Important
Bills to be presented in Indian Parliament’s Budget Session
The Budget Session of the
Indian Parliament convened on February 21st, with the 2013-14 budget
presented on February 28th. The Parliamentary Session, running for
over seven weeks total, will have a month-long break from March 22nd to April 22nd, and
will culminate on May 10th. The agenda for legislation includes 72
bills in all to be tabled and 35 bills to be considered and passed. From
a legislative point of view, even if half of the crucial pending bills in the
Parliament get passed, this Budget session would be one of the most important
Parliamentary sessions of the last few years. Below we describe some of the
important bills to be considered and passed in the ongoing Budget Session of
the Parliament:
The National Food Security
Bill, 2011
Background
The Bill seeks to provide food
and nutrition security in India, which is ranked 2nd in the world by the World Bank
in terms of the number of children suffering from malnutrition. The Bill was
first introduced in the Lok Sabha on December 22nd, 2011 by K.V.
Thomas, the Minister for Consumer Affairs, Food and Public Distribution, and
was then referred to the Standing Committee on Food, Consumer Affairs and
Public Distribution, which submitted its final report on January 17, 2013.
Key Features
·
The
Bill specifies that up to 75 percent of the rural population and 50 percent of
the urban population in the country shall be entitled to foodgrains.
·
Of
these, at least 46 percent of the rural population and 28 percent of the urban
population shall be categorized as priority groups, while the rest will be
categorized as general.
·
Entitlements
provided to these groups and others are listed in the table below.
·
The
central government will determine the percentage of people in each state that
will belong to the priority and general groups, while state governments
will identify households that belong to these groups.
·
The
Bill also seeks to establish grievance redress mechanisms at the district,
state, and central levels of government.
Sticky Issues:
·
The
process of identifying beneficiaries and placing them into three groups may
lead to large inclusion and exclusion errors.
·
Several
entitlements as well as the grievance redress structure would require state
legislatures to make adequate budgetary allocations. Quality of
implementation of the Bill may be severely affected if states do not pass
requisite allocations in their budgets.
·
The
Bill does not provide a rationale for the cut-off numbers prescribed for
entitlements to priority and general households.
·
India’s
food subsidies account for nearly 40 percent of overall subsidy costs, and
are likely to swell to more than 50 percent next fiscal year if the planned
rollout of the food security law goes through.
Prospects for Passing:
The Food Security Bill is seen
as a high priority for United Progressive Alliance (UPA) Chairperson Sonia
Gandhi, and is expected to shore up votes for the Congress party in the 2014
national elections. In his Budget speech, Finance Minister P. Chidambaram
stated that “food security is as much a basic human right as the right to
education or the right to health care. The National Food Security Bill is a
promise of the United Progressive Alliance government and I sincerely hope that
Parliament will pass the Bill as early as possible.”
However, even as he vocalized
support for the policy, the Finance Minister earmarked only Rs. 100 billion (US
$1.8 billion) for the Bill in the 2013-14 Budget. This has left policy experts
and analysts confused, as recent estimates from the Food Minister K.V Thomas
show that the program would need at least 200 billion rupees (US $3.7 billion)
a year, a figure disputed by economists, who say that the actual amount could
be double that figure. A possible explanation for the small budgetary
allocation to the Bill might be that the UPA does not expect the controversial
Bill to be approved until December, leaving only the last quarter of the
financial year for the subsidies to be implemented.
The Land Acquisition,
Rehabilitation and Resettlement Bill, 2011
Background
Land acquisition has been the
cause of over a third of the legal conflicts in India in the past decade,
partly because the government has continued to lean on the archaic colonial-era
Land Acquisition Act 1894 in the contestations and disputes that arise over
land acquisition. This Bill replaces the 1894 Act and establishes a
process for land acquisition that involves a Social Impact Assessment survey,
preliminary notification stating the intent for acquisition, a declaration of
acquisition, and compensation to be given by a certain time. All acquisitions
will also require rehabilitation and resettlement to be provided to the people
affected by the acquisition.
