PRS Legislative Research December-2019 Gist for Monthly Policy Review

PRS Legislative Research December-2019 Gist for Monthly Policy Review

PRS Legislative Research December-2019 Gist for Monthly Policy Review : Highlights of this Issue Dec-2019
 

Winter Session 2019 of Parliament concludes; 14 Bills passed by Parliament

Bills passed by both houses include the Citizenship (Amendment) Bill, the Taxation Laws (Amendment) Bill, the Prohibition of Electronic Cigarettes Bill, and the Transgender Persons (Protection of Rights) Bill.

17 Bills introduced during the Winter Session

These include two codes on labour reforms: the Code on Social Security, 2019, and the Industrial Relations Code, 2019.  The Personal Data Protection Bill, 2019 to regulate personal data of individuals was also introduced.

Citizenship (Amendment) Bill, 2019 introduced and passed by Parliament

The Citizenship (Amendment) Bill, 2019 was introduced and passed by Parliament this session.  The Bill makes illegal migrants of certain religions from specific countries eligible for citizenship.

The Insolvency and Bankruptcy Code (Amendment) Ordinance promulgated

The Ordinance provides immunity to the corporate debtor against offences committed prior to the initiation of resolution process if the resolution plan results in transfer of control. 

Seven Bills referred to Parliamentary Committees

The Personal Data Protection Bill, 2019 was sent to a Joint Parliamentary Committee.   The Surrogacy (Regulation) Bill, 2019 was referred to a Rajya Sabha Select Committee.  Five other Bills were referred to Standing Committees.

Cabinet approves conduct of Census and updation of National Population Register

The conduct of Census and the updation of the NPR will take place between 2020 and 2021.   The NPR is a register of usual residents in an area (i.e., those who have resided or intend to reside in a local area for six months or more).  

The Union Cabinet approves organisational restructuring of Indian Railways

The eight Group A services of Railways will be unified into a single service called Indian Railways Management Service.  The Railway Board will be reorganised on the basis of functional lines of Railways.

Cabinet approved Partial Credit Guarantee Scheme for public sector banks

The scheme allows PSBs to purchase pooled assets from financially sound NBFCs and housing finance companies.  The government will cover the initial losses up to a certain maximum amount. 

Cabinet approves creation of the post of Chief of Defence Staff

The Chief of Defence Staff will be the permanent chairman of the Chiefs of Staff Committee.  He will administer the three services and head the newly constituted Department of Military Affairs under the Ministry of Defence.

Standing Committees report on NIFTEM Bill, 2019 and Khelo India Scheme

Recommendations on NIFTEM Bill include limiting fees for technical courses in food science.  The report on Khelo India Scheme suggested improving fund utilisation and talent identification, and reducing coaching vacancies.

CAG reports on the environmental impact of mining and the Ujjwala Yojana

The report on the environmental impact of mining by CIL noted the non-compliance of certain mines with environmental standards.  The report on the Pradhan Mantri Ujjwala Yojana noted discrepancies in beneficiary data.

Changes notified to Inner Line Permit areas

The ILP regulates visits to certain areas of Arunachal Pradesh, Mizoram and Nagaland.   These areas have been expanded to include the states of Arunachal Pradesh, Manipur, Mizoram, and notified areas of Nagaland.

 

Parliament

 

Winter session 2019 of Parliament concludes

The Winter Session of Parliament ended on December 13, 2019.   During the session Parliament passed 14 Bills (excluding an appropriation Bill).  These include the Citizenship (Amendment) Bill, 2019, the Taxation Laws (Amendment) Bill, 2019, the Prohibition of Electronic Cigarettes Bill, 2019, and the Transgender Persons (Protection of Rights) Bill, 2019.  Parliament also passed a Bill amending the Constitution to extend the reservation for Scheduled Castes and Scheduled Tribes in Lok Sabha and State Assemblies by 10 years (till January 2030). 

17 bills were introduced during the Session (excluding an appropriation Bill).  These include the Personal Data Protection Bill, 2019, the Code on Social Security, 2019, the Industrial Relations Code, 2019, and the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019.

Seven Bills have been referred to Committees for detailed examination.  The Personal Data Protection Bill, 2019 was referred to a Joint Parliamentary Committee, and the Surrogacy (Regulation) Bill, 2019 was referred to a Select Committee of Rajya Sabha.  The following bills were referred to Standing Committees: (i) the Industrial Relations Code, 2019, (ii) the Code on Social Security, 2019, (iii) the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019, (iv) the Anti-Maritime Piracy Bill, 2019, and (v) the Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2019.

The First Supplementary Demand for Grants for 2019-20 was passed by Parliament.  Through the suplementary budget, the government sought the approval of Parliament for an additional expenditure of about about 19,000 crore. 

For more details on the legislative business taken up during the Winter Session 2019, see  here. For details on the functioning of Parliament during the session, see  here.

Home Affairs

Citizenship (Amendment) Bill, 2019 passed by Parliament

 

The Citizenship (Amendment) Bill, 2019 was passed by Parliament.    The Citizenship Act, 1955 provides various ways in which citizenship may be acquired.  It provides for citizenship by birth, descent, registration, naturalisation and by incorporation of territory into India.   Key features of the Bill include:

  • Definition of illegal migrants:  The Act prohibits illegal migrants from acquiring Indian citizenship.   Illegal migrants are those foreigners who do not have valid passport or travel documents.  The Bill amends the Act to provide that that the Hindus, Sikhs, Buddhists, Jains, Parsis and Christians from Afghanistan, Bangladesh and Pakistan, who entered India on or before December 31, 2014, will not be treated as illegal migrants.  
  • Citizenship by naturalisation:  The Act allows a person to apply for citizenship by naturalisation if he has resided in India or has been in central government service for at least 11 years before applying for citizenship.  For Hindus, Sikhs, Buddhists, Jains, Parsis and Christians from Afghanistan, Bangladesh and Pakistan, the Bill reduces the residency requirement from 11 years to five years.  
  • The provisions on citizenship for illegal migrants will not apply to the tribal areas of Assam, Meghalaya, Mizoram, and Tripura, included in the Sixth Schedule to the Constitution.  These tribal areas include Karbi Anglong (in Assam), Garo Hills (in Meghalaya), and Tripura Tribal Areas District.  Further, it will not apply to the “Inner Line” areas notified under the Bengal Eastern Frontier Regulation, 1873.  In these areas, visits by Indians are regulated through the Inner Line Permit.   Currently, this permit system is applicable to Arunachal Pradesh, Mizoram, and Nagaland.  
  • Cancellation of registration of OCIs:  Overseas Citizens of India (OCIs) are entitled to some benefits such as a multiple-entry, multi-purpose lifelong visa to visit India.  The Act provides that the central government may cancel registration of OCIs on certain grounds. These include: (i) if the OCI has registered through fraud, or (ii) if within five years of registration, the OCI has been sentenced to imprisonment for two years or more.  The Bill adds one more ground for cancellation, that is, if the OCI has violated the provisions of the Act or of any other law notified by the government.   

 

Changes notified to the areas regulated by the Inner Line Permit

 

Currently, certain areas in Arunachal Pradesh, Mizoram and Nagaland are notified as “Inner Line” areas under the Bengal Eastern Frontier Regulations, 1873.   In these areas, entry and exit of persons is regulated by an Inner Line Permit.  

The Ministry of Home Affairs has issued a notification to replace these areas.  The Inner Line will now include: (i) Arunachal Pradesh, (ii) Manipur, (iii) Mizoram, and, (iv) notified areas of Nagaland.   The Home Department of Nagaland has notified Dimapur under the Inner Line, in addition to the rest of the state.  

