Legislation

Explainer: The Citizenship (Amendment) Bill, 2019

The Minister of Home Affairs introduced the Citizenship (Amendment) Bill, 2019 today in Lok Sabha.   It is scheduled to be taken up for discussion and passing by the House later today.  The Bill amends the Citizenship Act, 1955, and seeks to make foreign illegal migrants of certain religious communities coming from Afghanistan, Bangladesh, and Pakistan eligible for Indian citizenship.  In this blog, we look at the criteria for determining citizenship in India, discuss how the Bill proposes to change the criteria, and highlight other key changes proposed by the Bill. 

How is citizenship acquired in India?

In India, citizenship is regulated by the Citizenship Act, 1955.  The Act specifies that citizenship may be acquired in India through five methods – by birth in India, by descent, through registration, by naturalisation (extended residence in India), and by incorporation of territory into India. [1]  

Can illegal migrants acquire citizenship?

An illegal migrant is prohibited from acquiring Indian citizenship.  An illegal immigrant is a foreigner who either enters India illegally, i.e., without valid travel documents, like a visa and passport, or enters India legally, but stays beyond the time period permitted in their travel documents.  An illegal migrant can be prosecuted in India, and deported or imprisoned.   

In September 2015 and July 2016, the central government exempted certain groups of illegal migrants from being imprisoned or deported. [2]  These are illegal migrants who came into India from Afghanistan, Bangladesh, or Pakistan on or before December 31, 2014, and belong to the Hindu, Sikh, Buddhist, Jain, Parsi, or Christian religious communities.  

How does the Bill seek to change the criteria for determining citizenship?

The Bill proposes that the specified class of illegal migrants from the three countries will not be treated as illegal migrants, making them eligible for citizenship.  On acquiring citizenship, such migrants shall be deemed to be Indian citizens from the date of their entry into India and all legal proceedings regarding their status as illegal migrants or their citizenship will be closed.

The Act allows a person to apply for citizenship by naturalisation, if the person meets certain qualifications.  One of the qualifications is that the person must have resided in India or been in central government service for the last 12 months and at least 11 years of the preceding 14 years.  For the specified class of illegal migrants, the number of years of residency has been relaxed from 11 years to five years.  

Are the provisions of the Bill applicable across the country?

The Bill clarifies that the proposed amendments on citizenship to the specified class of illegal migrants will not apply to certain areas.  These are: (i) the tribal areas of Assam, Meghalaya, Mizoram, and Tripura, as included in the Sixth Schedule to the Constitution, and (ii) the states regulated by the “Inner Line” permit under the Bengal Eastern Frontier Regulations 1873.  These Sixth Schedule tribal areas include Karbi Anglong (in Assam), Garo Hills (in Meghalaya), Chakma District (in Mizoram), and Tripura Tribal Areas District.   Further, the Inner Line Permit regulates visit of all persons, including Indian citizens, to Arunachal Pradesh, Mizoram, and Nagaland.

Is the differentiation among the specified class of illegal migrants and all other illegal migrants reasonable?

The Bill makes only certain illegal migrants eligible for citizenship.  These are persons belonging to the six specified religious communities, from the three specified countries, who entered India on or before December 31, 2014, and do not reside in the Sixth Schedule areas or in the states regulated by the Inner Line Permit states.  This implies that all other illegal migrants will not be able to claim the benefit of citizenship conferred by the Bill, and may continue to be prosecuted as illegal migrants.  Any provision which distinguishes between two groups may violate the standard of equality guaranteed under Article 14 of the Constitution, unless one can show a reasonable rationale for doing so. [3]   The Bill provides differential treatment to illegal migrants on the basis of (a) their country of origin, (b) religion, (c) date of entry into India, and (d) place of residence in India.   The question is whether these factors serve a reasonable purpose to justify the differential treatment.  We examine this below. 

The Bill classifies migrants based on their country of origin to include only Afghanistan, Pakistan and Bangladesh.  While the Statement of Objects and Reasons (SoR) in the Bill reasons that millions of citizens of undivided India were living in Pakistan and Bangladesh, no reason has been provided to explain the inclusion of Afghanistan.  The SoR also states that these countries have a state religion, which has resulted in religious persecution of minority groups.  However, there are other countries which may fit this qualification.   For instance, two of India’s neighboring countries, Sri Lanka (Buddhist state religion) [4] and Myanmar (primacy to Buddhism) [5], have had a history of persecution of Tamil Eelams (a linguistic minority in Sri Lanka), and the Rohingya Muslims, respectively.[6], [7], [8]   

Further, there are other religious minorities from Pakistan, Afghanistan and Bangladesh, such as the Ahmadiyya Muslims in Pakistan (considered non-Muslims in that country) [9], and atheists in Bangladesh [10] who have faced religious persecution and may have illegally migrated to India.  Given that the objective of the Bill is to provide citizenship to migrants escaping from religious persecution, it is not clear why illegal migrants belonging to other neighbouring countries, or belonging to religious minorities from these three specified countries, have been excluded from the Bill.  

The Bill also creates further differentiation between the specified class of illegal migrants based on when they entered India (before or after December 31, 2014), and where they live in India (provisions not applicable to Sixth Schedule and Inner Line Permit areas).  However, the reasons provided to explain the distinction is unclear.  Note that certain restrictions apply to persons (both citizens and foreigners) in the Sixth Schedule areas and in the states regulated by the Inner Line Permit.  Once an illegal migrant residing in these areas acquires citizenship, he would be subject to the same restrictions in these areas, as are applicable to other Indian citizens.  Therefore, it is unclear why the Bill excludes illegal migrants residing in these areas. 

How does the Bill change the regulations for Overseas Citizens of India?

The Bill also amends the provisions on registration of Overseas Citizens of India (OCI). OCI cardholders are foreigners who are persons of Indian origin. For example, they may have been former Indian citizens, or children of current Indian citizens. An OCI enjoys benefits such as the right to travel to India without a visa, or to work and study here.  At present, the government may cancel a person’s OCI registration on various grounds specified in the Act.  In case of a cancellation, an OCI residing in India may be required to leave the country. The Bill adds another ground for cancelling OCI registration — violation of any law notified by the central government.  However, the Bill does not provide any guidance on the nature of laws which the central government may notify.  The Supreme Court has noted that this guidance is necessary to set limits on the authority’s powers and to avoid any arbitrariness in exercise of powers. [11]    Therefore, the powers given to the government under the Bill may go beyond the permissible limits of valid delegation. 

Note:  The blog has been updated to remove the following issue: “Second, the Bill delegates the power to notify laws and not offences.  This may result in the cancellation of OCI for minor violations.  For instance, the government may want to cancel the registration of an OCI who is found guilty of sedition, under the Indian Penal Code, 1861.  However, since the government cannot notify one offence, it will need to notify the entire Indian Penal Code, which would include minor offences such as rash and negligent driving.” 

[1].  Section 2(1)(b) of the Citizenship Act, 1955.

[2].  State of West Bengal vs Anwar Ali Sarkar, AIR 1952 SC 75.  

[3].  State of West Bengal vs Anwar Ali Sarkar, AIR 1952 SC 75.  

