfer of proceedings: The Bill seeks to transfer all pending matters related to adoption before any court to the District Magistrate having jurisdiction over the

For more details on the Bill, please see here.

Standing Committee submits report on the functioning of FSSAI

The Standing Committee on Health and Family Welfare (Chair: Prof. Ram Gopal Yadav) submitted its report on ‘Functioning of Food Safety and Standards Authority of India (FSSAI)’.[56]  FSSAI is responsible for formulating science based food standards and regulating the manufacture, storage, distribution, and sale of food to ensure consumer safety.  Key observations and recommendations of the Committee include:

  • Regulatory framework: The Committee noted that even after more than a decade of the enactment of the Food Safety and Standards Act, 2006, FSSAI is yet to frame regulations governing various procedures relating to accreditation of food testing laboratories, food labelling standards, and genetically engineered food, among others.  It was observed that most states do not have a separate food safety department to efficiently implement food safety and standards.  This has resulted in: (i) lack of quality checks, (ii) food adulteration, (iii) misleading labelling, and (iv) sale of defective food products.
     
  • The Committee recommended that the FSSAI must frame and notify regulations on all areas that have been specified in the Act within a period of one year. Further, it recommends the establishment of a separate food safety department in all states for enforcing a robust food safety mechanism.
     
  • Licensing and registration: Under the Act, no person can commence or carry on any food business without obtaining a license.  The Committee noted that several food businesses were operating either without a license or with expired licenses.  Further, licenses were being issued on the basis of incomplete documents by central and state licensing authorities.  The Committee recommended that FSSAI ensure all licenses issued under the earlier system of product approvals are reviewed, and licenses are cancelled and reissued as required under the present procedure of product approvals.
     
  • Amendments to the Act: The Committee recommended several amendments to the existing Food Safety and Standards Act, 2006 to establish a uniform food safety regulatory regime in the country.  These recommendations relate to: (i) regulating use of food dye, (ii) regulating primary production i.e., the use of pesticides by farmers and fishermen, and (iii) modifying the process of selection of the Chairman and CEO of FSSAI to include experts and scientists in the food sector.

A PRS summary of the report is available here.

CAG submits report on Pradhan Mantri Swasthya Suraksha Yojana

The Comptroller and Auditor General (CAG) submitted a report on ‘Performance of the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)’.[57]  PMSSY was introduced in 2003 to correct imbalances in the availability of tertiary healthcare services and improve the quality of medical education.  The scheme has two components: (i) setting up of new AIIMS, and (ii) upgradation of selected Government Medical College Institutions (GMCIs).  Key observations and recommendations of the audit include:

  • Planning and implementation: The CAG observed that no operational guidelines had been formulated for PMSSY since its inception.  This resulted in several ad hoc decisions being taken with respect to key aspects of the scheme.  In case of setting up new AIIMS, initial approval was not based on a comprehensive assessment of the scope of work.  This led to an increase in costs and delays of up to five years.  In case of GMCIs, the criteria for selection of institutes was not formulated resulting in arbitrary selection.  
     
  • In this context, the CAG recommended that the Ministry of Health and Family Welfare must expedite the formulation of operational guidelines to regulate the implementation of the scheme. It also recommended that evaluation studies could be taken up for status check and to identify weaknesses in planning and implementation.
     
  • Financial management: During 2004-17, the government allocated Rs 14,971 crore for the scheme.  However, only 61% (Rs 9,207 crore) of these funds were released.  Further, a significant portion of the funds remained underutilised due to: (i) delays in obtaining approval, (ii) slow pace of procurement of equipment, (iii) non-filling up of posts, and (iv) pending utilisation certificates.  It was found that the Ministry had estimated the capital cost for setting up six new AIIMS to be Rs 332 crore per institute.  After four years, this cost was revised to Rs 820 crore per institute, on account of shortcomings in planning and assessment of requirements.
     
  • The CAG recommended that the Ministry should ensure adherence to contract provisions in the execution of works. In addition, accountability should be fixed where there is additional expenditure without adequate justification.

A PRS summary of the report is available here.

Information Technology

Vinayak Krishnan (vinayak@prsindia.org)

TRAI releases recommendations on promoting local telecom equipment manufacturing  

The Telecom Regulatory Authority of India (TRAI) released recommendation on ‘Promoting Local Telecom Equipment Manufacturing’.[58]  It includes recommendations on institutional mechanism, resolution of disputes, and market access.  Key recommendations include:

  • Institutional mechanism: To ensure focused attention, the progress of telecom equipment manufacturing in the country should be monitored at least at the level of Member, Telecom Commission.  For time-bound progress, a dedicated unit in Department of Telecommunications should be responsible for monitoring of telecommunication equipment design and manufacturing in the country.   
     
  • Resolution of disputes: TRAI noted that dispute resolution is a time consuming and costly process.  It recommended that an Alternate Dispute Resolution Framework should be institutionalized. 
     
  • Testing and certification: The Telecommunication Engineering Centre (TEC) should be made responsible for regulation of telecom products testing and certification agencies.  Further, government should institute mechanism of mutual recognition of Indian testing labs with international testing labs.
     
  • Manufacturing and productivity: India is a signatory to the Information Technology Agreement, and hence certain items are allowed to be imported at zero percent duty.  An expert committee should be constituted to identify telecom products which are not covered by the agreement, and suggest suitable tariffs for import of such products.   
     
  • Market access: The DoT had introduced Preferential Market Access (PMA) policy to provide preference to indigenously manufactured electronic products.  TRAI recommended that a nodal officer should be appointed to review lack of implementation of PMA policy. 
     
  • Further, the PMA policy should be reviewed so that products specified under the policy can be aligned with local market realities.

Standing Committee submits report on progress of implementation of BharatNet

The Standing Committee on Information Technology (Chairperson: Mr. Anurag Singh Thakur) submitted its report on ‘Progress of implementation of BharatNet’ on August 7, 2018.[59]  Key observations and recommendations of the Committee include:

  • Implementation of Phase I: Under Phase-I of BharatNet, a target of connecting one lakh GPs through optical fibre cable was set.  However, the Committee noted that inadequate planning and design coupled with lack of preparedness affected the project from 2011 to 2014.  Because of deficiencies in various aspects such as planning, design, procurement, and non-participation of states, the implementation could start only after 2014.  The Committee observed that the target of completing one lakh GPs had been achieved on December 28, 2017.
     
  • Last-mile connectivity: The Committee observed that last-mile connectivity (connectivity to households) was not in the scope of BharatNet till July 2017.  Since 1,09,099 GPs were service ready by May 1, 2017, the Committee stated that focus should be on provision of last-mile connectivity in these GPs.  Further, the Committee emphasised the need to set up Wi-Fi hotspots under Saansad Adarsh Gram Yojana.  It recommended that while setting up Wi-Fi hotspots, emphasis should be given to participation of village level entrepreneurs, so as to generate employment opportunities. 
     
  • Participation of states: The Committee noted that non-involvement of states in Phase-I has resulted in slow progress and non-utilization of infrastructure.  To address this issue, a modified strategy was adopted where GPs in eight states were provided connectivity through state-led model.  Under this model, states undertake the responsibility of laying of optical fibre cable and radio.  The Committee stated that a mechanism should be put in place whereby best practices adopted in one state can be shared with all other states.
     
  • Central Public Sector Undertakings (CPSUs): The Committee noted that Phase-I of the project had been allotted to three CPSUs (Bharat Sanchar Nigam Limited, RailTel, and Power Grid Corporation of India Limited).  Despite having expertise in optical fibre technology, performance of these CPSUs has not been satisfactory.  This included delays in achieving targets under Phase-I.  The Committee recommended in this regard that stringent measures, such as penalties for failure to achieve the targets, should be imposed on the CPSUs. 

A PRS summary of the report is available here.

Standing Committee submits report on expansion of rural BPOs

The Standing Committee on Information Technology (Chairperson: Mr. Anurag Singh Thakur) submitted its report on ‘Expansion of Rural BPOs and Challenges faced by them’ on August 9, 2018.[60]  Key observations and recommendations of the Committee include:

  • Schemes for BPO promotion: The Committee noted that the MEITY has launched two schemes for the creation of jobs in the BPO sector: (i) India BPO Promotion Scheme (IBPS), and (ii) North East BPO Promotion Scheme (NEBPS).  These schemes provide financial support to expand employment opportunities in the BPO sector.  The duration of both these schemes is up to March 2019.  The Committee recommended that necessary steps should be taken for successful implementation of both schemes so that they fulfil their objectives within the time-frame.
     
  • Revamping of schemes: The Committee noted that at present, IBPS and NEBPS do not have provisions for extending support to BPOs which want to expand.  It recommended that the scope and reach of both schemes be widened so that the Indian BPO sector remains internationally competitive.  In addition, the Committee recommended that there is a need to study BPO policies in other countries, and incorporate best practices of those countries in the ongoing schemes.
     
  • Safety of women: The Committee observed that safety of women is a major challenge faced by the BPO sector in India.  Companies have taken various steps to address this, including provision of transport facilities, security guards, and workshops to create awareness on women’s safety.  The Committee recommended that in addition to these initiatives, the option of creating suitable accommodation for women employees may be explored.  It further recommended that due emphasis must be given to create a conducive environment at the workplace so that women employees do not face safety issues.   

A PRS summary of the report is available here.

Sports

Gayatri Mann (gayatri@prsindia.org)

The National Sports University Bill, 2018 passed by Parliament

The National Sports University Bill, 2018 was passed by Parliament.[61]  It replaces the National Sports University Ordinance, 2018 that was promulgated on May 31, 2018.[62]  The Bill seeks to establish a National Sports University in Manipur.  Key features of the Bill include:

  • Establishment of the University: The National Sports University will be headquartered in Manipur.  It may establish outlying campuses (within or outside India), colleges, or regional centres.  The University will: (i) undertake research on physical education, (ii) strengthen sports training programmes, and (iii) collaborate internationally in the field of physical education, among others.
     
  • Functions of the University: Key powers and functions of the University include: (i) prescribing courses of study and conducting training programmes, (ii) granting degrees, diplomas, and certificates, (iii) providing facilities through a distance education system, and (iv) conferring autonomous status on a college or an institution.

For more details on the Bill, please see here.

Minority Affairs

Roshni Sinha (roshni@prsindia.org)

Standing Committee submits report on implementation of Jan Vikas Karyakram

The Standing Committee on Social Justice and Empowerment (Chair: Mr. Ramesh Bais) submitted its report on ‘Implementation of Scheme of Multi-Sectoral Development Programme / Pradhan Mantri Jan Vikas Karyakram’ on August 9, 2018.[63]  Key observations and recommendations of the Committee include:

  • Overall implementation: The Committee noted that although the Ministry has revised the scheme, the socio-economic conditions of the minorities remain unchanged.  There were significant trends of missing basic amenities/ infrastructure in minority areas.  The Committee recommend that the Ministry should co-ordinate with the concerned states/ union territories and other line Ministries to complete these projects in a timely manner and make efforts for better implementation of the scheme.  
     
  • Data on beneficiaries: The Committee noted that there is no community-wise data regarding the number of families benefited by the projects under the scheme.  In the absence of such data, the Ministry cannot analyse the impact of the scheme on minorities.  The Committee requested for updated data starting from 2008-09.
     
  • Housing: The Committee observed that provision of pucca housing in rural areas under the Indira Awas Yojana (IAY) was one of the priority sectors of the Multi-Sectoral Development Programme (MsDP) during the 11th and 12th Five Year Plan.  However, no units were sanctioned under IAY in several states during the Plan periods (including Kerala, Assam, Jammu & Kashmir, and Andaman and Nicobar Islands).  The Committee also observed that projects relating to drinking water supply and pucca housing have not been included in the restructured MsDP, despite housing being a basic infrastructure for the people living in minority areas.  It recommended that projects under IAY and those related to drinking water supply be included in the list of priority sectors of the MsDP.
     
  • Health-related projects: With regard to health projects, the Ministry undertakes construction of Primary Health Centres (PHCs), Health Sub-Centres, and labour rooms in PHCs.  Out of a total of 4,393 units/projects sanctioned in 11th and 12th Plan Period, only 2,432 projects/units were completed.  The Committee emphasised that health is one of the basic indicators of development of an area, and recommended that the Ministry take steps with the Health Ministry and state governments, to ensure completion of the projects.  

A PRS summary of the report is available here.

Labour and Employment

Roshni Sinha (roshni@prsindia.org)

Standing Committee submits report on functioning of EPF Scheme

The Standing Committee on Labour (Chairperson: Dr. Kirit Somaiya) submitted its report on ‘Regulatory Framework of the EPFO on the Excluded Category vis-à-vis Implementation of Various PF Acts’ on August 9, 2018.[64]  Key observations and recommendations of the Committee include:

  • Regulation of PF Trusts: The Committee noted that a large number of Provident Fund schemes are regulated by the Employees Provident Fund Organisation (EPFO), as per the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.  However, that there are several categories of PF schemes which exist under special acts (i.e., the Provident Fund Act, 1925 and other statutory PFs) and do not fall under the 1952 Act.  It observed that there was a need for a regulatory mechanism to cover these various PF trusts in existence. 
     
  • Regulation of Excluded PF Trusts: According to the 1952 Act, there are two categories of establishments – exempted and excluded.  Certain establishments are exempted from the 1952 Act.  However, the provisions of the 1952 Act do not apply to certain excluded establishments, such as registered cooperative societies with less than 50 workers.  They maintain their own PF trusts.  Further, the Committee noted that several excluded establishments are regulated by the Provident Fund Act, 1925.  The 1925 Act deals with provident funds primarily relating to the government, local authorities and Railways.  
     
  • The Committee noted that there is no specific regulator at the central level to regulate all existing PF trusts. It emphasised the need for a central regulator to: (i) protect the interests of contributing workers, (ii) ensure judicious investments of their contributions to yield maximum returns, (iii) make use of unclaimed amounts lying with these trusts, and (iv) prevent financial fraud.   
     
  • Regulation of Trusts under Provident Fund Act, 1925: The Committee observed that until recently, PF trusts governed under the 1925 Act were not regulated by any Ministry or regulatory authority (such as Pension Fund Regulatory and Development Authority or the EPFO).  It noted that the administration of PF trusts under the 1925 Act have only recently been handed over to the Ministry of Labour & Employment.   
     
  • The Committee was also informed that there is a consensus that EPFO be made the sole regulator of all PF trusts under the 1925 Act, and for the excluded and exempted establishments under the 1952 Act. The Committee noted that a single regulator will ensure efficient working of all trusts and avert future financial fraud.  Consequently, it recommended that the government should either draft a new law to cover these unregulated trusts, or insert the relevant provisions of the 1925 Act in the 1952 Act. 

A PRS summary of the report is available here.

Standing Committee submits report on overseas employment of women workers

Vinayak Krishnan (vinayak@prsindia.org)

The Standing Committee on Labour (Chairperson: Dr. Kirit Somaiya) submitted its report on ‘Overseas Employment of Women Workers including Nurses and Maids, Issues and Regulatory Framework’.[65]  Key observations and recommendations of the Committee include:

  • Inter-ministerial collaboration: The Committee observed that the Ministry of Labour and Employment (MLE) and Ministry of External Affairs (MEA) both have a role in safeguarding the interests of Indian emigrant workers.  It recommended that the two ministries must work together by setting up a joint committee.  Further, they recommended that the MLE should be responsible for educating workers seeking overseas employment about labour laws prevalent in other countries. 
     
  • Emigration Check Required category: Countries where protection of workers is not strong have been designated by Government of India as Emigration Check Required (ECR) countries.  The Committee noted that MEA has complete details of ECR category of workers for the 18 ECR countries.  However, the MEA does not have data on Indians going to these nations on Tourist Visas and overstaying illegally to seek employment.
     
  • Further, the Committee noted that MEA does not have data on holders of Emigration Check Not Required (ECNR) passports, as these passport holders are under the Ministry of Home Affairs (MHA). It recommended that cooperation should be established between MEA and MHA in sharing details of ECR and ECNR passport holders.
     
  • Coordination with states: The Committee stated that there is an urgent need to set up a cell and appointment of a nodal officer for emigrant workers in all states/UTs.  This would benefit emigrant Indian workers as their details would be passed on by state governments to the MEA.  The Committee recommended that this cell should insist that all emigrant workers deposit a copy of their passport with the nodal agency. 

A PRS summary of the report is available here.

Agriculture

Suyash Tiwari (suyash@prsindia.org)

Fourth advanced estimates of production of major crops for 2017-18 released

The Ministry of Agriculture and Farmers Welfare released the fourth advanced estimates of production of foodgrains and commercial crops for the year 2017-18.[66] 

  • The total foodgrain production in 2017-18 is estimated to grow by 3.5% as compared to final estimates in 2016-17. This increase was contributed by 3% growth in the production of cereals and 9.1% growth in the production of pulses.
     
  • In 2017-18, the production of oilseeds is expected to increase by 0.1% from 2016-17. Oilseeds include soyabean, groundnut, rapeseed-mustard, and castorseed.
     
  • During the same period, cotton production is expected to grow by 7.1% and sugarcane production is expected to increase by 23.1%.

Table 3: Fourth advanced estimates of production of major crops for the year 2017-18 (in million tonnes)

Crop

Final estimates

2016-17

4th advanced estimates 2017-18

% change over final estimate

Foodgrains

275.1

284.8

3.5%

Cereals

252.0

259.6

3.0%

Rice

109.7

112.9

2.9%

Wheat

98.5

99.7

1.2%

Coarse Cereals

43.8

47.0

7.4%

Pulses

23.1

25.2

9.1%

Gram

9.4

11.2

19.7%

Tur

4.9

4.2

-12.7%

Oilseeds

31.3

31.3

0.1%

Soyabean

13.2

11.0

-16.6%

Groundnut

7.5

9.2

23.0%

Rapeseed & Mustard

7.9

8.3

5.1%

Cotton*

32.6

34.9

7.1%

Sugarcane

306.1

376.9

23.1%

*Million bales of 170 kg each.

Sources: Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare; PRS.

CCEA approves release of pulses for utilisation under various welfare schemes

The Cabinet Committee on Economic Affairs approved the release of pulses to states and union territories for utilisation under the Public Distribution System and various welfare schemes such as the Mid-Day Meal Scheme, and the Integrated Child Development Services.[67]  This would be a one-time dispensation for a period of 12 months or till disposal of the 34.88 lakh metric tonne of stock of pulses, whichever is earlier. 

The pulses approved for release include Tur, Chana, Masoor, Moong, and Urad.  The pulses will be released at a discount of Rs 15/kg over the prevailing wholesale market price in the sourcing state, on a first come first serve basis.  The central government has allocated Rs 5,237 crore for implementation of this scheme. 

Standing Committee submits report on Central Tuber Crops Research Institute

The Standing Committee on Agriculture (Chair: Mr. Hukmdev Narayan Yadav) submitted a report on ‘ICAR – Central Tuber Crops Research Institute – A Performance Review’ on August 3, 2018.[68]  The Central Tuber Crops Research Institute (CTCRI) was established under the Indian Council of Agricultural Research (ICAR) in 1963 for research on root and tuber crops, i.e. crops which grow beneath the soil’s surface, such as cassava, sweet potato, and yam.  Key observations and recommendations of the Committee include: 

  • Finances: The Committee observed that CTCRI requires more capital investment for establishment of laboratories and purchase of latest scientific equipment in order to build a robust research system.  It recommended increased capital allocations to the Institute.  It also recommended that the ICAR analyse CTCRI’s revenue generation potential and increase its targets. 
     
  • Expansion: The Committee noted that there is a large scope for expanding root and tuber crop farming in the country, especially in eastern states.  It recommended that CTCRI: (i) work with state governments to identify potential areas suitable for these crops, (ii) take steps to educate farmers about their high yielding varieties and improved production techniques, and (iii) make an assessment of the support required by farmers for shifting to cultivation of these crops. 
     
  • Food Processing: The Committee observed that there is huge potential for food products and snacks based on root and tuber crops.  However, there is a lack of awareness of their health benefits.  It also noted that there is a need to develop food products based on dietary preferences of consumers in various parts of the country.  For this purpose, the Committee recommended that CTCRI take up a survey for analysis of dietary preferences.  Further research should be done on the basis of survey results to prepare region-specific food products.  It also recommended that CTCRI explore the possibility of a joint awareness campaign with industry, and central and state governments on health benefits of food products based on root and tuber crops.

A PRS summary of the report is available here.

External Affairs

Vinayak Krishnan (vinayak@prsindia.org)

Prime Minister attends BIMSTEC Summit

The Prime Minister Mr. Narendra Modi visited Nepal to attend the Fourth BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) Summit.[69]  The leaders signed the Fourth BIMSTEC Summit Declaration, which committed to cooperation in various sectors including: (i) poverty alleviation, (ii) trade and investment (renew commitment to early conclusion of BIMSTEC Free Trade Area negotiation), (iii) environment and disaster management (closer cooperation through sharing of information), (iv) agriculture (cooperation in sectors including crops, livestock, and farm machinery).[70]

 

[1] Parliament Session Wrap, August 10, 2018, http://www.prsindia.org/uploads/media/Monsoon%202018/Session%20wrap%20Monsoon%20Session%202018.pdf.

[2] “Press Note on Estimates of Gross Domestic Product for the first quarter of 2018-19”, Ministry of Statistics and Programme Implementation, August 31, 2018, http://www.mospi.gov.in/sites/default/files/press_release/PR_GDP_Q1_31aug18.pdf.

[3] “Third Bi-Monthly Monetary Policy Statement 2018-19”, Press Release, Reserve Bank of India, August 1, 2018,  https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/03MP_10082018CE37FEEC02384C4DA95F68DCDF26BDF7.PDF.

[4] “Quick Estimates of Index of Industrial Production and Use Based Index for the Month of June, 2018 (Base 2011- 12=100)”, Press Release, Ministry of Statistics and Programme Implementation, August 10, 2018, http://mospi.nic.in/sites/default/files/press_release/iip_PR_10aug18_0.pdf.

[5] Annual Report 2017-18, Reserve Bank of India, August 29, 2018, https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0ANREPORT201718077745EC9A874DB38C991F580ED14242.PDF.

[6] Report of the Joint Committee on the Financial Resolution and Deposit Insurance Bill, Lok Sabha, August 1, 2018, http://164.100.47.193/lsscommittee/Joint%20Committee%20on%20the%20Financial%20Resolution%20and%20Deposit%20Insurance%20Bill,%202017/16_Joint_Committee_on_the_Financial_Resolution_and_Deposit_Insurance_Bill_2017_1.pdf.

[7] The Central Goods and Services Tax (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/GST%20Amendment/Central%20Goods%20and%20Services%20Tax%20(Amendment)%20Bill,%202018.pdf.

[8] The Integrated Goods and Services Tax (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/GST%20Amendment/Integrated%20Goods%20and%20Services%20Tax%20(Amendment)%20Bill,%202018.pdf.

[9] The Union Territory Goods and Services Tax (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/GST%20Amendment/Union%20Territory%20Goods%20and%20Services%20Tax%20(Amendment)%20Bill,%202018.pdf.

[10] The Goods and Services Tax (Compensation to States) Amendment Bill, 2018, http://www.prsindia.org/uploads/media/GST%20Amendment/Goods%20and%20Services%20Tax%20(Compensation%20to%20States)%20Amendment%20Bill,%202018.pdf.

[11] Report No. 62, Standing Committee on Finance, The Chit Funds (Amendment) Bill, 2018, Lok Sabha, August 9, 2018, http://164.100.47.193/lsscommittee/Finance/16_Finance_62.pdf.

[12] “LIC to acquire controlling stake of IDBI Bank; Cabinet approves dilution of Government shareholding below 50%”, Press Information Bureau, Cabinet, August 1, 2018.