Arms (Amendment) Bill, 2019 passed by Parliament

 

The Arms (Amendment) Bill, 2019 was passed by Parliament.   The Bill amends the Arms Act, 1959.  It decreases the number of licensed firearms allowed per person and increases penalties for certain offences under the Act.   It also introduces new categories of offences.  Key features include:

  • License for acquiring firearms:  The Bill reduces the number of permitted firearms from three to two.  This includes licenses given on inheritance or heirloom basis.  The Bill provides a time period of one year to deposit excess firearms.  The Bill also increases the duration of a firearm license from three years to five years.
  • Increase in penalties:  The Bill enhances the punishment for various offences.  For example, the Act specifies the punishment for: (i) dealing in un-licensed firearms, (ii) shortening or converting a firearm without a licence, and (iii) importing or exporting banned firearms.   The punishment for these offences is between three years and seven years, along with a fine. The Bill increases the punishment to between seven years and life imprisonment, along with a fine.  
  • New offences:  The Bill adds new offences.  These include: (i) forcefully taking a firearm from police or armed forces, punishable with imprisonment between 10 years and life imprisonment, and a fine, and (ii) using firearms in a celebratory gunfire which endangers human life or personal safety of others, punishable with imprisonment of up to two years or fine of up to one lakh rupees, or both.  
  • The Bill also defines offences committed by organised crime syndicates and illicit trafficking. Possession of firearms or ammunition by a member of a syndicate, in violation of the Act, will be punishable with imprisonment between 10 years and life, along with a fine.  This punishment will also apply to anyone dealing in un-licensed firearms, converting a firearm without license, or importing or exporting firearms without license, on behalf of a syndicate.  Illicit trafficking is punishable with imprisonment between 10 years and life, along with a fine.

 

Special Protection Group (Amendment) Bill, 2019 passed by Parliament

 

The Special Protection Group (Amendment) Bill, 2019 was passed by Parliament.   The Bill amends the Special Protections Group Act, 1988.  The Act provides for constitution and regulation of the Special Protection Group (SPG) for providing security to the Prime Minister, former Prime Ministers, and their immediate family members.  Key features of the Bill include: 

  • Under the Act, the SPG provides security to the Prime Minister and his immediate family members.  It also provides security to former Prime Ministers and their immediate family members for a period of one year from the date on which they cease to hold the office.   Beyond this period, the SPG security is provided based on the level of threat as decided by the central government.   The threat must: (i) emanate from a military or terrorist organisation, and (ii) be of a grave and continuing nature.   
  • The Bill amends this provision to state that the SPG will provide security to the Prime Minister, and members of his immediate family residing with him at his official residence.  It will also provide security to any former Prime Ministers, and his immediate family members residing with him at the residence allotted to him.  This security will be provided for a period of five years from the date on which he ceases to hold the office of Prime Minister. 
  • The Act stipulates that if the SPG security is withdrawn from a former Prime Minister, it will also be withdrawn from his immediate family members, unless the level of threat faced by the immediate family member warrants such security.   The Bill removes this condition to state that if the SPG security is withdrawn from a former Prime Minister, it will also be withdrawn from his immediate family members.

 

The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill, 2019 passed by Parliament

 

The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill, 2019 was passed by Parliament. [9]  The Bill provides for the merger of the Union Territories (UTs) of Dadra and Nagar Haveli, and Daman and Diu into a single UT.  The Bill makes consequential amendments including retaining the representation in Lok Sabha, the jurisdiction of the High Court of Bombay, and provisionally allotting all officials of the two UTs to the merged UT.

 

Cabinet approves conduct of Census 2021 and updation of National Population Register

 

The Union Cabinet approved proposals to: (i) conduct the Census of India 2021 throughout the country, and (ii) update the National Population Register (NPR) in all parts of the country, except the state of Assam. 

The Census will be conducted in two phases: (i) a house listing and housing census between April and September 2020, and (ii) population enumeration in February 2021.  The NPR will be updated along with the house listing and housing census (except in Assam).  The NPR is a register of the usual residents in the country.  Usual residents refer to those who have either resided in a local area for the past six months or more, or intend to reside in that area for the next six months or more. [11], [12]       

Nagaland declared as a disturbed area under AFSPA

 

The Ministry of Home Affairs has declared the entire state of Nagaland to be a ‘disturbed area’ under the Armed Forces (Special Powers) Act, 1958 (AFSPA), for a period of six months from December 30, 2019. [13]  The AFSPA empowers the governor of the state, or the central government, to declare any part of the state as a ‘disturbed area’.  In a disturbed area, armed forces officers have certain special powers.   These include the power to open fire at any individual for violating laws which prohibit: (i) the assembly of five or more persons, or (ii) the carrying of weapons. 

Macroeconomic Development

 

Policy repo rate remains unchanged at 5.15%; reverse repo rate at 4.9%

The Monetary Policy Committee (MPC) released its fifth bi-monthly Monetary Policy Statement of 2019-20.   The policy repo rate (the rate at which RBI lends money to banks) remained unchanged at 5.15%.  Other decisions of the MPC include:

  • The reverse repo rate (the rate at which RBI borrows money from banks) remained unchanged at 4.9%. 
  • The marginal standing facility rate (the rate at which banks can borrow additional money) and the bank rate (the rate at which the RBI buys bills of exchange) also remained unchanged at 5.4%.
  • The MPC decided to continue with an accommodative stance of monetary policy.

Current Account Deficit at 0.9% of GDP during the second quarter of 2019-20

India’s Current Account Deficit (CAD) in the second quarter (July-September) of 2019-20 decreased to USD 6.3 billion (0.9% of GDP) from USD 19 billion (2.9% of GDP) in the corresponding quarter of 2018-19. [15]  The CAD in the previous quarter, i.e. the first quarter (April-June) of 2019-20 was USD 14.3 billion, which was 2% of GDP.  

The year-on-year decrease in CAD was primarily due to a lower trade deficit (the difference between a country’s exports and imports) of USD 38.1 billion in the second quarter of 2019-20, as compared to USD 50 billion in the corresponding period of the previous year.    Foreign exchange reserves increased by USD 5.1 billion in the second quarter of 2019-20, as compared with a depletion of USD 1.9 billion in the second quarter of 2018-19.  Table 1 shows India’s balance of payments in the second quarter of 2019-20.

Table 1: Balance of Payments, Q2 2019-20 (USD billion)

 

Q2

2018-19

Q1

2019-20

Q2

2019-20

Current Account

-19.0

-14.3

-6.3

Capital Account

16.6

27.9

12.0

Errors and Omissions

-0.6

-0.4

0.7

Change in reserves

-1.9

14

5.1

 

Finance

The Taxation Laws (Amendment) Bill, 2019 passed by Parliament

 

The Taxation Laws (Amendment) Bill, 2019 was passed by Parliament.   The Bill replaces the Ordinance promulgated in September 2019.  It amends the Income Tax Act, 1961 (IT Act), and the Finance (No. 2) Act, 2019.  The Bill provides domestic companies with lower tax rate options, if they do not claim certain deductions.  It also amends certain provisions regarding levy of surcharge on capital gains.  Key features include:

  • 22% tax rate for domestic companies:  Currently,domestic companies with annual turnover of up to Rs 400 crore pay income tax at the rate of 25%.  For other domestic companies, the tax rate is 30%.   The Bill provides domestic companies with an option to pay income tax at the rate of 22%, if they do not claim certain deductions under the IT Act.   These include deductions provided for: (i) newly established units in Special Economic Zones, (ii) investment in new plants or machinery in notified backward areas, (iii) expenditure on scientific research, extension of agriculture, and skill development projects, (iv) depreciation of new plants or machinery (in certain cases), and (v) various other provisions in the IT Act under Chapter VI-A.
  • 15% tax rate for new domestic manufacturing companies:New domestic manufacturing companies can opt to pay income tax at the rate of 15%, provided they do not claim the deductions specified above.   They should be set up and registered after September 30, 2019, and should start manufacturing before April 1, 2023.  These will not include companies: (i) formed by splitting up or reconstruction of an existing business, (ii) engaged in any business other than manufacturing, and (iii) using any plant or machinery previously used in India (except under certain specified conditions).
  • Applicability of new tax rates:  Companies can choose to opt for the new tax rates starting the financial year 2019-20 (i.e. assessment year 2020-21).  Once an option is chosen, it will apply for all the subsequent years.  If companies choosing a new option do not follow certain conditions, they cannot exercise the new option for that year and subsequent years.  In some cases, companies for whom the 15% tax rate option becomes invalid can opt for the 22% tax rate option.

