THE HINDU – CURRENT NOTE 13 APRIL
‘India breached Tibet commitment’
•China on Wednesday reiterated that the visit of the Dalai Lama to Arunachal Pradesh will have a negative impact on Sino-Indian ties, and accused New Delhi of breaching its commitment on the Tibet issue.
•In response to a question, the Chinese Foreign Ministry said Beijing would take “further action” to safeguard its territorial sovereignty.
•Foreign Ministry spokesperson Lu Kang took exception to statements by the Dalai Lama and Arunachal Pradesh Chief Minister Pema Khandu, who had said in an interview that the State did not share its border with China, but with Tibet.
‘Principle violated’
•Analysts saw the statement as a violation of the ‘One China’ principle that defines the country’s statehood.
•Mr. Lu said the “provocative” statements of the Tib- etan leader “exceeded the scope of religious activities.”
•“What India has done is violated the solemn commitment on the Tibet-related issues, and it also has a negative impact on proper settlement of territorial disputes between the two sides through negotiations,” the spokesperson said.
•The Foreign Ministry said: “The boundary question [and] the Tibet-related questions bear on the political foundation of China-India relationship.”
Important consensus
•“We have already reached important consensus on resolving the boundary dispute through negotiations and consultations.”
•He said: “We also hope that the Indian side bears in mind the fundamental interests of the two countries and two peoples and safeguard the political foundation of the bilateral relationship and not take any provocative action.”
Poll panel throws open challenge to hack EVMs
Experts, politicians invited to demonstration in May
•To all those alleging that the EVMs used by the Election Commission were tampered with in the recent Assembly elections or that they could be hacked, the electoral body has thrown an open challenge asking them to prove the allegations.
•The exercise may be carried out in the first week of May. Computer experts and political leaders would be invited to the demonstration site and they could use their skills to show whether the machines could be tampered with.
‘Use paper ballots’
•The move comes days after the Opposition parties met the Election Commission (EC) and requested to replace EVMs with paper ballots, as people had “lost trust” in the efficacy of the machines. Following similar allegations, the EC had earlier given an open invitation to experts. However, the Commission said, no one could prove that it could be hacked. After the Uttar Pradesh and Punjab elections, the Opposition parties have on several occasions alleged that the EVMs were tampered with, and each time the EC had maintained that the machines were secure, given the technology and the administrative processes adopted.
•The Commission has termed such charges baseless, stating that none of the complainants have come up with any proof to support their allegations.
Global interest in PSLV soars
Inquiries from prospective customers double after its record launch of satellites
•The PSLV (Polar Satellite Launch Vehicle) space vehicle has received more than double the volume of inquiries from prospective customers ever since it launched a record 104 satellites on a single flight in February. A world best, 101 small foreign commercial spacecraft were taken up at once in the feat, catapulting the PSLV’s overall commercial tally to 180.
•“There has been a spurt in inquiries, almost double what we were getting. Globally, 500 satellites are expected to come up for launch every year from 2018 onwards. We are seeing how we can equip ourselves towards using this big opportunity,” said Rakesh Sashibhushan, chairman and managing director of Antrix Corporation, ISRO’s (Indian Space Research Organisation) business arm that markets its rocket and satellite services.
•“ISRO is also ramping up availability of the PSLVs. Antrix has asked for two dedicated PSLVs a year for doing fully commercial launches. They can cater to the 5 kg to 100 kg small satellites,” he told The Hindu .
‘Clear leader’
•The PSLV, with a near impeccable 37 successes in 39 flights, he said, is a clear leader in the category of rockets that lift small satellites to low earth orbits or LEOs. These satellites weigh up to 500 kg and must be placed in polar orbits 500 km from the earth.
•“Antrix has launch orders worth around Rs. 600 crore,” Mr. Sasibhushan said. Roughly 15% of its nearly Rs. 2,000-crore turnover comes from PSLV launch orders of foreign satellite operators.
•Similar 100-plus satellite contracts on a single flight would be uncommon; Mr. Sasibhushan said the next PSLV, C-38, due in May, would have 30 small satellites (smallsats) riding piggyback with the primary Cartosat-2 series satellite. But they are not a result of the February launch, he clarified.