[13] Report of Committee on Fair Market Conduct, Securities and Exchange Board of India, August 8, 2018, https://www.sebi.gov.in/reports/reports/aug-2018/report-of-committee-on-fair-market-conduct-for-public-comments_39884.html.

[14] Report of the High Level Committee on the Settlement Mechanism, August 10, 2018, https://www.sebi.gov.in/reports/reports/aug-2018/report-on-settlement-mechanism-by-the-high-level-committee-to-review-the-enforcement-and-settlement-mechanism_39967.html.

[15] The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018, July 23, 2018, http://www.prsindia.org/uploads/media/Insolvency%202018/The%20Insolvency%20and%20Bankruptcy%20Code%20(Second%20Amendment)%20Bill,%202018.pdf.

[16] The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, June 6, 2018, http://www.prsindia.org/uploads/media/Ordinances/Insolvency%20and%20Bankruptcy%20Code%20(Amendment)%20Ordinance,%202018.pdf.

[17] Report of the Committee to review Offences under the Companies Act, 2013, Ministry of Corporate Affairs, August 28, 2018, http://www.mca.gov.in/Ministry/pdf/ReportCommittee_28082018.pdf.

[18] Report No.  146, Standing Committee on Commerce, ‘Impact of Banking Misappropriation on Trade and Industry’, Rajya Sabha, August 6, 2018, http://164.100.47.5/committee_web/ReportFile/13/97/146_2018_8_11.pdf.

[19] The Criminal Law (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Criminal%20Law%202018/The%20Criminal%20Law%20(Amendment)%20Bill,%202018.pdf.

[20] The Criminal Law (Amendment) Ordinance, 2018, http://www.prsindia.org/uploads/media/Ordinances/The%20Criminal%20Law%20Amendment%20Ordinance%202018.pdf.

[21] The Protection of Human Rights (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Human%20Rights,%202018/Protection%20of%20human%20rights%20bill,%202018.pdf.  

[22] The Constitution (One-Hundred and Twenty Third Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Constitution%20123rd%20bill/Bills%20as%20passed%20Const-102%20Amd%20Act.pdf.  

[23] The National Commission for Backward Classes (Repeal) Bill, http://www.prsindia.org/uploads/media/NCBC%20(Repeal)%20Bill/Bill%20as%20passed%20NCBC.pdf.

[24] The Personal Laws (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Personal%20Laws/Personal%20Laws%20(A)%20bill,%202018.pdf.

[25] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018, Ministry of Law and Justice, August 1, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/123-C%20_2018_Eng..pdfhttp://164.100.47.4/BillsTexts/LSBillTexts/Asintroduced/123_2018_LS_Eng.pdf.

[26] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, https://indiacode.nic.in/bitstream/123456789/2156/1/201604. pdf.

[27] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018, May 3, 2018, http://www.prsindia.org/uploads/media/Ordinances/Commercial%20Division%20of%20High%20Courts%20Amendment%20Ordinance%202018.pdf.

[28] The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Amendment Bill, 2018, http://www.prsindia.org/uploads/media/Prevention%20of%20Atrocities/Bill%20as%20passed%20Scheduled%20Castes%20and%20the%20Scheduled%20Tribes%20(Prevention%20of%20Atrocities)%20Amendment%20Bill,%202018.pdf.

[29] The Arbitration and Conciliation (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Arbitration/Arbitration%20and%20Conciliation%20(Amendment)%20Bill,%202018.pdf.

[30] Harsh Mander and Anr vs. Union of India, W.P.(C) 10498/2009 & CM APPL. 1837/2010, https://drive.google.com/file/d/1kfF55Tmq-H3of7cVVBNSSWvJO-6J2m4a/view.

[31] ‘Draft Report: Simultaneous Elections’, Public Appeal, Law Commission of India, August 30, 2018, http://www.lawcommissionofindia.nic.in/reports/Simultaneous_Elections.pdf

[32] ‘277th Report: Wrongful Prosecution (Miscarriage of Justice): Legal Remedies’, Law Commission of India, August 30, 2018, http://lawcommissionofindia.nic.in/reports/Report277.pdf.

[33] “Consultation Paper on Sedition”, Law Commission of India, August 30, 2018, http://www.lawcommissionofindia.nic.in/reports/CP-on-Sedition.pdf.  

[34] ‘Reform of Family Law’, Consultation Paper, Law Commission of India, August 31, 2018, http://www.lawcommissionofindia.nic.in/reports/CPonReformFamilyLaw.pdf.   

[35] The DNA Technology (Use and Application) Regulation Bill, 2018, http://www.prsindia.org/uploads/media/DNA/DNA%20Bill,%202018.pdf

[36] Circular No.  11 of 2018, “Implementation of Face Authentication”, Unique Identification Authority of India, Ministry of Electronics and Information Technology, August 17, 2018, https://uidai.gov.in/images/resource/Face_Auth_Circular_11_18082018.pdf

[37] “Cabinet approves Umbrella scheme “Ocean

Services, Technology, Observations, Resources

Modelling and Science (O-SMART)” of Ministry of

Earth Sciences”, Press Information Bureau, Cabinet Committee on Economic Affairs, August 29, 2018.

[38] “ISRO to send first Indian into Space by 2022 as announced by PM, says Dr Jitendra Singh”, Press Information Bureau, Department of Space, August 28, 2018.

[39] “The Report-cum-Decision of the Mahadayi Water Disputes Tribunal”, August 14, 2018, http://mowr.gov.in/sites/default/files/MWDT-Vol-12.pdf.

[40]Socio-economic impact of commercial exploitation of water by industries”, 23rd Report , Standing Committee on Water Resources 2017-18, River Development and Ganga Rejuvenation, August 9, 2018, http://164.100.47.193/lsscommittee/Water%20Resources/16_Water_Resources_23.pdf.

[41]National Rural Drinking Water Programme”, 15th Report of 2018, Comptroller and Auditor General of India, August 7, 2018, https://cag.gov.in/sites/default/files/audit_report_files/Report_No_15_of_2018_-_Performance_Audit_on_National_Rural_Drinking_Water_Programme_in_Ministry_of_Drinking_Water_and_Sanitation.pdf.

[42]Air Pollution in Delhi and National Capital Region”, Standing Committee on Science and Technology, Environment and Forests, August 7, 2018, http://164.100.47.5/committee_web/ReportFile/19/103/316_2018_8_14.pdf.

[43] “40th Report: Impact of RBI’s Revised Framework for Resolution of Stressed Assets on Non-Performing Assets (NPAs) in the Electricity Sector”, Standing Committee on Energy, August 7, 2018. 

[44] “Cabinet approves Policy Framework for exploration and exploitation of Unconventional Hydrocarbons”, Press Information Bureau, Cabinet, August 1, 2018

[45] F. No. 05-13/2014-AED Vol. IV, Requirements for Operation of Civil Remotely Piloted Aircraft System (RPAS), Director General of Civil Aviation, August 27, 2018, http://dgca.nic.in/cars/D3X-X1.pdf.

[46] “Implementation of the Directions of the Hon’ble Supreme Court of India in the matter of WP No.295/2012 of Shri.S.Rajaseekaran vs Union of India and Ors”, Ref. No:IRDAI/NL/CIR/MOT/ 137/08/2018, Insurance Regulatory and Development Authority of India, August 28, 2018, https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo3575&flag=1.

[47] NABH Nirman 2018, Proposed transaction structure for Greenfield Airports, Ministry of Civil Aviation, August 14, 2018, http://www.civilaviation.gov.in/sites/default/files/proposed%20transaction%20structure%20for%20greenfield%20airport%20.pdf.

[48] Notice No. AV- 13011/2/2018-DT(RCS), Draft Scheme for enhancing air connectivity between Indian states and international destinations, Ministry of Civil Aviation, August 21, 2018, http://www.civilaviation.gov.in/sites/default/files/Draft%20UDAN%20Scheme%20document.pdf.

[49] The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017, Ministry of Urban Development, July 18, 2017, http://www.prsindia.org/uploads/media/Immovable%20Property/Requisitioning%20of%20Immovable%20Property%20Bill,%202017.pdf.

[50]  “Ease of Living Index 2018”, Ministry of Housing and Urban Affairs, August 13, 2018, http://easeofliving.niua.org/.

[51] First ever ease of living index being launched to encourage cities to move towards improved living for the citizens through planning management and development”, Ministry of Housing and Urban Affairs, Press Information Bureau, August 13, 2018.

[52] The Homoeopathy Central Council (Amendment) Bill, 2018, Ministry of AYUSH, August 9, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedBothHouses/Homoeo-23%20of%202018.pdf.

[53] The Homoeopathy Central Council Act, 1973, https://www.nhp.gov.in/UploadFiles/microsite/635960641909289061_1.pdf.

[54] The Homoeopathy Central Council (Amendment) Ordinance, 2018, May 18, 2018, http://www.prsindia.org/uploads/media/Ordinances/Homoeopathy%20Central%20Council%20(A)%20Ordinance,%202018.pdf.

[55] The Juvenile Justice (Care and Protection of Children) Amendment Bill, 2018, Ministry of Women and Child Development, August 6, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/123-C%20_2018_Eng..pdf.

[56] Report No. 110, Standing Committee on Health and Family Welfare, ‘Functioning of Food Safety and Standards Authority of India’, Rajya Sabha, August 9, 2018, http://164.100.47.5/committee_web/ReportFile/14/100/110_2018_8_16.pdf.

[57] Report No.10, Performance Audit on Pradhan Mantri Swasthya Suraksha Yojana in Ministry of Health and Family Welfare, Comptroller and Auditor General of India, August 9, 2018, https://cag.gov.in/sites/default/files/audit_report_files/Report_No_10_of_2018_-_Performance_Audit_on_Pradhan_Mantri_Swasthya_Suraksha_Yojana_in_Ministry_of_Health_and_Family_Welfare.pdf

[58] Recommendation on Promoting Local Telecom Equipment Manufacturing, Telecom Regulatory Authority of India, August 3, 2018, https://www.trai.gov.in/sites/default/files/Recommendations_LTEM_03082018.pdf.  

[59] “50th Report: Progress of Implementation of BharatNet”, Standing Committee on Information Technology, Lok Sabha, August 7, 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_Information_Technology_50.pdf

[60] “53rd Report: Expansion of Rural BPOs and Challenges faced by them”, Standing Committee on Information Technology, Lok Sabha, August 9, 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_Information_Technology_53.pdf

[61] The National Sports University Bill, Ministry of Sports and Youth Affairs, August 3, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/119C_ls_eng_NSU%20Bill.pdf.

[62] The National Sports University Ordinance, 2018, May 31, 2018, http://www.prsindia.org/uploads/media/Ordinances/National%20Sports%20Univeristy%20Ordinance,%202018.pdf.

[63] “62nd Report: Implementation of Scheme of Multi-Sectoral Development Programme/Pradhan Mantri Jan Vikas Karyakram”, Standing Committee on Social Justice and Empowerment, August 9, 2018, http://164.100.47.193/lsscommittee/Social%20Justice%20&%20Empowerment/16_Social_Justice_And_Empowerment_62.pdf.   

[64] “42nd Report: Regulatory Framework of the EPFO on the Excluded Category vis-à-vis Implementation of Various PF Acts”, Standing Committee on Labour, August 9, 2018, http://164.100.47.193/lsscommittee/Labour/16_Labour_42.pdf.

[65] “40th Report: Overseas Employment of Women Workers including Nurses and Maids, Issues and Regulatory Framework”, Standing Committee on Labour, Lok Sabha, August 9, 2018, http://164.100.47.193/lsscommittee/Labour/16_Labour_40.pdf.    

[66] Fourth Advance Estimates of Production of Foodgrains and Commercial Crops for 2017-18, Directorate of Economics and Statistics, Ministry of Agriculture and Farmers Welfare, August 28, 2018, https://eands.dacnet.nic.in/Advance_Estimate/4th_Adv_Estimates2017-18_Eng.pdf.

[67] “Cabinet approves release of pulses procured from

farmers under Price Support Scheme to States

with Central Subsidy of Rs. 15 per Kg for utilization

under Welfare Schemes”, Press Information Bureau, Cabinet Committee on Economic Affairs, August 9, 2018.

[68] Report no. 58, Standing Committee on Agriculture: ‘ICAR – Central Tuber Crops Research Institute – A Performance Review’, Lok Sabha, August 3, 2018, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_58.pdf.

[69] “Visit of Prime Minister to Nepal (August 30-31, 2018)”, Ministry of External Affairs, https://mea.gov.in/outgoing-visit-info.htm?2/1098/Visit+of+Prime+Minister+to+Nepal+August+3031+2018

[70] “Fourth BIMSTEC Summit Declaration, Kathmandu, Nepal (August 30-31, 2018)”, Ministry of External Affairs, August 31, 2018, https://mea.gov.in/bilateral-documents.htm?dtl/30335/Fourth_BIMSTEC_Summit_Declaration_Kathmandu_Nepal_August_3031_2018

 

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

Highlights of this Issue

Monsoon Session 2018 of Parliament begins; 11 Bills introduced in Parliament

Bills introduced include the Banning of Unregulated Deposit Schemes Bill, 2018, the Arbitration and Conciliation (Amendment) Bill, 2018, and the Micro, Small and Medium Enterprises (Development) Amendment Bill, 2018.

Parliament passes five Bills in the ongoing Monsoon Session

These include the Fugitive Economic Offenders Bill, 2018, the Prevention of Corruption Bill, 2013, the Specific Relief Bill, 2018 and the State Banks (Repeal and Amendment) Bill, 2018.

Committee constituted to recommend data privacy law submits report and draft Bill

The Committee studied issues with respect to data protection, and made recommendations to address them.  The Committee also suggested a draft Data Protection Bill.

Six Bills passed by Lok Sabha; one by Rajya Sabha in Monsoon Session

These include the Right to Education (Second Amendment) Bill, 2017, the Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018, and the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018.

Cabinet approves introduction of DNA Technology (Use and Application) Bill, 2018

The Bill aims to: (i) expand the application of DNA-based forensic technologies to strengthen the justice delivery system in the country, and (ii) utilise DNA-based technologies for solving crimes, and identifying missing persons. 

Six higher educational institutions declared Institutions of Eminence

Of the six institutions, three are in the public sector and the remaining in the private sector.  These institutions were selected on the basis of recommendations made by an expert committee. 

GST Council recommends amendments to the Acts related to GST

The Council made recommendations on amendments regarding eligibility under the composition scheme and the reverse charge mechanism.

CCEA approves Minimum Support Prices for Kharif crops for the 2018-19 season

MSPs for Kharif crops for the 2018-19 marketing season have been fixed at a level of at least 1.5 times the cost of production.  The MSP for paddy has been increased by 13% and has been fixed at Rs 1,750 per quintal.

Standing Committees submit reports on various subjects

The subjects include the impact of Chinese goods on Indian industry, safety in petroleum sector, security situation in the north eastern states, development of inland fisheries, Swachh Bharat Mission, and functioning of panchayats.

Three Committees constituted to examine various issues

They will examine and make recommendations about: (i) issues facing stressed thermal power projects, (ii) re-categorisation of offences under the Companies Act, 2013, and (iii) recent instances of lynching and mob violence.  

Law Commission releases report on regulating betting and gambling

The Commission noted that while it is desirable to ban betting and gambling, it is difficult to prevent these activities altogether.  Therefore, the Commission recommended regulation of gambling and betting.

 

Parliament

Ahita Paul (ahita@prsindia.org)

Monsoon session of Parliament begins

The Monsoon Session 2018 of Parliament began on July 18, 2018.  It will have 18 sittings till August 10, 2018.[1]  In this session, 25 Bills have been listed for consideration and passing.  These included the Fugitive Economic Offenders Bill, 2018, the Right of Children to Free and Compulsory Education (Second Amendment) Bill, 2017, the Muslim Women (Protection of Rights on Marriage) Bill, 2017, and the National Medical Commission Bill, 2017.  Of these, five Bills have been passed by Parliament so far.  These include the Fugitive Economic Offenders Bill, 2018, the Specific Relief (Amendment) Bill, 2017, and the Prevention of Corruption (Amendment) Bill, 2013.

In addition, 11 Bills have been introduced so far.  These include six Bills which replace Ordinances, including the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018, the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018, and the Criminal Law (Amendment) Bill, 2018.  Other Bills introduced include the Unregulated Deposit Schemes Bill, 2018.

So far, Lok Sabha has passed six Bills, including the National Council for Teacher Education (Amendment) Bill, 2017, and the Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018.

For more details on the legislative agenda during the Monsoon Session 2018, see here.

Macroeconomic Development

Roopal Suhag (roopal@prsindia.org))

Retail inflation at 4.8% in first quarter of 2018-19

The Consumer Price Index (CPI) inflation (base year 2011-12) increased from 4.5% in April 2018 to 5% in June 2018, year-on-year.[2]  Food inflation was at 2.9% in June 2018.

The Wholesale Price Index (WPI) inflation (base year 2011-12) increased from 3.2% in April 2018 to 5.8% in June 2018, year-on-year.[3]  Trends in inflation during the first quarter of 2018-19 are shown in Figure 1.

Figure 1: Inflation trends in Q1 of 2018-19 (% change, year on year)

Sources: Ministry of Commerce and Industry; Ministry of Statistics and Programme Implementation; PRS.

Finance

The Fugitive Economic Offenders Bill, 2018 passed by Parliament

Roshni Sinha (roshni@prsindia.org)

The Fugitive Economic Offenders Bill, 2018, was passed by Parliament.[4]  It seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution, or refuse to return to the country to face prosecution.  Previously, an Ordinance was promulgated on April 21, 2018.[5]  Key features of the Bill include:

  • Fugitive economic offender: A fugitive economic offender has been defined as a person against whom an arrest warrant has been issued for committing an offence listed in the schedule of the Bill, and the value of the offence is at least Rs 100 crore.  Further, the person has: (i) left the country to avoid facing prosecution, or (ii) refuses to return to face prosecution.  Some of the offences listed in the schedule are: (i) counterfeiting government stamps or currency, (ii) cheque dishonour, (iii) money laundering, and (iv) transactions defrauding creditors.  The Bill allows the central government to amend the schedule through a notification.
  • Declaration as fugitive economic offender: After hearing the application, a special court (designated under the Prevention of Money-Laundering Act, 2002) may declare an individual as a fugitive economic offender.  It may confiscate properties which are: (i) proceeds of crime, (ii) benami properties, and (iii) any other property, in India or abroad.  Upon confiscation, all rights and titles of the property will vest in the central government, free from encumbrances (such as any charges on the property).  The central government may appoint an administrator to manage and dispose of these properties.
  • Bar on filing or defending civil claims: The Bill allows any civil court or tribunal to prohibit a declared fugitive economic offender, from filing or defending any civil claim.  Further, any company or limited liability partnership where such a person is a majority shareholder, promoter, or a key managerial person (such as a managing director or CEO), may also be barred from filing or defending civil claims.

For a PRS analysis on the Bill, see here.

The Banning of Unregulated Deposit Schemes Bill, 2018 introduced in Lok Sabha

Ahita Paul (ahita@prsindia.org)

The Banning of Unregulated Deposit Schemes Bill, 2018 was introduced in Lok Sabha on July 18, 2018.[6]  The Bill provides for a mechanism to ban unregulated deposits and protect the interests of depositors.  Key features of the Bill include:

  • Unregulated deposit scheme: The Bill defines a deposit as an amount of money received through an advance, a loan, or in any other form, with a promise to be returned with or without interest.  Such deposit may be returned either in cash or as a service, and the time of return may or may not be specified.  Currently, nine regulators oversee and regulate various deposit-taking schemes.  These include: (i) the Reserve Bank of India, and (ii) the Securities and Exchange Board of India.  All deposit-taking schemes are required to be registered with the relevant regulator.  A deposit-taking scheme is unregulated if it is not registered with the regulators listed in the Bill.
  • Offences and penalties: The Bill defines three types of offences, and penalties related to them.  These offences are: (i) running (advertising, promoting, operating or accepting money for) unregulated deposit schemes, (ii) fraudulently defaulting on regulated deposit schemes, and (iii) wrongfully inducing depositors to invest in unregulated deposit schemes by willingly falsifying facts.  For example, accepting unregulated deposits will be punishable with imprisonment between two and seven years, along with a fine ranging from three to 10 lakh rupees.

For a PRS summary of the Bill, see here.

The Negotiable Instruments (Amendment) Bill, 2017 passed by Parliament

Ahita Paul (ahita@prsindia.org)

The Negotiable Instruments (Amendment) Bill, 2017 was passed by Rajya Sabha on July 26, 2018.[7]  It was introduced in Lok Sabha on January 2, 2018 and was passed by the house on July 23, 2018.  The Bill amends the Negotiable Instruments Act, 1881.  The Act defines promissory notes, bills of exchange, and cheques.  It also specifies penalties for bouncing of cheques, and other violations with respect to such negotiable instruments.  Key features of the Bill include:

  • Interim compensation: The Bill seeks to allow a court trying an offence related to cheque bouncing, to direct the drawer (person who writes the cheque) to pay interim compensation to the complainant.
  • Returning the interim compensation: In case the drawer is acquitted (during trial or by the appellate court), the court will direct the complainant to return the interim compensation (or deposit in case of an appeal case), along with an interest.

For a PRS summary of the Bill, see here.

The State Banks (Repeal and Amendment) Bill, 2018 passed by Parliament

Ahita Paul (ahita@prsindia.org)

The State Banks (Repeal and Amendment) Bill, 2018 was passed by Parliament.[8]  It was introduced in Lok Sabha on July 21, 2017 and passed on August 10, 2017.  Rajya Sabha passed the Bill on July 18, 2018.  Key features of the Bill include:

  • Repeal: It seeks to repeal two Acts which established the State Bank of Bikaner, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, and State Bank of Hyderabad. These banks were subsidiaries of the State Bank of India (SBI), and have been merged with SBI.
  • Amendments to the SBI Act, 1955: The Bill seeks to amend the State Bank of India Act, 1955 to remove references related to subsidiary banks. These references include: (i) the definition of a subsidiary bank in the 1955 Act, and (ii) powers of SBI to act as an agent of the RBI for a subsidiary bank.

Cabinet approves extension of recapitalisation of Regional Rural Banks

Ahita Paul (ahita@prsindia.org)

The Union Cabinet approved the extension of the scheme of recapitalisation of Regional Rural Banks (RRBs) up to 2019-20.[9]  The scheme of recapitalisation of RRBs was started in 2010-11, and was previously valid till March 31, 2017.  Under the extension, an amount of about Rs 343 crore will be utilised to support RRBs whose capital to risk-weighted assets ratio is below 9%.  The identification of RRBs requiring recapitalisation, and the amount of capital to be provided, will be decided by the government in consultation with the National Bank for Agriculture and Rural Development.

GST Council recommends amendments to the Acts related to GST

Suyash Tiwari (suyash@prsindia.org)

The Goods and Services Tax (GST) Council, in its 28th meeting, gave its recommendations on amendments to be made to central and state GST laws.[10]  The key amendments recommended by the GST Council include: 

  • Eligibility under the composition scheme: The central and state GST laws allow certain taxpayers with annual turnover of less than Rs one crore to pay GST on turnover, instead of the value of supply of goods and services. The GST Council recommended increasing this limit to Rs 1.5 crore.
  • Services: At present, persons engaged in the supply of services (other than restaurant services) are not eligible to avail the composition scheme.  The Council recommended that such persons should be eligible, provided that the value of supply of these services does not exceed 10% of their turnover in the previous financial year, or Rs 5 lakh, whichever is high er. 
  • Reverse charge mechanism: Under reverse charge mechanism, when an unregistered person supplies goods or services to a registered person, the registered person should pay the GST on such supply.  The Council amends this provision to state that it will only apply to a class of registered persons to be notified by the central government.