 

International Financial Services Centres Authority Bill, 2019 passed by Parliament

 

The International Financial Services Centres Authority Bill, 2019 was passed by Parliament.   The Bill provides for the establishment of an authority to develop and regulate the financial services market in International Financial Services Centres in India.  Key features of the Bill include: 

  • Coverage: The Bill will apply to all International Financial Services Centres (IFSCs) set up under the Special Economic Zones Act, 2005.   An IFSC provides a jurisdiction where financial products and services can be offered to residents or non-residents in a foreign currency. 
  • Constitution of the International Financial Services Centres Authority: The Bill sets up the International Financial Services Centres Authority.  The Authority will consist of nine members (including a chairperson), appointed by the central government.  Members of the Authority will include representatives from the RBI, SEBI, IRDA, PFRDA, and the Ministry of Finance.  Further, two members of the Authority are to be appointed on the recommendation of a Search Committee. 
  • Functions of the Authority: Functions of the Authority include: (i) regulating approved financial products (such as securities or deposits), financial services, and financial institutions in an IFSC, (ii) regulating any other financial products, financial services, or financial institutions in an IFSC, which may be notified by the central government, and (iii) recommending to the central government any other financial services, products, or financial institutions which may be permitted in an IFSC.
  • International Financial Services Centres Authority FundThe Bill sets up the International Financial Services Centres Authority Fund.  Grants, fees and charges received by the Authority from various sources will be credited to the Fund.  
  • Transaction in foreign currency:As per the Bill, all transactions of financial services in IFSCs will be in such foreign currency as specified by the Authority, in consultation with the central government.

 

The Insolvency and Bankruptcy Code amended through an ordinance, Bill already introduced

 

The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 was promulgated on December 28, 2019.   The Ordinance amends the Insolvency and Bankruptcy Code, 2016.  The Code provides a time-bound process for resolving insolvency in companies and among individuals.  Amendments proposed under the Ordinance include:

  • Minimum threshold for initiating the resolution process: Under the Code, a financial creditor (either by itself or jointly with other financial creditors) may file an application before the National Company Law Tribunal (NCLT) for initiating the insolvency resolution process.   The Ordinance amends this to provide minimum thresholds for certain classes of financial creditors for initiating the insolvency resolution process.  In case of real estate projects, if an allottee (person to whom a plot, apartment, or building has been allotted or sold) wants to initiate the resolution process, the application should be filed jointly by at least 100 allottees of the same real estate project, or 10% of the total allottees under that project, whichever is less.
  • Liability for prior offences:  The resolution plan under the Code may result in change in the management or control of a corporate debtor to other persons.  The Ordinance states that in such cases, a corporate debtor will not be liable for any offences committed before the resolution process.  The liability will cease from the date the plan is approved by the NCLT.
  • Immunity to apply in certain cases:  The immunity against prior offences will be available if such other person (i) was not a promoter or in the management or control of the corporate debtor, or a related party of such a person, (ii) was not a person against whom investigating authorities have submitted or filed a complaint, or have reasons to believe that the person abetted or conspired to commit the offence.
  • Permits, licenses and registrations not to be terminated on the ground of insolvency: The Ordinance states that any existing license, permit, registration, quota, concession, or clearance, given by the government or local authority, will not be suspended or terminated on the grounds of insolvency.  However, there should be no default in payment of current dues for the use or continuation of such grants.
  • Supply of critical goods and services not to be discontinued: The Ordinance states that the resolution professional may order that the supply of certain goods and services which are critical for the corporate debtor’s operations cannot be discontinued during the moratorium period.  The moratorium period refers to the time period during which the NCLT may prohibit persons from taking certain actions against the corporate debtors, such as filing of recovery suits.  This provision will not apply if the debtor has unpaid dues to the suppliers, or in certain other specified circumstances.

Note that similar amendments are proposed in the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019, which was introduced in Lok Sabha during the Winter Session 2019.  The Bill has been referred to the Standing Committee on Finance.  

 

Cabinet approves Partial Credit Guarantee Scheme to public sector banks

 

The Union Cabinet has approved modifications to the Partial Credit Guarantee Scheme.    The scheme was announced in the Union Budget 2019-20 and issued on August 19, 2019. [20]  

Under the scheme, a government guarantee is provided to public sector banks (PSBs) for buying high-rated pooled assets from financially sound non-banking financial companies (NBFCs) and housing finance companies (HFCs).  The government will cover the initial losses up to 10% of the fair value of assets purchased by the banks, or Rs 10,000 crore, whichever is lower.   

The modified scheme will also cover NBFCs and HFCs which may have come under the SMA-0 sub-category during the one-year period prior to August 1, 2018.  The SMA-0 sub-category includes accounts classified as special mention accounts with principal or interest payments due for up to 30 days.  The minimum rating of the underlying asset pool being purchased by PSBs should be BBB+ as per the modified scheme.

The government expects that the guarantee support will help NBFCs and HFCs resolve their liquidity or cash flow issues.  The scheme will be operational till June 30, 2020, or till such date by which one lakh crore rupees worth of assets are bought by the PSBs, whichever is earlier. 

RBI issues guidelines on constituting a Board of Management in Primary (Urban) Cooperative Banks 

 

The Reserve Bank of India (RBI) issued guidelines on constituting a Board of Management (BoM) for Primary (Urban) Cooperative Banks (UCBs).   As per the guidelines, all UCBs with deposits of Rs 100 crore or more will be required to constitute a BoM, and obtain approval of RBI for appointing the bank’s Chief Executive Officer.  The constitution of a BoM will be a mandatory condition for these banks to open a new branch or to expand operations.  

The BoM will have a minimum of five and a maximum of 12 members, with special knowledge or expertise in various fields, including accountancy, banking or law.  The BoM will report to the Board of Directors of the bank.  Its functions will include exercising oversight over the banking-related functions of UCBs, and assisting the Board of Directors in policy formulation.  

Cabinet approves additional capital and equity support to IIFCL

The Union Cabinet has approved additional capital infusion and equity support to India Infrastructure Finance Company Limited (IIFCL). [22]  IIFCL is a non-banking financial company which provides long-term finance to viable infrastructure projects.  

The additional equity support for the financial years 2019-20 and 2020-21 would be Rs 5,300 crore and Rs 10,000 crore respectively.  This support will come either from budgetary support or the issuance of recapitalisation bonds.  Further, the authorised capital of IIFCL is also proposed to be increased from Rs 6,000 crore to Rs 25,000 crore.  Authorised capital is the maximum amount of shares that a company can issue as per its incorporation documents. 

RBI releases guidelines for on tap licensing of small finance banks 

 

The Reserve Bank of India (RBI) has released guidelines for on tap licensing of small finance banks in the country.   On tap licensing refers to the practice of granting license throughout the year.  Currently, there is no on tap licensing window for small finance banks.   The current process for licensing is governed by the 2014 guidelines by RBI on licensing of small finance banks in private sector.   

Small finance banks provide credit access to small businesses and unorganised sector entities through technology and low cost operations.  The guidelines provide for: 

  • Eligibility: Non-banking financial companies, micro finance institutions and local area banks in the private sector (which are controlled by residents) can opt for conversion into small finance banks.  They should have an experience of at-least five years in the area.  Public sector entities, large industrial house or business groups, and autonomous bodies will not be eligible for licensing.  Small finance banks will be given scheduled bank status (banks listed in the RBI Act, 1934 and eligible for borrowing from the RBI) immediately upon commencement of operations.  
  • Scope of activities: Small finance banks may accept deposits and lend to small businesses.  They may also undertake financial services such as mutual funds, insurance products, and pension products, with the prior approval of the RBI. 
  • Minimum capital requirements: The minimum equity capital required for setting up a small finance bank will be Rs 200 crore (up from Rs 100 crore currently).  Further, small finance banks should maintain a minimum capital to risk-weighted assets ratio (bank’s total capital as a percentage of its total risk weighted assets) of 15%.  

Other requirements: Small finance banks will be required to extend 75% of its net bank credit to sectors eligible for priority sector lending (such as agriculture, micro and small enterprises).  Further, at least 50% of loans by these banks should be kept up to 25 lakh rupees, on an ongoing basis.

Committee constituted to review framework for economic indicators

 

The Ministry of Statistics and Programme Implementation has constituted a Standing Committee on Economic Statistics (Chair: Mr. Pronab Sen) to review the framework of economic indicators related to the industrial sector, the services sector, and labour force statistics. [25], [26]   The Committee will comprise 28 members, including representatives from the United Nations, Reserve Bank of India, Ministry of Finance, NITI Aayog, and economists and statisticians.  Note that a copy of the order constituting the Committee is not available in the public domain.