[4].  Article 9 of the Constitution of the Democratic Socialist Republic of Sri Lanka states: “The Republic of Sri Lanka shall give to Buddhism the foremost place and accordingly it shall be the duty of the State to protect and foster the Buddha Sasana, while assuring to all religions the rights granted by Articles 10 and 14(1)(e).”

[5].  Articles 361 and 362 of the Constitution of the Republic of the Union of Myanmar state the following.  “361. The Union recognizes special position of Buddhism as the faith professed by the great majority of the citizens of the Union. 362. The Union also recognizes Christianity, Islam, Hinduism and Animism as the religions existing in the Union at the day of the coming into operation of this Constitution.”

[6]. It is estimated that there are over a lakh Sri Lankan refugees in India, two-thirds of them in government camps.  See https://timesofindia.indiatimes.com/city/chennai/why-lankan-refugees-are-reluctant-to-go-back-home/articleshow/65591130.cms

[7]. “Myanmar Rohingya: What you need to know about the crisis”, BBC News, April 24, 2018, https://www.bbc.com/news/world-asia-41566561.

[8]. “Why India is refusing refuge to Rohingyas”, Times of India, September 6, 2017, https://timesofindia.indiatimes.com/india/why-india-is-refusing-refuge-to-rohingyas/articleshow/60386974.cms.

[9].  The Second Amendment to the Constitution of Pakistan passed in 1974 effectively declared Ahmaddiyas as non-Muslims. 

[11].  Hamdard Dawakhana and Anr., v. The Union of India (UOI) and Ors., AIR1960SC554; Confederation of Indian Alcoholic Beverage Companies and Ors. vs. The State of Bihar and Ors., 2016(4) PLJR369. 

Understanding recent amendments to the Arms Act, 1959

The  Arms (Amendment) Bill, 2019 was introduced in Lok Sabha recently and is scheduled to be passed in this Winter Session.  The Bill amends the Arms Act, 1959 which deals with the regulation of arms in India.  The Act defines arms to include firearms, swords, and anti-aircraft missiles.  The Statement of Objects and Reasons of the Bill noted that law enforcement agencies have indicated a growing connection between the possession of illegal firearms and criminal activities.  In this context, the Bill seeks to reduce the number of firearms allowed per person, and increases punishments for certain offences under the Act.   The Bill also introduces new categories of offences.  In this post, we explain key provisions of the Bill.  

How many firearms are allowed per person?

The Arms Act, 1959 allows a person to have three licenced firearms.  The Bill proposes to reduce this to one firearm per person.  This would also include any firearms that may have been given as inheritance or as an heirloom.  Excess firearms must be deposited at the nearest police station or licensed arms dealer within one year of the passing of the Bill.  The Bill also extends the duration of a licence from three years to five years.

Note that in 2017, 63,219 firearms were seized from across India under the Arms Act, 1959.  Out of these, only 3,525 (5.5%) were licenced firearms.  Further, 36,292 cases involving firearms were registered under the Act in 2017, of which only 419 (1.1%) cases involved licenced firearms. [1]  This trend persisted even at the level of specific crimes, where only 8.5% of the murders committed using firearms involved licenced firearms. [2]

What changes are being made to existing offences?

Presently, the Act bans manufacture, sale, use, transfer, conversion, testing or proofing of firearms without license.  The Bill additionally prohibits obtaining or procuring un-licensed firearms, and the conversion of one category of firearms to another without a license.  The latter includes any modifications done to enhance the performance of a firearm.

The Bill also proposes increased punishments for several existing offences.   For example, the Act specifies the punishment for: (i) dealing in un-licensed firearms, including their manufacture, procurement, sale, transfer, conversion, (ii) the shortening or conversion of a firearm without a licence, and (iii) import or export of banned firearms.   The punishment for these offences currently is between three years and seven years, along with a fine.  The Bill increases the minimum punishment to seven years and the maximum to life imprisonment.

The Act also punishes dealing in prohibited firearms (such as automatic and semi-automatic assault rifles) without a license, with imprisonment between seven years and life imprisonment, along with fine.  The Bill increases the minimum punishment from seven years to 10 years.  Additionally, the punishment for cases in which the usage of prohibited arms results in the death of a person has been revised.  The punishment has been updated from the existing punishment of death penalty to allow for death penalty or life imprisonment, along with a fine.

Are there any new offences being introduced?

The Bill adds certain news offences.  For example, forcefully taking a firearm from police or armed forces has been made a crime under the Bill.  The punishment for doing so is imprisonment between 10 years and life imprisonment, along with a fine.  Additionally, the Bill punishes the negligent use of firearms, such as celebratory gunfire during weddings or religious ceremonies which endanger human life or personal safety of others.  The proposed punishment in this case is imprisonment of up to two years, or a fine of up to one lakh rupees, or both.

The Bill also adds a definition of ‘illicit trafficking’.  It is defined to include the trade, acquisition, sale of firearms or ammunitions into or out of India where the firearms are either not marked as per the Act or violate the provisions of the Act.  The Bill makes illicit trafficking punishable with imprisonment between 10 years and life, along with a fine.

Does the Bill address issues of organised crime?

The Bill also introduces a definition of ‘organised crime’.  ‘Organised crime’ has been defined as continued unlawful activity by a person, either as a member of a syndicate or on its behalf, by using unlawful means, such as violence or coercion, to gain economic or other benefits.  An organised crime syndicate refers to two or more persons committing organised crime.

The Bill introduces harsher punishments for members of an organised crime syndicate.  For example, for the possession of an unlicensed firearm, the minimum term for an individual would be seven years, extendable to life imprisonment and liable to a fine.  However, the possession of unlicensed firearms by a member of a syndicate will be punishable with imprisonment between 10 years and life, along with a fine.  This increased punishment also applies to non-members contravening provisions of the Act on behalf of a syndicate.

[1] Crime in India 2017, National Crime Records Bureau, October 21, 2019,  http://ncrb.gov.in/StatPublications/CII/CII2017/pdfs/CII2017-Full.pdf.

Explaining the recent ban on e-cigarettes

On Wednesday, the government promulgated an Ordinance to ban electronic cigarettes in India.  In this context, we look at what are electronic cigarettes, what are the current regulations in place, and what the Ordinance seeks to do.

What are electronic cigarettes?

The Ordinance defines electronic cigarettes (e-cigarettes) as battery-operated devices that heat a substance, which may or may not contain nicotine, to create vapour for inhalation.  These e-cigarettes can also contain different flavours such as menthol, mango, watermelon, and cucumber.  Usually, e-cigarettes are shaped like conventional tobacco products (such as cigarettes, cigars, or hookahs), but they also take the form of everyday items such as pens and USB memory sticks.

Unlike traditional cigarettes, e-cigarettes do not contain tobacco and therefore are not regulated under the Cigarettes and Other Tobacco Products Act, 2003.  This Act regulates the sale, production, and distribution of cigarettes and other tobacco products in India, and prohibits advertisement of cigarettes. 

What are the international regulations for e-cigarettes?