•Carolyn Belle, senior analyst at Northern Sky Research, a space industry consultancy based in Massachusetts, said in a response, “The PSLV is in an interesting position in the market. It has a strong technical track record and is an attractive vehicle for smallsat operators - especially if the launch [frequency] increases.” However, a limiting factor, in her view, is the waiver process that is needed to launch a U.S. satellite, the U.S. being the largest market.
National Lok Adalat settles over 6 lakh cases in one day
They include matrimonial disputes, partition suits, cheque bounce cases and motor accident claims
•As pendency hampers the justice delivery system, the National Legal Services Authority (NALSA), led by Supreme Court judge Justice Dipak Misra, has been quietly chipping away at the backlog and has accomplished its latest feat of settling over six lakh cases in just 24 hours.
•The Second National Lok Adalat for 2017, conducted on April 8, through out the country from taluk level courts to High Courts, has settled nearly 6.6 lakh cases.
•Out of this, 3.68 lakh cases have been reduced from court pendency and about 2.92 lakh cases were settled even before they could be filed in courts.
•The cases ranged from matrimonial disputes, partition suits, civil matters, cheque bounce cases, motor accident claims, revenue disputes pending in courts, criminal compoundable cases and service matters pertaining to pension, retrial benefits, etc.
Award is final
•The award of a Lok Adalat is final and cannot be challenged by way of appeals and revision, etc.
•Moreover, settlement of a pending court case in a Lok Adalat comes with an added incentive of refund of court fee to the party involved in the litigation.
•The NALSA, under Justice Misra, has decided to organise bi-monthly National Lok Adalats for both pending and pre-litigative cases.
‘Culture of settlement’
•Pendency in subordinate courts is a whopping over 2.7 crore cases.
•A statement issued by NALSA emphasised the point made by Justice Misra that it is developing a “culture of settlement”.
Guidelines issued
•“A set of guidelines has been issued to State Legal Services Authorities to concentrate on the days of Lok Adalats to make efforts to see that parties in contest arrive at an amicable settlement,” NALSA said in an official release.
‘Aadhaar robust; the poor have no complaints about it’
Minister says the Centre is enforcing UID under a proper mandate of law, with due regard to privacy and confidentiality
•Union Minister for Law and Information Technology Ravi Shankar Prasad tellsThe Hindu that nobody is being denied any benefit for not having Aadhaar and fears on that count are misplaced.
Why is Aadhaar being made compulsory for availing benefits when there is no legal compulsion for it?
•Let me clarify. Under Section 7 of the Act, no poor person shall be denied the benefit of subsidy at all. The only thing is that the person either should have an Aadhaar or should have applied for one; also, alternative means of identification will be available and acceptable through which the person can access all benefits. So nobody is being denied any benefit that might accrue to them. The poor are not complaining as they are getting benefits by direct benefits transfer in their bank accounts. The government has saved Rs. 49,000 crore under various schemes by plugging leakages. There are 113 crore Aadhaar enrolments out of a population of 125 crore; 83.7 crore adults are enrolled, 43.5 crore bank accounts have been opened, 16.97 crore LPG connections and 71.51 crore ration cards have been done using the system. The use of Aadhaar is transformative for good governance and it is a robust system. The second part of the answer is: Can we deny that fake bank accounts are not being set up, that money laundering is not taking place earlier? What is important is that there is a digital identity kept under safe and secure conditions and this will verify identity, prevent leakages, and end duplication.
What is the need for other services to link to Aadhaar? Like banks and for filing tax returns?
