The HINDU Notes – 22nd July 2019 - VISION

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Monday, July 22, 2019

The HINDU Notes – 22nd July 2019






πŸ“° Centre’s decision to bring amendments to RTI Act draws criticism from activists

They call the Bill a move to undermine independence of information commissions

•Activists and former information commissioners have hit out at the Centre’s move to amend the Right to Information (RTI) Act, saying it would dilute the Act and curtail the independence of the Chief Information Commissioner (CIC) and other information officers.

•The Right to Information Act (Amendment) Bill, 2019, which was introduced in Parliament on Friday, proposes to empower the government to fix the term of service of information commissioners among other things.

•Former CIC Shailesh Gandhi told The Hindu that the NDA government has offered no plausible reason as to why it is making these changes nor was there any pre-legislative consultation.

•“The proposed changes to the RTI Act were introduced in complete secrecy without any public disclosure and consultation on draft legislations. The implication is the Centre wants to control the CIC and downgrade the function of State information commissioners (SICs), and that appointments of information commissioners are to be henceforth dictated by political patronage,” Mr. Gandhi said.

•He said if the amendments were effected, it would weaken democratic institutions as the RTI Act thus far has proved to be the strongest and most effective tool ordinary citizens possess to hold accountable the powers that be.

•Pune-based RTI activist Vijay Kumbhar said if the amendments came into effect, the Centre could simply transfer any authority — be it the CIC or any of the SICs — in the event a case was thought to be directed against the interests of the government or merely keep it hanging fire.

•“The information commissions were created to function independently and free of any governmental pressure,” said Mr. Kumbhar, adding the status of information commissioners, including the question of the salaries of the CIC and the SICs, was discussed and fixed at the time of the formulation of the law.

•“If this government indeed has a problem with their salaries and designation, it must be remembered that in 2017, the salary structures of 19 quasi-judicial administrative commissions were brought on par with that of the Supreme Court and High Court judges,” he said.

•Meanwhile, in a release rejecting the amendments introduced by the NDA government, the National Campaign for Peoples’ Right to Information (NCPRI) demanded that they be withdrawn with immediate effect. “The contents of the draft amendments were not known to MPs, citizens, and the media till the Bill was circulated to members of the Lok Sabha on the eve of its introduction. The Bill seeks to amend the RTI Act to empower the Centre to unilaterally decide the tenure, salary, allowances and other terms of service of information commissioners at the Centre and in the States. The NDA government has done so by wilfully misrepresenting an amendment to a basic feature of the law, as a function of rule-making,” the release said.

•It further said the RTI Act provides for a fixed tenure of five years for information commissioners (subject to the age limit of 65 years). “The salaries, allowances, and other terms of service of the chief of the Central Information Commission are the same as that of the Chief Election Commissioner. This is part of the basic structure of the existing law and therefore any amendment to these provisions undermines the basic structure of the RTI.”

•Accusing the Central government of usurping the power to decide the tenure, salaries and allowances of SICs, it said the move indicates “the current government’s centralised, and undemocratic decision making.”

•The NCPRI accused the Centre of instead sidelining a “wide array of pressing issues” that require the urgent government attention to ensure effective implementation of the RTI Act. These include making time-bound and transparent appointments to fill vacancies in information commissions, addressing the issue of attacks on RTI activists, implementing the Whistle Blowers Protection Act, and addressing the lack of transparency in electoral funding.

πŸ“° Final index score of NITI Aayog report on States adversely impacted

Final index score of NITI Aayog report on States adversely impacted
•An analysis of the NITI Aayog’s ‘Healthy States, Progressive India’ report released on June 25 shows that the usage of estimated figures in place of reported numbers, to calculate certain health indicators, has adversely impacted the final index score of certain States while boosting that of others.

Skewed result

•The report had used an estimated number of births and deliveries to calculate two key health outcome indicators — “full immunisation coverage” and “proportion of institutional deliveries” — which carried high weightage in the calculation of the final index score. The use of estimated numbers instead of the reported figures resulted in a skew.

•For instance, in the case of Tamil Nadu, which had secured a composite index score of 63.38 for the base year 2015-16, using reported number of deliveries and births instead of estimated figures would have resulted in an increase of 2.17 points for that year.

•On the other hand, using reported numbers would have resulted in a decrease of 2.99 points and 3.34 points from the final index scores of Gujarat and West Bengal.

•The data for both the reported and estimated number of deliveries for 2015-16 is available in the Health Management Information System (HMIS), a statistical arm of the Ministry of Health and Family Welfare.