India is a signatory to the WHO Framework Convention on Tobacco Control (WHO FCTC) which was developed in response to the globalisation of the tobacco epidemic.  In 2014, the WHO FCTC invited all its signatories to consider prohibiting or regulating e-cigarettes in their countries.  This was suggested due to emerging evidence on the negative health impact of these products which could result in lung cancer, cardiovascular diseases, and other illnesses associated with smoking.

Since then, several countries such as Brazil, Mexico, Singapore, and Thailand have banned the production, manufacture, and sale of e-cigarettes.  Recently, the states of New York and Michigan in USA banned the sale of flavoured e-cigarettes.  Whereas, in UK, the manufacture and sale of e-cigarettes has been allowed based on certain conditions.  Further, the advertisement and promotion, and the levels of nicotine in e-cigarettes is also regulated.

Prior to the Ordinance, were e-cigarettes regulated in India?

In August 2018, the Ministry of Health and Family Welfare had released an advisory to all states requiring them to not approve any new e-cigarettes and restrict the sale and advertisements of e-cigarettes.  Based on this advisory, 15 states including Delhi, Maharashtra, and Uttar Pradesh have since banned e-cigarettes.  However, this advisory was challenged in the Delhi High Court in March 2019, which subsequently imposed a stay on the ban.

What does the Ordinance do?

The Ordinance 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 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.

Additionally, storage of e-cigarettes will be punishable with an imprisonment of up to six months, or a fine of Rs 50,000 or both.  Once the Ordinance comes into force (i.e., on September 18, 2019), 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. 

Note that, the Ordinance does not contain any provisions regarding possession or use of e-cigarettes.  The Ordinance will be in force for the next six months, and must be approved by Parliament within six weeks of the commencement of the next session of Parliament.  If it is not passed within this time frame, it will cease to be in force. 

Explainer: The Code on Occupation Safety, Health and Working Condition

Presently, there are around 40 central laws regulating different aspects of labour such as, industrial dispute resolution, bonus payments, and working conditions.  The Ministry of Labour and Employment has proposed to consolidate these laws into four codes—wages, social security, industrial safety and welfare, and industrial relations.

The Occupational Safety, Health and Working Conditions Code, 2019 was introduced in Lok Sabha on July 23, 2019.[1]  The Code consolidates 13 labour laws relating to safety, health and working conditions.  These include the Factories Act, 1948, the Mines Act, 1952, and the Contract Labour (Regulation and Abolition) Act, 1970.  In this context, we explain key provisions of the Code.

Who will be covered under the Code?

The Code applies to organisations employing at least 10 workers, and to all mines and docks.  Provisions of this Code will cover both employees and workers.  Employees include individuals in managerial and administrative positions.  However, the Code does not apply to apprentices, or to offices of the central or state governments.

Does the Code create special provisions for different types of organisations and workers?

Apart from prescribing health and safety provisions that apply to all organisations, the Code also outlines special requirements for different types of organisations (such as factories and mines) and workers (such as beedi and cigar workers).  These special provisions include exceptions or additional requirements.  For example, under the Code, factories are required to get a license in addition to registering under the general provisions of the Code. Similarly, the Code requires certain contractors to get licenses before hiring any contract labour.  Further, audio-visual workers can only be hired after signing an agreement with employers, which must be registered with a government authority.

What are the duties of employers and employees?

The Code lays down several duties of employers.  These include, providing a workplace that is free from hazards that may cause injury or diseases, and providing free annual health examinations to employees.  For certain organisations such as, factories and mines, the employer may have additional responsibilities. These include the obligation to notify authorities in case of an accident at the workplace that leads to death or serious bodily injury of an employee.

Under the Code, employees must take care of their own health and safety, comply with the specified standards, and report unsafe situations to the inspector-cum-facilitator.  Employees also have the right to obtain information related to safety and health standards from the employer.  They may do this by directly approaching the employer, or through a Safety Committee representative.   

Will work hours be uniform for all workers and employees?

Work hours for different types of organisations and employees will be notified by the government.  This is different from the current labour laws, many of which specify work hours within the law itself.  For example, the Factories Act, 1948 provides for a maximum 10 hours of work per day and 60 hours of work per week.[2] 

The Code also changes work hour requirements for women.  The current laws such as, the Mines Act, 1952, and the Plantations Labour Act, 1951, prohibit women from working after 7 pm and before 6 am.[3],[4]  However, the Code permits female workers to work past 7 pm and before 6 am with their consent and the approval of the government.  

What working conditions and welfare facilities does the Code provide for?

The employer is required to provide a hygienic work environment with: (i) ventilation, (ii) comfortable temperature, (iii) sufficient space, (iv) clean drinking water, and (v) latrine and urinal accommodations.  In addition, the government may specify certain other facilities such as, canteens, first aid boxes, and crèches that an employer must provide for.  This is a shift from the current legislation which provides for welfare facilities like canteens and crèches, in the law itself.  For instance, the Factories Act, 1948 requires the provision of canteens, ambulances, and first aid kits for organisations depending on the number of workers employed in the organisation.2

What is the leave policy for workers?

The Code states that no employee can be made to work for more than six days a week.  However, exceptions could be provided for motor transport workers.   Annually, workers must receive one day off for every 20 days they have worked.   While calculating annual leave, maternity leave and periods of lay off will be counted as days spent on duty.

What are the authorities set up under the Code?

The Code requires central and state governments to set up Occupational Safety and Health Advisory Boards at the national and state level, respectively.  These Boards will advise the central and state governments on the standards, rules, and regulations to be framed under the Code.  

The composition of the National Advisory Board includes five representatives for employers, five representatives of employees, and five reputed persons from the fields related to occupational health and safety, amongst other members.  The composition of State Advisory Boards will be decided by state governments.

How is the Code being enforced?

An inspector-cum-facilitator may be appointed by the government to inspect workplaces, inquire and investigate accidents, and provide safety information to workers.  In the case of factories, mines, and docks, the inspector may close or restrict employment in parts of the organisation if there is a health and safety risk.

The Code also prescribes penalties for violating provisions of the Code.  An offence that leads to the death of an employee could result in imprisonment of up to two years, or a fine up to five lakh rupees, or both.  Further, at least 50% of such fine may be given as compensation to the heirs of the victim.  For any other violation where the penalty is not specified, the employer will be penalised with a fine between two and three lakh rupees.  On the other hand, if an employee violates provisions of the Code, he could be fined up to Rs 10,000.

Does the Code provide gender specific provisions?

The Code includes certain provisions specific to female and transgender workers.  With respect to women, the government can prohibit employment of women in certain organisations if working there may be dangerous to their health and safety.  Further, the Code allows female workers to work night shifts with their consent and subject to approval of the government.  The Code also acknowledges transgender persons as a third gender by requiring separate urinal and latrine accommodations, rest rooms, washing spaces, and locker rooms for male, female, and transgender workers.  

[1] Occupational Safety, Health and Working Conditions Code, 2019, Ministry of Labour and Employment, https://www.prsindia.org/sites/default/files/bill_files/Occupational%20Safety%2C%20Health%20and%20Working%20Conditions%20Code%2C%202019.pdf.