Ministry of Finance increases monetary thresholds for appeals by tax departments

Suyash Tiwari (suyash@prsindia.org)

The Ministry of Finance increased the monetary thresholds for filing appeals by the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC).[11]  These thresholds are applicable for filing appeals before appellate tribunals, High Courts, and the Supreme Court.  Table 1 shows the revised limits for filing departmental appeals before these appellate forums.

Table 1: Monetary thresholds for filing appeals by tax departments (in Rs)

Appellate Forum

Previous Limit

Revised Limit

Appellate Tribunals

10 lakh

20 lakh

High Courts

20 lakh

50 lakh

Supreme Court

25 lakh

1 crore

Sources: Press Information Bureau; PRS. 

  • In case of CBDT, these limits will not apply to writ matters and matters related to any direct tax other than income tax. In addition, it will not apply in cases where any disputed amount is not involved or not quantifiable. 
  • In case of CBIC, these limits will apply in cases related to central excise and service tax.
  • For both departments, these limits will not apply to cases which involve substantial point of law. These include cases where: (i) the constitutional validity of the provisions of an Act or rule is under challenge, and (ii) notification, order, instruction, or circular has been held illegal or ultra vires. 

With this revision, the departments will also withdraw the pending cases having dispute amount below the new thresholds.  As a result, CBDT will withdraw 41% of the cases filed by it at various courts.  Similarly, CBIC will withdraw 18% of the cases filed by it. 

Information Technology

Roshni Sinha (roshni@prsindia.org)

Expert Committee submits report on data privacy

The Committee of Experts on a Data Protection Framework for India (Chair: Justice B. N. Srikrishna) submitted its report and draft Bill to the Ministry of Electronics and Information Technology on July 27, 2018.  The Committee was constituted in August, 2017 to examine issues related to data protection, recommend methods to address them, and draft a data protection Bill.

The Committee observed that the regulatory framework has to balance the interests of the individual with regard to his personal data and the interests of the entity such as a service provider who has access to this data.  It noted that the relationship between the individual and the service provider must be viewed as a fiduciary relationship.  This is due to the dependence of the individual on the service provider to obtain a service.  Therefore, the service provider processing the data is under an obligation to deal fairly with the individual’s personal data, and use it for the authorised purposes only. 

Key provisions of the draft Bill include:

  • Grounds for processing data: The Bill allows processing of data by fiduciaries if consent is provided.  Further, processing of sensitive personal data (e.g., caste, religion, and sexual orientation of the individual) requires explicit consent.  However, in certain circumstances, processing of data may be permitted without consent of the individual. 
  • Obligations of fiduciaries: Entities with access to personal data have several obligations, including: (i) to process data fairly and reasonably, and (ii) to give notice to the individual at the time of collecting data to various points in the interim. 
  • Data Protection Authority: The Bill provides for the establishment of a Data Protection Authority to: (i) protect interests of individuals, (ii) prevent misuse of personal data, and (iii) ensure compliance with the Bill.  It will consist of a chairperson and six members, with knowledge of at least 10 years in the field of data protection and information technology. 
  • Rights of the individuals: The Bill sets out certain rights of individuals.  These include: (i) right to obtain confirmation from the fiduciary on whether its personal data has been processed, (ii) right to seek correction of inaccurate, incomplete, or out-of-date personal data, and (iii) right to have personal data transferred to any other data fiduciary in certain circumstances.
  • Offences and penalties: Under the Bill, the Authority may levy penalties for various offences by the data fiduciary including (i) failure to perform its duties, (ii) data processing in violation of the Bill, and (iii) failure to comply with the directions issued by the Authority. 
  • Amendments to other laws: The Bill makes consequential amendments to the Information Technology Act, 2000.  It also amends the Right to Information Act, 2005, and to permit non-disclosure of personal information where harm to the individual outweighs public good.

A PRS summary of the report and draft Bill is available here.   

Law and Justice

Arbitration and Conciliation (Amendment) Bill, 2018 introduced in Lok Sabha

Roshni Sinha (roshni@prsindia.org)

The Arbitration and Conciliation (Amendment) Bill, 2018 was introduced in Lok Sabha.[12]  It seeks to amend the Arbitration and Conciliation Act, 1996.  The Act contains provisions to deal with domestic and international arbitration, and defines the law for conducting conciliation proceedings.  Key features of the Bill are:

  • Arbitration Council of India: The Bill seeks to establish an independent body called the Arbitration Council of India (ACI) for the promotion of arbitration, mediation, conciliation and other alternative dispute redressal mechanisms.  Its functions include: (i) framing policies for grading arbitral institutions and accrediting arbitrators, (ii) making policies for the establishment, and maintenance of uniform professional standards for all alternate dispute redressal matters, and (iii) maintaining a depository of arbitral orders made in India and abroad.
  • Composition of the ACI: The ACI will consist of a Chairperson who is either: (i) a Judge of the Supreme Court; or (ii) a Judge of a High Court; or (iii) Chief Justice of a High Court; or (iv) an eminent person with expert knowledge in conduct and administration of arbitration.  Other members will include an eminent arbitration practitioner, an academician with experience in arbitration, and government appointees.
  • Appointment of arbitrators: Under the Act, parties were free to appoint arbitrators.  In case of disagreement on an appointment, the parties could request the Supreme Court, or the concerned High Court, or any person or institution designated by such Court, to appoint an arbitrator. 
  • Under the Bill, the Supreme Court and High Courts may designate arbitral institutions, which parties can approach for the appointment of arbitrators. For international commercial arbitration, appointments will be made by the institution designated by the Supreme Court.  For domestic arbitration, appointments will be made by the institution designated by the concerned High Court.  In case there are no arbitral institutions available, the Chief Justice of the concerned High Court may maintain a panel of arbitrators to perform the functions of the arbitral institutions. 
  • Relaxation of time limits: Under the 1996 Act, arbitral tribunals are required to make their award within a period of 12 months for all arbitration proceedings.  The Bill proposed to remove this restriction for international commercial arbitrations.

For a PRS summary of the Bill, see here.

Specific Relief (Amendment) Bill, 2018 passed by Parliament

Roshni Sinha (roshni@prsindia.org)

The Specific Relief (Amendment) Bill, 2018, was passed by Parliament.[13]  It amends the Specific Relief Act, 1963.  The Act provides for the following remedies to a party whose contract has not been performed: (i) the aggrieved party may ask the court to require performance of the contract (known as specific performance); or (ii) it may seek monetary compensation. Key features of the Bill include:

  • Specific performance: Under the Act, specific performance may be granted by the court, at its discretion, in the following circumstances: (i) when monetary compensation is inadequate; or (ii) when monetary compensation cannot be easily ascertained. The Bill seeks to remove these conditions and permit specific performance by courts as a general rule.
  • Substituted performance: The Bill inserts a provision allowing an aggrieved party (i.e., party whose contract has not been performed) with the option of arranging for performance of the contract by a third party or through his own agency.  The aggrieved party has to give a written notice to the nonperforming party of at least 30 days before obtaining substituted performance.
  • Injunctions: Under the Act, courts can grant injunctions to aggrieved parties. The Act provides circumstances in which the injunction cannot be given, for example, to stop a party from filing a complaint in a criminal matter. The Bill seeks to prohibit courts from granting injunctions in certain infrastructure project contracts, if such an injunction would hinder or delay the completion of the project.  The Bill provides a list of project categories under certain infrastructure sectors and their sub-sectors.
  • Special courts: The Bill provides that certain civil courts may be designated as special courts by state governments, in consultation with the Chief Justice of the respective High Court. These special courts will deal with cases related to infrastructure projects. Such cases must be disposed of within 12 months.

For a PRS summary of the Bill, see here.

The Commercial Courts (Amendment) Bill, 2018 introduced in Lok Sabha

Gayatri Mann (gayatri@prsindia.org)

The Commercial Courts, Commercial Division, and Commercial Appellate Division of High Courts (Amendment) Bill, 2018 was introduced in Lok Sabha.[14]  The Bill amends the Commercial Courts, Commercial Division, and Commercial Appellate Division of High Courts Act, 2015, and replaces an Ordinance promulgated in May 2018.[15]  The Act enables the creation of commercial divisions in High Courts, and commercial courts at the district level to adjudicate commercial disputes.

  • Reduction in pecuniary limits: Under the Act, commercial courts and commercial divisions in high courts can decide disputes with a value of at least one crore rupees.  The Bill reduces this limit to an amount of at least three lakh rupees or a higher value to be notified by the central government.
  • Establishment of certain commercial courts: Under the Act, state governments may constitute commercial courts at district judge level, after consulting the concerned High Court.  The Act bars such commercial courts to be constituted in cases where the High Court has the original jurisdiction to hear commercial cases.  The Bill removes this bar and allows states to constitute commercial courts where high courts have ordinary original civil jurisdiction. 
  • Commercial Appellate Courts: In areas where High Courts do not have ordinary original civil jurisdiction, state governments may notify commercial appellate courts at the district judge level.  Appeals against the order of a commercial court (below the level of a district judge) will lie before the Appellate Court. 
  • Mediation: A provision for mandatory mediation has been provided in those cases where no urgent relief is being sought by the parties to the dispute.  The mediation process is required to be completed within a period of three months (may be extended by another two months). 

For a PRS analysis on the Bill, see here.

Law Commission submits report on a legal framework for betting and gambling

Roshni Sinha (roshni@prsindia.org)

The Law Commission of India (Chair: Dr. Justice B.S. Chauhan) submitted a report examining whether betting may be legalised in India.[16]  The report follows a Supreme Court directive in 2016 where the Court asked the Commission to examine the possibility of a law to regulate betting.  The Commission noted that while it is desirable to ban betting and gambling, it is difficult to prevent these activities altogether.  Therefore, the Commission recommended regulation of gambling and betting.  Key recommendations include:

  • Power to regulate gambling and betting: Betting and gambling is a state subject under the Constitution.  Therefore, the Commission notes that state legislatures may frame a law to regulate betting and gambling.  However, it stated that Parliament may enact a model law to regulate betting and gambling, which states may adopt.  Parliament may also enact laws under Article 249 (in national interest) or Article 252 (if two or more states consent).  With regard to online gambling and betting, it observed that Parliament has the competence to enact a law. 
  • Regulations governing gambling and betting: The Commission recommended that gambling and betting should only be permitted by licensed operators from India.  For participants, it recommended that there should be a cap on the number of such transactions for a specific period, i.e., monthly, half-yearly or yearly.  It also recommended that transactions between operators and participants should be made cashless and penalties should be imposed for cash transactions. 
  • In order to protect the public from the ill-effects of these activities and to increase transparency and state supervision, the Commission recommended that all betting and gambling transactions should be linked to the Aadhaar/PAN Card of the operator and participant. Further, any income derived from betting or gambling should be made taxable under the Income Tax Act (IT Act), 1961, the Goods and Services Tax Act (GST), 2017, and other relevant laws.
  • Prohibited persons: The Commission recommended that minors, or those who receive subsidies from the government, or those who do not fall within the purview of the IT Act, 1961, or the GST, 2017 should be barred from participating in online or offline gambling platforms.

For a PRS Report Summary, see here.

Personnel and Public Grievances

Roshni Sinha (roshni@prsindia.org)

Prevention of Corruption Bill, 2018 passed by Parliament

The Prevention of Corruption Bill, 2018 was passed by Parliament.[17]  The Bill seeks to amend the Prevention of Corruption Act, 1988.  The Bill was introduced in Rajya Sabha in August 2013 and referred to a Standing Committee.  Key features of the Bill passed by Parliament include:

  • Giving a bribe: The Bill introduces the offence of giving a bribe as a direct offence. However, a person who is compelled to give a bribe will not be charged with the offence if he reports the matter to law enforcement authorities within seven days.
  • Criminal misconduct: The Bill redefines the provisions related to criminal misconduct to only cover two types of offences: (i) fraudulent misappropriation of property; and (ii) illicit enrichment (such as amassing of assets disproportionate to one’s known sources of income).
  • Prior approval for investigation: Before a police officer conducts any investigation into an offence alleged to have been committed by a public servant, prior approval of the relevant government or competent authority should be taken. Such approval would not be necessary in cases which involves the arrest of a person on the spot on the charge of taking a bribe.
  • Time period for trial of cases: As per the Bill, endeavour should be made to complete the trial by special judge within two years.  This period may be extended for up to six months at a time, for recorded reasons.  However, the total period for completion of trial may not exceed four years.

For a PRS analysis of the Bill, see here.

Standing Committee submits report on Lokpal Rules

The Standing Committee on Personnel, Public Grievances, Law and Justice (Chairperson: Mr. Bhupender Yadav) submitted its report on “Draft Public Servants (Declaration of Assets and Liabilities and Minimum Value of Assets for Condonation or Exemption) Rules, 2017”.[18]  These Rules are proposed to be notified under the Lokpal and Lokayuktas Act, 2013.   They prescribe the form and manner for declaration of assets and liabilities of public servants. 

The 2013 Act requires a public servant to declare his assets and liabilities, and that of his spouse and dependent children.  Previously, the Act itself specified the form and manner of the declaration.  However, the Lokpal and Lokayuktas (Amendment) Act, 2016 amended this provision to state that the form and manner of making such a declaration will be prescribed by the central government through rules.  The Rules were drafted pursuant to the 2016 Amendment Act.

The Standing Committee examined the Rules and made the following recommendations:

  • Time period for declaration: As per the Rules, a public servant is required to make a declaration of assets and liabilities within six months of assuming office.  Public servants already in office are required to file a declaration on or before July 31, 2018.  Further, revised declarations need to be filed within six months if there is any change in the details provided in earlier declarations.  Instead of this process, the Committee recommended that declarations only be filed once a year.  This will allow public servants to file a single return in a year even if it includes several transactions.  
  • Determining threshold amount: Under the Rules, assets and liabilities below a certain value are exempted from declaration.  This minimum value of assets may be prescribed by the competent authority, having regard to the nature of public servant and the office held.  The Committee emphasised that the minimum value should be reasonable and should be revised at regular intervals.  

For a PRS Report Summary, see here.

Corporate Affairs

The Insolvency and Bankruptcy (Amendment) Bill, 2018 passed by Lok Sabha

Prachee Mishra (prachee@prsindia.org)

The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018 was passed by Lok Sabha.[19]  The Bill amends the Insolvency and Bankruptcy Code, 2016, and replaces the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 that was promulgated on June 6, 2018.[20]  The Code provides a time-bound process for resolving insolvency in companies and among individuals.  Key features of the Bill include:  

  • Financial creditors: The Code defines a financial creditor as a person to whom financial debt is owed.  Such debt includes any amount raised that has the commercial effect of a borrowing.  The Bill clarifies that an allottee under a real estate project will be considered a financial creditor.  An allottee includes any person to whom a plot, apartment, or building has been allotted, sold, or transferred by a promoter (real estate developer or development authority).  These allottees will be represented by an authorised representative on the committee of creditors. 
  • Applicability of the Code to Micro, Small and Medium Enterprises (MSMEs): The Code prohibits certain persons from bidding for the company in the resolution process.  This includes persons whose account has been classified as a Non-Performing Asset (NPA) for a year, and any guarantor for a defaulting debtor.  The Bill provides that the ineligibility criteria for resolution applicants regarding NPAs and guarantors will not be applicable to persons applying for resolution of MSMEs.  The central government may modify or remove other provisions of the Code while applying them to MSMEs. 
  • Voting threshold of committee of creditors: The Code specifies that all decisions of the committee of creditors be taken by a majority of at least 75% of the financial creditors.  The Bill lowers this threshold to 51%.  For certain key decisions, the voting threshold has been reduced from 75% to 66%.  These include: (i) appointment and replacement of the resolution professional, and (ii) approval of the resolution plan. 

For a PRS analysis of the Bill, see here.

Committee constituted to review offences under Companies Act, 2013

Roshni Sinha (roshni@prsindia.org)

A committee has been constituted to review the offences under the Companies Act, 2013.[21]  The Committee will examine the following: (i) whether offences categorised as compoundable (attracting fine or imprisonment or both) may be considered as mere ‘defaults’ or 'civil wrongs', where only a penalty may be imposed in the first instance, and on default to pay penalty, the offence may be re-categorised as an offence triable by court, (ii) whether non-compoundable offences (attracting imprisonment or imprisonment and fine) need to be re-categorised as compoundable offences, and (iii) to examine the existing mechanism for levy of penalty under the Companies Act, 2013.  The Committee will be chaired by the Secretary of the Ministry of Corporate Affairs, and eight other members including members from the industry. 

Education

Gayatri Mann (gayatri@prsindia.org)

The RTE (Second Amendment) Bill, 2017 passed by Lok Sabha

The Right of Children to Free and Compulsory Education (Second Amendment) Bill, 2017 was passed by Lok Sabha.[22]  The Bill was introduced in Lok Sabha on August 11, 2017.  It is currently pending in Rajya Sabha.

The Right of Children to Free and Compulsory Education Act, 2009 prohibits detention of children till they complete elementary education i.e., class 8.  The Bill seeks to amend this provision to empower the central or state government to allow schools to hold back a child in class 5, class 8, or in both classes.

The Bill seeks to amend this provision to state that a regular examination will be held in class 5 and class 8 at the end of every academic year.  If a child fails in the examinations, he will be given additional instruction, and will take a re-examination.  If he fails in the re-examination, the relevant central or state government may decide to allow schools to detain the child.

Note that, the Standing Committee on Human Resource Development (Chair: Dr. Satyanarayan Jatiya) submitted its report on the Bill in February 2018.   It reinstated that learning of children must be assessed through examinations.

For more details on the Bill, see here.

The National Council for Teacher Education (Amendment) Bill, 2017 passed by Lok Sabha

The National Council for Teacher Education (Amendment) Bill, 2017 was passed by Lok Sabha.[23]  The Bill was introduced in Lok Sabha on December 18, 2017.  It amends the National Council for Teacher Education Act, 1993.  The Act establishes the National Council for Teacher Education (NCTE) which regulates the teacher education system and the standards it is required to maintain. 

The Bill seeks to grant retrospective recognition to institutions: (i) notified by the central government, (ii) funded by the central government or state/union territory government, (iii) which do not have recognition under the Act, and (iv) which must have offered teacher education courses on or after the establishment of the NCTE until the academic year 2017-2018.   It also seeks to grant retrospective permission to such institutions to start a new course or offer training in teacher education.

For more details on the Bill, see here.

The National Sports University Bill, 2018 introduced in Lok Sabha

The National Sports University Bill, 2018 was introduced in Lok Sabha.[24]  It replaces the National Sports University Ordinance, 2018 that was promulgated on May 31, 2018.[25]  The Bill provides for the establishment a National Sports University in Manipur.

  • Establishment of the University: The National Sports University will be headquartered in Manipur.  It may establish outlying campuses (within or outside India), colleges, or regional centres.  The University will: (i) undertake research on physical education, (ii) strengthen sports training programmes, and (iii) collaborate internationally in the field of physical education, among others.
  • Functions of the University: Key powers and functions of the University include: (i) prescribing courses of study and conducting training programmes, (ii) granting degrees, diplomas, and certificates, (iii) providing facilities through a distance education system, and (iv) conferring autonomous status on a college or an institution.

For a PRS summary of the Bill, see here.

Government declares six educational Institutions of Eminence

The Ministry of Human Resource Development recently declared six higher educational institutions as Institutions of Eminence.[26]  Of these six institutions, three are in the public sector and the remaining in the private sector.  These institutions were selected on the basis of recommendations  of the Empowered Expert Committee (Chair: Mr. N. Gopalaswami).[27]

In February 2018, the University Grants Commission constituted an Empowered Expert Committee to recommend ten public and ten private higher educational institutions to emerge as world-class teaching and research institutions i.e., as Institutions of Eminence.[28]  These institutions would be allowed greater autonomy in admitting foreign students, fixing fees, and recruiting foreign faculty, among others.

The institutions selected by the Ministry are: (i) Indian Institute of Science, Bangalore, (ii) Indian Institute of Technology, Bombay, (iii) Indian Institute of Technology, Delhi, (iv) Jio Institute, Pune; (v) Birla Institute of Technology & Sciences, Pilani and (vi) Manipal Academy of Higher Education, Manipal.

UGC releases regulations on minimum qualifications for appointment of teachers

The University Grants Commission (UGC) released new regulations to alter the conditions of recruitment, and promotion of university teachers and academic staff.[29]  In February 2018, the UGC released draft regulations for public feedback.[30]  Key features of the regulations are:

  • Direct recruitment of assistant professors: As per the regulations, the minimum eligibility criteria for direct recruitment of assistant professors will be: (i) a master’s degree with 55% marks, and the candidate should have cleared the National Eligibility Test or have a Ph. D degree; or (ii) a Ph. D. degree from a foreign university ranked among the top 500 universities.  However, from July 1, 2021, Ph. D. will be mandatory for direct recruitment of assistant professors.
  • Appointment of professors: A Ph. D. degree will be mandatory for the appointment and promotion of professors, associate professors, and assistant professors.  In addition, up to 10% of the existing sanctioned strength of professors in universities will be appointed as senior professors.  These senior professors can be appointed through: (i) direct recruitment, or (ii) promotion as per criteria set out under the Career Advancement Scheme.
  • Teacher evaluation grading system: Currently, professors are evaluated on the basis of the performance based appraisal system which measure the quality of teaching by linking it to their academic performance.  The regulations replace this system with a new teacher evaluation grading system which adds a research based score as well.  This score measures the number of research papers published in UGC listed journals, books published, and works translated in other languages.

Cabinet approves increasing capital base of HEFA to Rs 10,000 crore

The Cabinet approved the proposal for expanding the scope of the Higher Education Financing Agency (HEFA) by increasing its capital base to Rs 10,000 crore.[31]   In addition, the HEFA has been tasked to mobilise Rs 1,00,000 crore to meet the infrastructure needs of higher educational institutions under Revitalizing Infrastructure and Systems in Education by 2022. 

The HEFA was established in May 2017 with an authorised capital of Rs 2,000 crore.[32]  It seeks to promote the creation of high quality infrastructure in premier educational institutions.  In the existing arrangement, the entire principle amount is repaid by the institution over ten years, and the interest amount is serviced by the government by providing grants to the institution. So far, funding proposals of Rs 2,016 crore have been approved by the HEFA.31 

The Cabinet approved the following five categories for financing under HEFA:

  • Technical institutions established before ten years: Will repay the whole principal amount from internal resources.
  • Technical institutions started between 2008 and 2014: Will repay 25% of the principal amount from internal resources, and receive grants for the balance amount.
  • Central universities started prior to 2014: Will repay 10% of the principal amount from internal resources, and receive grants for the balance amount.
  • Central universities started after 2014:  Grants will be provided for complete servicing of loan (principal and interest).
  • Other educational institutions and grant-in-aid institutions: This includes all newly set up AIIMSs and Kendriya Vidyalayas which will be provided with complete servicing of the loan.

Science and Technology

Roshni Sinha (roshni@prsindia.org)

Cabinet approves introduction of the DNA Technology (Use and Application) Bill, 2018

The Union Cabinet approved the introduction of the DNA Technology (Use and Application) Bill, 2018.[33]  The Cabinet identified the following purposes of the Bill: (i) expand the application of DNA-based forensic technologies to support and strengthen the justice delivery system of the country, (ii) utilise DNA-based technologies for solving crimes, and to identify missing persons, (iii) provide for mandatory accreditation and regulation of DNA laboratories, (iv) ensure that DNA test results are reliable and the privacy rights of citizens with respect to the data remain protected, and (v) enable the matching between persons who have been reported missing and unidentified dead bodies found in various parts of India, and also to establish the identity of victims in mass disasters.

For a copy of the Bill to be introduced, see here.