•Do you have a voter identity card, a passport? You have no problem with these marks of identity, but you have a problem with Aadhaar. What does Aadhaar contain? Under Section 2(j), one is core biometric, that is iris and fingerprint. Second is demographic information: name, date of birth, and address, but shall not include race, religion, caste, tribe, ethnicity, language, income or medical history. It is minimum information, optimal utilisation. Under Section 29(2), no core biometric information under this Act shall be shared with anyone for any reason whatsoever; my information cannot be shared even with my consent. The identity related information collected under this Act can only be shared as specified by the Act and its regulations. The regulation clearly enjoins that you will only use for the purpose you are collecting it for. The Aadhaar system is completely insulated for the purpose for which the information is sought. For instance, we have 113 crore Aadhaar numbers, they just confirm the identity. The Aadhaar system does not know the purpose for which it is being sought. The requisitioning authority will only use it for this purpose, it is completely encrypted, and if anyone uses it for unauthorised purposes, they can be punished for three years, and if a company violates this law, Rs. 10 lakh in compensation is to be awarded to the aggrieved. Till date, there is no leakage of data from the system. We have blacklisted 34,000 agencies till now.
Again, what is the need for linking Aadhaar with PAN cards or tax returns?
•Finance Minister Arun Jaitley said in his budget speech that out of a population of 125 crore, only 1.72 lakh file returns above Rs. 50 lakh, and shockingly only 25 lakh people show their income above Rs. 10 lakh. If the country has to grow, more people will have to come into the tax net. This linkage, therefore, will help in weeding out double-triple accounts, and combating money laundering. It is, therefore, good governance in an atmosphere of improving fiscals.
There are fears that operators doing the enrolments can leak data.
•Operators are selected by a strict process, with the registrar of the State governments, the Centre and municipalities being involved. Operators have to first put in their own biometric to operate the system every time and the whole process is robust in terms of safety features. If anyone tries to fiddle with it, the system can help trace any attempts to tamper.
There are also fears of a burgeoning of a surveillance state.
•Disclosure of information cannot be done for any reason other than national security. In that case, a joint secretary-level officer of the government of India specially designated for this purpose, shall record in writing the reasons for this. A high-level committee consisting of the Cabinet Secretary, the Secretaries of the Ministry of Law and the Information Technology Secretary will go into any oversight. And it is also open to legal challenge before a district judge, and no order shall be issued without a hearing.
•This is tougher than the Supreme Court’s certified guidelines on tracking of phone calls given out in 1995. Core digital biometric information cannot be disclosed even by the person who owns it. General biometric information cannot be disclosed except for the purposes authorised, and those who do so are liable for prosecution. I know of cases where the police sought biometric information on certain people suspected to be involved in certain crimes and the UIDAI refused. Therefore, a very robust architecture for privacy is there in the system.
There is puzzlement over this government’s advocacy of Aadhaar after it opposed it when the previous government had gone ahead.
•The previous government was enforcing Aadhaar by an executive order, which was one of the challenges before the Supreme Court, while we are doing this under a proper mandate of law with due regard to privacy and confidentiality. There is a United Nations report on Enabling Digital Identity that states that the Aadhaar system helped India save fuel subsidy of over $1 billion.
But the Comptroller and Auditor-General’s report says it was due to falling fuel prices and not Aadhaar.
•I have responded to this in Parliament. A proper press statement was put out by the Petroleum Ministry that they surveyed 3 crore fake gas connections because of Aadhaar linkages. After DBT, the clamour for non-subsidised connections rose by 39%.
Centre files curative plea on AFSPA
SC order a fetter on security forces involved in anti-militancy operations: A-G
•The government on Wednesday asked the Supreme Court to urgently reconsider its July 2016 verdict which ripped open the cloak of immunity and secrecy provided by the Armed Forces (Special Powers) Act of 1958 (AFSPA) to security forces for deaths caused during encounters in disturbed areas. The Supreme Court had held that “there is no concept of absolute immunity from trial by a criminal court” if an Army man has committed an offence.
•The judgment by a Bench led by Justice Madan B. Lokur had held that every death caused by security forces in a disturbed area, even if the victim was a dreaded criminal or a militant or a terrorist or an insurgent, should be thoroughly inquired into to address any allegation of use of excessive or retaliatory force.
A-G’s stance
•Attorney-General Mukul Rohatgi on Wednesday appeared before a Bench led by Chief Justice of India J.S. Khehar during the mentioning hour, and apprised the court that the judgment had become a fetter on security forces involved in anti-militancy operations.