[2] Factories Act, 1948, Ministry of Labour and Employment, https://labour.gov.in/sites/default/files/TheFactoriesAct1948.pdf

[3] Mines Act, 1952, http://www.dgms.gov.in/writereaddata/UploadFile/Mines%20Act,%201952.pdf.

[4] Plantations Labour Act, 1951, https://labour.gov.in/sites/default/files/The-Plantation-Labour-Act-1951.pdf.

[5] Beedi and Cigar Workers (Conditions of Employment) Act, 1966, http://labour.bih.nic.in/acts/beedi-and-cigar-workers-act-1966.pdf.

Explainer: The Right to Information (Amendment) Bill, 2019

The Right to Information (Amendment) Bill, 2019 that amends the Right to Information Act, 2005 was introduced in Lok Sabha today.

What does the RTI Act do?  

Under the RTI Act, 2005, Public Authorities are required to make disclosures on various aspects of their structure and functioning.  This includes: (i) disclosure on their organisation, functions, and structure, (ii) powers and duties of its officers and employees, and (iii) financial information.  The intent of such suo moto disclosures is that the public should need minimum recourse through the Act to obtain such information.  If such information is not made available, citizens have the right to request for it from the Authorities.  This may include information in the form of documents, files, or electronic records under the control of the Public Authority.  The intent behind the enactment of the Act is to promote transparency and accountability in the working of Public Authorities.  

Who is included in the ambit of ‘Public Authorities’?

‘Public Authorities’ include bodies of self-government established under the Constitution, or under any law or government notification.  For instance, these include Ministries, public sector undertakings, and regulators.  It also includes any entities owned, controlled or substantially financed and non-government organizations substantially financed directly or indirectly by funds provided by the government. 

How is the right to information enforced under the Act?

The Act has established a three tier structure for enforcing the right to information guaranteed under the Act.

Public Authorities designate some of their officers as Public Information Officers.  The first request for information goes to Central/State Assistant Public Information Officer and Central/State Public Information Officer, designated by the Public Authorities. These Officers are required to provide information to an RTI applicant within 30 days of the request.  Appeals from their decisions go to an Appellate Authority.  Appeals against the order of the Appellate Authority go to the State Information Commission or the Central Information Commission.  These Information Commissions consists of a Chief Information Commissioner, and up to 10 Information Commissioners.  

What does the Right to Information (Amendment) Bill, 2019 propose?

The Bill changes the terms and conditions of service of the CIC and Information Commissioners at the centre and in states.  Table 1 below compares the provisions of the Act and the Bill. 

Table 1:  Comparison of the provisions of the Right to Information Act, 2005 and the Right to Information (Amendment) Bill, 2019

Provision

RTI Act, 2005

RTI (Amendment) Bill, 2019

Term

The Chief Information Commissioner (CIC) and Information Commissioners (ICs) (at the central and state level) will hold office for a term of five years. 

The Bill removes this provision and states that the central government will notify the term of office for the CIC and the ICs.

Quantum of Salary

The salary of the CIC and ICs (at the central level) will be equivalent to the salary paid to the Chief Election Commissioner and Election Commissioners, respectively. 

Similarly, the salary of the CIC and ICs (at the state level) will be equivalent to the salary paid to the Election Commissioners and the Chief Secretary to the state government, respectively. 

 The Bill removes these provisions and states that the salaries, allowances, and other terms and conditions of service of the central and state CIC and ICs will be determined by the central government.

 

Deductions in Salary

The Act states that at the time of the appointment of the CIC and ICs (at the central and state level), if they are receiving pension or any other retirement benefits for previous government service, their salaries will be reduced by an amount equal to the pension. 

Previous government service includes service under: (i) the central government, (ii) state government, (iii) corporation established under a central or state law, and (iv) company owned or controlled by the central or state government.

The Bill removes these provisions.

 

Sources:  Right to Information Act, 2005; Right to Information (Amendment) Bill, 2019; PRS.

Understanding the AERA (Amendment) Bill, 2019

Earlier this week, Rajya Sabha passed the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, and the Bill is now pending in Lok Sabha.  The Bill amends the Airports Economic Regulatory Authority of India Act, 2008.  The Act established the Airports Economic Regulatory Authority of India (AERA).  AERA regulates tariffs and other charges for aeronautical services provided at civilian airports with annual traffic above 15 lakh passengers.  It also monitors the performance standard of services across these airports.  In this post, we explain the amendments that the Bill seeks to bring in and some of the issues around the functioning of the regulator.

Why was AERA created, and what is its role?

Few years back, private players started operating civilian airports.  Typically, airports run the risk of becoming a monopoly because cities usually have one civilian airport which controls all aeronautical services in that area.  To ensure that private airport operators do not misuse their monopoly, the need for an independent tariff regulator in the airport sector was felt.  Consequently, the Airports Economic Regulatory Authority of India Act, 2008 (AERA Act) was passed which set up AERA. 

AERA regulates tariffs and other charges (development fee and passenger service fee) for aeronautical services (air traffic management, landing and parking of aircraft, ground handling services) at major airports.  Major airports include civilian airports with annual traffic above 15 lakh passengers.  In 2018-19, there were 32 such airports (see Table 1).  As of June 2019, 27 of these are being regulated by AERA (AERA also regulates tariffs at the Kannur airport which was used by 89,127 passengers in 2018-19).  For the remaining airports, tariffs are determined by the Airports Authority of India (AAI), which is a body under the Ministry of Civil Aviation that also operates airports. 

What changes are being proposed in the Bill?

The Bill seeks to do two things:

Definition of major airports:  Currently, the AERA Act defines a major airport as one with annual passenger traffic over 15 lakh, or any other airports as notified by the central government.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh. 

Tariff determination by AERA:  Under the Act, AERA is responsible for determining the: (i) tariff for aeronautical services every five years, (ii) development fees, and (iii) passengers service fee.  It can also amend the tariffs in the interim period.  The Bill adds that AERA will not determine: (i) tariff, (ii) tariff structures, or (iii) development fees, in certain cases.  These cases include those where such tariff amounts were a part of the bid document on the basis of which the airport operations were awarded.  AERA will be consulted (by the concessioning authority, the Ministry of Civil Aviation) before incorporating such tariffs in the bid document, and such tariffs must be notified.

Why is the Act getting amended?

The Statement of Objects and Reasons of the Bill states that the exponential growth of the sector has put tremendous pressure on AERA, while its resources are limited.  Therefore, if too many airports come under the purview of AERA, it will not be able to perform its functions efficiently.  If the challenge for AERA is availability of limited resources, the question is whether this problem may be resolved by reducing its jurisdiction (as the Bill is doing), or by improving its capacity. 

Will the proposed amendments strengthen the role of the regulator?

When AERA was created in 2008, there were 11 airports with annual passenger traffic over 15 lakh.  With increase in passenger traffic across airports, currently 32 airports are above this threshold.  The Bill increases the threshold of annual passenger traffic for major airports to over 35 lakh.  With this increase in threshold, 16 airports will be regulated by AERA.  It may be argued that instead of strengthening the role of the regulator, its purview is being reduced. 