•There is a difference in the number of institutional deliveries recorded in the NITI Aayog’s report based on the estimated number of deliveries, and what is recorded in the HMIS database based on reported number of deliveries for the year 2015-16. However, the degree of variation is high in certain States.

•In Tamil Nadu, according to the NITI Aayog report, institutional deliveries were pegged at 81.82% in 2015-16, whereas in the HMIS database, it is 100 % — a difference of more than 18% points. However, in the case of Gujarat, the indicator was almost similar in both datasets (98% in HMIS, 97.78% in NITI Aayog).

•Similar variations were also seen in “full immunisation coverage”. In Tamil Nadu, according to the NITI Aayog report, 82.66 % of infants were fully immunised, whereas, according to the HMIS database, it is 104.9 %, that is, more than a 22% point difference. In Gujarat, the indicator was almost same in both the datasets (90.55% in NITI Aayogand 93.9% in HMIS).

Index score impacted

•In the case of bigger States, both the indicators — immunisation of children and institutional deliveries — carry a weight of 50 each. The weighted scores of all the 23 indicators are then added to form the final index score.

•Calculation of the weighted score for the base year 2015-16 using reported figures from the HMIS instead of the estimated figures used by the NITI Aayog report, increases the final index score of certain States and decreases the numbers for others.

•When the final index was recalculated using the HMIS’ reported figures, Madhya Pradesh’s score increased by 2.78 points and Tamil Nadu’s by 2.17 points while West Bengal’s and Gujarat’s decreased by close to 3 points each.

•A similar analysis for the year 2017-18, for the institutional deliveries indicator, shows that usage of reported deliveries would have increased the final score of Madhya Pradesh by 2.3 points while it decreased the score of Gujarat by -0.09 points. As the data for 2017-18 immunisation coverage was not publicly available in the HMIS website, a similar analysis could not be done for that indicator in that year.

‘Inherent problems’

•It is necessary to use the estimated number of births to determine the level of registration of births. However, the same cannot be said about full immunisation coverage and proportion of institutional deliveries.

•A senior official with the NITI Aayog, who was involved in the drafting of the report on condition of anonymity, said, “The reported number of births can vary [from the actual figures]... Because, there are some inherent problems [with the Civil Registration System] and experts have expressed reservations about using them. Ideally, the reported numbers should come from the Civil Registration System but because of these issues, we have not used it.”

πŸ“° 60.14% turnout of service voters, says EC

Voting sees a jump from 4% in 2014

•Having sent postal ballots to service voters electronically for the first time in the 2019 Lok Sabha elections, the Election Commission of India on Sunday said the one-way electronic transmission had enabled 60.14% turnout of such voters.

•In comparison, an EC statement noted, the service voter turnout in the 2014 General Elections was just 4%. While the service voters still had to post their ballots back, an online registration system was set up and the ballots sent to them electronically for the first time.

Online system




•“Compared to 13,27,627 number of registered Service Electors of last General Election in 2014, a record highest number of 18,02,646 were enrolled as Service Electors in 2019 in the world’s largest democratic election process. For the first time enabled through the dedicated portal https://www.servicevoter.eci.nic.in online registration, the service voters were sent postal ballots electronically one way to save processing time, resources and avoid human errors,” the statement read.

•Service voters comprise those working in Central forces and government officials deployed at embassies around the world. Of the total service electors, 10,16,245 were from the Ministry of Defence; 7,82,595 from the Central Armed Police Forces; 3,539 of the Ministry of External Affairs and 267 of State Police.

•“A total of 18,02,646 postal ballots were dispatched electronically... In return 10,84,266 e-postal ballots were received indicating 60.14% turnout,” it noted.

•The Electronically Transmitted Postal Ballot System has two layers of security, with use of a one-time password, PIN and unique QR code on the portal, it said.

πŸ“° The tremor of unwelcome amendments to the RTI Act

The Right to Information (Amendment) Bill is a twin attack on accountability and the idea of federalism

•“Amendments” have haunted the Right to Information (RTI) community ever since the RTI Act came into effect almost 14 years ago. Rarely has a law been so stoutly defended by activists. It is not possible to pass a perfect law. But it was a popular opinion strongly held by most RTI activists that a demand for progressive amendments could be used as a smokescreen by the establishment to usher in regressive changes.

•Nevertheless, the sword of Damocles of regressive amendments has hung over the RTI with successive governments. Amendments have been proposed since 2006, just six months after the law was implemented and many times thereafter. Peoples’ campaigns, through reasoned protest and popular appeal, have managed to have them withdrawn.