Information and Broadcasting

 

The Personal Data Protection Bill, 2019 introduced in Lok Sabha

The Personal Data Protection Bill, 2019 was introduced in Lok Sabha.   It seeks to provide for protection of personal data of individuals, and establishes a Data Protection Authority for the same.  The Bill defines personal data as data which pertains to characteristics, traits, or attributes of identity, which can be used to identify an individual.  Key features include: 

  • Obligations of the data fiduciary: The Bill sets out obligations of the entity who has access to the personal data (the data fiduciary).  It states that the processing of personal data will be subjected to certain purpose, collection and storage limitations. 
  • Rights of the individual: The Bill sets out certain rights of the individual.  These include the right to: (i) obtain confirmation from the fiduciary on whether their personal data has been processed, (ii) seek correction, erasure, completion or updating of personal data, or (iii) restrict continuing disclosure of their personal data, if it is no longer necessary or if consent is withdrawn.  Further, fiduciaries may process personal data only if consent is provided by the individual (except in certain cases, such as, if required by a law or a court order).
  • Data Protection Authority: The Bill sets up a Data Protection Authority which may: (i) take steps to protect interests of individuals, (ii) prevent misuse of personal data, and (iii) ensure compliance with the Bill.  The Authority will be comprised of members with expertise in the field of data protection and information technology.  
  • Exemptions: Processing of personal data is exempt from the provisions of the Bill in some cases.  For example, the central government can exempt any of its agencies from the provisions of the Act in interest of security of state, public order, sovereignty and integrity of India and friendly relations with foreign states.  
  • Further, the Bill provides that central government may direct data fiduciaries to provide it with any: (i) non-personal data and (ii) anonymised personal data (where it is not possible to identify data individual) for better targeting of services. 

The Bill has been referred to a Joint Parliamentary Committee, which is expected to submit its report by the first day of the last week of the Budget Session, 2020.  

Labour and Employment

 

Code on Social Security introduced in Lok Sabha

The Code on Social Security, 2019 was introduced in Lok Sabha.   It replaces nine laws related to social security, including the Employees’ Provident Fund Act, 1952, and the Unorganised Workers’ Social Security Act, 2008.   Key features of the Code include: 

  • Social security schemes:  Under the Code, the central government may notify various social security schemes for the benefit of workers.  These include: (i) an Employees’ Provident Fund (EPF) Scheme, (i) an Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other benefits, and (ii) specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover.  
  • Gig workers refer to workers outside of the traditional employer-employee relationship (e.g., freelancers).  Platform workers are workers who access other organisations or individuals using online platforms and earn money by providing them with specific services.  Unorganised workers include home-based and self-employed workers.  
  • Coverage and registration:  The Code specifies different applicability thresholds for the schemes.  For example, the EPF Scheme will apply to establishments with 20 or more employees.  These thresholds may be amended by the central government.  All eligible establishments are required to register under the Code, unless they are already registered under another labour law.  
  • Contributions:  Certain schemes, such as the EPF and ESI Schemes will be financed through a combination of contributions from the employer and employee.  All contributions towards payment of gratuity, maternity benefit, cess for building workers, and employee compensation will be borne by the employer.  Schemes for gig workers, platform workers, and unorganised workers may be financed through a combination of contributions from the employer, employee, and the appropriate government. 
  • Social security organisations:  The Code provides for the establishment of several bodies to administer the social security schemes.  These include: (i) a Central Board of Trustees to administer the EPF, EPS and EDLI Schemes, (ii) an Employees State Insurance Corporation to administer the ESI Scheme, and (iii) national and state-level Social Security Boards to administer schemes for unorganised workers. 

 

Social Justice and Empowerment

The Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019 passed by Parliament

The Constitution (One Hundred and Twenty-Sixth Amendment) Bill, 2019 was passed by Parliament.   The Bill amends provisions related to reservation of seats for Scheduled Castes (SCs) and Scheduled Tribes (STs).

The Constitution provides for reservation of seats for SCs and STs and representation of the Anglo-Indian community by nomination, in Lok Sabha and Legislative Assemblies of states.  This has been provided for a period of 70 years since the enactment of the Constitution and will expire on January 25, 2020.  The Bill seeks to extend the reservation for SCs and STs by another 10 years till January 25, 2030.  The provision of seats by nomination for Anglo-Indians in Lok Sabha and State Assemblies has not been extended. 

 

The Maintenance and Welfare of Parents and Senior citizens (Amendment) Bill, 2019 introduced in Lok Sabha

The Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2019 was introduced in Lok Sabha.   The Bill amends the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.   Key features include:

  • Definitions:  In the Act, the term ‘children’ refers to children and grandchildren, excluding minors.  The Bill adds step-children, adoptive children, children-in-laws, and the legal guardian of minors to the definition.  Further, the Act defines a relative as the heir of a childless senior citizen, excluding minors, who possesses or would inherit his property after death.  The Bill amends this to include minors represented by their legal guardians.  The Act defines parents to include biological, adoptive, and step parents.  The Bill expands this definition to include both parent-in-laws and grandparents.  
  • Under the Act, maintenance includes provision of food, residence, and medical attendance.  Welfare includes the provision of food, healthcare, and other amenities necessary for senior citizens.  The Bill expands the definition of: (i) maintenance, to include provision of healthcare, safety, and security for parents and senior citizens to lead a life of dignity, (ii) welfare, to include provision of housing, clothing, safety, and other amenities necessary for the well-being of a senior citizen or parent. 
  • Maintenance orders:  Under the Act, state governments constitute maintenance Tribunals which may direct children and relatives to pay a monthly maintenance fee of up to Rs 10,000 to parents and senior citizens.  The Bill removes the upper limit on the maintenance fee.   
  • Offences and penalties:  The Bill increases the penalty for abandonment of a senior citizen or parent from imprisonment of up to three months to imprisonment between three and six months, and fine of up to Rs 5,000, to Rs 10,000.  The Bill also provides that failure to comply with the maintenance order by children or relatives may lead to imprisonment up to one month, or until the payment is made.

Health and Family Welfare

 

The Prohibition of E-Cigarettes Bill, 2019 passed by Parliament

The Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage, and Advertisement) Bill, 2019 was passed by Parliament. [32]  It replaced an Ordinance promulgated in September 2019.  The Bill seeks to prohibits the production, trade, storage, and advertisement of electronic cigarettes.

  • Electronic cigarettes:  The Bill defines electronic cigarettes (e-cigarettes) as electronic devices that heat a substance, which may contain nicotine and other chemicals, to create vapour for inhalation.  These e-cigarettes can also contain different flavours and include all forms of electronic nicotine delivery systems, heat-not-burn products, e-hookahs, and other similar devices.
  • Banning of e-cigarettes: The Bill prohibits the production, manufacture, import, export, transport, sale, distribution and advertisement of e-cigarettes in India.  Any person who contravenes this provision will be punishable with imprisonment of up to one year, or a fine of up to one lakh rupees, or both.  For any subsequent offence, the person will be punishable with an imprisonment of up to three years, along with a fine of up to five lakh rupees.
  • Storage of e-cigarettes:  Under the Bill, no person is allowed to use any place for the storage of any stock of e-cigarettes.  If any person stores any stock of e-cigarettes, he will be punishable with an imprisonment of up to six months, or a fine of up to Rs 50,000 or both.
  • Once the Bill comes into force, the owners of existing stocks of e-cigarettes will have to declare and deposit these stocks at the nearest office of an authorised officer.  Such an authorised officer may be a police officer (at least at the level of a sub-inspector), or any other officer as notified by the central or state government.