The Bill was first introduced
in the Parliament in September 2011 and was referred to a Parliamentary
Standing Committee, which submitted its recommendations in May 2012. But due to
differences within the Government, Prime Minister Manmohan Singh constituted a
Group of Ministers (GoM) in September 2012 to formulate a consolidated draft of
the Bill. The GoM, headed by Agriculture Minister Sharad Pawar, approved the
draft in October 2012, after which it was sent to the Cabinet again. After a
mammoth 157 amendments, the Bill is expected to be reintroduced in the Lok
Sabha in the ongoing Budget Session.
Key Features
·
Compensation
for the owners of the acquired land shall be four times the market value in
rural areas and twice in urban areas.
·
In the
case of acquisition of land for use by private companies, consent of 80 per
cent of the displaced people will be required.
·
In the
case of acquisition for urbanization purposes, 20 per cent of the developed
land would be reserved and offered to the original owners at a price equal to
the cost of acquisition and development.
·
Purchase
of large pieces of land by private companies will require provision of
rehabilitation and resettlement.
·
Deciding
at what threshold the resettlement and rehabilitation provisions will be
invoked in the case of purchase by private parties has been left for state
governments to decide.
·
If the
projects fall above the threshold, consent would be required from 70% of land
owners in the case of PPP projects and 80% of landowners in the case of private
projects, but not other project-affected people.
·
The
functioning of the critical R&R committee has been left for the states to
make a final decision on.
·
The
provisions of this Bill shall not apply to acquisitions under 16 existing
legislations including the Atomic Energy Act, 1962, the Railways Act, 1989,
etc.
Sticky Issues
·
It is
not clear whether Parliament has jurisdiction to impose rehabilitation and
resettlement requirements on private purchase of agricultural land.
·
The
requirement of a Social Impact Assessment for every acquisition without a
minimum threshold may delay the implementation of certain government programs.
·
The
market value is based on recent reported transactions. This value is
doubled in rural areas to arrive at the compensation amount. This method
may not lead to an accurate adjustment for the possible underreporting of
prices in land transactions.
·
The
government can temporarily acquire land for a maximum period of three
years. There is no provision for rehabilitation and resettlement in such
cases.
·
All
national and state highway projects have been exempted from the requirements of
the new Bill and state governments have also been given leniency in
decision-making when it comes to land acquisition for development projects in
their own states, leaving the Bill vague.
Prospects for Passing:
Parliamentary Affairs
Minister Kamal
Nath has called a meeting of political parties on March 7th to address the concerns raised
over the proposed legislation. All major political parties, including
the BJP, the Left, Trinamool Congress, Samajwadi Party, Bahujan Samaj Party and
the Janata Dal (United),
are expected to participate in the meeting. With Rural Development
Minister Jairam Ramesh pushing
for the passage of the Bill; all signs indicate that it will be passed in the
current Session.
The National Accreditation
Regulatory Authority for Higher Educational Institutions Bill, 2010
Background:
Presently, foreign educational
institutions are allowed to operate in India through various modes.
Universities can sign MoUs with foreign universities without prior
approval of the state or Central government or the University Grants Commission
(UGC). Currently, there are over 600 foreign institutions operating in India;
the maximum number are from the UK (158), followed by Canada (80) and the US
(44). However, only six foreign universities have approval from the All India
Council for Technical Education (AICTE) to collaborate with Indian
institutions. Also, there are 67 institutions running technical programs with
foreign collaboration without AICTE approval. There have been concerns that
many of these institutions are operating without legitimate approvals from the
Government, raising questions over the legitimacy of degrees given by these
institutions.
The Bill seeks to make it
mandatory for every higher educational institution (other than institutions
engaged in agricultural education) to be accredited by an independent
accreditation agency. This Bill was first introduced in the Lok Sabha in May
2010 and was then referred to the Standing Committee on Human Resource
Development, which submitted its report in August 2011.
Key Features:
·
The
Bill establishes a National Accreditation Regulatory Authority (NARA) for Higher
Education, which shall register and monitor accreditation agencies.