•The proposed amendments tabled in Parliament on July 19, 2019 have been in the offing for some time now. In the form of the Right to Information (Amendment) Bill, 2019, they seek to amend Sections 13, 16, and 27 of the RTI Act which carefully links, and thereby equates, the status of the Central Information Commissioners (CICs) with the Election Commissioners and the State Information Commissioners with the Chief Secretary in the States, so that they can function in an independent and effective manner. The deliberate dismantling of this architecture empowers the Central government to unilaterally decide the tenure, salary, allowances and other terms of service of Information Commissioners, both at the Centre and the States. Introducing the Bill in the Lok Sabha, the Minister of State for Personnel, Public Grievances and Pensions, Jitendra Singh, asserted that this was a benevolent and minor mechanism of rule-making rather than a basic amendment to the RTI law.

Agent of change

•Why is there unseemly haste and determination to amend the law? Some feel that it is because the RTI helped with the cross-verification of the affidavits of powerful electoral candidates with official documents and certain Information Commissioners having ruled in favour of disclosure. It is unlikely to be a set of instances but more the fact that the RTI is a constant challenge to the misuse of power. In a country where the rule of law hangs by a slender thread and corruption and the arbitrary use of power is a daily norm, the RTI has resulted in a fundamental shift — empowering a citizen’s access to power and decision-making. It has been a lifeline for many of the 40 to 60 lakh ordinary users, many of them for survival. It has also been a threat to arbitrariness, privilege, and corrupt governance. More than 80 RTI users have been murdered because their courage and determination using the RTI was a challenge to unaccountable power.

•The RTI has been used brilliantly and persistently to ask a million questions across the spectrum — from the village ration shop, the Reserve Bank of India, the Finance Ministry, on demonetisation, non-performing assets, the Rafale fighter aircraft deal, electoral bonds, unemployment figures, the appointment of the Central Vigilance Commissioner (CVC), Election Commissioners, and the (non)-appointment of the Information Commissioners themselves. The information related to decision-making at the highest level has in most cases eventually been accessed because of the independence and high status of the Information Commission. That is what the government is trying to amend.

•The RTI movement has struggled to access information and through it, a share of governance and democratic power. The Indian RTI law has been a breakthrough in creating mechanisms and platforms for the practice of continual public vigilance that are fundamental to democratic citizenship. The mostly unequal struggle to extract information from vested interests in government needed an institutional and legal mechanism which would not only be independent but also function with a transparency mandate and be empowered to over-ride the traditional structures of secrecy and exclusive control. An independent Information Commission which is the highest authority on information along with the powers to penalise errant officials has been a cornerstone of India’s celebrated RTI legislation.

Part of checks and balances

•The task of the Information Commission is therefore different but no less important than that of the Election Commission of India. Independent structures set up to regulate and monitor the government are vital to a democratic state committed to deliver justice and constitutional guarantees. The separation of powers is a concept which underscores this independence and is vital to our democratic checks and balances. When power is centralised and the freedom of expression threatened no matter what the context, democracy is definitely in peril. That is perhaps why these set of amendments have to be understood as a deliberate architectural change to affect, in a regressive manner, power equations, the freedom of expression and democracy. The Commission which is vested by law with status, independence and authority, will now function like a department of the Central government, and be subject to the same hierarchy and demand for obeisance. The decision of the government to usurp the powers to set the terms and conditions of service and salaries of an independent body must be understood as an obvious attempt to weaken the independence and authority granted by the law.

•Apart from Section 13 which deals with the terms and conditions for the Central information Commission, in amending Section 16, the Central government will also control through rules, the terms and conditions of appointment of Commissioners in the States. This is an assault on the idea of federalism.

Opaque moves

•All the provisions related to appointment were carefully examined by a parliamentary standing committee and the law was passed unanimously. It has been acknowledged that one of the most important structural constituents of any independent oversight institution, i.e. the CVC, the Chief Election Commission (CEC), the Lokpal, and the CIC is a basic guarantee of tenure. In the case of the Information Commissioners they are appointed for five years subject to the age limit of 65 years. It was on the recommendation of the parliamentary standing committee that the Information Commissioner and CIC were made on a par with the Election Commissioner and the CEC, respectively. The manner in which the amendments are being pushed through without any citizen consultation, bypassing examination by the standing committee demonstrates the desperation to pass the amendments without even proper parliamentary scrutiny. The mandatory pre-legislative consultative policy of the government has been ignored. Previous governments eventually introduced a measure of public consultation before proceeding with the amendments. In fact, both the United Progressive Alliance and the National Democratic Alliance put out proposed amendments to the RTI rules on the website for public deliberation. But the present regime seems determined to pass these amendments to the law itself without any consultation.