 

Transport

Recycling of Ships Bill, 2019 passed by Parliament 

The Recycling of Ships Bill, 2019 was passed by Parliament.   The Bill restricts the use of hazardous material on ships and regulates the recycling of ships.  Key features include:

  • Applicability of the Bill:  The Bill will apply to: (i) any new or existing ship which is registered in India, (ii) ships entering a port or terminal in India, or the territorial waters of India, (iii) any warship, or other ship owned and operated by an administration and used on government non-commercial service, and (iv) ship recycling facilities operating in India.  
  • Ship recycling:  The Bill defines ship recycling as the dismantling of a ship at a facility to recover the components and materials for reuse, and taking care of the hazardous material so produced.  
  • Requirements for ships:  Ships should not use prohibited hazardous materials as notified.  The central government may exempt certain categories of ships from this requirement.  The National Authority will carry out periodic surveys to verify the prescribed requirements.  This Authority will be notified by the central government to administer, supervise and monitor all activities related to ship recycling. 
  • Recycling facilities:  Ships will be recycled only in authorised recycling facilities.  An application to authorise such a facility must be submitted to the Competent Authority (which will be notified by the central government) along with a ship recycling facility management plan, and prescribed fee.  Existing facilities must apply for authorisation within 60 days of the commencement of the Act.  A facility will be authorised when the Competent Authority is satisfied that it follows the specified standards.  The certificate of authorisation will be valid for a period as specified but not exceeding five years.  Contravening these provisions will be punishable with imprisonment of up to one year, or a fine of up to Rs 10 lakh, or both. 

 

Toll Operate Transfer model for monetising highways amended 

 

The Ministry of Road Transport and Highways approved certain changes in the Toll-Operate-Transfer (TOT) model for monetising National Highways. [34]  In August 2016, the Union Cabinet had authorised the National Highway Authority of India (NHAI) to monetise certain public funded National Highway projects. [35]  The revenue generated from this monetisation would be utilised by the central government for the future development, operation, and maintenance of highways.  Changes approved include:

  • Earlier, projects could be monetised if they are operational and have been generating toll revenues for at least two years after the commercial operations date.  This threshold has been reduced to one year.  
  • NHAI may vary the concession period between 15 to 30 years depending upon the project features.
  • The NHAI Board will approve the detailed proposal for each TOT bundle.  This will include details of proposed project stretches, estimated concession value and the proposed concession period. 
  • NHAI may raise long term finance from banks by securitising the user fee receipts collected from the toll fee plazas as an alternate mode of asset monetisation.   

Draft amendments for mandating BS-VI level emission norms for quadricycles published

The Ministry of Road Transport and Highways published draft amendments in the Central Motor Vehicles Rules, 1989. [36]  The draft amendments provide for mandating Bharat Stage VI (BS-VI) level emission norms for quadricycles, manufactured on or after April 1, 2020.  A quadricycle is a four-wheeler, which is smaller and lighter than a passenger car.  The Bharat Stage Emission Standards (BSES) are emission standards instituted by the central government to regulate the output of air pollutants from motor vehicles.   BSES provides progressive standards with more stringent norms.  Presently, applicable emission norms for the quadricycles is Bharat Stage IV.   Comments are invited within 30 days from the date of publication of the draft amendments, i.e., December 13, 2019.

Railways       

 

Cabinet approves organisational restructuring of Indian Railways

The Union Cabinet approved the organisation restructuring of Indian Railways.  

  • Various Group A services of Indian Railways to be unified: The eight group A services of Indian Railways, such as Indian Railways Traffic Service and Indian Railways Accounts Service, will be merged into a single service called Indian Railways Management Service. [37]  This is in accordance with the recommendations of certain Committees constituted on railways reforms such as the Prakash Tandon Committee (1994) and the Bibek Debroy Committee (2015).  
  • Reorganisation of Railway Board: The Railway Board will be reorganised on the basis of functional lines of Railways.  It will have a Chairman, who will act as the Chief Executive Officer.  It will have four members responsible for (i) infrastructure, (ii) operations & business development, (iii) rolling stock, and (iv) finance, respectively.  Some independent members in advisory role will also be appointed to the board.   Currently, Railway Board consists of a Chairman and members along the departmental lines. 

Housing and Urban Affairs

The NCT of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019 passed by Parliament

The National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019 was passed by Parliament. [38]  The Bill provides for recognising the property rights of residents of certain unauthorised colonies in the National Capital Territory of Delhi.  Key features include:

  • Recognition of property rights:  The Bill provides that the central government may regularise transactions of immovable properties held by residents of certain unauthorised colonies, through notification.  These transactions could be regularised based on documents including the latest power of attorney, agreement to sale, will, or possession letter.   Any resident of an unauthorised colony having these documents will be eligible to obtain the right of ownership through a conveyance deed or an authorisation slip.  
  • Resident:  The Bill defines a resident as a person with physical possession of property on the basis of a registered sale deed or certain other documents.  The definition includes legal heirs of residents but does not include any tenant, licensee, or persons permitted to use the property.  
  • Unauthorised colony:  An unauthorised colony is defined as a colony or development comprising of an adjoining area, where no permission has been obtained for the approval of layout or building plans.  Further, the Delhi Development Authority must have had notified the colony as subject to regularisation.  
  • Payment of charges:  The residents will be required to pay certain charges to obtain such ownership.  These charges may be notified by the central government.  Stamp duty and registration charges will also be payable on the amount mentioned in the conveyance deed or the authorisation slip.  

 

Education

 

Central Sanskrit Universities Bill passed by Lok Sabha

The Central Sanskrit Universities Bill, 2019 was passed by the Lok Sabha. [39]  The Bill seeks to convert three deemed-to-be Sanskrit universities into Central Sanskrit Universities.  These universities are: (i) Rashtriya Sanskrit Sansthan, New Delhi, (ii) Shri Lal Bahadur Shastri Rashtriya Sanskrit Vidyapeeth, New Delhi, and (iii) Rashtriya Sanskrit Vidyapeeth, Tirupati.  

 

External Affairs

Anti-Maritime Piracy Bill, 2019 introduced in Lok Sabha

The Anti-Maritime Piracy Bill, 2019 was introduced in Lok Sabha.   The Bill provides for prevention of maritime piracy and prosecution of persons for such piracy related crimes.  Key features of the Bill include: 

  • Applicability of the Bill:  The Bill will apply to all parts of the sea adjacent to and beyond the limits of the Exclusive Economic Zone of India.   Exclusive Economic Zone refers to the area of sea to which India has exclusive rights for economic activities.
  • Piracy:   The Bill defines piracy as any illegal act of violence, detention, or destruction committed against a ship, aircraft, person or property, for private purposes, by the crew or passengers of a private ship or aircraft.  Such acts may be carried out on the high seas or in any place outside the jurisdiction of India.  Inciting or intentionally facilitating such acts would also qualify as piracy.  It also includes any other act that is considered piracy under international law.
  • Piracy also includes voluntary participation in the operations of a pirate ship or aircraft.  This includes a ship or aircraft which is either: (i) intended to be used for committing any act of piracy, or (ii) has been used to commit an act of piracy, and is still under the control of the persons guilty of such act.
  • Offences and penalties:  An act of piracy will be punishable with: (i) imprisonment for life; or (ii) death, if the act of piracy includes attempted murder, or causes death.  An attempt to commit, aid, abet, or procure for an act of piracy, or directing others to participate in an act of piracy will be punishable with up to 14 years of imprisonment, and a fine.  
  • Designated Court:  The central government, may notify certain Sessions Courts to be Designated Courts under the Bill.  It may also notify the territorial jurisdiction of each Designated Court.   It will try offences committed by: (i) a person of any nationality in the custody of the Indian Navy or Coast Guard, (ii) a citizen of India, a resident foreign national in India, or a stateless person.  Further, the Court may try a person even if they are not physically present.  

 

Cabinet approves the Social Security Agreement between India and Brazil

The Union Cabinet approved the Social Security Agreement between India and Brazil. [41]  The agreement states that indian professionals and skilled workers working in Brazil for short durations only need to make social security payments in one of the countries.  Further, it provides for unrestricted payment of pensions even in cases where the worker has residence in the other contracting state. 

