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.
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).
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.
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:
For a PRS Ordinance summary, see here.
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:
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:
The Court stated that Parliament should consider enacting a law to ensure that persons facing serious criminal charges do not contest elections.
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.
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.
For a PRS summary of the Ordinance, see here.
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:
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.
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.
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.
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:
For a PRS Report Summary, see here.
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:
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.
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 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.
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:
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.
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:
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:
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:
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:
To achieve these objectives, the ICAP has prioritised areas to make interventions, which include:
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:
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.
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]
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:
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:
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.
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