•“This court ought to have appreciated that the principles of right to self-defence cannot be strictly applied while dealing with militants and terrorist elements in a hostile and unstable terrain. This court ought to have taken into account the complexity and the reality of the conduct of military operations and tactics, especially while combating terrorists,” the curative petition said.
•The judgment came on a plea by hundreds of families in Manipur for a probe by Special Ivestigation Team.
Ending nuclear lawlessness
The attempt at the UN to ban atomic weapons is based on the premise that all countries deserve equal security
•In the last week of March, at the United Nations in New York, history was made as diplomats from about 130 countries started formal talks on an international treaty to ban nuclear weapons. The goal is simple: declare it illegal for any country to produce, possess, stockpile, deploy, threaten to use, or use nuclear weapons. The final treaty could be approved and ready for signature before the end of this year.
•Not surprisingly, none of the nine nuclear weapon countries showed up, India and Pakistan included. Numbers are not on the side of the nuclear weapons states, however. The U.S. Ambassador to the UN, Nikki Haley, staged a public boycott outside the negotiating hall but managed to rally only a ragtag band of about 20 diplomats, mostly from Eastern Europe.
•Ms. Haley claimed that, as a mother, “there is nothing that I want more for my family than a world with no nuclear weapons” but she insisted that as an American “to ban nuclear weapons now would make us and our allies more vulnerable.” Clearly, however, she was not willing to accord the same protection to all countries. Ironically, it took an Indian Ambassador to inadvertently puncture this claim to nuclear privilege: “The language of privilege and entitlement has no place in today’s world.”
•The nuclear weapons ban talks are the fulfilment of a long-standing demand that all countries deserve equal security. For decades, the world has pressed the handful of countries with nuclear weapons to free humanity from the nuclear danger. The very first resolution at the UN, passed in 1946, called for a plan “for the elimination from national armaments of atomic weapons.”
The Cold War race
•The driving force for the demand for a nuclear weapon-free world is a simple humanitarian impulse, the love and compassion for other human beings — as even Ms. Haley realised. Nuclear weapons are the ultimate means of mass destruction and history has shown their use brings immeasurable death and suffering. It was this realisation that led to the November 1961 UN General Assembly resolution that declared: “Any state using nuclear and thermonuclear weapons is to be considered as violating the Charter of the United Nations, as acting contrary to the laws of humanity, and as committing a crime against mankind and civilisation.”
•During the Cold War, the United States and the Soviet Union argued that the world was in a life or death struggle and nuclear weapons were a tragic necessity. Both sides knew no one would win in a nuclear war but they prepared to fight regardless. It was an insane and murderous logic: since neither side could allow the other to prevail, the only acceptable outcome to both was mutual assured destruction. A handful of states followed them down into this moral pit: answer mass destruction with mass destruction. Tragically, this included India, which was warned by none other than Mahatma Gandhi that “the moral to be legitimately drawn from the supreme tragedy of the bomb is that it will not be destroyed by counter-bombs”.
Resistance of the nuclear club
•The end of the Cold War offered the hope of a new start for the world. The UN General Assembly asked the International Court of Justice to rule on the legality of the threat or use of nuclear weapons. In July 1996, the court issued an advisory opinion, with two key conclusions. First, “the threat or use of nuclear weapons would generally be contrary to the rules of international law applicable in armed conflict, and in particular the principles and rules of humanitarian law.” And, second, “there exists an obligation to pursue in good faith and bring to a conclusion negotiations leading to nuclear disarmament in all its aspects under strict and effective international control.” The door opened to a nuclear weapons ban.
•In the 20 years since the court issued its judgment, countries with nuclear weapons have simply refused to comply. Rather than starting “negotiations leading to nuclear disarmament”, they have sought to block them, choosing to launch long-term costly programmes to maintain, modernise, and in some cases augment their nuclear arsenals.
•Non-nuclear states and peace movement activists went back to basics. They launched an international effort to highlight nuclear weapons capacity to cause widespread suffering and indiscriminate harm. This won support from the majority of the world’s countries. At the Vienna Conference on the Humanitarian Impact of Nuclear Weapons in 2014, officials from 158 countries showed up. This process led to the adoption of a historic resolution at the UN last October “to negotiate a legally binding treaty to prohibit nuclear weapons, leading towards their total elimination”.