Statistics

 

Draft National Statistical Commission Bill, 2019 released

The Ministry of Statistics and Programme Implementation published the Draft National Statistical Commission Bill, 2019 for public comments.   The draft Bill seeks to constitute a National Statistical Commission (NSC) as the nodal regulatory body for all principal statistical activities of the country.  Key features include:

  • Constitution of National Statistical Commission:  The draft Bill sets up the National Statistical Commission (NSC).  The NSC will consist of nine members.  These include: (i) the Chairperson, (ii) five full time members, (iii) the Deputy Governor, RBI, (iv) the Chief Statistician of India, and (v) the Chief Economic Advisor, Ministry of Finance.  The Chairperson and the five full time members of the NSC will be appointed by the centre.  These appointments will be based on the recommendations of a Search Committee constituted by the central government.
  • Functions of the National Statistical Commission:  The NSC will advise central and state governments, courts and tribunals on matters relating to government statistics.  These include evolving national policies, legislative measures, and laying standards for statistical concepts and methodologies.  It will maintain government statistics data for public distribution.
  • Statistical audit:  The draft Bill establishes the National Statistical Audit and Assessment Organization within the NSC.  This division will conduct periodic statistical audit of any statistical survey being conducted by a government agency.  It will be headed by the Chief Statistical Auditor, appointed by the central government.
  • National Statistical Fund:  The draft Bill constitutes the National Statistical Fund. This fund shall include resources received by the NSC through government grants, fees and charges, and any other sources decided by the central government.   The fund can be used to pay salaries, allowances and other remuneration to the members, among others.
  • Inquiries, offences and penalties:  The NSC has the power to warn, caution or censure a government agency if: (i) it does not comply with the standards of statistical ethics, or (ii) any person engaged in government statistics commits professional misconduct, makes a false or misleading statement or material omission in any information furnished to the NSC.

 

Defence

 

Cabinet approves creation of the post of Chief of Defence Staff

The Union Cabinet has approved the creation of the post of Chief of Defence Staff (CDS).   The post will be in the rank of a four-star General.  Further, a Department of Military Affairs will be constituted under the Ministry of Defence.  This department will be headed by the CDS.  General Bipin Rawat has been appointed as the Chief of Defence Staff (CDS) with effect from December 31, 2019.

The creation of post of Chief of Defence Staff was first recommended by the report of the Group of Ministers on ‘Reforming the National Security System’ (2001) to provide single-point military advice to the government.   The government expects this reform will enable the armed forces to implement coordinated defence practices and procedures. 

The CDS will be the permanent chairman of the Chiefs of Staff Committee.  Currently, this position is held by the senior most Chief of Staff until they retire, and therefore is not permanent.  The CDS will also: 

  • Administer the tri-services organisations (Indian Army, Indian Navy and Indian Air Force) and act as the principal military advisor to the Defence Minister on all tri-services matters.  Note that CDS will not exercise any military command over the three service chiefs. 
  • Function as a military advisor to the Nuclear Command Authority (authority responsible for command and control of India’s nuclear weapons programme). 
  • Bring inter-service cooperation in operations, logistics, transport, communications of the three services.
  • Serve as member of the defence acquisition council and defence planning committee. 

The Department of Military Affairs will deal with: (i) matters related to defence procurement, training and staffing for the services, (ii) facilitating restructuring of military commands for optimal utilisation of resources, and (iii) promoting use of indigenous equipment.  

Food Processing

 

Standing Committee submits report on the NIFTEM Bill, 2019

The Standing Committee on Agriculture (Chair: Mr. P. C. Gaddigoudar) submitted its report on the National Institutes of Food Technology, Entrepreneurship and Management Bill, 2019.  The Bill declares certain institutes of food technology, entrepreneurship, and management as institutions of national importance.   These are the National Institute of Food Technology, Entrepreneurship and Management (NIFTEM), Kundli and the Indian Institute of Food Processing Technology (IIFPT), Thanjavur.  Key observations and recommendations of the Committee include:

  • Composition of the Board of Governors: The Bill provides for a Board of Governors, which will be the principal executive body of the institute.  The Chairperson of the Board will be a distinguished person in the field of food science or technology, management, or public administration.  The Committee observed that since food processing is a specialised field, the Chairperson should have a practical experience of the industry or academia.  It recommended that the provision appointing public administrators as Chairperson of the Board should be removed.  This would help de-bureaucratise the working of the institute and adopt industry friendly policies.  It also recommended the inclusion of a Member of Parliament in the Board similar to the Institutes of Technology Act, 1961. 
  • Maximum limit on fee for technical courses: The National Fee Committee under the All India Council for Technical Education fixes the maximum tuition and development fee for professional courses.  The Committee noted that NIFTEM, Kundli is charging a higher fee for certain programmes as compared to the maximum fee recommended by the National Fee Committee.  It recommended that the central government should form a high-level Committee to analyse the extent of excess fee charged by the institute till date and take corrective measures.  The fee for existing courses should be capped from current academic session.  It also recommended introduction of a new provision in the Bill to cap the fee for various courses in NIFTEMs at a reasonable level.

 

Draft National Food Processing Policy released for public feedback

The Ministry of Food Processing Industries released the Draft National Food Processing Policy, 2019 for public comments. [48]  The draft policy aims for the development of the food processing sector and addressing the critical gaps hampering its growth.  It also aims to increase the investment in the sector by six-fold by 2035.  Key features of the draft policy include:

  • Objectives:  Key objectives include: (i) reducing wastage at the farmer level to increase their incomes, (ii) supporting the food processing industry to create employment opportunities, (iii) ensuring a higher deployment of credit in the sector, (iv) enhancing the availability of safer, affordable, and higher quality food products for consumer, and (v) infrastructure and skill building to meet the demands of the sector.
  • Infrastructure development:  The draft policy seeks to incentivise the creation of supply chain infrastructure for the food processing sector.  Some of the proposed measures include: (i) identifying, developing and promoting new agriculture processing and production clusters, and (ii) supporting the development of logistics infrastructure such as cleaning and packing facilities. 
  • Incentives and support measures:  The draft policy proposes various incentives that can be provided for the growth of the sector. These include: (i) capital investment subsidy for setting up new food processing units and technology upgradation of existing units, (ii) fiscal incentives such as lower Goods and Services Tax rates on food products and food processing machineries, and (iii) certain electrical duty and land related concessions may also be provided.
  • Training and skill development:  The draft policy proposes various incentives for the promotion of employment such as (i) promoting employment welfare, (ii) facilitating farmers to set up food processing units, and (iii) promoting food processing training cum incubation centres.  It also proposes starting new courses and conducting research in food technology, entrepreneurship and management.   

Agriculture

Cabinet approves the continuation of horticulture scheme for J&K and Ladakh

The Union Cabinet approved the continuation of the Prime Minister’s Development Package for horticulture development in the union territories of Jammu and Kashmir (J&K), and Ladakh till 2021-22.   The scheme was approved in 2016 for the development of horticulture, including restoration of damaged horticulture areas, in the erstwhile state of J&K.   The scheme provides certain benefits to J&K for import of planting material of special varieties of apple, and additional assistance for adopting techniques which increase productivity.   Earlier, the scheme was approved for implementation till 2018-19.  This has been extended by three years to 2021-22, with provision for further extension of up to one year with the approval of the Union Minister of Agriculture and Farmers’ Welfare. An outlay of Rs 500 crore has been approved for the scheme, with Rs 40 crore earmarked for Ladakh and Rs 460 crore earmarked for J&K.

Draft National Fisheries Development Board Bill released

The Ministry of Fisheries, Animal Husbandry and Dairying released the draft National Fisheries Development Board (NFDB) Bill. [50]    The NFDB was registered in 2006 in Hyderabad, Telangana under the Andhra Pradesh Societies Registration Act, 2001.   It seeks to enhance fish production in the country and coordinate fishery development in a holistic manner.   Key features of the Draft Bill include: 

  • Re-constitution of NFDB:  The Draft Bill sets up the NFDB as a body corporate and declares it to be an institution of national importance.  Further, it seeks to transfer the assets, liabilities, and other rights and obligations of certain existing institutions to the NDFB.  These institutions are: (i) the National Freshwater Fish Brood Bank, Odisha, (ii) the North Eastern Regional Centre, Guwahati, and (iii) the Moolapalem site of the NFDB.  These bodies will continue as subsidiary units of the NFDB.
  • Board of Directors:  The NFDB will be run by a Board of Directors.   The Board will consist of: (i) the Chief Executive of the NFDB (the Chairperson of the Board), (ii) the Joint Secretary, Department of Fisheries, (iii) seven directors from the secretaries of the state fishery departments, and (iv) two subject experts. 
  • Functions of the NFDB: The functions of the NDFB include: (i) planning and promoting the development of fisheries and aquaculture, (ii) formulating schemes with the approval of the central government for the development fisheries in a sustainable manner, (iii) strengthening fisheries infrastructure, (iv) facilitating training and skill development of stakeholders, and (v) assisting the central government in regulatory measures. 
  • Finances: The NFDB will maintain a fund which will be credited with sums received from the transfer of the existing undertakings to the NFDB, fees collected for its activities, and other sources.  The accounts of the NFDB will be audited by the Comptroller and Auditor-General of India.