Before AERA was set up, the Airports Authority of India (AAI) fixed the aeronautical charges for the airports under its control and prescribed performance standards for all airports and monitored them.  Various committees had noted that AAI performed the role of airport operator as well as the regulator, which resulted in conflict of interest.  Further, there was a natural monopoly in airports and air traffic control.  In order to regulate the growing competition in the airline industry, and to provide a level playing field among different categories of airports, AERA was set up.  During the deliberations of the Standing Committee examining the AERA Bill, 2007, the Ministry of Civil Aviation had noted that AERA should regulate tariff and monitor performance standards only at major airports.  Depending upon future developments in the sector, other functions could be subsequently assigned to the regulator.

How would the Bill affect the regulatory regime?

Currently, there are 32 major airports (annual traffic above 15 lakh), and AERA regulates tariffs at 27 of these.  As per the Bill, AERA will regulate 16 major airports (annual traffic above 35 lakh).  The remaining 16 airports will be regulated by AAI.  Till 2030-31, air traffic in the country is expected to grow at an average annual rate of 10-11%.  This implies that in a few years, the traffic at the other 16 airports will increase to over 35 lakh and they will again fall under the purview of AERA.  This may lead to constant changes in the regulatory regime at these airports.  The table below provides the current list of major airports:

Table 1: List of major airports in India (as on March 2019) 

Airports with annual traffic above 35 lakh Airports with annual traffic between 15 and 35 lakh

Ahmedabad

Goa

Mumbai

Amritsar

Madurai*

Srinagar

Bengaluru

Guwahati

Patna

Bagdogra

Mangalore

Trichy*

Bhubaneswar

Hyderabad

Pune

Calicut

Nagpur

Varanasi

Chennai

Jaipur

Thiruvananthapuram

Chandigarh

Port Blair*

Vishakhapatnam

Cochin

Kolkata

 

Coimbatore

Raipur*

 

Delhi

Lucknow

 

Indore

Ranchi*

 

* - AERA does not regulate tariffs at these airports currently. 

Sources: AAI Traffic News; AERA website; PRS.

Examining the anti-trafficking Bill, 2018

The Trafficking of Persons (Prevention, Protection and Rehabilitation) Bill, 2018 is listed for passage in Rajya Sabha today.  Earlier this year, the Bill was introduced and passed in Lok Sabha.  It provides for the prevention, rescue, and rehabilitation of trafficked persons.  If the Bill is not passed today, it will lapse with the dissolution of the 16th Lok Sabha.  In this post, we analyse the Bill in its current form.

What was the need for a new law?

According to the National Crime Records Bureau, 8,132 human trafficking cases were reported in India in 2016 under the Indian Penal Code, 1860.[i]  In the same year, 23,117 trafficking victims were rescued.  Of these, the highest number of persons were trafficked for forced labour (45.5%), followed by prostitution (21.5%).  Table 1 provides details of persons trafficked for various purposes (as of 2016). 

Table 1: Victims rescued by type of purpose of trafficking ​

Purpose 2016 (as a %)
Forced labour 10,509 45.5
Prostitution 4,980 21.5
Other forms of sexual exploitation 2,590 11.5
Domestic servitude 412 1.8
Forced marriage 349 1.5
Petty crimes 212 0.9
Child pornography 162 0.7
Begging 71 0.3
Drug peddling 8 0
Removal of organs 2 0
Other reasons 3,824 16.5
Total persons 23,117 100

Source: Human Trafficking, Crime in India, 2016, National Crime Records Bureau; PRS

In India, the offence of trafficking is dealt with under different laws.  Trafficking is primarily an offence under the Indian Penal Code, 1860.  It defines trafficking to include recruiting, transporting, or harboring persons by force or other means, for exploitation.  In addition, there are a range of laws presently which deal with bonded labour, exploitation of children, and commercial sexual exploitation.  Each of these laws operate independently, have their own enforcement machinery and prescribe penalties for offences related to trafficking. 

In 2015, pursuant to a Supreme Court order, the Ministry of Women and Child Development constituted a Committee to identify gaps in the current legislation on trafficking and to examine the feasibility of a comprehensive legislation on trafficking.[ii]  Consequently, the Trafficking Bill was introduced in Lok Sabha by the Minister of Women and Child Development, Ms. Maneka Gandhi in July, 2018.

What does the Bill seek to do?

The Bill provides for the investigation of trafficking cases, and rescue and rehabilitation of trafficked victims.  It includes trafficking for the purposes of sexual exploitation, slavery, or forced removal of organs.  In addition, the law also considers trafficking for certain purposes, such as for begging or for inducing early sexual maturity, to be an aggravated form of trafficking.  These forms of trafficking attract a higher punishment.  

In order to punish trafficking, the Bill provides for the setting up of investigation and rehabilitation authorities at the district, state and national level.  The primary investigation responsibility lies with anti-trafficking police officers and anti-trafficking units constituted at the district level.  The authority at the national level can take over investigation of cases referred to it by two or more states. 

The Bill also provides for the setting up of Protection Homes and Rehabilitation Homes to provide care and rehabilitation to the victims.  The Bill supplements the rehabilitation efforts through a Rehabilitation Fund, which will be used to set up the Protection and Rehabilitation Homes.  Special Courts will be designated in every district to complete trial of trafficking cases within a year. 

Additionally, the Bill specifies penalties for various offences including for promotion of trafficking and trafficking with the aid of media.  All offences are cognizable (i.e. police officer can arrest without a warrant) and non-bailable.  If a person is found guilty under the Bill and also under any other law, the punishment which is higher will apply to the offender.

How does the Bill compare with existing trafficking laws?

The current Bill does not replace but adds to the existing legal framework.  As discussed above, currently a range of laws deal with various aspects of trafficking.  For instance, the Immoral Traffic (Prevention) Act, 1986 covers trafficking for commercial sexual exploitation while the Bonded Labour System (Abolition) Act, 1976 deals with punishment for employment of bonded labour.  These laws specify their own procedures for enforcement and rehabilitation. 

One of the challenges with the Bill is that these laws will continue to be in force after the Bill.  Since each of these laws have different procedures, it is unclear as to which procedure will apply in certain cases of trafficking.  This may result in overlap in implementation of these laws.  For instance, under the ITPA, 1986, Protective Homes provide for rehabilitation of victims of sexual exploitation.  The Bill also provides for setting up of Protection Homes.  When a victim of sexual exploitation is rescued, it is not clear as to which of these Homes she will be sent to.  Further, each of these laws designate special courts to hear offences.  The question arises as to which of these courts will hear the case. 

Are the offences in the Bill reasonably tailored?

As discussed earlier, the Bill imposes penalties for various offences connected with trafficking.  One of the offences states that if trafficking is committed on a premise, it will be presumed that the owner of the premise had knowledge of the offence.  The implication of this would be that if an owner lives in a different city, say Delhi, and lets out his house in Mumbai to another person, and this person is discovered to be detaining girls for sexual exploitation on the premise, it will be presumed that the owner knew about the commission of the offence.  In such circumstances, he will have to prove that he did not know about the offence being committed on his premise.  This provision is a departure from the standard principle in criminal law where the guilt of the accused has to be proved and not presumed.   