·
These
accreditation agencies shall accredit every higher educational institution
based on a specified procedure and fees. An accreditation agency has to be a
non-profit organization, which is controlled by the central or state
government.
·
Assessment
of such accreditation has to be made before the institution starts the process
of admission to such programs. Existing educational institutions have to
get their accreditation within three years (five years for medical
institutions).
Sticky Issues:
·
The
Bill, which allows only government controlled agencies to accredit educational
institutions, may dilute the objective of creating a healthy competitive
environment for quality rating of educational institutions.
·
Regulatory
bodies are required when the private sector is allowed to provide certain goods
and services. Under the Bill, private players cannot register as
accreditation agencies. Thus, a regulatory authority for registering
agencies may be redundant.
·
The
Bill allows an institution to appeal to NARA for modification of a rating given
by an accreditation agency. This implies that NARA would have to perform
the role of an accreditation agency, however it may not have the competence to
do so.
·
Accreditation
agencies are required to help institutes to improve their quality and may be
penalized for not performing this duty. This may result in conflict of
interest. Downgrading of an institution may be seen as admission of
failure to improve quality by an agency. As this may invite penalty, so
agencies may be wary of downgrading institutions.
Prospects for Passing:
While listed for consideration
and passing in the Budget Session of the Parliament, there has been little talk
of the Bill from the Ministry of Human Resource and Development.
The Prevention of Bribery of
Foreign Public Officials and Officials of Public International Organisations
Bill, 2011
Background:
India had signed the United
Nations Convention against Corruption on December 9, 2005. This Bill is
necessary for the ratification of the Convention. It provides a mechanism
to deal with bribery among foreign public officials (FPO) and officials of
public international organizations (OPIO). The Prevention of Bribery of Foreign
Public Officials and Officials of Public International Organizations Bill, 2011
was introduced in the Lok Sabha on March 25, 2011 by the Minister of State for
Personnel, Public Grievance and Pensions, Mr. V. Narayanasamy.
Key Features:
·
The
Bill empowers the Central Government to enter into agreements with other
countries (contracting states) for enforcing this law and for exchange of
investigative information.
·
The
Bill criminalizes acceptance or solicitation of bribes by FPO and OPIO for acts
or omissions in their official capacity; Offering or promising to offer a bribe
to any FPO and OPIO for obtaining or retaining business; Abetment or attempting
either of the above acts.
·
Any
person who commits offences under the Bill shall be liable to imprisonment
between six months and seven years, and a fine. Extradition treaties
entered into by India with other countries that are signatories to the
convention are deemed to be amended to include offences under the Bill.
Sticky Issues:
·
The
Bill does not prescribe any time limit for completing the investigation.
·
There
is a difference in the length of punishment provided under the Prevention of
Corruption Act, 1988 and this Bill. Under the Prevention of Corruption Act, the
punishment ranges from six months to five years, whereas under the Bill the
maximum punishment is seven years.
Prospects for Passing:
While listed for consideration
and passing in the Budget Session of the Parliament, there has been little news
of the Bill from the Ministry of State for Personnel, Public Grievance and
Pensions
The Insurance Laws (Amendment)
Bill, 2008 and The Pension Fund Regulatory and Development Authority Bill, 2011
Background:
In the December 2012, Winter
Session of Parliament, the Indian government was successful in passing the
crucial Banking Laws
(Amendment) Act, 2012,
enabling the Reserve Bank of India (RBI) to issue new bank licenses to
corporate houses. Two other key Ministry of Finance Bills, The Insurance Laws
(Amendment) Bill, 2008 and The Pension Fund Regulatory and Development
Authority Bill, 2011, were also introduced in the Winter Session and are
pending approval in the Budget Session of the Parliament.
Prospects for Passing:
Finance Minister P. Chidambaram
has repeatedly expressed confidence that there is broad consensus regarding the
passage of these two key Bills in the Budget Session. To read more about these
two Bills, please go here.
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