Environment and Forests

CAG assesses the environmental impact due to mining activities and its mitigation in Coal India Limited

The Comptroller and Auditor General (CAG) of India submitted its report on the assessment of the environmental impact of mining activities and its mitigation in Coal India Limited and its subsidiaries on December 11, 2019.   Key observations and recommendations include:

  • Air pollution:  CAG noted that 12 of the 28 mines studied did not comply with the State Pollution Control Boards directives for installation of continuous ambient air quality monitoring stations.
  • Water pollution:  During 2013-18, out of the 28 mines studied, pollutants exceeded the limits prescribed by Bureau of Indian Standards in eight mines.   Further, certain mines continued to use ground water for their operations without obtaining a no-objection certificate from the Central Ground Water Authority. 
  • Environment management system:   The National Environmental Policy (NEP) was formulated in 2006 and requires all concerned central, state and local bodies to prepare environment protection action plans consistent with the NEP.  However, CIL amended its original environment policy and formulated a comprehensive environment policy much later in 2012.  Further, six of the seven coal producing subsidiaries of CIL did not have an environment policy approved by the Board of Directors as mandated by the Ministry.   CAG recommended that all coal sector companies should have an environment policy approved by their respective Boards.
  • Adherence to regulations for environment protection:  CAG noted that the 35 mines which were closed between April 1946 and July 2009 did not have CIL required Mine Closure Status Report.  As of March 2018, 16 units were being operated without valid environmental documents.  
  • Other recommendations:  CAG made certain other recommendations such as: (i) the subsidiaries should complete all capital work related to pollution control measures expeditiously, and (ii) implementation of solar power projects to increase environmental benefits should be improved.  

 

India State of Forest Report, 2019 released

The Ministry of Environment, Forests and Climate Change released the India State of Forest Report, 2019. [52]  The report gives a forest and tree cover map for the country.  Key findings of the report include:

  • The total forest cover is around 21.7% of the geographical area of the country. The total tree cover is around 2.9% of the geographical area.
  • There has been an increase of 0.6% of forest cover, and 1.3% of tree cover compared to the previous assessment in 2017.  Mangrove cover in the country has increased by 1.1% since the previous assessment.
  • The annual removal of small timber by people living in villages around forests is nearly 7% of the average annual yield of forests in the country.
  • About 21.4% of the forest cover of the country is highly-to-extremely fire prone.

Table 2 shows forest cover of India in 2019. 

Table 2: Forest cover of India (2019) 

Class

Area (sq km)

% of area

Very dense forest

99,278

3.02%

Moderately dense forest

3,08,472

9.38%

Open forest

3,04,499

9.26%

Total forest cover

7,12,249

21.67%

Tree cover

95,027

2.89%

Non-forest and scrub

24,80,193

75.44%

Total geographical area

32,87,469

100.00%

Note: Forest area covers Mangrove cover.

 

Jal Shakti

Cabinet approves Atal Bhujal Yojana 

The Union Cabinet has approved the Atal Bhujal Yojana which aims to improve ground water management through community participation. [53]  The scheme will be implemented in certain identified priority areas in seven states.  These states are Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Uttar Pradesh.  It will be implemented over a period of five years (2020-21 to 2024-25).   

The central government will provide Rs 6,000 crore of total grants towards the scheme.  50% of this will be through a World Bank loan, to be repaid by central government.  The remaining 50% will be through central assistance from regular budgetary support. 

The scheme has two major components: 

  • Institutional strengthening:  Institutional arrangements for sustainable ground water management will be strengthened.   This includes improving monitoring networks, efficient use of available ground water through measures such as micro-irrigation, crop diversification, and capacity building.
  • Incentives:  States will be incentivised for achievements in improved groundwater management practices.  These include data distribution, preparation of water security plans (through convergence of various ongoing/new schemes), and implementation of management interventions, among others.

Operational guidelines for Jal Jeevan Mission released

The Ministry of Jal Shakti released the operational guidelines for the Jal Jeevan Mission.   The Mission was approved by the Union Cabinet in August, 2019 to provide functional household tap connection to every rural household by 2024.   Currently, out of 17.9 crore rural households in the country, about 14.6 crore (82%) households do not have household water tap connections.  Key features of the guidelines include:

  • Institutional structure:  The Mission subsumes some on-going and new schemes to form a four tier institutional framework: (i) National Jal Jeevan Mission at central level, (ii) State Water and Sanitation Mission at state level, (iii) District Water and Sanitation Mission at district level, and (iv) Gram Panchayat and/ or its sub-committees at village level.  The guidelines provide the powers, functions, and a framework for the structure for different bodies working under the Missions at different levels.  For example, gram panchayats will help in planning, designing, execution, operations and maintenance of village level infrastructure.
  • Funding:  The total project cost of the Mission is estimated to be Rs 3.6 lakh crore.  Of this, central share will be about Rs 2.1 lakh crore.  The fund sharing pattern will be 90:10 for Himalayan and North-Eastern states; 50:50 for other states and 100% for union territories.  It has been proposed that 10% of the capital cost contribution towards water supply infrastructure should be from the village.  This should be 5% for hilly and forested areas, and villages with more than 50% SC/ST population.  
  • Implementation:  Every village is to prepare a village action plan which will have the following components: (i) water source and its maintenance, (ii) water supply, and (iii) grey water (waste water generated from activities such as bathing and washing) management.  These plans will be aggregated at district and state levels.   This will give a holistic view on projects like regional grids, bulk water supply, and distribution projects.
  • Monitoring:  The physical and financial progress of the mission is proposed to be monitored through Integrated Management Information System.  Water quality monitoring and surveillance is proposed to be ensured by the Public Health Engineering Department and the local community.

Power

Guidelines for the development of decentralised solar power plants released

The Ministry of New and Renewable Energy released guidelines for the development of decentralised solar power plants. [55]   These guidelines will be applicable to the procurement of solar power by distribution companies (discoms) from decentralised solar power plants in rural areas.  This is to promote the use of solar energy and ensure the availability of affordable and reliable solar power in rural areas.  Key features of the guidelines are as follows:

  • Applicability: The guidelines will be applicable for procurement of solar power by discoms from following types of decentralised solar power plants: (i) of capacity more than 2 MW and connected to distribution sub-stations of rating 66/11 KV and higher and (ii) up to 2 MW capacity and connected to distribution sub-stations of rating 33/11 KV and below.  Such projects may be installed by any individual, cooperative, or company.
  • Process for selection of generators: The discoms will identify substation-wise solar power capacity based on factors such as average load requirement during day time and technical feasibility.  They will conduct an open competitive bidding process for the development of solar power plants on build own and operate basis.
  • Power purchase agreement:  The discom and solar power generator will enter a power purchase agreement for a period of 25 years.  The generator will be required to make the plant operational within nine months from the date of agreement, where land and connectivity is being provided by discoms.   In other cases, the timeline is 12 months.  If there is a shortfall in minimum generation requirement, the generator will be liable to pay compensation to the discoms, as agreed in the power purchase agreement.   All such solar power plants will be required to comply with grid regulations.
  • Coordinating agency: A state nodal agency will coordinate with discoms, and will assist the generator with necessary clearances, and in project development activities.