Health

Gayatri Mann (gayatri@prsindia.org)

Bill to supersede the Homoeopathy Central Council passed by Lok Sabha

The Homoeopathy Central Council (Amendment) Bill, 2018 was introduced and passed by Lok Sabha.[34]  It amends the Homoeopathy Central Council Act, 1973 and replaces the Homoeopathy Central Council (Amendment) Ordinance, 2018 that was promulgated on May 18, 2018.[35]  The Act sets up the Central Council of Homoeopathy which regulates homoeopathic education and practice.

  • Supersession of the Central Council: The Bill amends the 1973 Act to provide for the supersession of the Central Council.  The Central Council will be reconstituted within one year from the date of its supersession.  In the interim period, the central government will constitute a Board of Governors to exercise the powers of the Central Council.
  • The Board of Governors will consist of up to seven members including: (i) persons of eminence in the field of homoeopathy education, and (ii) eminent administrators, appointed by the central government. The central government will select one of these members as the Chairperson of the Board. 
  • Permission for existing homoeopathy colleges: The Bill states that: (i) if any person has established a homoeopathy medical college, or (ii) if an established homoeopathy medical college has opened new courses or increased its admission capacity before the passage of the Bill, it will have to seek permission from the central government within one year.  If the person or homoeopathy medical college fails to seek such permission, then any medical qualification granted to a student from such medical college will not be recognised under the Act.

For a PRS summary of the Bill, see here.

Bill to amend the National Trust for welfare of persons with disabilities introduced in Rajya Sabha

The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities (Amendment) Bill, 2018 was introduced in Rajya Sabha.[36]  It amends the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.[37] 

The 1999 Act sets up a National Trust to enable persons with disability to live independently by: (i) promoting measures for their protection in case of death of their parents, (ii) evolving procedures for appointment of their guardians and trustees, and (iii) facilitating equal opportunities in society.

  • Tenure of the Board: Under the Act, the Chairperson and members of the Board of the National Trust can hold office for a term of three years from the date of their appointment or until their successors are appointed, whichever is longer.  The Bill amends this provision to fix the tenure of the Chairperson and members of the Board to three years.  Further, the Bill states that the central government will initiate the process for appointment of the Chairperson or any member of the Board, at least six months prior to the expiry of his tenure.
  • Resignation of Chairperson: The Act states that if the Chairperson or members of the Board resign, they will continue in office until the appointment of their successor is made by the central government.  The Bill amends this provision to allow the Chairperson or members of the Board to hold office till their resignation is accepted by the central government.
  • Vacancy in office of the Chairperson: In case of a vacancy in the office of the Chairperson, the central government may direct an officer of appropriate level to perform the functions of the Chairperson until such vacancy is filled in.

For a PRS summary of the Bill, see here.

Housing and Urban Affairs

Prachee Mishra (prachee@prsindia.org)

The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017 passed by Rajya Sabha

The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017 was passed by Rajya Sabha.[38]  The Bill was introduced in Lok Sabha on July 18, 2017, and passed by Lok Sabha on December 20 2017.  The Bill will have to be passed by Lok Sabha again to incorporate the change regarding the year of passage. 

The Bill amends the Requisitioning and Acquisition of Immovable Property Act, 1952.  The Act provides for the central government to requisition property for its own purpose, which further must be a public purpose.  Under certain conditions it can also acquire such property.  Features of the Bill are:

  • Retrospective application: The Bill will deemed to have come into force on March 14, 1952.  This is the date of the enactment of the Act. 
  • Re-issue of notice: Under the Act, when acquiring a requisitioned property, the central government has to issue a notification with regard to such an acquisition.  Before issuing such a notice, the government has to provide the property owner (or any person interested in the property), an opportunity to be heard.  The property owner at such hearing has to provide reasons for why the property should not be acquired. 
  • The Bill provides that the government may re-issue the acquisition notice to the property owner (or a person interested in the property) to give them adequate opportunity for a hearing. This re-issue would be irrespective of any past court orders or judgments setting aside any past notices for acquisition.  However, the re-issue of notice will not apply to cases where the compensation has already been awarded and accepted by the claimants. 
  • Interest payable on compensation: In cases where a notice has been re-issued, the property owner (or a person interested in the property) will be entitled to an interest on the compensation payable to them.  The interest will be calculated for the period from when the first notice was issued till the date of the final payment of compensation.  This interest will be the same as the annual rate of interest, prevalent at any relevant time, on the domestic fixed deposit offered by the State Bank of India. 

For a PRS summary of the Bill, see here

Transport

Prachee Mishra (prachee@prsindia.org)

The Airports Economic Regulatory Authority of India (Amendment) Bill, 2018 introduced

The Airports Economic Regulatory Authority of India (Amendment) Bill, 2018 was introduced in Lok Sabha by the Minister of State for Civil Aviation, Mr. Jayant Sinha.[39]  It amends the Airports Economic Regulatory Authority of India Act, 2008.  The Act established the Airports Economic Regulatory Authority of India (AERA).  The AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers.  It also monitors the performance standard of services across these airports.  Key features of the Bill are:

  • Definition of major airports: The Act defines a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh. 
  • Tariff determination by AERA: Under the Act, the AERA is responsible for determining: (i) the tariff for aeronautical services at different airports every five years, (ii) the development fees of major airports, and (iii) the passengers service fee.  It can also call for necessary information to determine tariffs and perform any other tariff-related functions, including amending the tariffs if necessary in the interim periods. 
  • The Bill provides that the AERA will not determine: (i) the tariff, (ii) tariff structures, or (iii) the development fees, in certain cases. These cases will include those where such tariff amounts were a part of the bid document, on the basis of which airport operations are awarded.  The AERA will be consulted before incorporating such tariffs in a bid document, which will be notified. 

For a PRS summary of the Bill, see here

Amendments proposed to the Central Motor Vehicles Rules, 1989

The Ministry of Road Transport and Highways has notified draft amendments to the Central Motor Vehicles Rules, 1989.[40],[41]  Key amendments proposed include:

  • FASTags, and vehicle tracking system devices will be made mandatory for all commercial vehicles obtaining national permit. FASTag is a reloadable tag which enables automatic deduction of toll charges and lets vehicles pass through toll plazas without stopping for cash transactions.  The vehicle tracking system devices will be as per the Automotive Industry Standard 140, which is a set of standards published by the Automotive Research Association of India.  National permits are granted for the carriage of goods across states (at least four). 
  • No fitness certification will be required at the time of registration for new transport vehicles sold as fully built vehicles. Such vehicles will be deemed to have a certificate of fitness for a period of two years from the date of registration. Further, fitness certificate of transport vehicles will be renewed every two years for vehicles up to eight years old, and every one year for vehicles older than eight years. 

Suggestions and objections to the proposed amendments are invited till August 11, 2018.

Women and Child Development

Roshni Sinha (roshni@prsindia.org)

Anti-trafficking Bill passed by Lok Sabha

The Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018 was passed in Lok Sabha.[42]  The Bill provides for the prevention, rescue, and rehabilitation of trafficked persons. 

Key features of the Bill include:

  • National Anti-Trafficking Bureau: The Bill provides for the establishment of a National Anti-Trafficking Bureau to investigate trafficking cases and implement provisions of the Bill.  The Bureau will comprise of police officers, and any other officers as required.  The Bureau may take over the investigation of any offence under the Bill, that has been referred to it by two or more states.  
  • Functions of the Bureau: Key functions of the Bureau include: (i) coordinating and monitoring surveillance along known routes, (ii) facilitating surveillance, enforcement and preventive steps at source, transit and destination points, and (iii) maintaining coordination between law enforcement agencies, non-governmental organisations, and other stakeholders.
  • Anti-Trafficking Units: The Bill also provides for the setting up of Anti-Trafficking Units (ATUs) at the district level.  ATUs will deal with the prevention, rescue, and protection of victims and witnesses, and for the investigation and prosecution of trafficking offences.  In districts where an ATU is not functional, this responsibility will be taken up by the local police station. 
  • Anti-Trafficking Relief and Rehabilitation Committee: The Bill provides for the establishment of Anti-Trafficking Relief and Rehabilitation Committees (ATCs) at the national, state, and district levels.  These Committees will be responsible for: (i) providing compensation to victims, (ii) repatriation of victims, and (iii) re-integration of victims in society, among others.
  • Penalties: The Bill specifies the penalties for various offences including for (i) trafficking of persons, (ii) promoting trafficking, (iii) disclosing the identity of the victim, and (iv) aggravated trafficking (such as trafficking for bonded labour and begging).  For example, aggravated trafficking will be punishable with rigorous imprisonment of 10 years up to life imprisonment, along with a minimum fine of one lakh rupees. 

For a PRS summary of the Bill, see here.

Petroleum and Natural Gas

Prachee Mishra (prachee@prsindia.org)

Standing Committee submits report on Safety, Security and Environmental Aspects in Petroleum Sector

The Standing Committee on Petroleum and Natural Gas (Chairperson: Mr. Pralhad Joshi) submitted its report on ‘Safety, Security and Environmental Aspects in Petroleum Sector’.[43]  Key observations and recommendations of the Committee include:

  • Safety, security and environment protection in the petroleum sector: The Committee noted that the petroleum industry handles highly inflammable hydrocarbons, and operates processes under high temperature and pressure.  Further, the industry has a significant influence on environmental pollution through exploration and production operations, oil spillage, and refining operations.  Therefore, safety, security and environment protection in this industry is important and its safe operations are necessary both for the employees and the society at large.  It recommended that all these operations should be continuously monitored, and the legal framework strengthened to enhance safety and minimise the environmental impact.
  • Role of the Safety Council: Data submitted by Oil Industry Safety Directorate indicates that the major cases of accidents across the oil and gas industry occur due to: (i) not following the standard operating procedures (SOPs), (ii) violation of work permit system, and (iii) knowledge gap.  The Committee also noted that the Safety Council, an apex body under the Ministry of Petroleum and Natural Gas, has not played its regulatory role in safety matters and procedures in the hydrocarbon sector.  Further, there is no set procedure to fix the accountability for accidents in oil and gas installations.  The Committee recommended that the Safety Council should seek compliance in the oil and gas industry within a fixed time frame.  Failure to comply should be followed by penalties.  The Ministry of Petroleum and other agencies entrusted with enforcement of safety regulations should fix accountability for any cases of violation of SOPs. 

For a PRS summary of the report, see here.    

Home Affairs

Roshni Sinha (roshni@prsindia.org)

Criminal Law (Amendment) Bill, 2018 passed by Lok Sabha

The Criminal Law (Amendment) Bill, 2018 was passed by Lok Sabha.[44]  The Bill replaces the Criminal Law (Amendment) Ordinance, 2018 promulgated on April 21, 2018.[45]  It amends certain laws related to rape of minors.  Key features of the Bill include:

Amendments to IPC, 1860

  • Enhanced punishment for rape: Under IPC, 1860, the offence of rape is punishable with a rigorous imprisonment of at least seven years up to life imprisonment, along with a fine.  The minimum imprisonment has been increased from seven years to ten years. 
  • New offences: The Bill creates new offences to increase punishment for rape of minor girls.

Table 1: New offences under the IPC, 1860

Age

Offence

IPC, 1860

2018 Bill

Below 12 years

Rape

  • Minimum: 10 years
  • Maximum: life imprisonment
  • Minimum: 20 years
  • Maximum: life imprisonment or death

Gang Rape

  • Minimum: 20 years
  • Maximum: life imprisonment
  • Minimum: life imprisonment
  • Maximum: life imprisonment or death

Below 16 years

Rape

  • Minimum: 10 years
  • Maximum: life imprisonment
  • Minimum: 20 years
  • Maximum: no change

Gang Rape

  • Minimum: 20 years
  • Maximum: life imprisonment
  • Minimum: life imprisonment
  • Maximum: no provision

16 years and above

Rape

  • Minimum: 7 years
  • Maximum: life imprisonment
  • Minimum: 10 years 
  • Maximum: no change

Sources: Indian Penal Code, 1860; The Criminal Law (Amendment) Bill, 2018; PRS.

  • Repeat offenders: Under the IPC, 1860, a person who commits rape for the second time may be punished with life imprisonment or  This provision has now been extended to cover rape under the new offences.

For a PRS analysis of the Bill, see here.

Standing Committee submits report on security situation in North East India

The Standing Committee on Home Affairs (Chair: Mr. P. Chidambaram) submitted its report on the impact of the security situation in the Northeast.[46]  Key recommendations of the Committee include:

  • Arunachal Pradesh: The Committee observed that, unlike other states, Arunachal Pradesh has seen a rise in the number of insurgency-related incidents and civilian casualties.  The Committee recommended that the government intensify its efforts to contain spillover insurgency activities from other states in Arunachal Pradesh. 
  • Assam: The Committee noted that Assam has the highest rate of violent crimes among all states of India. It felt that this may be due to poor rehabilitation and settlement of surrendered insurgents.  Therefore, it recommended that the central government closely monitor their activities in coordination with the state government. 
  • The Committee also noted that a large number of victims kidnapped in Assam in 2016 are still missing. It noted that more than 81% of these victims are female and that there may be a connection between these abductions and human trafficking.  The Committee recommended that an interstate investigation should be carried to find out reasons for the high rate of kidnappings of women. 
  • Nagaland: The Committee noted there was a delay in concluding the Naga Peace Talks, which had resulted in growing unrest among the Naga tribal Hohos.  The Committee recommended that the government conclude peace talks at the earliest.  It also recommended that the Ministry of Home Affairs prepare a generous and detailed rehabilitation-cum-settlement scheme for the insurgent groups that will surrender as a part of the agreement.
  • Application of Armed Forces (Special powers) Act (AFSPA): The Committee noted the Ministry has stated that there has been an improvement in the security situation in Assam.  However, on the other hand the area declared as disturbed under the AFSPA has been increased.  The Committee also noted that the state government of Assam has notified the whole state as a disturbed area.  The Committee recommended that the central and state government hold discussions on the issue and come to a conclusion about the necessity of AFSPA in Assam.
  • Modernisation of Police Forces: The Committee noted that the funds provided to the North Eastern states under the Modernisation of Police Forces Scheme reduced from Rs 180 crore in 2013-14 to Rs 46 crores in 2016-17. The Committee recommended that the Ministry of Home Affairs increase the allocation of funds to the North Eastern states during the current financial year to adequately modernise their police forces.

For a PRS Report Summary, see here.

High Level Committee constituted to check mob violence and lynching

A committee has been constituted to review the incidents of mob violence and lynching in the country and formulate measures to address these problems.[47]  The Committee will be chaired by the Union Home Secretary and will comprise the following members: (i) Secretary, Department of Justice, (ii) Secretary, Department of Legal Affairs, (iii) Secretary, Legislative Department and, (iv) Secretary, Social Justice and Empowerment.  The Committee is required to submit its recommendations to the government within four weeks. 

Further, a Group of Ministers will be constituted to consider the recommendations of the Committee.  The Committee will be headed by the Minister of Home Affairs, and will comprise: (i) Minister of External Affairs, (ii) Minister of Road Transport and Highways, Shipping, Water Resources, River Development and Ganga Rejuvenation, (iii) Minister of Law & Justice, and (iv) Minister of Social Justice and Empowerment.  The recommendations of the Group will be submitted to the Prime Minister.  

Agriculture

Suyash Tiwari (suyash@prsindia.org)

Cabinet approves Minimum Support Prices for Kharif crops of 2018-19

The Cabinet Committee on Economic Affairs approved the Minimum Support Prices (MSPs) for Kharif crops for the 2018-19 marketing season.[48]  The MSPs have been fixed at a level of at least 1.5 times the cost of production.  Table 2 shows the change in MSPs for Kharif crops as compared to 2017-18. 

Table 2: MSPs notified for Kharif crops for the 2018-19 marketing season (in Rs/quintal)

Crop

2017-18

2018-19

Change (in %)

Paddy (common)

1,550

1,750

12.9

Paddy (grade A)

1,590

1,770

11.3

Jowar (hybrid)

1,700

2,430

42.9

Jowar (maldandi)

1,725

2,450

42.0

Bajra

1,425

1,950

36.8

Maize

1,425

1,700

19.3

Ragi

1,900

2,897

52.5

Arhar (tur)

5,450

5,675

4.1

Moong

5,575

6,975

25.1

Urad

5,400

5,600

3.7

Groundnut

4,450

4,890

9.9

Soyabean

3,050

3,399

11.4

Sunflower seed

4,100

5,388

31.4

Sesamum

5,300

6,249

17.9

Nigerseed

4,050

5,877

45.1

Cotton medium staple

4,020

5,150

28.1

Cotton long staple

4,320

5,450

26.2

Sources: Press Information Bureau; PRS.  

Cabinet approves fair and remunerative price of sugarcane for 2018-19 season

The Cabinet Committee on Economic Affairs approved the Fair and Remunerative Price (FRP) of sugarcane for the sugar season starting from October 1, 2018.[49]  The FRP has been fixed at Rs 275 per quintal for a basic recovery rate of 10%.  Basic recovery rate is determined by the recovery of sugar from the sugarcane and depends on various factors such as the sucrose content in sugarcane, production practices, and operation of the sugar mill.  This notified FRP is 77.4% over the cost of production for the 2018-19 season, which is Rs 155/quintal. 

A premium of Rs 2.75 per quintal has been fixed for each 0.1 % increase in recovery over 10%. In sugar mills where recovery is below 9.5%, the price has been fixed at Rs 261.25 per quintal.

Standing Committee submits report on Development of Inland Fisheries and Aquaculture

The Standing Committee on Agriculture (Chair: Mr. Hukmdev Narayan Yadav) submitted a report on ‘Scheme on Development of Inland Fisheries and Aquaculture – An Analysis’ on July 25, 2018.[50]  Key recommendations include: 

  • Diversification: The Committee observed that the share of freshwater aquaculture in inland fisheries has increased from 34% in mid-1980s to 80% in recent years.  It recommended diversification of fish production in other areas like integrated fish farming, cold water fisheries, riverine fisheries, capture fisheries, and brackish water fisheries, among others. 
  • Funding: The Committee observed that only Rs 400 crore was allocated out of the approved central outlay of Rs 598 crore in 2017-18. Given that only a portion of this would be allocated to inland fisheries and aquaculture, it noted that this allocation is insufficient and should be increased.  It also observed that utilisation certificates (UCs) amounting to Rs 290 crore were pending as on March 31, 2017.  It noted that under-utilisation of funds leads to the vicious cycle of lower allocation and downsized targets.  It recommended corrective measures for liquidation of outstanding UCs in a time bound manner. 
  • Scientific and Sustainable Methods: The Committee noted that Recirculatory Aquaculture System (RAS) is a scientific and sustainable method of fish farming which can be used to increase production. RAS is a production system that continuously filters and recycles water, enabling large-scale fish farming that requires a small amount of water without causing pollution.  It recommended that fish farmers should be encouraged to take up RAS practices, aided with easy availability of required funds and infrastructure. 
  • Availability of resources: The Committee stressed that fisheries should be treated at par with agriculture so that fish farmers get easier access to institutional credit and insurance.  It recommended that states make policies to lease out water bodies and to ensure deserving prices to fishers. 

For a PRS Report Summary, see here.

Labour and Employment

Roshni Sinha (roshni@prsindia.org)

Standing Committee submits report on functioning of ESI Scheme

The Standing Committee on Labour (Chairperson: Dr. Kirit Somaiya) submitted its report on “Employees’ State Insurance Corporation (ESIC) – Coverage of Establishments, Recovery of Arrears and Functioning of the Hospitals and Dispensaries under the Scheme” on July 26, 2018.[51]  Key observations and recommendations of the Committee include:

  • Strengthening centre-state coordinate: Under the Employees State Insurance Act, 1948 (ESI Act), the Employee State Insurance Corporation (ESIC) has the authority to collect contributions from workers.  However, the state government (through the state-run Employee State Insurance Scheme (ESIS)) is responsible for providing medical services and other benefits to workers.  The Committee felt that this duality of roles has adversely impacted the effectiveness of the scheme.   The Committee also observed that the ESIC collects double of what is spent on benefits for workers, without ensuring adequate medical infrastructure.  Therefore, the Committee recommended revisiting the ESI Act to provide for stronger co-ordination between the centre and state governments to meet the objects of the Act.
  • Regulator for ESIC/ESIS: The Committee noted that the regulation of the insurance sector has been made mandatory for all types of insurance schemes, including health insurance, life insurance, and general insurance schemes.  However, the Committee noted that there is no regulator for ESIC/ESIS.  Therefore, the Committee recommended that ESIC/ESIS be brought within the ambit of the regulatory system.
  • Reviewing of eligibility: The Committee recommended reviewing eligibility of benefits given to workers by carrying out an audit of ESIS.  This will ensure that no eligible person is deprived of the benefits under the scheme.
  • Surplus funds: The Committee noted that ESIC has a corpus fund of more than Rs 73,303 crores as on March, 2018.  The Committee observed the contributions being paid by the employees is in the nature of a cess imposed by ESIC and are being used for other purposes.  The Committee recommended that the ESIC obtain a legal opinion on the legality of maintaining such a corpus fund and inform the Committee.   
  • Linking with Ayushman Bharat: The Committee noted that a National Health Protection Scheme called “Ayushman Bharat” has been launched to cover poor and vulnerable families.  It further noted that the ESIC also provides medical benefits to workers under the ESIS.  So far, the ESIC had not finalised its policy of linking up with Ayushman Bharat.  The Committee recommended that ESIC should finalise its policy in this regard at the earliest. 

For a PRS Report Summary, see here.

Comments invited on draft amendment to Trade Unions Act, 1926

The Ministry of Labour and Employment released a draft Trade Unions (Amendment) Bill, 2018.[52]  The Bill amends the Trade Unions Act, 1926.  The 1926 Act relates to the registration and regulation of trade unions.  Under the Trade Unions Act, 1926, there is no provision for giving statutory recognition to trade unions. 

The Bill seeks to amend the Act to provide for recognition of trade unions or a federation of trade unions at the central level by the central government, and at the state level by respective state governments.  The trade unions or the federation of trade unions at the central level will be recognised as Central Trade Unions, and at the state level as State Trade Unions.

Power

Roshni Sinha (roshni@prsindia.org)

High Level Committee constituted for stressed thermal power projects

A Committee has been constituted to resolve issues facing Stressed Thermal Power Assets and to revive them.[53]  The Committee will be headed by the Cabinet Secretary with representatives from the: (i) Ministry of Railways, (ii) Ministry of Finance, (iii) Ministry of Power, (iv) Ministry of Coal, and (v) lenders having major exposure to the power sector.

The Committee will look to maximise the efficiency of investments made in these assets by examining various aspects, including: (i) changes required to be made in the fuel allocation policy, (ii) changes in regulatory framework, (iii) mechanisms to facilitate sale of power, and (iv) ensuring timely payments.

Water

Roopal Suhag (roopal@prsindia.org)

CCEA approves special package for irrigation projects in drought prone areas of Maharashtra

The Cabinet Committee on Economic Affairs (CCEA) approved a special package for the completion of 83 minor irrigation projects and 8 major/medium irrigation projects in Marathawada, Vidharbha and other drought prone areas of Maharashtra.[54]  The special package will help to create additional irrigation potential of 3.77 lakh hectares.  Total central assistance of Rs 3,831 crore will be provided for the implementation of these projects. 