•The reason is not far to seek. If the amendments are discussed by citizens and RTI activists in the public domain, it would be apparent that these amendments fundamentally weaken an important part of the RTI architecture. They violate the constitutional principles of federalism, undermine the independence of Information Commissions, and thereby significantly dilute the widely used framework for transparency in India.

•The RTI community is worried. But the sword of Damocles is double-edged. It is an idiom originally used to define the hidden insecurity of an autocrat. Questions are threats to unaccountable power. The RTI has unshackled millions of users who will continue to use this democratic right creatively and to dismantle exclusive power. The RTI has been and will be used to withstand attacks on itself and strengthen the movement for transparency and accountability in India. Eventually, the Narendra Modi government will realise that while it might be able to amend a law, it cannot stop a movement.

πŸ“° Revamp of Army Headquarters to get under way by end of July

Government has already given in-principle approval

•The Army’s attempt at major restructuring will begin with the draft government sanction letter for reorganisation of the Army Headquarters (AHQ) expected by the month-end, Army sources said. The AHQ restructuring is the first of the four measures being undertaken as part of the transformation of the force. 

Aligning procurements

•“The government has already given in-principle approval for the AHQ restructuring. We have identified how to utilise the available space. One of the main ideas is to get procurements aligned, among other things. A new Deputy Chief (Sustenance) is going to look after all procurements,” a senior Army source told The Hindu. 

•Under the plan, the Master-General Ordnance will report to the Deputy Chief to bring all ammunition under one head, the source stated.

•The Army now has two Deputy Chiefs, one for information systems and training and the other for planning and systems. These functions are being brought under one authority to avoid overlapping. 

•In another major change at the AHQ, the Directorates of Military Operations, Military Intelligence and Operational Logistics will report to the Deputy Chief (Strategy). The Perspective Planning Directorate will also report to this Deputy Chief. The third Deputy Chief, Information Systems, will look after all technology and cyber-related issues, the source said. 

•A new post of Additional Director-General (ADG), Vigilance, is being created, and he will report to the Army chief.

•The four studies ordered by Army chief Gen. Bipin Rawat are restructuring of the AHQ; the Army restructuring which includes creation of Integrated Battle Groups; the cadre review of officers; and review of the terms and conditions of Junior Commissioned Officers and Other Ranks.

•The aim is a holistic integration to enhance the operational and functional efficiency, optimise budget expenditure, facilitate force modernisation and address aspirations, the Army had stated.

•“So far, investigations are happening locally. He will get information of all investigations in the entire Army. This will standardise the nature of punishment,” the source said, adding the current ADG, Discipline and Vigilance, is not getting the feedback. There will be a new position of ADG, Human Resources, who “shall take proactive action on HR violations.”

•In the Quartermaster General (QMG) branch, the post of ADG, Technology Evaluation, is to be abolished and chief engineers in formations will be responsible for constructions in their area, and not the Army Headquarters, as is the practice now. “The AHQ cannot look into every construction that is happening,” the source said.

•The entire training function will move under the Army Training Command (ARTRAC), which will be shifted from Shimla to Meerut. Furthermore, the Director-General, Rashtriya Rifles (RR), now based in Delhi, will be moved to Udhampur, under an Additional Director-General , where the Northern Command is located. 

πŸ“° Government to roll out big push for infrastructure

Major projects mark 50 days of NDA II

•An Annual Global Investors Summit is to be organised later this year, with the National Investment and Infrastructure Fund (NIIF) anchoring the event, to invite investment in the infrastructure segment, where spending for the next five years is projected at ₹1.5 lakh crores.

•The government is hoping that this massive push for infrastructure, with investors from India and abroad participating, will have a cascading effect of pushing growth.

•This was revealed by government sources as the Modi government completed the first 50 days of its second term and shared data on decisions taken by it.

•Significantly, Prime Minister Narendra Modi told close aides in his office that there will be no “settling-in” period this time around as it was a continuing government.

•Giving further details, government sources said the 50-day push was important as it clearly delineated the government’s priorities and where it wanted to focus resources and policy thought.