•India and Pakistan abstained from the UN vote. India’s main argument was that nuclear disarmament talks should only happen at the Conference on Disarmament in Geneva. The reason was simple: the Conference on Disarmament works by consensus, which means any state can block progress. India used this feature to try to block the Comprehensive Nuclear-Test-Ban Treaty in 1996, and Pakistan now uses this power to stop talks on a treaty to ban the production of fissile materials for nuclear weapons. Their prescription would mean continued inactivity on nuclear disarmament.
Time to force the issue
•Most of the other nuclear weapons states, led by the U.S., did not try to hide behind diplomatic procedure. They simply insisted that the world wait for them to decide when they are ready to give up their nuclear weapons. After 70 years, the vast majority of countries around the world suspect that day may never come. After all, the world would never have banned slavery if we had to wait for all the slave owners to agree in advance that slavery was a bad thing and that they were ready to end it.
•Rather than waiting for that day, the nuclear weapon-free countries have decided to take matters into their own hands. Their first step is the ban treaty. It lays down a clear marker for what weapons the world thinks no state can seek, possess and use in wartime. This is how other weapons have been banned, be they chemical weapons, biological weapons, landmines, or cluster munitions.
•Of course, as has happened in Syria with chemical weapons, there are occasional violations of the international laws banning weapons of mass destruction, but the world now condemns such actions and decent people everywhere would support efforts to find the perpetrators and bring them to justice. The possibility of violations has never stopped countries from passing laws and agreeing on what should be prohibited. India, Pakistan, and all of the nuclear weapons states should prepare to give up their arsenals or be treated as outlaws.
In a safer lane
States should start preparing to implement the changes in the Motor Vehicles Act
•The Motor Vehicles (Amendment) Bill passed by the Lok Sabha this week will take a little more time to come into force, since it has not cleared the Rajya Sabha in the Budget session. But the changes that it proposes to the Motor Vehicles (MV) Act of 1988 are significant. The Centre assumes a direct role in the reforms, since it will introduce guidelines that bind State governments in several areas, notably in creating a framework for taxicab aggregators, financing insurance to treat the injured and to compensate families of the dead in hit-and-run cases, prescribing standards for electronically monitoring highways and urban roads for enforcement and modernising driver licensing. There is a dire need to have clear rules and transparent processes in all these areas, since transport bureaucracies have remained unresponsive to the needs of a growing economy that is witnessing a steady rise in motorisation. The bottleneck created by their lack of capacity has stifled regulatory reform in the transport sector and only encouraged corruption. There is some concern that the move to amend the MV Act overly emphasises the concurrent jurisdiction of the Centre at the cost of State powers, but the proposed changes come after a long consultation exercise. A group of State Transport Ministers went into the reform question last year, while the comprehensive recommendations of the Sundar Committee on road safety have been left on the back burner for nearly a decade.
•It may appear counter-intuitive, but research shows that imposing stricter penalties tends to reduce the level of enforcement of road rules. As the IIT Delhi’s Road Safety in India report of 2015 points out, the deterrent effect of law depends on the severity and swiftness of penalties, but also the perception that the possibility of being caught for violations is high. The amendments to the MV Act set enhanced penalties for several offences, notably drunken driving, speeding, jumping red lights and so on, but periodic and ineffective enforcement, which is the norm, makes it less likely that these will be uniformly applied. Without an accountable and professional police force, the ghastly record of traffic fatalities, which stood at 1,46,133 in 2015, is unlikely to change. On another front, State governments must prepare for an early roll-out of administrative reforms prescribed in the amended law, such as issuing learner’s licences online, recording address changes through an online application, and electronic service delivery with set deadlines. Indeed, to eliminate corruption, all applications should be accepted by transport departments online, rather than merely computerising them. Protection from harassment for good samaritans who help accident victims is something the amended law provides, and this needs to be in place.