CAG submitted report on National Projects of Ministry of Water Resources

The Comptroller and Auditor General (CAG) of India submitted its report on ‘National Projects of the Ministry of Water Resources, River Development and Ganga Rejuvenation’.[55]  The audit was conducted for the period 2008-17.  Major findings and recommendations of the CAG include:

  • Underperformance of the scheme: In February 2008, the government approved a scheme of national projects, under which it identified 16 major water resource development and irrigation projects.  These projects were previously under the Accelerated Irrigation Benefits Programme.  However, the progress of these projects had declined due to various factors.  These include land acquisition, inter-state coordination, financial constraints, and issues relating to rehabilitation and re-settlement of the affected population.  The scheme was aimed to ensure coordinated and focussed action to expedite the execution and completion of these 16 projects.  The performance audit of the scheme has revealed that this objective of the scheme remains unachieved.
  • Of the 16 national projects, only five projects with an estimated irrigation potential of 25 lakh hectare are under implementation. Of this, 14.5 lakh hectare irrigation potential has been created, but only 5.3 lakh hectare (36.5%) is being utilised.  The remaining 11 projects with an estimated irrigation potential of 10.4 lakh hectare are yet to commence.
  • Delays in execution: Execution of projects has been delayed due to administrative delays, non-adherence to rules, poor contract management, and lack of effective and timely monitoring. 
  • To expedite the implementation of the scheme, the CAG has recommended that these projects may be taken up in a mission mode. Nodal officers may be designated at the central level to effectively monitor the progress of the projects.

A PRS Summary of the report is available here.

Rural Development

Roopal Suhag (roopal@prsindia.org)

Standing Committee submitted report on Swachh Bharat Mission- Gramin

The Standing Committee on Rural Development (Chair: Dr. P Venugopal) submitted its report on the ‘Swachh Bharat Mission- Gramin in States/ UTs’.[56]  The Swachh Bharat Mission- Gramin (SBM-G) was launched on October 2, 2014 to accelerate efforts to achieve universal sanitation coverage, improve cleanliness, and eliminate open defecation in India by October 2, 2019.  Key findings and recommendations of the Committee include:

  • Sanitation coverage and behavioural change:  The Committee is of the view that sanitation coverage figures may not reflect the actual progress of the Mission on ground.  It stated that even a village with 100% household toilets cannot be declared Open Defecation Free (ODF) till all the inhabitants start using them.  It recommended that the government needs to take adequate steps to bring about behavioural change in rural India and inculcate a sense of hygiene among the inhabitants.  This should be done through mechanisms such as awareness campaigns.
  • Quality of toilets: The Committee stated that it is aware of the low quality of raw materials being used in the construction of toilets under SBM-G.  It raised serious concerns over this issue and urged the Ministry of Drinking Water and Sanitation to ensure that the standard quality raw materials are used for constructing toilets.
  • Availability of water: Construction of toilets without adequate availability of water will be an impediment to achieving 100% sanitation coverage in rural areas.  The Committee recommended that provision of water availability should be prioritised along with construction of toilets to attain ODF status across all villages.
  • Data accuracy: 77% of households in rural India have access to toilets, and about 93% of them use toilets regularly.  However, the Committee noted that in the past, the fall back rate of ODF declared villages was very high, either due to: (i) filing of wrong information regarding attaining of ODF status, or (ii) non-sustainability of toilets.  This has led to ODF villages going back to open defecation, while as per records, they remain ODF.  The Committee recommended that information on ODF declared villages must be collected accurately on a continuous basis, either through an institutional mechanism or through resurveys. 

For a PRS Report Summary, see here.

Standing Committee submitted report on improvement in the functioning of panchayats

The Standing Committee on Rural Development (Chair: Dr. P Venugopal) submitted its report on ‘Improvement in the functioning of Panchayats’.[57]  The participation of local people for development of rural areas through the Panchayati Raj System was provided in the Indian Constitution through the 73rd amendment.  Key findings and recommendations of the Committee include:

  • Devolution of powers: Local government, including panchayats, is a state subject in the Constitution, and consequently, the devolution of power and authority to panchayats has been left to the discretion of states.  The Ministry of Panchayati Raj has issued comprehensive guidelines for the effective functioning of panchayats.  However, the Committee noted that the mandatory meetings of panchayats were not taking place and had poor attendance, especially from women representatives.  The Committee recommended that state governments should put a quorum in gram sabha meetings for participation of panchayat representatives.
  • Funding of panchayats: Grants from Finance Commission play an important role in the implementation of schemes by panchayats.  These grants are intended to be used to support and strengthen the delivery of basic services including water supply, sanitation, sewerage and solid waste management and any other basic service within the functions assigned to panchayats under relevant legislations.  The Committee noted that some state governments have delayed releasing funds to panchayats.  They subsequently had to pay interest to panchayats and wherever panchayat accounts were not audited, the grants were not released.
  • The Committee recommended that the Ministry should monitor the release and expenditure of Finance Commission grants to ensure that there is no delay in their release. It should also be ensured that grants are utilised in a proper and effective manner.  Panchayats should also be encouraged to carry out local audits regularly so that Finance Commission grants are not delayed.

For a PRS Report Summary, see here.

Defence

Roopal Suhag (roopal@prsindia.org)

Estimates Committee submitted report on preparedness of armed forces

The Estimates Committee (Chair: Dr. Murli Manohar Joshi) submitted its report on ‘Preparedness of Armed Forces – Defence Production and Procurement’.[58]  Key findings and recommendations of the Committee include:

  • Expenditure on defence services: The Committee noted that defence expenditure as a percentage of GDP has ranged between 2% in 2014-15 to 1.6% in 2017-18.  The defence expenditure at 1.6% of GDP in 2017-18 was the lowest since 1962 when the India-China war was fought.  It stated that in the current geo-political scenario, India cannot afford complacency with regard to defence preparedness.  It recommended that adequate financial resources for defence preparedness should be allocated, both for current needs and future expansion and modernisation plans.
  • Proportion of capital procurement budget: The Committee noted that the share of capital procurement budget in the defence budget has been continuously declining.  It has decreased from 39% in 2013-14 to 34% in 2018-19.  In addition, procurement in the forces is not being made in accordance with the Long Term Integrated Perspective Plan (a 15 year perspective plan for each of the three services- Army, Air Force, and Navy), but being adjusted as per budgetary allocations.  Decrease in capital expenditure has an adverse impact on the modernisation process of armed forces.  The Committee recommended that provisions for adequate allocation of capital budget should be made and fully utilised. 
  • Self-reliance in defence: India is one of the largest importers of defence goods and services in the world.  The Department of Defence Production, while deposing in front of the Committee, stated that of the total defence production, 40% is produced indigenously and 60% is imported.  Further, the dependence on foreign suppliers for military hardware results in huge expenditure on import of defence equipment.  The indigenisation (domestic production) level in the defence sector is increasing at a very slow rate. 
  • The Committee urged the government to take immediate initiatives to decrease the country’s dependence on imports. It suggested that the government should ensure usage of local content in defence platforms and hardware is increased. 

For a PRS Report Summary, see here.

Commerce and Industry

Ahita Paul (ahita@prsindia.org)

Standing Committee submits report on impact of Chinese goods on Indian industry

The Standing Committee on Commerce (Chair: Mr. Naresh Gujral) submitted a report on ‘Impact of Chinese Goods on Indian Industry’ on July 26, 2018.[59]  Bilateral trade between India and China increased from USD 38 billion in 2007-08 to USD 89.6 billion in 2017-18.  While imports from China increased by USD 50 billion, exports increased by USD 2.5 billion during the same period.  Trade with China constitutes more than 40% of India’s total trade deficit.  Key observations and recommendations of the Committee include:

  • Anti-dumping duty: Dumping refers to the practice of exporting goods at a price lower than their market value in the originating country.  The importing country conducts detailed investigations and imposes anti-dumping duty for these goods.  The Committee noted that: (i) India’s anti-dumping duties on Chinese goods are being evaded by misclassification of products, and (ii) the government is reluctant to review the effectiveness of anti-dumping measures undertaken by it.  The Committee suggested that the government: (i) address the problem of lax implementation of anti-dumping duties, and (ii) rationalise the duties and make them more in line with current domestic production costs.
  • Impact on various industries: The Committee noted that the import of Chinese goods has adversely affected domestic pharmaceutical, solar, textile, toy and bicycle industries.  It recommended various actions to promote these industries, including: (i) providing infrastructure support, (ii) reviewing free trade agreements with Least Developed Countries to check rerouting of goods originating in China, and (iii) banning import of products like toys and firecrackers to prevent health hazards to the population.

For a PRS Report Summary, see here.

The Micro, Small and Medium Enterprises Development (Amendment) Bill introduced in Lok Sabha

The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2018 was introduced in Lok Sabha on July 23, 2018.[60]  The Bill amends the Micro, Small and Medium Enterprises Development Act, 2006.  Key features of the Bill include:

  • Basis for classification of MSMEs: The Act classifies micro, small and medium enterprises (MSMEs) on the basis of investment in: (i) plant and machinery, for enterprises engaged in the manufacturing or production of goods, and (ii) equipment, for enterprises providing services.  The Bill replaces this with a uniform classification for all MSMEs. 
  • Under the Bill, all MSMEs, whether they are manufacturing or service-providing enterprises, will be classified on the basis of their annual turnover. An enterprise is classified as: (i) a micro enterprise if annual turnover is less than Rs 5 crore, (ii) a small enterprise if annual turnover is between Rs 5 and Rs 75 crore, and (iii) a medium enterprise if annual turnover is between Rs 75 and Rs 250 crore.

For more details on the bill, see here.

Department of Industrial Policy and Promotion released Ease of Doing Business rankings of states

The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, released the rankings of states and union territories on the Ease of Doing Business, 2017 on July 10, 2018.[61]  The DIPP, in collaboration with the World Bank, conducted annual reforms for all states and union territories under the Business Reforms Action Plan 2017.  The reform exercise consisted of 372 action points to ease regulations and systems in areas such as labour permits, environmental clearances, construction permits, contract enforcement, registration and inspection of property, among others. 

States and union territories were ranked on a combined score based on: (i) evidence provided by the states and union territories on their performance and progress with respect to reforms, and (ii) feedback gathered from the users of the services provided to businesses by the government.  The component of feedback was introduced for the first time in the 2017 rankings.  The top rankers are Andhra Pradesh, Telangana and Haryana.  Jharkhand and Gujarat stood fourth and fifth respectively.

External Affairs

Roshni Sinha (roshni@prsindia.org)

President of Republic of Korea visits India

The Prime Minister of Republic of Korea visited India.  The countries signed 11 MoUs for cooperation in various fields, including: (i) trade, (ii) scientific and technological research, (iii) railway research and development of railway industries, (iv) adoption of biotechnology, and (v) development, modernisation and expansion of state-of-the-art telecommunication services.[62]

Prime Minister visits Uganda

The Prime Minister visited Uganda.  India and Uganda signed four MoUs in relation to: (i) defence cooperation, (ii) visa exemption for diplomatic and official passport holders, (iii) material testing laboratories, and (iv) cultural exchange programmes.[63] 

Prime Minister attends BRICS Summit

The Prime Minister attended the tenth BRICS (Brazil, Russia, India, China, South Africa) Summit in South Africa.  The leaders adopted the Johannesburg Declaration[64] India and South Africa signed three MoUs in the areas of outer space exploration, agricultural research and education, and setting up of an artisan skills centre in South Africa.[65]

Prime Minister visits Rwanda

The Prime Minister visited Rwanda.  The countries signed eight MoUs for cooperation in several areas, including trade, defence, dairy production, agriculture, and development of industrial parks. [66]

 

[1] Parliament session alert, July 16, 2018, http://www.prsindia.org/uploads/media/Monsoon%202018/Parliament%20Session%20Alert%20Monsoon%20Session%202018.pdf.

[2] “Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the month of June 2018”, Press Information Bureau, Ministry of Statistics and Programme Implementation, July 12, 2018.

[3] “Index Numbers of Wholesale Price in India (Base: 2011-12=100) Review for the month of June 2018”, Press Information Bureau, Ministry of Commerce and Industry, July 16, 2018.

[4] The Fugitive Economic Offenders Bill, 2018, http://www.prsindia.org/uploads/media/Fugitive%20Economic%20Offenders/Fugitive%20Economic%20Offenders%20Bill,%202018.pdf

[5] The Fugitive Economic Offenders Ordinance, 2018, http://www.prsindia.org/uploads/media/Ordinances/The%20Fugitive%20Economic%20Offenders%20Ordinance%202018.pdf

[6] The Banning of Unregulated Deposit Schemes Bill, 2018, Ministry of Finance, July 18, 2018, http://www.prsindia.org/uploads/media/Banning%20deposit/The%20Banning%20of%20Unregulated%20Deposit%20Schemes%20Bill,%202018.pdf

[7] The Negotiable Instruments (Amendments) Bill, 2017, Ministry of Finance, January 2, 2018, http://www.prsindia.org/uploads/media/Negotiable%20instrument/Negotiable%20Instruments%20Amendment%20Bill%202017.pdf

[8] The State Banks (Repeal and Amendment) Bill, 2017, Ministry of Finance, July 21, 2017, http://www.prsindia.org/uploads/media/State%20Bank/The%20State%20Banks%20%28Repeal%20and%20Amendment%29%20Bill,%202017.pdf

[9] “Cabinet approves extension of Scheme of Recapitalization of Regional Rural Banks upto 2019-20”, Press Information Bureau, Cabinet, July 4, 2018

[10] “Recommendations made during the 28th meeting of the GST Council held in New Delhi on 21st 2018”, Press Information Bureau, Ministry of Finance, July 21, 2018

[11] “Major Steps taken for Reducing Tax Litigations”, Press Information Bureau, Ministry of Finance, July 11, 2018.

[12] The Arbitration and Conciliation (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Arbitration/Arbitration%20and%20Conciliation%20(Amendment)%20Bill,%202018.pdf.

[13] The Specific Relief (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Specific%20Relief/Specific%20Relief%20(A)%20Bill,%202017.pdf

[14] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Bill, 2018, Minstry of Law and Justice, July 23, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/Asintroduced/123_2018_LS_Eng.pdf.

[15] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018, May 3, 2018, http://www.prsindia.org/uploads/media/Ordinances/Commercial%20Division%20of%20High%20Courts%20Amendment%20Ordinance%202018.pdf.

[16] Report No. 276: Legal Framework: Gambling and Sports Betting Including Cricket in India, Law Commission of India, July, 2018, http://lawcommissionofindia.nic.in/reports/Report276.pdf.

[17] The Prevention of Corruption (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Corruption/PCA-as%20passed%20by%20RS.pdf.

[18] “97th Report: Draft Public Servants (Declaration of Assets and Liabilities and Minimum Value of Assets for Condonation or Exemption) Rules, 2017”, Standing Committee on Personnel, Public Grievances, Law and Justice, July 19, 2018, http://164.100.47.5/committee_web/ReportFile/18/104/97_2018_7_12.pdf.

[19] The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2018, July 23, 2018, http://www.prsindia.org/uploads/media/Insolvency%202018/The%20Insolvency%20and%20Bankruptcy%20Code%20(Second%20Amendment)%20Bill,%202018.pdf.

[20] The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, June 6, 2018, http://www.prsindia.org/uploads/media/Ordinances/Insolvency%20and%20Bankruptcy%20Code%20(Amendment)%20Ordinance,%202018.pdf.

[21] “MCA has constituted a 10-member Committee to review the offences under the Companies Act, 2013”, Press Information Bureau, Ministry of Corporate Affairs, July 15, 2018.

[22] The Right to Education (Second Amendment) Bill, 2017 (as passed by Lok Sabha), Ministry of Human Resource Development, July 18, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/166_C_2017_LS_Eng.pdf.

[23] The National Council for Teacher Education (Amendment) Bill 2017, (as passed by Lok Sabha), Ministry of Human Resource Development, July 23, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/PassedLoksabha/203c_ls_eng_%20Teacher.pdf.

[24] The National Sports University Bill, Ministry of Sports and Youth Affairs, July 23, 2018, http://164.100.47.4/BillsTexts/LSBillTexts/Asintroduced/119_2018_LS_Eng.pdf.

[25] The National Sports University Ordinance, 2018, May 31, 2018, http://www.prsindia.org/uploads/media/Ordinances/National%20Sports%20Univeristy%20Ordinance,%202018.pdf.

[26] ‘Government declares 6 educational ‘Institutions of Eminence’ ; 3 Institutions from Public Sector and 3 from Private Sector shortlisted’, Ministry of Human Resource Development, July 11, 2018, http://mhrd.gov.in/sites/upload_files/mhrd/files/IoE_PR.pdf.

[27] Report of the Empowered Expert Committee, University Grants Commission, July 11 2018, https://www.ugc.ac.in/pdfnews/3275454_IoE-EEC-Final-Report11-May2018-9AM-.pdf

[28] Notification on the constitution of the Empowered Expert Committee, University Grants Commission, February 20, 2018, https://www.ugc.ac.in/pdfnews/2796069_Notification-- -EEC--IOE.pdf.

[29] UGC Minimum Qualifications for Appointment of Teachers in Universities and Colleges and Measures for Maintenance of Standards in Higher Education”, University Grants Commission, July 18, 2018, https://www.ugc.ac.in/pdfnews/4033931_UGC-Regulation_min_Qualification_Jul2018.pdf.

[30] Draft UGC Minimum Qualifications for Appointment of Teachers in Universities and Colleges and Measures for Maintenance of Standards in Higher Education”, University Grants Commission, February 2018, 2018, https://www.ugc.ac.in/pdfnews/5323630_New_Draft_UGCRegulation-2018-9-2.pdf.

[31] ‘Boost to Higher Education’, Press Information Bureau, Cabinet, July 4, 2018.

[32] Cabinet approves establishment of Higher Education Financing Agency for creating capital assets in higher educational institutions, Press Information Bureau, Cabinet, September 12, 2016.

[33] “Cabinet approves DNA Technology (Use and Application) Regulation Bill, 2018”, Press Information Bureau, Cabinet, July 4, 2018. 

[34] The Homoeopathy Central Council (Amendment) Bill, 2018, Ministry of AYUSH, July 23, 2018, http://www.prsindia.org/uploads/media/Homoeopathy%20Bill,%202018/Homoeopathy%20Central%20Council%20(Amendment)%20Bill,%202018.pdf.

[35] The Homoeopathy Central Council (Amendment) Ordinance, 2018, May 18, 2018, http://www.prsindia.org/uploads/media/Ordinances/Homoeopathy%20Central%20Council%20(A)%20Ordinance,%202018.pdf.

[36] The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities (Amendment) Bill, 2018,  Ministry of Social Justice and Empowerment, July 18, 2018, http://www.prsindia.org/uploads/media/Trust%20Welfare%20Autism/The%20National%20Trust%20for%20the%20Welfare%20of%20Persons%20Bill%202018.pdf.

[37] The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999, http://disabilityaffairs.gov.in/upload/uploadfiles/files/National_Trust_act-englsih.pdf.

[38] The Requisitioning and Acquisition of Immovable Property (Amendment) Bill, 2017, Ministry of Urban Development, July 18, 2017, http://www.prsindia.org/uploads/media/Immovable%20Property/Requisitioning%20of%20Immovable%20Property%20Bill,%202017.pdf.

[39] The Airports Economic Regulatory Authority of India (Amendment) Bill, 2018, July 18, 2018, http://www.prsindia.org/uploads/media/Airport%20Regulatory%20Authority/The%20Airports%20Economic%20Regulatory%20Authority%20of%20India%20(Amendment)%20Bill,%202018.pdf.

[40] Notification: G.S.R. 643(E), Ministry of Road Transport and Highways, July 12, 2018, http://morth.nic.in/showfile.asp?lid=3281.

[41] “Amendments Proposed to Central Motor Vehicles Rules”, Press Information Bureau, Ministry of Road Transport and Highways, July 17, 2018.

[42] The Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018, http://www.prsindia.org/uploads/media/Trafficking/Trafficking%20of%20Persons%20(Prevention,%20Protection%20and%20Rehabilitation)%20Bill,%202018.pdf.

[43] “24th  Report: Safety, Security and Environmental Aspects in Petroleum Sector”, Standing Committee on Petroleum and Natural Gas, August 25, 2018, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natural%20Gas/16_Petroleum_And_Natural_Gas_24.pdf.

[44] The Criminal Law (Amendment) Bill, 2018, http://www.prsindia.org/uploads/media/Criminal%20Law%202018/The%20Criminal%20Law%20(Amendment)%20Bill,%202018.pdf.

[45] The Criminal Law (Amendment) Ordinance, 2018, http://www.prsindia.org/uploads/media/Ordinances/The%20Criminal%20Law%20Amendment%20Ordinance%202018.pdf.

[46] “213th Report: Security Situation in the North Eastern States of India”, Standing Committee on Home Affairs, July 19, 2018, http://164.100.47.5/committee_web/ReportFile/15/101/213_2018_7_17.pdf. . 

[47] “Government set up high level committee chaired by Union Home Secretary to check mob lynching”, Press Information Bureau, Ministry of Home Affairs, July 23, 2018.

[48] “Boost to farmers’ income”, Press Information Bureau, Cabinet Committee on Economic Affairs, July 4, 2018.

[49] “Cabinet approves determination of Fair and Remunerative Price payable by Sugar Mills for 2018-19 sugar season”, Press Information Bureau, Cabinet Committee on Economic Affairs, July 18, 2018.

[50] Report no. 53, Standing Committee on Agriculture: ‘Scheme on Development of Inland Fisheries and Aquaculture – An Analysis’, Lok Sabha, July 25, 2018, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_53.pdf.

[51] “39th Report: Esmployees’ State Insurance Corporation (ESIC) – Coverage of Establishments, Recovery of Arrears and Functioning of the Hospitals and Dispensaries under the Scheme”, Standing Committee on Labour, July 26, 2018, http://164.100.47.193/lsscommittee/Labour/16_Labour_39.pdf.

[52] “Amendment of the Trade Unions Act, 1927 to provide provisions for recognition of Trade Unions”, Ministry of Labour and Employment, July 20, 2017, https://labour.gov.in/sites/default/files/The%20Trade%20Unions%20Amendment%20Bill%2C%202018.pdf.

[53] “Cabinet approves revision of pay and allowance of Lieutenant Governors of Union Territories”, Press Information Bureau, Cabinet, April 11, 2018.

[54] ‘Cabinet approves Special Package for Irrigation Projects in Vidarbha, Marathwada and other chronically drought prone areas of Rest of Maharashtra’, Cabinet Committee on Economic Affairs, July 18, 2018. 

[55] ‘Performance Audit on National Projects of Ministry of Water Resources, River Development and Ganga Rejuvenation’, Report No. 6 of 2018, Comptroller and Auditor General of India, July 20, 2018, https://cag.gov.in/content/report-no6-2018-performance-audit-national-projects-ministry-water-resources-river.

[56] ‘Swachh Bharat Mission- Gramin in States/ UTs’, 51st Report, Standing Committee on Rural Development, July 19, 2018, http://164.100.47.193/lsscommittee/Rural%20Development/16_Rural_Development_51.pdf.

[57] ‘Improvement in the functioning of Panchayats’, 50th Report, Standing Committee on Rural Development, July 19, 2018, http://164.100.47.193/lsscommittee/Rural%20Development/16_Rural_Development_50.pdf.

[58] ‘Preparedness of Armed Forces – Defence Production and Procurement’, 29th Report, Committee on Estimates, July 25, 2018, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_29.pdf.

[59] Report No. 145, Standing Committee on Commerce, ‘Impact of Chinese Goods on Indian Industry’, Rajya Sabha, July 26, 2018, http://164.100.47.5/committee_web/ReportFile/13/97/145_2018_7_13.pdf

[60] The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2018, Ministry of Micro, Small and Medium Enterprises, July 23, 2018, http://www.prsindia.org/uploads/media/MSME/The%20Micro,%20Small%20and%20Medium%20Enterprises%20Development%20(Amendment)%20Bill,%202018.pdf

[61] “Andhra Pradesh, Telangana and Haryana Top Rankers in Ease of Doing Business”, Press Information Bureau, Ministry of Commerce and Industry, July 10, 2018

[62] List of MoUs/Agreements signed between India and the Republic of Korea during the State Visit of President of Korea to India, Ministry of External Affairs,  http://mea.gov.in/incoming-visit-detail.htm?30040/List+of+MoUsDocuments+signed+between+India+and+the+Republic+of+Korea+during+the+State+Visit+of+President+of+Korea+to+India.