•Many of the big ticket promises made in the BJP’s manifesto, like the universalisation of the Prime Minister Kisan Samman Nidhi (farmers income support scheme) and pensions for small retailers and the unorganised sector, were taken up at the first Cabinet meeting.

•The first decision of the Cabinet being major changes to the Prime Minister’s Scholarship Scheme under the National Defence Fund.

•A big promise in the BJP’s manifesto before the polls was the supply of piped water to all households. The setting up of a Jal Shakti Ministry to address, across sectors, issues related to water, was one step, but a campaign, on the lines of Ujjwala (supply of cooking gas to BPL households) called Jal Shakti Abhiyan was launched on July 1 this year. This will aim at water conservation and water security, but the big stress will be on participation of citizens especially during monsoons and will concentrate on water stressed districts and blocks.

•The blistering pace is, however, most evident in the ongoing monsoon session of Parliament. Government data shows that at least 17 bills have been cleared and 104 more have been introduced in this session alone, from various ministries.

πŸ“° Lucknow to host DefExpo next year

•Lucknow will host the 11th biennial edition of DefExpo from February 5 to 8, 2020, the Defence Ministry announced on Sunday.

•“The main theme of DefExpo India-2020 will be “India: the emerging defence manufacturing hub” and the focus will be on “Digital transformation of defence’,” the Ministry said in a statement.

•The exhibition will also highlight Uttar Pradesh as an attractive destination for investment in the defence sector and act as a platform for joint ventures in the industry. The State has four units of Hindustan Aeronautics Ltd. and will get one of the two Defence Industrial Corridors announced by the Centre recently.

•The previous two editions of the biennial were held in Chennai and Goa.

πŸ“° Chandrayaan-2 to try moon landing on Sept. 7




The launch is scheduled for 2.43 p.m. on Monday and the countdown has begun at 6.43 p.m. on Sunday. 

•The loss of a week due to the aborted launch of India’s second moon mission, Chandrayaan-2, on July 15 has not hampered the mission’s targeted landing date on the moon’s South Pole with ISRO aiming to make up for the lost time by adjusting the module’s Earth and Moon-bound phases.

•The space agency is still aiming to put the Lander (Vikram) and Rover (Pragyan) on the lunar surface on September 7, just one day behind the earlier schedule, to ensure that the duo get their planned full schedule of operating for nearly 14 Earth Days by tweaking the Chandrayaan-2’s timelines in space when it travels from one phase to another. ISRO Chairman K. Sivan confirmed to The Hindu that the landing will be attempted on September 7.

•One of the major challenges ISRO faced when the launch was aborted was to ensure that they got the current window of September 6-7 to land on the moon. This meant the team had to work backwards to make modifications to the mission, or as one ISRO official said do some reverse engineering. “Plus, there is always flexibility over the Earth-bound and Lunar-bound phases,” the official said.

•Under the old plan, the soft-landing of Vikram and Pragyan was planned to be executed on Day 54 from the lift-off date. But with a ‘technical snag’ wrecking the plans, ISRO had to improvise or risk losing precious time for the mission.

•The launch is now scheduled for 2.43 p.m. on Monday and the countdown began at 6.43 p.m. on Sunday.

•As per the new timeline, the Earth-bound phase has increased by six days to 23 days; earlier it was 17. Under the old schedule, the Lunar Orbit Insertion (LOI) was supposed to have happened on Day 22, but now it will be on Day 30. The Lunar Bound Phase (LBN), which under the previous launch schedule was to have taken 28 days has now shrunk to just 13, between Day 30 and Day 42 after lift-off.

•The Lander-Orbiter Separation will be executed on Day 43, while deboosting will be initiated on Day 44, with the powered descent of the Lander and Rover on Day 48 to the lunar surface. It is crucial for ISRO to land during this window, as the touchdown will be done at the high plain between two craters, Manzinus C and Simpelius N that will be at a point facing the Earth and would have started receiving sunlight by then.

πŸ“° Facial recognition is an invasive and inefficient tool

Use of facial recognition technology in law enforcement can have disastrous consequences

•The Automated Facial Recognition System (AFRS) recently proposed by the Ministry of Home Affairs is geared towards modernising the police force, identifying criminals, and enhancing information sharing between police units across the country. The AFRS will use images from sources like CCTV cameras, newspapers, and raids to identify criminals against existing records in the Crime and Criminal Tracking Networks and System (CCTNS) database.

•The Home Ministry has clarified that this will not violate privacy, as it will only track criminals and be accessed only by law enforcement. However, a closer look at facial recognition systems and India’s legal framework reveals that a system like the AFRS will not only create a biometric map of our faces, but also track, classify, and possibly anticipate our every move.