Powering India-Nepal ties
This is an opportune moment to push for electricity trade with a long-term perspective
•An important step in promoting electricity trade between India and Nepal took place on February 14 when Energy Secretary-level talks — known as the joint steering committee (JSC) meeting — concluded in Kathmandu. Here, it was decided to endorse the detailed project report of the 400 kV Butwal-Gorakhpur cross-border transmission line. It follows the guidelines issued by India’s Ministry of Power for cross-border electricity trade on December 5, 2016.
•This is an opportune moment to push for electricity trade with a long-term perspective. Nepal is short of power and will need to import power for some years to accelerate its economic growth. India has surplus capacity at present. In the years to come, it can fruitfully import flexible hydropower from Nepal to balance its fast growing renewable generation and also provide a market for Nepal’s electricity. With this market, Nepal’s hydro potential can be developed faster.
•India and Nepal have been talking about electricity trade and joint projects for many years now, but somehow these talks did not succeed. It was only in 2014 when India and Nepal signed a Power Trade Agreement that the doors opened for Nepal developers/traders to access the Indian power market. At first, Nepal was apprehensive that it would not get a fair deal trading with a large neighbour, but power is now traded in India on exchanges transparently and the price is known to all, thus assuaging some of Nepal’s apprehensions.
What the data show
•Due to political uncertainty, the development of Nepal’s hydro potential has been delayed. Out of an economically viable and technically feasible potential of 43.5 GW, only 0.8 GW had been developed by March 2016. Thus, a great opportunity has been missed. By selling power to India, Nepal could have developed its economy at a faster rate. Bhutan has reaped the benefit of power export to India and its per capita income in purchasing power parity adjusted for international dollars increased from $475 in 1980 to $7,860 in 2015. India’s was $5,730 in 2015.
•Electricity is required for economic growth and well-being. In 2015, Nepal faced load-shedding of up to 16 hours a day during the dry season, when the available capacity of Nepal’s hydropower decreases to a third of installed capacity. Peak load outstripped domestic power generation capacity, causing serious power shortage, which was partly met with by import from India. Nepal’s electricity supply in 2015-16 was around 5,100 GWh, of which 3,300 GWh was domestic generation and remaining 1,758 GWh was import from India. Import has increased steadily from 746 GWh in 2011-12 to 1,758 GWh in 2015-16, an almost threefold increase. Nepal also exports electricity to India in some periods, although in very small quantity. Per capita electricity consumption in Nepal is one of the world’s lowest, at 119 kWh in 2012. It has an ambitious target of reaching 16,500 MW of hydro capacity by 2030, which includes the joint project with India at Pancheshwar.
Energy study
•We at the Integrated Research and Action for Development (IRADe) have carried out a detailed modelling study which explored electricity trade potential on an hourly basis till 2045. (This study was carried out as a part of US AID-supported South Asia Regional Initiative for Energy Integration project.) The trade takes place at a price that is acceptable to both buyer and seller. Its macroeconomic impact has also been estimated. For example, Nepal’s revenue from export of electricity to India increases its ability to import more goods and also to invest more in the economy. This increases its gross domestic product, consumption and use of electricity, which improves quality of life.
•The prospect of electricity trade with India makes it possible for Nepal to develop its hydropower potential and has important consequences. Even though significant exports to India will begin only from 2025 because domestic capacity development takes time, Nepal could already benefit through larger import of electricity from India. Increased availability of electricity accelerates its economic development. The construction of transmission lines to import electricity become lines to export electricity by 2025. Nepal imports 0.7 billion kWh (bkWh) in 2020 but by 2025 exports 18 bkWh, which increases to 65 bkWh by 2030 and to 113 bkWh by 2040. Its annual export revenue from the electricity trade becomes NPR 310 billion in 2030, NPR 840 billion in 2040 and NPR 1,069 billion in 2045, at 2011-12 prices. By 2045, Nepal’s GDP becomes 39% larger, its per capita consumption 23% higher and per capita electricity consumption 50% higher than if trade were to continue at its modest current level.
•Trade also benefits India. Meeting the evening peak in India when its large solar PV capacity would not be available becomes easier and cheaper. The gains in monetary terms are comparable for both Nepal and India.