Methodology for auction of short term coal linkages under the SHAKTI policy released

The Ministry of Power had constituted a High-Level Empowered Committee to resolve issues related to stressed thermal power assets in July 2018.   The Union Cabinet approved some of the Committee’s recommendations in March 2019. One of the recommendations of the Committee was to provide short-term coal linkage to power plants which do not have power purchase agreements (PPA).  This short-term linkage will be provided under the SHAKTI policy.  The SHAKTI policy seeks to provide for the allocation of coal among thermal power plants in a transparent and objective manner.   The Ministry released the methodology for auctioning such short-term linkages.   Key features of the methodology are as follows:

  • Eligibility:  All power plants, except captive power plants, which have at least 50% untied capacity (generation capacity without PPAs) will be eligible to participate in the auction for short-term linkage.
  • Duration of linkage:  Coal linkages will be provided for consumption of coal by the power plant for a period of three months.
  • Periodicity of auction:  Auction of coal linkages will be carried out every quarter.  An annual calendar will be published by the coal companies in this regard.
  • Methodology for bidding:  The coal company will conduct a competitive bidding process.  The bid for the auction will include a premium above the notified price of coal. 
  • Conditions on use of power:  The power generated under these coal linkages will have to be sold in: (i) the day-ahead market through power exchanges, and (ii) short term through a transparent bidding process using the Discovery of Efficient Energy Price (DEEP) portal.   The DEEP portal is an e-bidding and e-reverse auction portal for procurement of short term supply of power by distribution companies.

Steel             

Draft policy for promotion of greenfield investments in the steel sector published

The Ministry of Steel has published a draft policy for the promotion of new steel plants.   The Ministry has estimated that an additional capacity of 25-30 million tonnes per annum of steel production will be required to meet the domestic steel consumption demand by 2024-25.  Such capacity expansion will require setting up new plants (greenfield steel plants) with investments worth Rs 1-1.5 lakh crore.  

The draft policy attempts to address the key challenges in setting up new projects, such as: (i) availability of land, (ii) long term availability of iron ore at a competitive price, (iii) faster grant of statutory clearances, and (iv) incentives for a large investment.  Key features of the draft policy are:

Operating Models: The draft policy provides the following models for providing land and iron ore mines to the new projects: 

  1. Steel CPSEs driven: Excess land available with central public sector enterprises (CPSEs) in the steel sector and supply of iron ore from mines under such CPSEs can be leveraged for this purpose.
  2. (ii)    State government driven: State governments will be responsible to identify suitable land for the project.  Mines may be provided through the following options: (i) direct auction of a mine, (ii) a specified mine may be reserved for a CPSE/state PSE and then long-term linkage (for more than 15 years) to the specified mine may be provided to the project, or (iii) a specified mine may be reserved for a state government company and the project owner may be given 26% equity in the company.  A joint auction will be conducted to transfer ownership of land and mines.

Role of the Ministry: Key responsibilities of the Ministry of Steel under the draft policy include: 

  • setting up a task-force for reviewing the projects and facilitating approval and infrastructural support for the projects,
  • providing a single window for environmental and forest clearance,
  • leveraging incentives under the state industrial policies and the central government schemes for these projects,
  • setting up a project monitoring cell to drive completion of a greenfield project within the specified timeline, and
  • ensuring prioritisation of projects for expansion of logistics infrastructure such as railways, roads and slurry pipelines.

Petroleum and Natural Gas

CAG submits performance audit of Pradhan Mantri Ujjwala Yojana

The Comptroller and Auditor General (CAG) of India submitted a performance audit report on the Pradhan Mantri Ujjwala Yojana (PMUY). [60]   The PMUY scheme was launched in May 2016 with the objective of providing Liquefied Petroleum Gas (LPG) connections to women from below poverty line (BPL) households.  The report audited the implementation of the scheme between May 2016 and December 2018.  Key findings of the report include: 

  • Identification of beneficiaries: In order to get a connection under the scheme, the eligible beneficiaries have to provide certain documents such as a proof of residence, Aadhaar number, and bank account details.  CAG observed that 42% of the total connections under the scheme were issued only on the basis of Aadhaar number.  Further, it found cases of mismatch in identification of beneficiaries.  It recommended that the LPG distributors should use measures such as data validation and electronic KYC to prevent issuance of connections to ineligible persons.
  • Sustained usage of LPG: CAG observed that a total of 7.2 crore connections have been issued under the scheme against a target of eight crore by March 2020 (90%).  However, the average annual refill consumption for beneficiaries has remained low (the average annual refill consumption for 3.18 crore beneficiaries, as of January 2019, was 3.21 refills per annum).  
  • The distributors provide the beneficiaries an option to opt for a loan for covering the expense of cooking stove and first refill.  CAG noted that low consumption of refills has also hindered loan recovery worth Rs 1,235 crore for LPG distributors.  It recommended that since the target of releasing PMUY connections has broadly been achieved, the scheme should now be focussed towards sustained usage. 
  • Delay in installation and diversion of cylinders: CAG observed several cases of delay in the installation of cylinders.  Further, it found several cases where the annual consumption was more than 12 cylinders.   It noted that this points to risk of domestic cylinders being diverted for commercial purposes and recommended that high consumption cases should be reviewed regularly to curb diversion. 

Communications

TRAI extends the date for abolition of termination charges on domestic calls

Termination charges are the wholesale charges payable by the service provider of an originating subscriber to the service provider in whose network the call terminates.  As per the existing regulation, termination charges for wireless to wireless domestic call is Rs 0.06 per minute.    These charges were to be abolished from January 1, 2020.1   TRAI has extended the deadline for abolition by one year, i.e., to January 1, 2021. 

TRAI invites consultation on tariff issues in the telecom sector

TRAI released a consultation paper on tariff issues in the telecom sector.   The current tariff framework gives the telecom service providers the freedom to design the tariffs according to the prevailing market conditions for various telecommunication services.  TRAI specifies only a few tariffs such as those for national roaming, rural telephony, and mobile number portability charges.  It observed that given the concerns about the financial health of the telecom sector, certain representations have been received on the need for the regulator to fix a floor price for various telecom services.  

TRAI noted that the freedom and flexibility to design tariffs based on market conditions has enabled healthy competition in the sector. However, the telecom sector requires huge capital investments for ensuring quality of service as well as adapting to the rapid technological changes and hence, there is a need to ensure the financial well-being of the sector.4  The consultation paper seeks views on the following issues: 

  • the need for regulatory intervention in tariff fixation at the current stage, 
  • the need for fixing a floor price despite the recent increase in tariffs by several telecom service providers,
  • the need for fixing floor price for various types of services such as mobile data services and voice calls, and various customer segments such as retail customers and corporate,
  • the methodology and parameters to be kept in mind while fixing the floor price, 
  • the need for a price ceiling to safeguard consumer interest (if a floor price is considered), and
  • the methodology and parameters for determining ceiling price.

 

Youth Affairs and Sports

 

Standing Committee submits report on the Khelo India scheme

The Standing Committee on Human Resource Development (Chair: Dr. Satyanarayan Jatiya) submitted its report on the Khelo India scheme. [65]  The scheme aims to revive sports culture and promote excellence in sports.  Key observations and recommendations of the Committee include:

  • Utilisation of funds: The Committee observed that there was underutilisation of funds under the scheme. For example, during 2018-19 the actual expenditure on the scheme was Rs 324 crore, while the estimated allocation was Rs 500 crore.  The Department of Sports noted the need for an increased budget to remedy constraints such as inadequate funds and human resources.  The Committee recommended that the Department should first utilise funds allocated to it, and then mobilise other resources.  Other resources could include: (i) funds from private and corporate sectors, and (ii) public private partnerships.
  • Shortage of coaches: The Committee observed that out of 1,524 posts for coaches 544 were vacant.  It recommended that the vacant posts should be filled expediently.  Further, the Department should collaborate with coaches running private sports academies to help train athletes. 
  • Sports infrastructure:The Committee noted that sports infrastructure is lacking across India.  To fill these gaps in infrastructure, the Department provides grants to states.  The Committee observed that only 13 states have been given these grants.  Certain states including Bihar, Jharkhand, and Odisha did not receive any grants.   The Committee recommended that sports infrastructure should be built in these states where unassessed sporting talent may exist.
  • Education:  The Committee noted that in 2018-19, of the 1,518 players selected for training under the scheme, 893 dropped out.  It identified the main reason for drop-outs as a lack of integrated education at sports academies.  The Committee recommended that academies should have educational and hostel facilities so that trainees can complete their basic education.  Further, training spaces in existing private schools, colleges and academies with hostels, should be identified.  These may be affiliated under the Khelo India scheme for the training of sportspersons. 

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