There are other laws where the owner of a property is presumed guilty.  However, the prosecution is required to prove certain facts before presuming his guilt.  For instance, under the Narcotics and Psychotropic Substances Act, 1985 it is presumed that the owner has knowledge of an offence committed on his property.  However, the Bill clarifies that the presumption will only apply if the prosecution can prove that the accused was connected with the circumstances of the case.  For instance, an owner of a truck is not presumed to be guilty only because his truck was used for transporting drugs.[iii]  However, he may be considered guilty if he was also driving the truck in which drugs were transported.[iv]  The Bill does not contain such safeguards and this provision may therefore violate Article 21 of the Constitution which requires that laws which deprive a person of his life or personal liberty should be fair and reasonable.[v] 

Does the Bill provide any protection to trafficking victims compelled to commit crimes?

The Bill provides immunity to a victim who commits an offence punishable with death, life imprisonment or imprisonment for 10 years.  Immunity to victims is desirable to ensure that they are not prosecuted for committing crimes which are a direct consequence of them being trafficked.[vi]  However, the Bill provides immunity only for serious crimes.  For instance, a trafficked victim who commits murder under coercion of his traffickers may be able to claim immunity from being tried for murder.  However, if a trafficked victim commits petty theft (e.g. pickpocketing) under coercion of his traffickers, he will not be able to claim immunity. 

Further, the immunity is only available when the victim can show that the offence was committed under coercion, threat, intimidation or undue influence, and there was a reasonable apprehension of death or injury.  Therefore, it may be argued that the threshold to claim immunity from prosecution may be too high and may defeat the purpose for providing such immunity.  

[i]. ‘Crime in India’ 2016, National Crime Records Bureau.

[ii]. Prajwala vs. Union of India 2016 (1) SCALE 298.

[iii]. Bhola Singh vs. State of Punjab (2011) 11 SCC 653.

[iv]. Sushant Gupta vs. Union of India 2014 (308) ELT 661 (All.).

[v]  Maneka Gandhi vs. Union of India 1978 AIR 597.

[vi]. Guideline 7, ‘Recommended Principles and Guidelines on Human Rights and Human Trafficking’, OHCHR,  https://www.ohchr.org/Documents/Publications/Traffickingen.pdf.

Indian Railways: Analysing the Budget

Finances of the Railways were presented along with the Union Budget on February 1, 2018 (the Railways Budget was merged with the Union Budget last year).  In the current Budget Session, Lok Sabha is scheduled to discuss the allocation to the Ministry of Railways.  In light of this, we discuss Railways’ finances, and issues that the transporter has been facing with regard to financing.

What are the different sources of revenue for Railways?

Indian Railways has three primary sources of revenue: (i) its own internal resources (revenue from freight and passenger traffic, leasing of railway land, etc.), (ii) budgetary support from the central government, and (iii) extra budgetary resources (such as market borrowings, institutional financing).

Figure 1Railways’ internal revenue for 2018-19 is estimated at Rs 2,01,090 crore which is 7% higher than the revised estimates of 2017-18.  Majority of this revenue comes from traffic (both freight and passenger), and is estimated at Rs 2,00,840 crore.  In the last few years, Railways has been struggling to run its transportation business, and generate its own revenue.  The growth rate of Railways’ earnings from its core business of running freight and passenger trains has been declining.  This is due to a decline in the growth of both freight and passenger traffic (see Figure 1).  Railways is also slowly losing traffic share to other modes of transport such as roads and airlines.  The share of Railways in total freight traffic has declined from 89% in 1950-51 to 30% in 2011-12.

 

The Committee on Restructuring Railways (2015) had observed that raising revenue for Railways is a challenge because: (i) investment is made in projects that do not have traffic and hence do not generate revenue, (ii) the efficiency improvements do not result in increasing revenue, and (iii) delays in projects results in cost escalation, which makes it difficult to recover costs.  Railways also provides passenger fares that are heavily subsidised, which results in the passenger business facing losses of around Rs 33,000 crore in a year (in 2014-15).  Passenger fares are also cross-subsidised by charging higher rates for freight.  The consequence is that freight rates have been increasing which has resulted in freight traffic moving towards roads.

Figure 2Figure 2 shows the trends in capital outlay over the last decade.  A decline in internal revenue generation has meant that Railways funds its capital expenditure through budgetary support from the central government and external borrowings.  While the support from central government has mostly remained consistent, Railways’ borrowings have been increasing.  Various committees have noted that an increased reliance on borrowings will further exacerbate the financial situation of Railways.

The total proposed capital outlay (or capital expenditure) for 2018-19 is Rs 1,48,528 crore which is a 24% increase from the 2017-18 revised estimates (Rs 1,20,000 crore).  Majority of this capital expenditure will be financed through borrowings (55%), followed by the budgetary support from the central government (37%).  Railways will fund only 8% of its capital expenditure from its own internal resources.

How can Railways raise more money?

The Committee on Restructuring Railways had suggested that Railways can raise more revenue through private participation in the following ways: (i) service and management contracts, (ii) leasing to and from the private sector, (iii) joint ventures, and (iv) private ownership.  However, private participation in Railways has been muted as compared to other sectors such as roads, and airports.

Figure 3One of the key reasons for the failure of private participation in Railways is that policy making, the regulatory function, and operations are all vested within the same organisation, that is, the Ministry of Railways.  Railways’ monopoly also discourages private sector entry into the market.  The Committee on Restructuring Railways had recommended that the three roles must be separated from each other.  It had also recommended setting up an independent regulator for the sector.  The regulator will monitor whether tariffs are market determined and competitive.

Where does Railways spend its money?

The total expenditure for 2018-19 is projected at Rs 1,88,100 crore, which is 4% higher than 2017-18.  Staff wages and pension together comprise more than half of the Railways’ expenditure.  For 2018-19, the expenditure on staff is estimated at Rs 76,452 crore.  Allocation to the Pension Fund is estimated at Rs 47,600 crore.  These constitute about 66% of the Railways’ expenditure in 2018-19.

Railways’ primary expenditure, which is towards the payment of salaries and pension, has been gradually increasing (with a jump of around 15% each year in 2016-17 and 2017-18 due to implementation of the Seventh Pay Commission recommendations).  Further, the pension bill is expected to increase further in the years to come, as about 40% of the Railways staff was above the age of 50 years in 2016-17.

The Committee on Restructuring Railways (2015) had observed that the expenditure on staff is extremely high and unmanageable.  This expense is not under the control of Railways and keeps increasing with each Pay Commission revision.  It has also been observed that employee costs (including pensions) is one of the key components that reduces Railways’ ability to generate surplus, and allocate resources towards operations.

What is the allocation towards depreciation of assets?

Railways maintains a Depreciation Reserve Fund (DRF) to finance the costs of new assets replacing the old ones.  In 2018-19, appropriation to the DRF is estimated at Rs 500 crore, 90% lower than 2017-18 (Rs 5,000 crore).  In the last few years, appropriation to the DRF has decreased significantly from Rs 7,775 crore in 2014-15 to Rs 5,000 crore last year.  Provisioning Rs 500 crore towards depreciation might be an extremely small amount considering the scale of infrastructure managed by the Indian Railways, and the requirement to replace old assets to ensure safety.