•Therefore, the sooner Nepal develops its hydropower potential, the earlier the benefits. For electricity trade to materialise, policy, institutional and technical infrastructure are necessary. Building hydropower projects and transmission infrastructure is highly investment-intensive. Without a stable, long-term conducive policy and an institutional environment in place, which ensures payment security, it is unlikely that investors will put their money in this risky business. Recently, the Indian government issued guidelines and draft notification on cross-border electricity trade (CBET) policy to enable Indian/Nepal producers/traders to seamlessly exchange power with neighbouring nations.
•A climate of confidence and trust in the long-term trading relationship between India and Nepal can greatly help Nepal meet its ambitious target and provide an opportunity for Indian investors to invest in Nepal. This could help us smoothen our recently strained relations with Nepal as well as strengthen our historically friendly ties.
Passage without scrutiny
We must move to a system where every Bill goes through the committee stage in each House of Parliament
•The Budget session of Parliament that concluded on Wednesday was an eventful one. Lok Sabha clocked in 108% of the originally scheduled hours, while Rajya Sabha did 86%. The Budget dates were advanced to enable the discussion and passing before the beginning of the financial year. Several important Bills were passed. However, there were several instances when Parliament failed to perform its role in scrutinising Bills before passing them. This Session, 20 Bills were introduced, and to date none of these have been referred to standing committees of Parliament; one Bill — the constitutional amendment to create a national commission for backward classes — was passed by Lok Sabha and then referred by Rajya Sabha to a select committee.
•In the last three years, just 29% of Bills have been referred to parliamentary committees. This is in contrast to the 60% and 71% of bills examined by committees in the 14th and 15th Lok Sabhas, respectively. The important contribution of committees is evident in the progress of the Bills referred to them. The Mental Healthcare Bill passed this session and the Motor Vehicles (Amendment) Bill passed by Lok Sabha this week incorporated most of the changes recommended by the committees.
Some problematic Bills
•Three Bills passed by Parliament may face constitutional challenges. The Specified Bank Notes (Cessation of Liabilities) Bill follows up on the demonetisation exercise. It provides a limited time period for citizens who were abroad between November 9 and December 30 to exchange their notes. Indian residents could do that until the end of March 2017, and NRIs till June. The Bill also made it an offence to hold more than 10 pieces of the old notes (25 for research or numismatic purposes). This Bill raises two significant constitutional issues. First, the notification of November 8 that denotified the notes allowed time till December 30 for depositing these, and said that any person unable to do so would be given further time to deposit them at specified RBI branches. On December 30, an ordinance was issued (the Bill is identical to the ordinance) that provided further time only to citizens who were abroad till that date. This is akin to expropriation of property without any compensation and may violate Article 300A of the Constitution. Also, if holding the notes is made a criminal offence on December 30, and a person having them that day cannot deposit or exchange them, then this is effectively making an action an offence with retrospective effect and may be seen as a violation of a fundamental right.
•The second Bill is the Finance Bill. Other than amending tax rates, it allowed the process of appointment, removal and service conditions of members of appellate tribunals to be determined by rules. That is, the terms of engagement of quasi-judicial bodies will be determined by the Central government by notification instead of being specified in the Act. This provision may contravene several judgments that lay out the independence of the judiciary as a basic feature of the Constitution. Another provision of the Finance Bill permits income tax officers to refuse to disclose to any court or tribunal the information that formed the basis for a raid; this may contravene the principle of judicial review of executive action.
•The third Bill is the Enemy Property Bill which vests the rights over enemy property with the Central government. This amendment has been made with retrospective effect (going back four decades), and will affect all property that may have been sold (and resold) since then. The Bill also bars any court from hearing cases related to enemy property. These provisions may not adhere to principles of due process and judicial review.
Taxation Laws Bill
•The Taxation Laws (Amendment) Bill, that was introduced in Lok Sabha and passed within a week, too raises some concern. It makes several amendments related to the introduction of the Goods and Services Tax. In addition, it adds a section to the Customs Act, which requires various authorities to disclose to the customs officer any information required. The question is whether Lok Sabha examined the appropriateness of giving such powers to the customs officer.