•Technically speaking, it is impossible for the AFRS to be truly used only to identify, track and verify criminals, despite the best of intentions. Recording, classifying and querying every individual is a prerequisite for the system to work.

Assumed guilty

•The system will treat each person captured in images from CCTV cameras and other sources as a potential criminal, creating a map of her face, with measurements and biometrics, and match the features against the CCTNS database. This means that we are all treated as potential criminals when we walk past a CCTV camera — turning the assumption of “innocent until proven guilty” on its head.

•It is assumed that facial recognition will introduce efficiency and speed in enforcing law and order. However, the evidence suggests otherwise. In August 2018, a facial recognition system used by the Delhi police was reported to have an accuracy rate of only 2%. This is a trend worldwide, with similar levels of accuracy reported in the U.K. and the U.S.

•Accuracy rates of facial recognition algorithms are particularly low in the case of minorities, women and children, as demonstrated in multiple studies across the world. Use of such technology in a criminal justice system where vulnerable groups are over-represented makes them susceptible to being subjected to false positives (being wrongly identified as a criminal). Image recognition is an extremely difficult task, and makes significant errors even in laboratory settings. Deploying these systems in consequential sectors like law enforcement is ineffective at best, and disastrous at worst.

Fears of mass surveillance

•Facial recognition makes data protection close to impossible as it is predicated on collecting publicly available information and analysing it to the point of intimacy. It can also potentially trigger a seamless system of mass surveillance, depending on how images are combined with other data points. The AFRS is being contemplated at a time when India does not have a data protection law. In the absence of safeguards, law enforcement agencies will have a high degree of discretion. This can lead to a mission creep. The Personal Data Protection Bill 2018 is yet to come into force, and even if it does, the exceptions contemplated for state agencies are extremely wide.

•The notion that sophisticated technology means greater efficiency needs to be critically analysed. A deliberative approach will benefit Indian law enforcement, as police departments around the world are currently learning that the technology is not as useful in practice as it seems in theory. Police departments in London are under pressure to put a complete end to use of facial recognition systems following evidence of discrimination and inefficiency. San Francisco recently implemented a complete ban on police use of facial recognition. India would do well to learn from their mistakes.

πŸ“° Sucking up surplus: SEBI needs financial autonomy to remain effective

A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent

•The Centre’s decision to clip the wings of the Securities and Exchange Board of India has not gone down too well with its members. Yet, the Centre is refusing to budge. In a letter dated July 10, SEBI Chairman Ajay Tyagi said the Centre’s decision to suck out SEBI’s surplus funds will affect its autonomy. SEBI employees had also written to the government with the same concern. As part of the Finance Bill introduced in Parliament, the Centre had proposed amendments to the Securities and Exchange Board of India Act, 1992 that were seen as affecting SEBI’s financial autonomy. To be specific, the amendments required that after 25% of its surplus cash in any year is transferred to its reserve fund, SEBI will have to transfer the remaining 75% to the government. On Friday, the government rejected the plea from SEBI’s officials asking the government to reconsider its decision, thus paving the way for further conflict. Prima facie, there seems to be very little rationale in the government’s decision to confiscate funds from the chief markets regulator. For one, it is highly unlikely that the quantum of funds that the government is likely to receive from SEBI will make much of a difference to the government’s overall fiscal situation. So the amendment to the SEBI Act seems to be clearly motivated by the desire to increase control over the regulator rather than by financial considerations. This is particularly so given that the recent amendments require SEBI to seek approval from the government to go ahead with its capital expenditure plans.

•A regulatory agency that is at the government’s mercy to run its financial and administrative operations cannot be expected to be independent. Further, the lack of financial autonomy can affect SEBI’s plans to improve the quality of its operations by investing in new technologies and other requirements to upgrade market infrastructure. This can affect the health of India’s financial markets in the long run. In the larger picture, this is not the first time that the government at the Centre has gone after independent agencies. The Reserve Bank of India and the National Sample Survey Office have come under pressure in recent months, and the latest move on SEBI adds to this worrisome trend of independent agencies being subordinated by the government. The Centre perhaps believes it can do a better job of regulating the economy by consolidating all existing powers under the Finance Ministry. But such centralisation of powers will be risky. Regulatory agencies such as SEBI need to be given full powers over their assets and be made accountable to Parliament. Stripping them of their powers by subsuming them under the wings of the government will affect their credibility.



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