The Standing Committee on Railways (2015) had observed that appropriation to the DRF is the residual amount after appropriation to the Pension Fund, instead of the actual requirement for maintenance of assets.  Under-provisioning for the DRF has also been observed as one of the reasons behind the decline in track renewals, and procurement of wagons and coaches.

Is there any provision towards safety?

Last year, the Rashtriya Rail Sanraksha Kosh was created to provide for passenger safety.  It was to have a corpus of one lakh crore rupees over a period of five years (Rs 20,000 crore per year).  The central government was to provide a seed amount of Rs 1,000 crore, and the remaining amount would be raised by the Railways from their own revenues or other sources.

As per the revised estimates of 2017-18, no money was allocated towards this fund.  In 2018-19, Rs 5,000 crore has been allocated for it.  With the Railways struggling to meet its expenditure and declining internal revenues, it is unclear how Railways will fund the remaining amount of Rs 95,000 crore for the Rail Sanraksha Kosh.

What happened to the dividend that was waived off last year?

Railways used to pay a return on the budgetary support it received from the government every year, known as dividend.  The rate of this dividend was about 5% in 2015-16.  From 2016-17, the requirement of paying dividend was waived off.  The last dividend amount paid was Rs 8,722 crore in 2015-16.

The Standing Committee on Railways (2017) had noted that part of the benefit from dividend is being utilised to meet the shortfall in the traffic earnings of Railways.  This defeats the purpose of removing the dividend liabilities since they are not being utilised in creating assets or increasing the net revenue of Railways.

Making Smart Cities

In the last decade, the government has implemented several schemes to address issues related to urbanisation and aid the process of urban development.  One of the schemes is the Smart Cities Mission, which intends to take advantage of the developments in information technology in developing the urban development strategy, across 100 cities.  Last week the government announced the list of 9 new Smart Cities, taking the total to 99.  In light of this, we look at the Smart Cities Mission and a few issues with it.

What is a Smart City?

The primary objective of the Mission is to develop cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment, and apply ‘smart’ solutions.

However, the Mission document does not provide one definition of a Smart City.  Instead it allows cities to come up with their own solutions of what they identify as a Smart City.  The guidelines suggest that the core infrastructure elements in a Smart City will include: (i) adequate water supply, (ii) assured electricity supply, (iii) sanitation, including solid waste management, (iv) efficient urban mobility and public transport, (v) affordable housing, (vi) robust IT connectivity, and (vii) good governance.  ‘Smart’ solutions may include (i) energy efficient buildings, (ii) electronic service delivery, (iii) intelligent traffic management, (iv) smart metering, (v) citizen engagement, etc.

How were the Smart Cities selected?

The Mission was introduced in the form of a competition, called the Smart City challenge.  The first stage was in July 2015 when states nominated their cities for the competition.  In August 2015, the Ministry of Urban Development selected 100 of those cities to participate in the competition.  These cities were required to develop their smart city plans (SCPs) and compete against each other.  The SCPs were evaluated on the basis of the solutions, the processes followed, the feasibility and cost effectiveness of the plans, and citizen engagement.  Over the last 2 years, the Ministry has announced winner cities in batches.  So far, 99 cities have been selected under the Mission.

What information do these SCPs contain?

The cities had to prepare their SCPs with two primary strategic components: (i) area-based development, and (ii) pan-city development.  The area-based development would cover a particular area of the city, and could have either a redevelopment model, or be a completely new development.  Pan-city development would envisage application of certain smart solutions across the city to the existing infrastructure.

Each city had to formulate its own concept, vision, mission and plan for a Smart City that was appropriate to its local context and resources.  The Ministry of Urban Development provided technical assistance, through consultancy firms, to cities for helping them prepare these strategic documents.

How will the Mission be implemented?

The Mission will be implemented at the city level by a Special Purpose Vehicle (SPV).  The SPV will plan, approve, release funds, implement, manage, monitor, and evaluate the Smart City development projects.

The SPV will be a limited company incorporated under the Companies Act, 2013 at the city-level.  It will be chaired by the Collector/ Municipal Commissioner of the Urban Development Authority.  The respective state and the Urban Local Body (ULB or municipality) will be the promoters in this company having 50:50 equity shareholding.

How are the Plans getting financed?

The Mission will be operated as a Centrally Sponsored Scheme.  The central government will provide financial support of up to Rs 48,000 crore over five years, that is, an average of Rs 500 crore per city.  The states and ULBs will have to contribute an equal amount.  The central government allocated Rs 4,000 crore towards the Mission in the 2017-18 budget.

Since funding from the government will meet only a part of the funding required, the rest will have to be raised from other sources including: (i) states/ ULBs own resources from collection of user fees, land monetization, etc., (ii) innovative finance mechanisms such as municipal bonds, (iii) leverage borrowings from financial institutions (such as banks), and (iv) the private sector through Public Private Partnerships (PPPs).

The total cost of projects proposed under the various SCPs of the 90 winner cities is Rs 1.9 lakh crore.  About 42% of this amount will come from central and state funding, 23% through private investments and PPPs, and 19% through convergence with other schemes (such as HRIDAY, AMRUT, Swachh Bharat-Urban).  The remaining will be generated by the cities through the levy of local taxes, and user fees.

What are some of the issues to consider?

Financial capacity of cities:  Under the Mission, cities have to generate additional revenue through various sources including market borrowings, PPPs, and land monetization.  The High Powered Expert Committee on Indian Urban Infrastructure and Services (HPEC) had observed that ULBs in India are among the weakest in the world, both in terms of capacity to raise resources and financial autonomy.  Even though ULBs have been getting higher allocations from the centre and states, and tax devolution to them has increased, their own tax bases are narrow.  Further, owing to their poor governance and financial situation, ULBs find it difficult to access external financing.

Such a situation may pose problems when implementing the Mission, where the ULBs have to raise a significant share of the revenue through external sources (PPPs, market borrowings).  For example, the Bhubaneswar Smart City Plan has a total project cost of Rs 4,537 crore (over five years), while the city’s annual budget for 2014-15 was Rs 469 crore.

In order to improve the finances of the ULBs, committees have made various recommendations, which include:

  • State governments make legislative changes to give more taxation powers and autonomy to ULBs for improving their revenue collections.
  • ULBs could raise their own revenue by tapping into land-based financing sources, and introducing reforms to strengthen non-tax revenues (such as water and sewerage charges, parking fees, etc.).
  • Municipal bonds may also be used as a source of revenue for ULBs.

The government has recently introduced a few policies and mechanisms to address municipal financing.  Examples include value capture financing through public investments in infrastructure projects, and a credit rating system for cities.  In June 2017, the Pune Municipal Corporation raised Rs 200 crore by issuing municipal bonds.

Technical capacity of the ULBs:  The Smart Cities Mission seeks to empower ULBs to raise their own revenue, and also lays emphasis on the capacity building of ULBs.  The HPEC had observed that municipal administration has suffered due to: (i) presence of untrained and unskilled manpower, and (ii) shortage of qualified technical staff and managerial supervisors.  It had recommended improving the technical capacity of ULBs by providing technical assistance to state governments, and ULBs in planning, financing, monitoring, and operation of urban programmes.  The central government had allocated Rs 10.5 crore towards the capacity building component of the Mission in 2017-18.