[63] List of MoUs signed between India and Uganda during visit of Prime Minister to Uganda (July 23-27), Ministry of External Affairs, July 24, 2018, http://mea.gov.in/outoging-visit-detail.htm?30150/List+of+MoUs+signed+between+India+and+Uganda+during+visit+of+Prime+Minister+to+Uganda.

[64] India-Nepal Statement on New Partnership in Agriculture, Ministry of External Affairs, April 7, 2018, http://www.mea.gov.in/incoming-visit-detail.htm?29797/IndiaNepal+Statement+on+New+Partnership+in+Agriculture.

[65] 10th BRICS Summit Johannesburg Declaration (July 23-27, 2018), Ministry of External Affairs, July 26, 2018, http://mea.gov.in/outoging-visit-detail.htm?30190/10th+BRICS+Summit+Johannesburg+Declaration.

[66] List of MoUs/Documents signed between India and Rwanda during visit of Prime Minister to Rwanda (July 23-24, 2018), Ministry of External Affairs, July 23, 2018, http://mea.gov.in/outoging-visit-detail.htm?30144/List+of+MoUsDocuments+signed+between+India+and+Rwanda+during+visit+of+Prime+Minister+to+Rwanda.

 

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

Highlights of this Issue

Policy repo rate increased to 6.25%; reverse repo rate increased to 6% 

The Monetary Policy Committee increased the repo rate (at which RBI lends money to banks) from 6% to 6.25%.  The reverse repo rate (at which RBI borrows money from banks) was also increased from 5.75% to 6%.

CAD at 1.9% of GDP in 2017-18; fourth quarter 2017-18 CAD also at 1.9% of GDP 

In 2017-18, Current Account Deficit (CAD) increased to 1.9% of GDP from 0.6% in 2016-17.  CAD in the fourth quarter of 2017-18 increased to USD 13 billion from USD 2.6 billion in the corresponding quarter of 2016-17.

The Insolvency and Bankruptcy (Amendment) Ordinance, 2018 promulgated 

The Ordinance clarifies that homebuyers will be considered financial creditors.  It also makes certain changes to the voting threshold for the committee of creditors, and the applicability of the Code to MSMEs.

 Ministry of Corporate Affairs invites comments on draft on cross border insolvency 

The draft provides a comprehensive framework to access the foreign assets of companies undergoing insolvency proceedings.  It will apply to all corporate debtors under the Insolvency and Bankruptcy Code, 2016.

Draft Bill introduced to repeal the University Grants Commission Act, 1956 (UGC) 

The draft Bill sets up a Higher Education Commission to replace the UGC.  The Commission will determine norms for granting autonomy, fees, specify learning outcomes for courses, and conduct annual reviews.

Report of the High Level Task Force on Public Credit Registry for India released 

The report examines the current credit information infrastructure systems in India and recommends the setting up of a public credit registry in the country.

 Cabinet approves the Dam Safety Bill, 2018 

The draft Bill aims to provide proper surveillance, inspection, operation, and maintenance of all specified dams in the country to ensure their safe functioning.

Cabinet approves interventions to deal with the current crisis in the sugar sector

The Union Cabinet approved measures of Rs 7,000 crore to improve liquidity of sugar mills and enable them to clear sugarcane arrears of farmers.  These include setting the minimum selling price of refined sugar at Rs 29 per kg.

 Cauvery Water Management Scheme, 2018 formulated

The scheme has been formulated to implement the decision of the Cauvery Water Disputes Tribunal, that was modified by the Supreme Court in February 2018.

 Long term growth trajectory for renewable purchase obligations (RPO) notified 

The current RPO growth trajectory (for both solar and non-solar) is between 11.5%-17% for 2016-17 to 2018-19.  This has been increased to 17.5% - 21% for 2019-20 to 2021-22. 

 NITI Aayog submits two reports on water management and artificial intelligence 

NITI Aayog released a report on the Composite Water Management Index which ranks states on several parameters including water availability and management.  It also released a paper on national strategy for artificial intelligence.

 

Macroeconomic Development

Roopal Suhag (roopal@prsindia.org)

Policy repo rate increased to 6.25%; reverse repo rate increased to 6%

The Monetary Policy Committee (MPC) released the second Bi-Monthly Monetary Policy Statement of 2018-19.[1]  The policy repo rate (rate at which RBI lends money to banks) was increased from 6% to 6.25%.  Other decisions of the MPC include:

  • The reverse repo rate (the rate at which RBI borrows money from banks) was also increased from 5.75% to 6%.
     
  • The marginal standing facility rate (at which banks can borrow additional money) and bank rate (at which RBI buys or rediscounts bills of exchange) were also increased from 6.25% to 6.5%.

CAD increased to 1.9% of GDP in financial year 17-18 and in Q4 of 2017-18

India’s Current Account Deficit (CAD) in the fourth quarter (Jan-Mar) of 2017-18 increased to USD 13 billion (1.9% of GDP) from USD 2.6 billion (0.4% of GDP) in the corresponding quarter of 2016-17.[2]  Note that CAD in the third quarter (Oct-Dec) of 2017-18 was USD 13.5 billion (2.1% of GDP). 

Foreign exchange reserves increased by USD 13.2 billion, as compared with an increase of USD 7.3 billion in the fourth quarter of 2016-17, driven by stronger capital inflows.

Table 1 shows the balance of payments in the fourth quarter of 2017-18.

Table 1: Balance of Payments in Q4 of 2017-18 (USD billion)

 

Q4

2016-17

Q3

2017-18

Q4

2017-18

Current Account

-2.6

-13.5

-13.0

Capital Account

10.3

22.0

25.0

Errors and Omissions

-0.5

0.8

1.3

Change in reserves

7.3

9.4

13.2

Sources: Reserve Bank of India; PRS.

In the financial year 2017-18, CAD increased to 1.9% of GDP from 0.6% in 2016-17.  India’s trade deficit increased to USD 160 billion from USD 112.4 billion in 2016-17.  Table 2 shows the balance of payments in 2017-18.

Table 2: Balance of Payments in 2017-18 (USD billion)

 

2016-17

2017-18

Current Account

-14.4

-48.7

Capital Account

36.4

91.4

Errors and Omissions

-0.5

0.9

Change in reserves

21.6

43.6

Sources: Reserve Bank of India; PRS.

 

Finance

Report of the High Level Task Force on Public Credit Registry for India released

Ahita Paul (ahita@prsindia.org)

  •  The Reserve Bank of India (RBI) had constituted a High Level Task Force to assess the need and scope of creating a public credit registry in India.  The report was made available to the public on June 6, 2018. [3] 

  • Currently, India has multiple entities storing credit data.  For example, there are four private Credit Information Companies – (i) TransUnion CIBIL, (ii) Equifax, (iii) Experian and (iv) CRIF High Mark that maintain credit data of borrowers.  There are also entities within the RBI such as the Central Repository of Information on Large Credits and the Basic Statistical Return-1 that record loans larger than five crore rupees, and credit across various sectors.  Information Utilities also store financial credit data to help establish defaults by borrowers.

  • Challenges with current scenario:  The Task Force identified various shortcomings in the current credit information structure in India, such as: (i) data stored is incomprehensive, and fragmented across different entities, for example, data on borrowings from banks, inter-corporate and overseas borrowings, are not available in a single repository; (ii) reliance on self-disclosure by the borrower; (iii) time lags and discrepancies between multiple data sources; and (iv) increased reporting burden on credit institutions from having to report to multiple entities. 

  • Public credit registry:  To bring about efficiency and transparency in the lending market, the task force recommended creating a public credit registry.  The credit registry should: (i) be backed by a suitable legal framework, (ii) be for all loans regardless of amount, capture data currently not recorded in the system, for example, data on external borrowings, (iv) store supplementary credit data such as utility bill payments history to benefit individuals with no credit history, and (vi) ensure security and privacy of the stored information.  Further, reporting entities should ensure the quality of data in the registry.

For a PRS report summary, see here.

SEBI sets up Committee to examine direct listing of Indian companies on foreign stock exchanges and vice versa

Ahita Paul (ahita@prsindia.org)

The Securities and Exchange Board of India (SEBI) created an Expert Committee to examine allowing companies incorporated in India to directly list their equity overseas, and foreign companies to directly list their equity on Indian exchanges.[4]  The terms of reference of the Committee require it to examine the economic feasibility as well as the legal, regulatory and operational constraints of permitting direct listing of Indian companies on foreign exchanges and vice versa.  The Committee will also recommend a suitable framework for the same.

RBI releases draft guidelines on loan system for delivery of bank credit

Ahita Paul (ahita@prsindia.org)

The Reserve Bank of India (RBI) released draft guidelines related to delivering bank credit to borrowers with large working capital borrowings.[5]  With regard to borrowers with working capital limit of Rs 150 crore and more, the guidelines require that at least 40% of the working capital should be held as loans, limiting the cash credit component to 60%.  This provision will be applicable from October 1, 2018.  The 40% loan component will be increased to 60% from April 1, 2019.  The banks will decide the fixed loan amount and tenure in consultation with the borrower, subject to the tenure being at least seven days.

Income Tax Department launches reward schemes for information on tax evasion

Suyash Tiwari (suyash@prsindia.org)

The Income Tax Department launched the revised Income Tax Informants Reward Scheme, 2018 and the Benami Transactions Informants Reward Scheme, 2018.[6],[7]  These schemes reward informants whose information leads to: (i) detection of substantial tax evasion, or (ii) identification of any benami property worth more than one crore rupees.  Persons residing outside India, irrespective of their nationalities, are also eligible to become informants. 

  • Income Tax Informants Reward Scheme, 2018: The Income Tax Informants Reward Scheme, 2018 defines substantial tax evasion as an evasion of at least five crores rupees if detected by investigation directorates of Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Ahmedabad, Pune, or Bangalore.  This amount is one crore rupees in case of detection by any other investigation directorate. 
     
  • As per the scheme, the reward amount is based on the additional taxes levied and realised, directly attributable to that information. The maximum reward amount is: (i) 5% of such tax revenue under the Income Tax Act, 1961, up to Rs 50 lakh, and (ii) 10% of such tax revenue under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, up to five crore rupees.
     
  • Benami Transactions Informants Reward Scheme, 2018: The Benami Transactions Informants Reward Scheme, 2018 rewards information on any movable or immovable benami property actionable under the Prohibition of Benami Property Transactions Act, 1988.  The reward amount is up to 5% of the fair market value of movable property, and the circle rate of immovable property.  This amount should be limited to one crore rupees in respect of a single benami property. 
     
  • If an informant is eligible for a reward under both the schemes based upon the same facts, the total amount of reward is restricted to the maximum permissible limit, whichever is higher, under the two schemes.

 

Corporate Affairs

The Insolvency and Bankruptcy (Amendment) Ordinance, 2018 promulgated

Prachee Mishra (prachee@prsindia.org)

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 was promulgated.  It amends the Insolvency and Bankruptcy Code, 2016.  The Code provides a time-bound process for resolving insolvency in companies and among individuals.  Key features of the Ordinance include:  

  • Real estate allottees: The Ordinance clarifies that an allottee under a real estate project will be considered a financial creditor.  An allottee includes any person to whom a plot, apartment, or building has been allotted, sold, or transferred by a promoter (real estate developer or development authority).  The Code defines a financial creditor as a person to whom financial debt is owed.  Such debt includes any amount raised that has the commercial effect of a borrowing.  Financial creditors are a part of the committee of creditors, which is responsible for taking the main decisions related to the resolution.  The allottees can appoint an authorised representative to the committee of creditors to vote on their behalf.
     
  • Applicability of the Code to Micro, Small and Medium Enterprises (MSMEs): The Code prohibits certain persons from bidding for the company in the resolution process.  This includes persons whose account has been classified as a NPA for a year, and any guarantor for a defaulting debtor.  The Ordinance provides that the ineligibility criteria for resolution applicants regarding NPAs and guarantors will not be applicable to persons applying for resolution of MSMEs.  The central government may, in public interest, modify or remove other provisions of the Code while applying them to MSMEs. 
     
  • Voting threshold of committee of creditors: The Code specifies that all decisions of the committee of creditors be taken by a majority of at least 75% of the financial creditors.  The Ordinance lowers this threshold to 51%.  For certain decisions of the committee, the voting threshold has been reduced from 75% to 66%.  These include: (i) appointment and replacement of the resolution professional, (ii) approval of the resolution plan, and (iii) approval of certain actions of the resolution professional during the insolvency resolution process.

For a PRS Ordinance summary, see here.

Ministry releases draft on cross border insolvency

Gayatri Mann (gayatri@prsindia.org)

The Ministry of Corporate Affairs released draft norms on cross border insolvency under the Insolvency and Bankruptcy Code, 2016 (IBC).[8] The norms are based on the UNCITRAL Model Law on Cross Border Insolvency, 1997 which provides a uniform mechanism for cross border insolvency.  Under the IBC, the central government is required to enter into agreements with countries to initiate cross border insolvency proceedings.  In addition, a letter of request is issued to access assets situated in other countries.  Key features of the draft norms include:

  • Applicability: The draft norms will apply to all corporate debtors covered under the IBC.  However, the central government may notify certain classes of corporate debtors to whom these provisions may not apply. 
     
  • The draft norms will be applicable in cases where: (i) assistance is sought in India by a foreign court or foreign insolvency professional, or (ii) assistance is sought in a foreign country in connection with proceedings under the IBC, or (iii) creditors in a foreign country want to commence or participate in proceedings under IBC, or (iv) foreign proceedings and proceedings under the IBC are concurrently underway.
     
  • Foreign proceeding: A foreign proceeding is a judicial or administrative insolvency proceeding in another country, where the assets of the corporate debtor are under control or supervision by a foreign court, for the purpose of recognition or liquidation.  A foreign representative may apply to the National Company Law Tribunal (NCLT) for recognition of the foreign proceeding to commence cross border insolvency proceedings with India.
     
  • Relief granted upon recognition of a foreign proceeding: To protect the assets of the corporate debtor or the interests of the creditors, the NCLT may grant relief, including moratorium on: (i) institution of suits or continuation of pending proceedings against the debtor, (ii) transferring or disposing of assets of the debtor, and (iii) recovery of any property by an owner or lessor which is occupied by the debtor.
     
  • Cooperation with foreign courts: The central government, in consultation with NCLT will notify guidelines for communication and cooperation between NCLT and foreign courts in cross border insolvency matters.

 

Commerce and Industry

Ahita Paul (ahita@prsindia.org)

Cabinet approves revised guidelines on time bound closure of sick or loss making Central Public Sector Enterprises

The Union Cabinet approved guidelines on timely closure of sick central public sector enterprises and disposal of their assets.[9]  According to the new guidelines, the land obtained from the closure of such public sector enterprises will be prioritised to provide affordable housing per the relevant guidelines of Ministry of Housing and Urban Affairs.  The employees of these enterprises will be given voluntary retirement at 2007 notional pay scales.

Ministry sets up expert group to study Special Economic Zones Policy

The Ministry of Commerce and Industry constituted an expert group (Chair: Mr. Baba Kalyani, Chairman of Bharat Forge) to study the Special Economic Zones (SEZ) Policy of India.[10]  The current SEZ Act was passed in 2005.  The group will: (i) evaluate India’s SEZ policy, (ii) suggest measures to cater to the needs of exporters in the present economic scenario, and (iii) make the SEZ policy compatible with the World Trade Organisation.  The group is required to submit its recommendations within three months.

Cabinet approves a corpus to National Export Insurance Account Trust

The Cabinet Committee on Economic Affairs approved a grant-in-aid of Rs 1,040 crore to the National Export Insurance Account Trust.[11]  The corpus is to be utilised during three years from 2017-18 to 2019-20.  An amount of Rs 440 crore has already been received for the year 2017-18.  The remaining Rs 600 crore will be split equally in the following two years.

Cabinet approves capital infusion in Export Credit Guarantee Corporation

The Cabinet Committee on Economic Affairs approved capital infusion of Rs 2,000 crore for strengthening the Export Credit Guarantee Corporation.[12]  The amount will be distributed in the next three financial years, in the following manner, Rs 50 crore in 2017-18, Rs 1,450 crore in 2018-19 and Rs 500 crore in 2019-20.

 

Education

Gayatri Mann (gayatri@prsindia.org)

Draft Higher Education Commission of India (Repeal of University Grants Commission Act) Bill, 2018 released

The Ministry of Human Resource Development has invited comments till July 7, 2018 on the Draft Higher Education Commission of India (Repeal of University Grants Commission Act) Bill 2018.[13]  The draft Bill seeks to repeal the University Grants Commission Act, 1956 and set up a Higher Education Commission.  The Commission will ensure: (i) maintenance of academic standards in higher education, (ii) promotion of autonomy of higher education institutions, and, (iii) periodic performance assessment of higher education institutions.  Currently, the UGC is a statutory body that coordinates, determines, and maintains the standards of higher education.  Key features of the draft Bill include:

  • Higher Education Commission: The draft Bill seeks to set up the Higher Education Commission of India.  The Commission will consist of 14 members, to be appointed by the central government. 
     
  • The Chairman of the Commission will be a professor from an institute of national importance, or an eminent academician with proven capacity for institution building. In addition to the Chairman and Vice Chairman, the Commission will include: (i) Chairpersons of other regulatory bodies of education i.e., All India Council of Technological Education and National Council for Teacher Education, (ii) Vice Chancellors of universities of academic excellence, (iii) Chairpersons of accreditation bodies such as the National Accreditation and Assessment Council, and (iv) nominees of the central government, among others.
     
  • Functions of the Commission: Functions of the Commission will include: (i) specifying learning outcomes for courses in higher education, (ii) laying down standards for teaching, curriculum development, and skill development, (iii) specifying norms for granting autonomy to universities, and (iv) framing guidelines for determination of fees chargeable by higher education institutions.
     
  • Advisory Council: The draft Bill seeks to set up an Advisory Council chaired by the Union Minister of Human Resource Development.  The Council will render advice on issues concerning: (i) coordination between the central government and state governments, and (ii) determination of standards in higher education.  The Council will include members of the Commission, and Chairpersons or Vice Chairpersons of all State Councils for Higher Education.

 

Water

Roopal Suhag (roopal@prsindia.org)

Cabinet approves Dam Safety Bill, 2018

The Union Cabinet has approved the introduction of the Dam Safety Bill, 2018.[14]  The draft Bill aims to provide proper surveillance, inspection, operation, and maintenance of all specified dams in the country to ensure their safe functioning.  Key features of the draft Bill include:

  • National Committee on Dam Safety: The Bill seeks to establish the National Committee on Dam Safety.  The Committee will evolve dam safety policies and recommend necessary regulations.
     
  • State Committee on Dam Safety: The State Committee on Dam Safety will ensure proper surveillance, inspection, operation, maintenance, and safe functioning of all specified dams in a state. 
     
  • National Dam Safety Authority: The Bill establishes the National Dam Safety Authority as a regulatory body.  The Authority will implement policies, guidelines, and standards for dam safety in the country.  It will maintain a national level database of all dams in the country and the records of major dam failures.  It will also look into unresolved issues between the State Dam Safety Organisation of two states.
     
  • State Dam Safety Organisation: The State Dam Safety Organisation in every state will look into the safety aspects of the state specific dams.

The draft Bill is not available in public domain.

Cauvery Water Management Scheme, 2018 formulated

The Cauvery Water Management Scheme, 2018 was formulated by the government to implement the decision of the Cauvery Water Disputes Tribunal, that was modified by the Supreme Court in February 2018.[15]  The Supreme Court in its judgement increased the share of Karnataka by 14.75 TMC and reduced  the share of Tamil Nadu by the same amount.  To implement the scheme, the government has constituted the Cauvery Water Management Authority and the Cauvery Water Regulation Committee.[16]  Key details include:

Cauvery Water Management Authority

  • Composition: The Cauvery Water Management Authority (CWMA) will be headed by a Chairman, and will comprise two whole-time members, two-part time members who will be government representatives from the Ministry of Water Resources and Agriculture, respectively, and four part-time members, one each from the state of Kerala, Karnataka, Tamil Nadu and one from Puducherry. 
     
  • Function and duties of CWMA: The functions of CWMA include: (i) storage, apportionment, regulation and control of Cauvery water; (ii) supervising the operation of reservoirs and regulating water releases and (iii) regulating release of water by Karnataka at the inter-state contact point of Karnataka and Tamil Nadu. 

Cauvery Water Regulation Committee

  • Composition: The Cauvery Water Regulation Committee (CWRC) will be headed by a Chairman, and will comprise eight other members, including representatives from the three states and one union territory, the Indian Meteorological Department, Central Water Commission, and Ministry of Agriculture.
     
  • Functions of CWRC: The CWRC, on the directions of the CWMA, will: (i) collect daily water levels, inflows, and storage position at eight reservoirs of the Cauvery; (ii) ensure 10 daily releases of water on monthly basis from the reservoirs as directed by the CWMA; and (iii) prepare seasonal and annual reports of the water account and submit it to the CWMA, among other things.

NITI Aayog released the Composite Water Management Index 2018

NITI Aayog has developed the Composite Water Management Index 2018 to enable effective water management in Indian states.[17]  In its report released on June 14, 2018, it has noted that currently, 600 million Indians face high to extreme water stress and about two lakh people die every year due to inadequate access to safe water.  In addition, by 2030, the country’s water demand is projected to be twice the available supply, implying severe water scarcity and an eventual loss of 6% to the country’s GDP.  Through the Composite Water Management Index, NITI Aayog has: (i) ranked states on several parameters with regard to their water availability, use, and management, and (ii) prepared a national database on water.  The index aims to increase competitiveness among states with regard to water use and conservation.

The main findings from the report include:

  • Data on water resources: One of the key factor driving the water crisis is the lack of water data.  Data related to water in India is limited in its coverage, robustness, and efficiency.  Detailed data is not available for several critical sectors such as domestic and industrial use.  Further, the data exists in silos, with little inter-state or centre-state sharing, thereby reducing efficiency. 
     
  • Ground water: 54% of India’s ground water wells are declining in level due to extraction rates exceeding recharge rates. 21 major cities are expected to run out of groundwater by 2020, affecting 100 million people.  Over-extraction of ground water is highest in the agriculture sector, where ground water accounts for 63% of water used for irrigation.
     
  • Water use efficiency: Agriculture accounts for 80% of all water demand in India.  Water efficiency of Indian farmers is currently amongst the lowest in the world.  On average, Indian farmers use three to five times more water for producing the same amount of crops than their Chinese, American, and Israeli counterparts.  This problem is further worsened by the provision of electricity subsidies for ground water extraction in most states. 
     
  • Rural drinking water: Currently, only half of the rural population in the country has access to safe drinking water.  This has resulted in a high disease burden in the country (two lakh annual deaths from inadequate or unsafe drinking water). 

 

Housing and Urban Affairs

Prachee Mishra (prachee@prsindia.org)

RBI revises housing loan limits for eligibility under priority sector lending

The RBI has increased housing loan limits for eligibility under priority sector lending.[18],[19]  The revisions seek to bring convergence between the priority sector lending guidelines for housing loans and the affordable housing scheme, Pradhan Mantri Awas Yojana (PMAY). 

As per the older criteria, loans to individuals up to: (i) Rs 28 lakh in metropolitan centres (with population of ten lakh and above), and (ii) Rs 20 lakh in other centres, were eligible to be classified under priority sector.  The maximum cost of these dwelling units was Rs 35 lakh and Rs 25 lakh, respectively.

These limits have been increased to: (i) Rs 35 lakh in metropolitan centres, and (ii) Rs 25 lakh in other centres.  The maximum cost of these dwelling unit should not exceed Rs 45 lakh and Rs 30 lakh in the metropolitan centre and at other centres, respectively.  