•Except the Enemy Property Bill, the other three were not referred to committees and were passed as Money Bills. The Enemy Property Bill was examined by a select committee of Rajya Sabha, and a note of dissent signed by six of its 23 members pointed out constitutional issues, but the suggested changes were not incorporated by Parliament while passing it.
•The key lesson is the importance of detailed scrutiny by Parliament. Perhaps, it may be advisable to move to a system like that of the British Parliament where every Bill goes through the committee stage in each House. That may take more time to pass a Bill but will ensure that there is adequate deliberation by parliamentarians before they pass a Bill.
Hold fiscal deficit at 3% till FY20, says N.K. Singh panel
Centre had set a target of 3.2% of GDP in 2017-18
•The Centre can take a pause on the fiscal consolidation front over the next three years by maintaining a fiscal deficit to GDP ratio of 3% till 2019-20, the Fiscal Responsibility and Budget Management (FRBM) Review Committee chaired by former Revenue Secretary N.K. Singh has recommended.
•Set up to comprehensively review and give recommendations on the FRBM roadmap for future, the panel has advocated reaching a fiscal deficit to GDP ratio of 2.8% in 2020-21, 2.6% the subsequent year and 2.5% in 2022-23.
•To put that in context, the government has set a fiscal deficit target of 3.2% of GDP in 2017-18, marginally better than the 3.5% clocked last year.
•The FRBM law enacted in 2003 had originally envisaged attaining a fiscal deficit of 3% of GDP by 2008-09, but amendments over the years had revised the year for achieving the same target to 2017-18.
Escape clause
•The panel has introduced an escape clause that allows the government to skip the fiscal deficit target for a particular year, in situations that include national security concerns, acts of war, national calamities, a collapse of the agriculture sector and far-reaching structural reforms with unanticipated fiscal implications.
•It recommended that deviations from the stipulated fiscal targets should not be more than 0.5%. The Reserve Bank of India governor Urjit Patel was not in favour of such a large deviation. Mr. Patel, who was also a member of the panel along with Chief Economic Adviser Arvind Subramanian, was inclined to only permit a 0.3% deviation.
•The escape clause can also be triggered if the economy’s real output growth slips by three percentage points from the average of the previous four quarters. A similar buoyancy clause has been proposed, so that fiscal deficit must fall at least 0.5% below the target if real output grows 3% faster than that average.
•The panel has recommended that the existing FRBM Act and rules be scrapped and a new Debt and Fiscal Responsibility Act be adopted and proposed the creation of a Fiscal Council that the government must consult before invoking escape clauses.
Panel to suggest norms for Bitcoins, virtual currencies
The committee will also include experts from the RBI, the central government’s think tank NITI Aayog and State Bank of India.
•The government has decided to close the regulatory gaps to keep a check on virtual currencies, including Bitcoins, and has set up an inter-disciplinary committee to recommend an action plan for dealing with such currencies within three months.
•“The circulation of Virtual Currencies which are also known as Digital/Crypto Currencies has been a cause of concern. This has been expressed in various fora from time to time,” the finance ministry said in a statement on Wednesday.
•The Reserve Bank of India (RBI) had also cautioned users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to, the ministry said.
•To examine the existing framework for virtual currencies, the department of economic affairs in the Ministry of Finance has constituted an inter- disciplinary committee chaired by Special Secretary (Economic Affairs) with representatives from the departments of revenue and financial services and the ministries of home Affairs as well as electronics and Information Technology.
•In its latest advisory issued this February, the Reserve Bank of India had said it has not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin or any virtual currency. “As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk,” it had warned.
•The committee will also include experts from the RBI, the central government’s think tank NITI Aayog and the country’s largest bank, State Bank of India.
•The panel has been asked to submit its report within three months and its terms of reference require it to take stock of the present status of Virtual Currencies both in India and the world over, examine the existing regulatory and legal structures governing them and suggest measures for dealing with such currencies.
•The committee, the ministry said, will necessarily examine how to cope with money laundering opportunities as well as consumer protection concerns that could arise from the use of virtual currencies.