Further, under the older criteria, for the purpose of identifying the economically weaker sections (EWS) and low income groups (LIG), the family income limit prescribed was two lakh rupees per annum.  This limit has been increased to three lakh rupees per annum for EWS and six lakh rupees per annum for LIG.  This is in alignment with the income criteria specified under PMAY. 

Carpet area of houses in the MIG group eligible for PMAY-U increased

The Ministry of Housing and Urban Affairs has approved revision of the carpet area of houses eligible for the Credit Linked Subsidy Scheme (CLSS) for the middle income group (MIG) under the Pradhan Mantri Awas Yojana – Urban (PMAY-U).[20]  Under CLSS, subsidy is provided on home loans taken by eligible persons for buying or constructing a house.  The revised carpet area will be effective retrospectively from January 1, 2017, i.e., from the date when the scheme became operational.  The CLSS for MIG scheme will be implemented till March 31, 2019. 

There are two categories of MIG beneficiaries: (i) MIG-I (annual income between six lakh rupees and Rs 12 lakh), and (ii) MIG-II (annual income between Rs 12 lakh and Rs 18 lakh).  The carpet area of dwelling units under the scheme has been increased: (i) from 120 sq ft to 160 sq ft for MIG-I, and (ii) from 150 sq ft to 200 sq ft for MIG-II. 

Benefits under CLSS had been extended to the MIG group in February 2017 (earlier they were only applicable to the economically weaker section, and the lower income groups).  The carpet area of dwelling units under the MIG category were last increased in November 2017.  Details of CLSS for MIG are as follows:

Table 3: Details of CLSS for MIG

Particulars

MIG I

MIG II

Household Income (per annum)

Between Rs six lakh and Rs 12 lakh

Between Rs 12 lakh and Rs 18 lakh

Interest subsidy (% per annum)

4%

3%

Maximum loan tenure (in years)

20

20

Eligible Housing Loan Amount for Interest Subsidy (Rs.)

Rs 9 lakh

Rs 12 lakh

Carpet Area of dwelling unit

160 sq.m.

200 sq.m.

Sources: Press Information Bureau, Ministry of Housing and Urban Affairs; PRS. 

Committee for standardisation and indigenisation in Metro Rail Systems constituted

The Ministry of Housing and Urban Affairs constituted a Committee for Standardisation and Indigenisation in Metro Rail Systems (Chair: Dr. E. Sreedharan).[21]  The Committee will look at various indigenous standards that need to be formulated for metro systems.  These include: (i) layout of metro station, platforms, signage and displays, (ii) size of tunnels, (iii) fire protection systems, (iv) disaster management systems, (v) environment friendly and waste management systems, and (vi) standards for solar panels at metro stations. 

These indigenous standards will seek to encourage manufacturing of metro systems in the country and help reduce the cost of the metro rail construction and operation.  The committee is expected to submit its report in three months.

Shillong selected as the 100th Smart City

Shillong, the capital of Meghalaya has been selected as the 100th Smart City.[22]  This completes selection of the 100 cities under the Smart Cities Mission.  With the selection of Shillong, the total proposed investment in the selected 100 cities under the Mission would be Rs 2,05,018 crore.

 

Agriculture

Suyash Tiwari (suyash@prsindia.org)

Sub-group of CMs constituted to coordinate policies in agriculture and MGNREGS

The governing council of the NITI Aayog constituted a sub-group of Chief Ministers (CMs) to coordinate policy approaches for the agriculture sector and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).[23]  The sub-group has the CM of Madhya Pradesh as its convenor and will submit its report within three months.  Its members include the CMs of: (i) Andhra Pradesh, (ii) Bihar, (iii) Gujarat, (iv) Sikkim, (v) Uttar Pradesh, and (vi) West Bengal, and Mr. Ramesh Chand, Member, NITI Aayog. 

Terms of reference of the sub-group include:

  • Suggesting a wider choice of state-specific interventions during pre-sowing and post-harvest seasons in order to improve income level, water conservation, and the utilisation of waste for wealth creation.
     
  • Recommending interventions under MGNREGS that reduce agrarian distress, such as work availability, wage rates, and doubling farmers’ income by 2022. This would include thrust on water conservation, individual beneficiary schemes, construction of rural haats, and vermi-composting.
     
  • Exploring the possibilities of MGNREGS as a livelihood resource for development and diversification of livelihoods of small and marginal farmers especially those belonging to SC and ST households.
     
  • Exploring convergence of program resources across departments to ensure optimal utilization of funds, efficiency, effectiveness, and sustainability.

Cabinet approves continuation of three-year action plan for higher agricultural education

The Union Cabinet has approved the continuation of the three-year action plan (2017-2020) of the Agricultural Education Division and the Indian Council of Agricultural Research (ICAR) institutes.[24]  This has an outlay of about Rs 2,225 crore, of which Rs 2,197 crore shall be contributed by the central government.  States shall contribute about Rs 28 crore to cover expenditure on the salary component. 

The action plan aims to generate quality human resources from institutes of higher agricultural education.  It also allocates funds for research to make agriculture and allied fields gender-equitable, and to address capacity building needs of all stakeholders. 

 

Science and Technology

Suyash Tiwari (suyash@prsindia.org)

NITI Aayog releases paper on National Strategy for Artificial Intelligence

NITI Aayog released a discussion paper on National Strategy for Artificial Intelligence.[25]  Artificial Intelligence (AI) refers to the ability of machines to perform cognitive tasks like thinking, perceiving, problem solving, and decision making.  The discussion paper focuses on how India can leverage AI to ensure growth in line with the development priorities of the government.  It emphasises on the adoption of AI solutions for: (i) agriculture, (ii) education, (iii) healthcare, (iv) smart cities and infrastructure, and (v) smart mobility and transportation. 

While each sector has its barriers to successful adoption of AI, the paper identifies some key challenges across the sectors.  These include: (i) lack of expertise in research and application of AI, (ii) lack of quality data ecosystems suitable for successful adoption, (iii) high resource cost and low awareness for adoption of AI, (iv) lack of formal privacy, security, and ethical regulations, and (v) absence of collaborative approach to adoption and application of AI. 

In order to address these challenges, the paper gives a set of recommendations, which include:   

  • Research and skill development: It recommends establishment of academic and applied research institutions as centres of excellence in AI. This would promote innovative avenues and aid in skilling and reskilling of the workforce.  This would be implemented keeping in mind changing employment patterns, and needs of the job market and entrepreneurial sectors. 
     
  • Market-based adoption: It recommends the government to facilitate the creation of a National AI Marketplace. This would focus on creating markets for: (i) data collection and aggregation, (ii) data annotation or insight, and (iii) ready-to-use deployable models for sector-specific applications.  Adoption of AI would take place using this model where the government would act as a catalyst by creating demand and supporting partnerships. 
     
  • Regulatory challenges: It recommends the government to address regulatory challenges by creating strong legal frameworks. This would include frameworks related to data protection, intellectual property, and sector-specific regulations on privacy, security, and ethics.  This would be assisted by the adoption of international standards and practices. 

Cabinet gives approvals for GSLV Mark-III and PSLV continuation programmes

The Union Cabinet approved Phase VI of the Polar Satellite Launch Vehicle (PSLV) continuation programme and funding for Phase I of the Geosynchronous Satellite Launch Vehicle Mark III (GSLV Mk-III) continuation programme.[26],[27]  These approvals will apply to the launch of satellite missions during the period 2019-2024. 

The funding of Rs 4,338 crore for Phase I of GSLV programme will cover the cost of ten GSLV Mk-III vehicles, essential facility augmentation, programme management, and launch campaign.  This is the first phase of operational flights that will enable the launch of four tonne class of communication satellites. 

The approval for Phase VI of PSLV programme comes with a funding of Rs 6,131 crore.  These funds account for the cost of 30 PSLV vehicles, essential facility augmentation, programme management, and launch campaign.  This phase shall meet the demand for the launch of satellites at a frequency of up to eight launches per year, primarily for earth observation, navigation, and space sciences.

 

Consumer Affairs

Gayatri Mann (gayatri@prsindia.org)

Cabinet approves interventions to deal with the current crisis in the sugar sector

The Union Cabinet approved several measures to improve liquidity of the sugar mills and enable them to clear sugarcane price arrears of farmers.[28]  The following measures of Rs 7,000 crore were approved:

  • Creation of buffer stock: The Department of Food and Public Distribution notified a scheme for the creation and maintenance of buffer stock of 30 Lakh Metric Tonnes of sugar by the sugar mills for one year with effect from July 1, 2018.  The reimbursement under the scheme will be made on quarterly basis, which will be directly credited into farmers’ account on behalf of the sugar mills against their sugarcane price arrears.
     
  • Sugar Price (Control) Order, 2018: The central government notified the Sugar Price (Control) Order, 2018 under the Essentials Commodities Act, 1955.  The Order fixes the minimum selling price of refined (white) sugar below which no producer can sell or deliver white sugar in the domestic market.  The minimum selling price of refined sugar would be based on the Fair Remunerative Price of sugarcane, and the minimum conversion cost of refined sugar.  The Department of Food and Public Distribution has fixed the rate at Rs 29 per kg.
     
  • Increasing capacity of sugar mills: The government will upgrade the capacity of the existing distilleries attached to sugar mills by: (i) installing incineration boilers, and (ii) setting up new distilleries in sugar mills.  The government will provide an interest subsidy of up to Rs 1,332 crore over a period of five years.

 

Energy

Prachee Mishra (prachee@prsindia.org)

Mechanism for implementing new environmental norms for thermal power plants released

The Ministry of Environment, Forest and Climate Change had notified the Environment (Protection) Amendment Rules, 2015 on December 7, 2015 to introduce revised emission standards for thermal power plants (TPPs).[29]  These standards would require additional infrastructure and operational costs due to large scale installation, renovations and retrofitting of existing plant machinery.  The Ministry of Power has released a mechanism (or enabling guidelines) to ensure implementation of these revised environmental norms.[30]  These guidelines also seek to provide regulatory certainty to TPPs to recover the additional costs through tariff. 

Key guidelines include:

  • The notification will not apply to: (i) Power Purchase Agreements of TPPs where the tariff was determined through a bidding process, with bid deadlines on or after December 7, 2015, and (ii) TPPs where pollution control systems were mandated under the environmental clearance of the plant, before notification of the rules.
     
  • The additional cost implication to meet the new environmental norms, will be considered for being passed through in the power tariff.
     
  • The TPPs may approach the appropriate Electricity Regulatory Commission to approve the additional capital expenditure, and compensation for additional cost.
     
  • The Central Electricity Regulatory Commission will develop a regulatory mechanism to address the impact on tariff and certainty in cost recovery for TPPs under its purview.

Long term growth trajectory for renewable purchase obligations notified

The Ministry of Power notified the long term growth trajectory of Renewable Purchase Obligations (RPOs) for both solar and non-solar energy.[31]  RPOs are purchase obligations on electricity distribution companies to purchase certain amount of their energy requirements from renewable energy sources.  The new targets seek to achieve the target of 175 GW of renewable capacity by 2022. 

Between 2016-17 and 2018-19, the long term RPO trajectory was as follows:

Table 4: Long-term RPO trajectory

 

2016-17

2017-18

2018-19

Non-solar

8.75%

9.50%

10.25%

Solar

2.75%

4.75%

6.75%

Total

11.50%

14.25%

17.00%

Sources: Ministry of Power; PRS. 

These obligations are based on the total consumption of electricity, excluding consumption met from hydro power.  The new long term RPO trajectory for all states and union territories is as follows:

Table 5: Long-term RPO trajectory

 

2019-20

2020-21

2021-22

Non-solar

10.25%

10.25%

10.50%

Solar

7.25%

8.75%

10.50%

Total

17.50%

19.00%

21.00%

Sources: Ministry of Power; PRS. 

If either RPO is achieved till 85% and above, the remaining shortfall can be met by purchasing the other energy (solar or non-solar) beyond its required RPO for that year.

Guidelines for the New National Biogas and Organic Manure Programme released

The Ministry of New and Renewable Energy released the guidelines for the New National Biogas and Organic Manure Programme.[32]  This is a Central Sector Scheme, which provides for setting up of family type biogas plants mainly for rural and semi-urban households.  A family type biogas plant generates biogas from organic substances such as cattle-dung, and other bio-degradable materials such as biomass from farms, gardens, and kitchens. 

Key guidelines include:

  • Objectives: Objectives of the scheme include: (i) providing clean cooking fuel and meeting other small power needs of farmers, and individual households, (ii) reducing drudgery of women and help them save time for other livelihood activities, (iii) improving sanitation in rural and semi-urban areas by linking sanitary toilets with cattle dung biogas plants, and (iv) helping reduction in causes of climate change by preventing emission of green-house gases.
     
  • Physical targets: The target for 2017-18 was to set up 65,180 biogas plants.  For 2018-19, this target has been increased to one lakh plants.
     
  • Central assistance: The guidelines also provide details of central assistance that will be provided depending upon the state (in which the plant is located), and the size of the plant.  This assistance will be directly disbursed to the beneficiary accounts after setting up of the plants. 

Off-grid and Decentralised Solar PV Applications Programme - Phase III approved

The Cabinet Committee on Economic Affairs approved the Phase III of the Off-grid and Decentralised Solar Photo Voltaic (PV) Applications Programme.[33]  Phase III will have the following components:

  • Solar street lights: Three lakh solar street lights will be installed throughout the country.  Special emphasis will be given to areas where there is no facility for street lighting systems through grid power, such as north eastern (NE) states and left wing extremism (LWE) affected districts.
     
  • Stand-alone solar power plants: Solar power plants of individual size up to 25 kilo Watt peak (kWp) will be promoted in areas where grid power has not reached or is not reliable.  These plants provide electricity to schools, hostels, panchayats, police stations and other public service institutions.  The aggregated capacity of solar power plants would be 100 MWp.
     
  • Solar study lamps: 25 lakh solar study lamps will be provided in the NE states and LWE affected districts.
     
  • Central assistance: The total cost of the three components is Rs 1,895 crore.  Of this Rs 637 crore will be provided as central financial assistance.  For solar street lights and solar power plants, financial support of up to 30% of the benchmark cost of the system will be provided.  For NE states, hill states and island union territories, up to 90% of the benchmark cost will be provided. 

 

Petroleum and Natural Gas

Prachee Mishra (prachee@prsindia.org)

Ethanol pricing for public sector oil marketing companies revised

The Cabinet Committee on Economic Affairs approved the revision of ethanol price under the Ethanol Blended Petrol Programme for supply to public sector oil marketing companies.[34]  Currently, there is a flat rate for ethanol, irrespective of the mode of manufacture. Blending ethanol with petrol helps reduce vehicle exhaust emissions and reduces the import burden for petroleum.  The Ethanol Blended Petrol Programme was launched in 2003 to promote the use of alternative and environment friendly fuels.  However, since 2006, Oil Marketing Companies were not able to procure the required quantity of ethanol due to pricing issues of ethanol.  Therefore, the government has been administering the price of ethanol under the programme since December 2014.

The revision approves different rates for ethanol manufactured from different sources, for the ethanol supply period between December 1, 2018 and November 30, 2019.  Key changes approved include:

  • The price of ethanol derived out of C heavy molasses (end product obtained during sugar processing) will be Rs 43.70 per litre.
     
  • The price of ethanol derived out of B heavy molasses (intermediate product obtained during sugar processing) and sugarcane juice will be Rs 47.49 per litre.
     
  • GST and transportation charges will also be payable additionally.
     
  • As the price of ethanol is based on estimated fair and remunerative price (FRP) for sugar season 2018-19, it will be modified by the Ministry of Petroleum and Natural Gas according to the actual FRP declared by the central government.
     
  • For the ethanol supply year 2019-20, ethanol prices will be modified by the Ministry as per normative cost of molasses and sugar derived from FRP of sugarcane.

 

Social Justice

Gayatri Mann (gayatri@prsindia.org)

Cabinet approves extension of term of the Commission to examine the issue of sub-categorisation of Other Backward Classes

The Union Cabinet approved the extension of term of the Commission to examine the issue of sub-categorisation of Other Backward Classes (Chairperson: Justice G. Rohini) by eight weeks, from June 20, 2018 to July 31, 2018.[35]  The Commission had previously received an extension of 12 weeks from March 27, 2018.  The Commission started functioning on October 11, 2017.  It was required to submit its report within 12 weeks from the date of appointment of its Chairperson.[36]

 

Information Technology

Prachee Mishra (prachee@prsindia.org)

Amendments to the Digidhan Mission released

The Ministry of Electronics and Information Technology released certain amendments to the Digidhan Mission.[37]  The Mission is implemented under the Digital India programme and seeks to achieve a target of 2,500 crore digital transactions in 2017-18.  Key amendments include:

  • The Mission has been extended till March 31, 2020.
     
  • The target of 2,500 crore digital transactions in 2017-18 has been removed from the Mission objectives. Subsequently, the strategy of the Mission has been changed to (i) promote digital payments in the country and (ii) increase the digital payment acceptance infrastructure.
     
  • New policy measures and interventions will be proposed to design tax incentives to promote digital payments.
     
  • Mechanisms will be devised to monitor the regional penetration of digital payments by geo-tagging the digital payment transactions.

 

External Affairs

Roopal Suhag (roopal@prsindia.org)

Visit of President of Seychelles to India

The President of Seychelles visited India.[38]  Six agreements were signed between the two countries on various subjects, including: (i) Indian grant assistance for implementation of small development projects through local bodies; (ii) cooperation in the area of cyber security; and (iii) sharing white shipping information between the India Navy and National Information Sharing and Coordination Center of Seychelles.

Visit of Prime Minister to China

The Prime Minister visited China and signed two bilateral agreements.[39]  These relate to: (i) provision of hydrological information of Brahmaputra river in flood season by China to India; and (ii) phytosanitary requirements (measures for control of plant diseases in agricultural crops) for exporting rice from India to China.

 

[1] Second Bi-Monthly Monetary Policy Statement 2018-19, Press Release, Reserve Bank of India, June 6, 2018, http://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR3190CD624DC4A2BD4F20AF3F8C8CAD81A513.PDF.

[2] “Developments in India’s Balance of Payments during the fourth quarter of 2017-18”, Reserve Bank of India, Press Release, June 13, 2018, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR3265747CB80687CD49A9A1444D2B46F81400.PDF.

[3] Report of the High Level Task Force on Public Credit Registry for India, June 6, 2018 https://rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=895#C2.

[4] “Expert Committee for listing of equity share capital of companies incorporated in India on foreign exchanges and vice versa”, Press Release, SEBI, June 12, 2018

https://www.sebi.gov.in/media/press-releases/jun-2018/expert-committee-for-listing-of-equity-share-capital-of-companies-incorporated-in-india-on-foreign-exchanges-and-vice-versa_39254.html.

[5] “Draft guidelines on Loan System for Delivery of Bank Credit”, RBI, June 11, 2018

https://rbi.org.in/scripts/bs_viewcontent.aspx?Id=3495.

[6] “Income Tax Department issues Revised Income Tax Informants Reward Scheme, 2018”, Press Information Bureau, Ministry of Finance, June 1, 2018.

[7] “New Benami Transactions Informants Reward Scheme, 2018 launched by the Income Tax Department”, Press Information Bureau, Ministry of Finance, June 1, 2018.

[8] “Draft on Cross Border Insolvency”,  Ministry of Corporate Affairs, July 20, 2018, http://www.mca.gov.in/Ministry/pdf/PublicNoiceCrossBorder_20062018.pdf.

[9] “Cabinet approves Revised guidelines on time bound closure of sick/ loss making Central Public Sector Enterprises and disposal of movable and immovable assets”, Press Information Bureau, Cabinet, June 6, 2018.

[10] “Baba Kalyani heads group to study SEZ Policy”, Press Information Bureau, Ministry of Commerce and Industry, June 6, 2018.

[11] “Cabinet approves a Corpus to National Export Insurance Account Trust”, Press Information Bureau, Cabinet Committee on Economic Affairs, June 27, 2018.

[12] “Cabinet approves capital infusion in Export Credit Guarantee Corporation Ltd.”, Press Information Bureau, Cabinet Committee on Economic Affairs, June 27, 2018

[13] Draft Higher Education Commission of India (Repeal of University Grants Commission Act) Act 2018, Ministry of Human Resource Development, June 27, 2018

http://mhrd.gov.in/sites/upload_files/mhrd/files/HE_CoI_India_2018_act.pdf.

[14] “Cabinet approves proposal for enactment of Dam Safety Bill, 2018”, Press Information Bureau, Ministry of Water Resources, River Development and Ganga Rejuvenation, June 13, 2018.

[15] The State of Karnataka by its Chief Secretary vs State of Tamil Nadu by its Chief Secretary & Ors., Civil Appeal No. 2453 of 2007 with State of Kerala through the Chief Secretary to Government vs State of Tamil Nadu through the Chief Secretary to Government and others, Civil Appeal No. 2454 of 2007 with State of Tamil Nadu through the Secretary Public Works Department vs State of Karnataka by its Chief Secretary Government of Karnataka & Ors., Civil Appeal No. 2456 of 2007, http://supremecourtofindia.nic.in/supremecourt/2007/11993/11993_2007_Judgement_16-Feb-2018.pdf.

[16] Ministry of Water Resources, River Development and Ganga Rejuvenation Notification, June 1, 2018, http://mowr.gov.in/sites/default/files/CWMA_GazatteNotification.pdf.

[17] Composite Water Management Index 2018 – A Tool for Water Management, NITI Aayog, June 2018, http://www.niti.gov.in/writereaddata/files/document_publication/2018-05-18-Water-index-Report_vS6B.pdf.

[18] “Priority Sector Lending – Targets and Classification”, RBI/2017-18/203, Reserve Bank of India, June 19, 2018, https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11308&Mode=0.

[19] “Master Direction - Priority Sector Lending – Targets and Classification (Updated as on April 16, 2018)”, RBI/FIDD/2016-17/33, Reserve Bank of India, July 7, 2016, https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10497.

[20] “Carpet Area of Houses Eligible for Subsidy Under CLSS for Middle Income Group (MIG) Increased to 160 Sq.M for MIG -I and 200 Sq.M for MIG-II”, Press Information Bureau, Ministry of Housing and Urban Affairs, June 12, 2018. 

[21] “Constitution of Committee for Standardization and Indigenization in Metro Rail Systems”, Press Information Bureau, Ministry of Housing and Urban Affairs, June 26, 2018. 

[22] “Shillong (Meghalaya) gets selected as the 100th Smart City”, Press Information Bureau, Ministry of Housing and Urban Affairs, June 20, 2018. 

[23] “Chief Ministers Subgroup Constituted to Coordinate Policy Approaches for Agriculture and MGNREGS”, Press Information Bureau, NITI Aayog, June 19, 2018.

[24] “Cabinet approves 'Three Year Action Plan of Agricultural Education Division & ICAR Institutes”, Press Information Bureau, Ministry of Agriculture and Farmers Welfare, June 13, 2018.

[25] Discussion Paper on National Strategy for Artificial Intelligence, NITI Aayog, June 2018, http://www.niti.gov.in/writereaddata/files/document_publication/NationalStrategy-for-AI-Discussion-Paper.pdf.

[26] “Cabinet approves Continuation Programme for

Geosynchronous Satellite Launch Vehicle Mark-III”, Press Information Bureau, Cabinet, June 6, 2018

[27] “Cabinet approves Polar Satellite Launch Vehicle Mark-III

Continuation Programme – Phase 6”, Press Information Bureau, Cabinet, June 6, 2018.

[28] “Cabinet approves interventions to deal with the current crisis in the sugar sector”, Cabinet, Press Information Bureau, June 6, 2018.

[29] Environment (Protection) Amendment Rules, 2015, S.O. 3305 (E), Ministry of Environment, Forest and Climate Change, December 7, 2015, http://www.moef.gov.in/sites/default/files/Thermal%20plant%20gazette%20scan.pdf.

[30] “Mechanism for implementation of New Environmental Norms for Thermal Power Plants (TPP) supplying power to distribution licensees under concluded long term and medium term Power Purchase Agreement (PPA)”, Ministry of Power, May 30, 2018, https://powermin.nic.in/sites/default/files/webform/notices/Letter_dated_30th_May_2018_on_New_Environmental_Norms.pdf

[31] “Long-term growth trajectory of Renewable Purchase Obligations (RPOs) for Solar and Non-Solar for a period of three years i.e., 2019-20 to 2021-22”, No.23/03/2016-R&R, Ministry of Power, June 14, 2018, https://powermin.nic.in/sites/default/files/webform/notices/RPO_trajectory_2019-22_Order_dated_14_June_2018.pdf.

[32] “Administrative Sanction – cum – Guidelines for implementation of the Central Sector Scheme, New National Biogas and Organic Manure Programme (NNBOMP) during the period 2017-18 to 2019-20, co-terminating with the 14th Finance Commission Period on 31.03.2020”, E-File No. 253/16/2017-Biogas, Ministry of New and Renewable Energy, May 30, 2018, https://mnre.gov.in/sites/default/files/schemes/New-National-Biogas-Organic-Manure-Programme%28NNBOMP%29-upto-2020-1.pdf.

[33] Cabinet approves Continuation of Off-grid and Decentralised Solar PV Applications Programme - Phase III”, Press Information Bureau, Cabinet Committee on Economic Affairs, June 6, 2018. 

[34] “Cabinet approves Mechanism for procurement of ethanol by Public Sector Oil Marketing Companies (OMCs) to carry out the Ethanol Blended Petrol (EBP) Programme- Revision of ethanol price for supply to Public Sector OMCs”, Press Information Bureau, Cabinet Committee on Economic Affairs, June 27, 2018.

[35] “Cabinet approves extension of term of the Commission to examine the issue of sub-categorisation of Other Backward Classes”, Press Information Bureau Cabinet, June 13, 2018.

[36] “Cabinet approves setting up of a Commission to examine the Sub-Categorization within OBCs”, Press Information Bureau, Cabinet, August 23, 2017.

[37] “Notification: Extension of Digidhan Mission”, F.No.3(4)/2017-EG-II, Ministry of Electronics and Information Technology, May 25, 2018. 

[38] “List of MoUs signed between India and Seychelles during the State Visit of President of Seychelles to India”, Ministry of External Affairs, June 25, 2018, http://www.mea.gov.in/incoming-visit-detail.htm?30014/List+of+MoUs+signed+between+India+and+Seychelles+during+the+State+Visit+of+President+of+Seychelles+to+India.

[39] “India-China Bilateral Agreements signed in Qingdao, China”, Ministry of External Affairs, June 9, 2018, http://www.mea.gov.in/outoging-visit-detail.htm?29966/IndiaChina+Bilateral+Agreements+signed+in+Qingdao+China.

 

DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”).  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it.

Highlights of this Issue

GDP growth estimated at 6.7% in 2017-18; fourth quarter 2017-18 growth at 7.7%

The GDP growth (at constant prices) in the January to March quarter was higher than the 7% growth in the previous quarter of 2017-18.  Higher growth was visible across all sectors.

The Commercial Courts (Amendment) Ordinance, 2018 promulgated

The Ordinance seeks to reduce the pecuniary jurisdiction of commercial courts from a minimum of rupees one crore to a minimum of rupees three lakh.  Further, it provides for the establishment of Commercial Appellate Courts.

The Homoeopathy Central Council (Amendment) Ordinance, 2018 promulgated

The Ordinance supersedes the Central Council.  It enables the central government to constitute a Board of Governors, which will exercise the powers of the Council.  A new Council has to be constituted within a year.

The National Sports University Ordinance, 2018 promulgated

It establishes a National Sports University in Manipur.  The University will strengthen sports training and undertake research on physical education.  It will have the power to grant degrees, diplomas, and certificates. 

Cabinet approves resolution mechanism for commercial disputes in CPSEs

The Union Cabinet approved a two-tier resolution mechanism for commercial disputes between Central Public Sector Enterprises (CPSEs), and CPSEs and government departments or organizations, outside the courts. 

University Grants Commission approves UGC (Online Courses) Regulations, 2018

Higher educational institutions will be able to offer programmes through an online mode in courses if they are already offering similar courses, and at least one batch has graduated in such courses.

National Clean Air Programme for India released by the Ministry of Environment

The Programme aims to meet the prescribed annual average ambient air quality standards at all locations in the country in a stipulated timeframe. 

Draft National Digital Communications Policy 2018 released

The draft Policy includes a National Broadband Mission to ensure universal access, spectrum for 5G, recognise telecom as a critical infrastructure sector, and a data protection regime for digital communications.

Ministry of New and Renewable Energy releases National Wind-Solar Hybrid Policy

The policy provides for the promotion of large grid connected wind-solar photovoltaic (PV) hybrid systems.  The systems can be integrated depending upon the size of each of the source integrated and the technology type.

DGCA releases draft guidelines related to airline cancellation and refunds

The draft guidelines provide for (i) refund of airline tickets to passengers, and (ii) facilities to be provided to passengers by airlines due to denied boarding, cancellation of flights and delays in flights. 

Telecom Commission approved in-flight connectivity

The Telecom Commission has approved in-flight connectivity where airlines and telecom service providers can offer voice and data services in Indian airspace once an aircraft reaches an altitude of 3000 metres. 

Macroeconomic Development

Roopal Suhag (roopal@prsindia.org))

GDP estimated to grow at 6.7% in 2017-18; fourth quarter of 2017-18 sees 7.7% growth

Provisional estimates suggest that the Gross Domestic Product (GDP) (at constant prices) of the country is expected to be at 6.7% year-on-year. [1] GDP grew at 7.7% in the fourth quarter of 2017-18, over the corresponding period a year ago.1  This was higher than the 7% growth in the third quarter of 2017-18.  The quarterly trend of GDP growth over the last two financial years is shown in Figure 1.

Figure 1: GDP growth (in %, year-on-year)

Sources: MOSPI; PRS.

GDP growth across economic sectors is measured in terms of Gross Value Added (GVA).  The year-on-year growth of services was the same as in the third quarter, while that of other sectors was higher than the growth in third quarter.   Details on sectoral GVA growth are shown in Table 1.

Table 1: Gross Value Added across sectors in Q4 of 2017-18 (% growth, year-on-year)

Sector

Q4

Q3

Q4

2016-17

2017-18

2017-18

Agriculture

7.1%

3.1%

4.5%

Mining

18.8%

1.4%

2.7%

Manufacturing

6.1%

8.5%

9.1%

Electricity

8.1%

6.1%

7.7%

Construction

-3.9%

6.6%

11.5%

Services

6.3%

7.7%

7.7%

GVA

6.0%

6.6%

7.6%

GDP

6.1%

7.0%

7.7%

Note: GVA is GDP without taxes and subsidies, at basic prices (2011-12 base year).

Sources: MOSPI; PRS.

Industrial production grew by 6.3% in the fourth quarter of 2017-18

The Index of Industrial Production (IIP) grew by 6.3% in the fourth quarter (Jan-Mar) of 2017-18, as compared to the same period in 2016-17.[2]  Manufacturing saw the highest increase of 7.2% in this quarter, followed by an increase of 6.1% in electricity and 1% in mining.  Figure 2 shows the change in industrial production in the fourth quarter of 2017-18, and the average for the fourth quarter.

Figure 2: Growth in IIP in fourth quarter of 2017-18 (year-on-year)

Sources: MOSPI; PRS.

Law and Justice

The Commercial Courts (Amendment) Ordinance promulgated

Roshni Sinha (roshni@prsindia.org)

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Ordinance, 2018 was promulgated on May 3, 2018.[3]  It amends the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015.[4]  The Act enables the creation of commercial courts to adjudicate commercial disputes (such as disputes related to construction contracts or contracts for provision of goods).  Key features of the Ordinance include:

  • Reduction in pecuniary limits: Under the Act, commercial courts and commercial divisions in High Courts can decide disputes with a value of at least one crore rupees.  The Ordinance reduces this limit to three lakh rupees.
  • Establishment of certain commercial courts: Under the Act, state governments may constitute commercial courts at the district judge level, after consulting the concerned High Court.  District judge level includes judge of a city civil court, sessionsjudge, and an additional district judge.  The Act bars such commercial courts to be constituted in cases where the High Court has the original jurisdiction to hear commercial cases.  (Original jurisdiction refers to when a court has the power to hear a fresh case).  The Ordinance removes this bar and allows states to constitute commercial courts where the High Court has original jurisdiction. 
  • Commercial Appellate Courts: In areas where High Courts do not have ordinary original civil jurisdiction, state governments, may notify commercial appellate courts at the district judge level.  Appeals against the order of a commercial court (below the level of a district judge) will lie before the Commercial Appellate Court. 
  • Mediation: A provision for mandatory mediation has been provided in those cases where no urgent relief (such as an injunction) is being sought by the parties to the dispute.  The mediation process is required to be completed within a period of three months (may be extended by another two months).  A signed settlement between the parties will have the same effect as an arbitral award under the Arbitration and Conciliation Act, 1996.

For a PRS Ordinance Summary, see here.

Cabinet approves resolution mechanism for commercial disputes in CPSEs

Sai Priya Kodidala (saipriya@prsindia.org)

The Union Cabinet approved a two-tier resolution mechanism for commercial disputes of Central Public Sector Enterprises (CPSEs).[5]  Currently, commercial disputes are resolved through the Permanent Machinery of Arbitration (set up under the Department of Public Enterprises).  The new two-tier mechanism will replace this existing system to resolve commercial disputes between CPSEs, and CPSEs and government departments or organisations.  This excludes disputes concerning the Railways, Income Tax, Customs and Excise Departments.  Key features of the new mechanism include:

  • First level: Commercial disputes will be referred to a Committee which will comprise of Secretaries of the respective Ministries or Departments to which the disputing parties belong to, and the Secretary of the Department of Legal Affairs.  Further, financial advisors of the two concerned Ministries or Departments will represent the issues related to the dispute before the above Committee.  At this level, the disputes must be resolved within three months.
  • Second level: If the dispute remains unresolved at the first level, it will be referred to the Cabinet Secretary.  The decision of the Cabinet Secretary will be final and binding.

Sports

Vatsal Khullar (vatsal@prsindia.org)

The National Sports University Ordinance, 2018 promulgated

The National Sports University Ordinance, 2018 was promulgated on May 31, 2018.[6]  It establishes a National Sports University in Manipur.  Note that the National Sports University Bill, 2017 was introduced in Lok Sabha in August 2017 and is currently pending passage.[7]  Key features of the Ordinance include:

  • Establishment of the University: The National Sports University will be headquartered in Manipur.  It may establish outlying campuses, colleges, or regional centres.  The University will: (i) undertake research on physical education, (ii) strengthen sports training programmes, and (iii) collaborate internationally in the field of physical education, among others.
  • Functions: Key powers and functions of the University include: (i) prescribing courses of study and conducting training programmes, (ii) granting degrees, diplomas, and certificates, (iii) providing facilities through a distance education system, and (iv) conferring autonomous status on institutions.
  • Authorities: The University will have the following authorities:  (i) the Court, which will review the policies of the University and suggest measures for its development, (ii) the Executive Council, which will be the principal executive body, (iii) the Academic and Activity Council, which will supervise academic policies, (iv) the Board of Sports Studies, which will approve the subjects for research and recommend measures to improve standards of teaching, and (v) the Finance Committee, which will examine proposals related to creation of posts and recommend limits on the expenditure of the University.  Additional authorities may be declared through statutes of the University.

For a PRS Ordinance Summary, see here.  For more details on the Bill pending in Parliament, see here.

Health

Gayatri Mann (gayatri@prsindia.org)

Ordinance promulgated to amend the Homoeopathy Central Council Act, 1973

The Homoeopathy Central Council (Amendment) Ordinance, 2018 was promulgated on May 18, 2018.[8]  It amends the Homoeopathy Central Council Act, 1973, which sets up the Central Council of Homoeopathy.  The Central Council of Homoeopathy regulates homoeopathic education and practice.  Key features of the Ordinance include:

  • Supersession of the Central Council: The Ordinance amends the 1973 Act to provide for the supersession of the Central Council with effect from May 18, 2018.  The Central Council will be reconstituted within one year from the date of its supersession.  In the interim period, the central government will constitute a Board of Governors, which will exercise the powers of the Central Council.
  • The Board of Governors will consist of up to seven members including: (i) persons of eminence in the field of homoeopathy education, and (ii) eminent administrators, appointed by the central government. The central government will select one of these members as the Chairperson of the Board.  With regard to policy decisions, directions of the central government will be final.
  • Permission for existing homoeopathy colleges: The Ordinance states that: (i) if any person has established a homoeopathy medical college, or (ii) if an established homoeopathy medical college has opened new courses or increased its admission capacity before the Ordinance was promulgated, it will have to seek permission from the central government within one year.  If the person or homoeopathy medical college fails to seek such permission, then any medical qualification granted to a student from such medical college will not be recognised under the Act.

For more details on the Ordinance, see here.

Cabinet approves setting up of National Institute of Mental Health Rehabilitation

The Union Cabinet approved the establishment of the first National Institute of Mental Health Rehabilitation in Bhopal.[9]  It will be set up as a society under the Societies Registration Act, 1860.  The estimated cost for the first three years of the project is Rs 180 crore.

The main objectives of the institute are: (i) providing rehabilitation services to persons with mental illness, and (ii) policy framing, capacity development, and advanced research in mental health rehabilitation.

The institute will consist of nine departments and will conduct 12 courses in the area of mental health rehabilitation.  These courses will lead to the award of diploma, certificate, graduate, post graduate, and M.Phil. degrees.

Cabinet approves setting up of new AIIMS in Deoghar, Jharkhand

The Union Cabinet approved the establishment of a new All India Institute of Medical Sciences (AIIMS) in Deoghar, Jharkhand.[10]  It will be set up under the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY).  PMSSY was launched in 2006 with the aim of correcting the imbalances in the availability of affordable healthcare facilities in different parts of the country.[11]

A provision of Rs 1,103 crore has been approved for setting up the new AIIMS.  It will consist of: (i) a hospital with a capacity of 750 beds, (ii) trauma center facilities, (iii) a medical college with an intake of 100 MBBS students per year, (iv) nursing college with an intake of 60 B.Sc. (Nursing) students per year, (v) 20 speciality and super-speciality departments including 15 operation theatres, and (vi) an AYUSH department with 30 beds for providing treatment facilities in traditional system of medicine.

Education

Gayatri Mann (gayatri@prsindia.org)

University Grants Commission approves UGC (Online Courses) Regulations, 2018

The University Grants Commission approved the UGC (Online Courses) Regulations, 2018.[12]  As per the regulations, higher educational institutions will be able to offer certificate, diploma and degree programmes through an online mode.  Such courses should be in the disciplines in which: (i) they are already offering similar courses at graduation level, and (ii) at least one batch has graduated.

As per the scheme, only those institutions will be eligible to offer online courses that have been: (i) in existence for at least five years, (ii) accredited by National Assessment and Accreditation Council with a minimum score of 3.26 on a 4-point scale, and (iii) in the top-100 in overall category in the National Institutional Ranking Framework for at least two years in the previous three years.

Scheme to provide holistic education from pre-school to Class 12 launched

The Ministry of Human Resource Development launched a scheme ‘Samagra Shiksha’, which seeks to provide holistic education from pre-school to senior secondary levels.[13]  It subsumes three existing schemes, namely: (i) Sarva Shiksha Abhiyan, (ii) Rashtriya Madhyamik Shiksha Abhiyan, and (iii) Teacher Education.  The budget allocation for the scheme is Rs 34,000 crore for 2018-19, and Rs 41,000 crore for 2019-20. 

To determine district level interventions, the scheme will focus on learning outcomes and results of the latest National Achievement Survey.  Further, it envisages active participation of stakeholders such as parents and school management committee members.

Energy

Prachee Mishra (prachee@prsindia.org)

National Wind-Solar Hybrid Policy released

The Ministry of New and Renewable Energy released the National Wind-Solar Hybrid Policy.[14]  Key features of the policy include:

  • Objective: The policy provides a framework for the promotion of large grid connected wind-solar photovoltaic (PV) hybrid systems.  This would: (i) enable optimal utilisation of power transmission infrastructure and land, (ii) reduce variability in renewable power generation, and (iii) help achieve better grid stability. 
  • Wind-solar hybrid systems: Wind-solar hybrid power plants will include wind turbine generators and solar PV systems, that will be configured to operate at the same point of grid connection.  The two systems can be integrated in different ways depending upon the size of each of the source integrated and the technology type.  Further, if a particular energy source is stronger at a site, the size of the other source (in terms of capacity) can be kept smaller.  However, for a plant to be recognized as hybrid, the rated power capacity of one resource should be at least 25% of the rated power capacity of the other source.  
  • New hybrid plants: The power generated from the hybrid project may be used for: (i) captive purpose (for the plant’s own use), (ii) sale to third party through open access (large consumers buying directly from the power plant instead of through a distribution company), or (iii) sale to the power distribution companies.  With regard to the procurement of hybrid power through transparent bidding, the bidding parameters may include: (i) capacity delivered at grid interface point, (ii) effective capacity utilisation factor of the plant, and (iii) unit price of electricity. 
  • Battery storage: Battery storage may be added to the power plant to: (i) reduce the variability of output power from the hybrid plant, (ii) providing higher energy output for a given capacity, and (iii) ensuring availability of continuous power for a particular period. 
  • Incentives: All fiscal and financial incentives available to wind and solar power projects will also be made available to hybrid projects.

Promoting biomass based co-generation in sugar mills, and other industries

The Ministry of New and Renewable Energy has released a scheme to support the promotion of biomass based co-generation in sugar mills, and other industries.[15]  Co-generation means generating both electricity and useful heat at the same time, therefore utilising the available energy in more than one form. 

The total central financial assistance towards the scheme will be Rs 170 crore for the period 2017-18 to 2019-20.  The guidelines for power generation from biomass power plants will be issued separately.  Key provisions under the scheme include:

  • Eligibility: The programme will provide central assistance for projects utilising biomass such as bagasse, agro-based industrial residue, crop residue, weeds, and wood waste produced in industrial operations.  Municipal solid waste is not covered under the scheme.
  • Firms eligible for financial support under the scheme include registered companies, partnership firms, cooperatives, and public sector companies. To avail such financial support, the applicant must have availed a term loan (for the eligible project) from any financial institution like public or private sector banks, central or state cooperative banks, or a non-banking financial company. 
  • Central Financial Assistance: Central assistance under the scheme will be Rs 25 lakh/MW for bagasse cogeneration projects, and Rs 50 lakh/MW for non-bagasse cogeneration projects.  The assistance will be released to the term loan account to reduce the loan component of the promoter.  Biomass based cogeneration projects which intend to add capacity to the existing plants will also be considered for such assistance.  However, assistance in such cases will be considered only for the enhanced capacity.
  • Project timeline: Promoters will have to complete the project within 24 months (with a six-month extension) from the date of sanction of the central assistance.  If the project is not completed within the stipulated time, the central assistance will be cancelled. 

Cabinet approves National Policy on Biofuels, 2018

The Union Cabinet approved the National Policy on Biofuels, 2018.[16]  The Ministry of New and Renewable Energy had released a National Policy on Biofuels in 2009.  Biofuels are liquid or gaseous fuels produced from biomass resources.  These resources include biodegradable fraction of products, wastes and residues from agriculture, forestry and related industries, and the biodegradable fraction of industrial and municipal wastes.  Key features of the approved policy include:

  • Categories of biofuels: The policy creates two categories of biofuels: basic and advanced.  Basic biofuels include first generation bioethanol.  Advanced biofuels include second generation ethanol, municipal solid waste, third generation biofuels, bio-CNG. 
  • Raw materials: The policy expands the scope of raw material for ethanol production by allowing the use of certain items that are unfit for human consumption.  These include: (i) sugarcane juice, (ii) materials containing sugar such as sugar beet, (iii) materials containing starch such as corn, cassava, and (iv) damaged food grains like wheat, broken rice, and rotten potatoes.  It also allows the use of surplus food grains for production of ethanol for blending with petrol, with the approval of the National Biofuel Coordination Committee.
  • Financial incentives: The policy indicates a viability gap funding scheme of Rs 5,000 crore in six years for second generation ethanol bio refineries.  Further, advanced biofuels will also get additional tax incentives, and higher purchase price as compared to basic biofuels.

Coal

Prachee Mishra (prachee@prsindia.org)

Inter-ministerial groups submits recommendations on rationalising coal linkages for independent power producers

The Ministry of Coal had constituted an inter-ministerial group to review the existing sources of coal for independent power producers with coal linkages in October 2017.[17]  (Coal linkage is the allocation of coal mines to thermal power plants.)  The recommendations made by the group include:

  • Transfer of coal linkage: Under coal linkage rationalisation, the coal linkage of a thermal power plant of an independent power producer (IPP) may be transferred from one coal company to another.  Such transfer will be based on the existing availability of coal and the future coal production plan of the coal company.  The objective of such transfer is to allocate coal mines closer to the power plants, reducing coal transportation costs, resulting in lower coal costs for the power producers.  These savings have to be passed on to the  consumers of power, such as power distribution companies. 
  • Such rationalisation will be voluntary for the thermal power plants. It is also expected that if coal travel distance is reduced, it will free up railway freight infrastructure for other sectors. 
  • Process of rationalisation: The calling for requests for linkage rationalisation will be a one-time process.  It will be undertaken jointly by Coal India Limited, Singareni Collieries Company Limited, and Central Electricity Authority in a transparent manner.  Such rationalisation will be considered only for the IPPs that have these linkages through the allotment route (government allotment). 
  • Post rationalisation: Fuel Supply Agreements (agreement between coal company and power plant) of the rationalised source will be implemented only after the central or state Electricity Regulatory Commission approves the supplementary agreement. 

Transport

Prachee Mishra (prachee@prsindia.org)

DGCA releases draft guidelines related to airline cancellation and refunds

The Director General of Civil Aviation (DGCA) has released draft guidelines related to: (i) refund of airline tickets to passengers, and (ii) facilities to be provided to passengers by airlines due to denied boarding, cancellation of and delays in flights.[18],[19]  Key guidelines include:

Refund of airline tickets

  • Lock-in period: The airlines will provide a ‘lock-in’ option for 24 hours after booking the ticket.  During this time period a passenger can cancel or change the ticket without any additional charges, except for the normal prevailing fare of the changed ticket.  This lock-in option will be available to passengers up to 96 hours before the flight’s departure. 
  • Additional charges: Airlines will not levy any additional charge for correction in name of the same person.  Such error has to be pointed out by the passenger within 24 hours of the booking. 
  • Cancellation charges: Currently, airlines cannot levy cancellation charges that are more than the basic fare plus fuel surcharge.  The proposed guidelines extend this provision to travel agents.   

Denied boarding, cancellation of and delays in flights

  • Cancellation of flights: Currently, if an airline informs the passengers of the cancellation less than two weeks before and up to 24 hours of the scheduled time of departure, then it will offer the passenger an alternate flight within two hours of their scheduled departure.  The guidelines propose that, in addition, the airline may also refund the price of the ticket, if acceptable to the passenger. 
  • Flight delays: If a flight is expected to be delayed by more than four hours from the scheduled departure time or a previously revised departure time (before 24 hours), airlines will offer an option of full refund of ticket.  If the delay is more than 24 hours and is moved to the next day, the airline will offer the passengers: (i) meals and refreshments in relation to waiting time, and (ii) hotel accommodation when necessary (including transfers).  Such facilities will be free of charge. 
  • If a passenger misses a connectin