The Ministry of Urban Development has been running several programmes to improve capacity of ULBs.  This includes MoUs with 18 states to conduct training programmes for their ULB staff.

Coverage of the Mission:  The Mission covers 100 cities, of which 99 have been announced as winners so far.   The urban population that will be impacted through the Mission is around 96 million (data for 90 cities excluding the recently announced 9 cities).

As per Census 2011, India’s urban population was 377 million.  The Mission impacts about 25% of this population.  Further, most of the SCPs approved so far focus on area-based development, thus affecting a particular area of the cities.  About 80% of the total project cost proposed is towards this model of development.  In each city, this area-based development will cover up to 50 acres of area.  The remaining 20% of the project cost is towards pan-city development proposals, which provide smart planning solutions for the entire city.  It may be argued that even within the selected cities, the Mission will only impact few selected areas, and not necessarily help with development of the entire city.

Explained: The National Medical Commission Bill, 2017

The National Medical Commission Bill, 2017 was introduced in Lok Sabha recently and is listed for consideration and passage today.[1]  The Bill seeks to regulate medical education and practice in India.  To meet this objective, the Bill repeals the Indian Medical Council Act, 1956 and dissolves the current Medical Council of India (MCI).  The MCI was established under the 1956 Act, to establish uniform standards of higher education qualifications in medicine and regulating its practice.[2]

A Committee was set up in 2016, under the NITI Aayog with Dr. Arvind Panagariya as its chair, to review the 1956 Act and recommend changes to improve medical education and the quality of doctors in India.[3]  The Committee proposed that the Act be replaced by a new law, and also proposed a draft Bill in August 2016.

This post looks at the key provisions of the National Medical Commission Bill, 2017 introduced in Lok Sabha recently, and some issues which have been raised over the years regarding the regulation of medical education and practice in the country.

What are the key issues regarding the regulation of medical education and practice?

Several experts have examined the functioning of the MCI and suggested a different structure and governance system for its regulatory powers.3,[4]  Some of the issues raised by them include:

Separation of regulatory powers

Over the years, the MCI has been criticised for its slow and unwieldy functioning owing to the concentration and centralisation of all regulatory functions in one single body.  This is because the Council regulates medical education as well as medical practice.  In this context, there have been recommendations that all professional councils like the MCI, should be divested of their academic functions, which should be subsumed under an apex body for higher education to be called the National Commission for Higher Education and Research.[5]  This way there would be a separation between the regulation of medical education from regulation of medical practice.

An Expert Committee led by Prof. Ranjit Roy Chaudhury (2015), recommended structurally reconfiguring the MCI’s functions and suggested the formation of a National Medical Commission through a new Act.3   Here, the National Medical Commission would be an umbrella body for supervision of medical education and oversight of medial practice.  It will have four segregated verticals under it to look at: (i) under-graduate medical education, (ii) post-graduate medical education, (iii) accreditation of medical institutions, and (iv) the registration of doctors.  The 2017 Bill also creates four separate autonomous bodies for similar functions.

Composition of MCI

With most members of the MCI being elected, the NITI Aayog Committee (2016) noted the conflict of interest where the regulated elect the regulators, preventing the entry of skilled professionals for the job.  The Committee recommended that a framework must be set up under which regulators are appointed through an independent selection process instead.

Fee Regulation 

The NITI Aayog Committee (2016) recommended that a medical regulatory authority, such as the MCI, should not engage in fee regulation of private colleges.  Such regulation of fee by regulatory authorities may encourage an underground economy for medical education seats with capitation fees (any payment in excess of the regular fee), in regulated private colleges.  Further, the Committee stated that having a fee cap may discourage the entry of private colleges limiting the expansion of medical education in the country.

Professional conduct

The Standing Committee on Health (2016) observed that the present focus of the MCI is only on licensing of medical colleges.4  There is no emphasis given to the enforcement of medical ethics in education and on instances of corruption noted within the MCI.  In light of this, the Committee recommended that the areas of medical education and medical practice should be separated in terms of enforcement of the appropriate ethics for each of these stages.

What does the National Medical Commission, 2017 Bill seek do to?

The 2017 Bill sets up the National Medical Commission (NMC) as an umbrella regulatory body with certain other bodies under it. The NMC will subsume the MCI and will regulate the medical education and practice in India.   Under the Bill, states will establish their respective State Medical Councils within three years.  These Councils will have a role similar to the NMC, at the state level.

Functions of the NMC include: (i) laying down policies for regulating medical institutions and medical professionals, (ii) assessing the requirements of human resources and infrastructure in healthcare, (iii) ensuring compliance by the State Medical Councils with the regulations made under the Bill, and (iv) framing guidelines for determination of fee for up to 40% of the seats in the private medical institutions and deemed universities which are governed by the Bill.

Who will be a part of the NMC?

The NMC will consist of 25 members, appointed by the central government.  It will include representatives from Indian Council of Medical Research, and Directorate General of Health Services. A search committee will recommend names to the central government for the post of Chairperson, and the part-time members.  These posts will have a maximum term of four years, and will not be eligible for extension or reappointment.

What are the regulatory bodies being set up under the NMC?

The Bill sets up four autonomous boards under the supervision of the NMC, as recommended by various experts.  Each autonomous board will consist of a President and two members, appointed by the central government (on the recommendation of the search committee).  These bodies are:

  • The Under-Graduate Medical Education Board (UGMEB) and the Post-Graduate Medical Education Board (PGMEB): These two bodies will be responsible for formulating standards, curriculum, guidelines, and granting recognition to medical qualifications at the under-graduate and post-graduate levels respectively;
  • The Medical Assessment and Rating Board: The Board will have the power to levy monetary penalties on institutions which fail to maintain the minimum standards as laid down by the UGMEB and the PGMEB.  It will also grant permissions for establishing new medical colleges; and
  • The Ethics and Medical Registration Board: The Board will maintain a National Register of all licensed medical practitioners, and regulate professional conduct.  Only those included in the Register will be allowed to practice as doctors.

What does the Bill say regarding the conduct of medical entrance examinations?

There will be a uniform National Eligibility-cum-Entrance Test (NEET) for admission to under-graduate medical education in all medical institutions governed by the Bill.  The NMC will specify the manner of conducting common counselling for admission in all such medical institutions.

Further, there will be a National Licentiate Examination for the students graduating from medical institutions to obtain the license for practice.  This Examination will also serve as the basis for admission into post-graduate courses at medical institutions.

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[1] The National Medical Commission Bill, 2017, http://www.prsindia.org/uploads/media/medical%20commission/National%20Medical%20Commission%20Bill,%202017.pdf.

[2] Indian Medical Council Act, 1933.

[3] A Preliminary Report of the Committee on the Reform of the Indian Medical Council Act, 1956, NITI Aayog, August 7, 2016, http://niti.gov.in/writereaddata/files/document_publication/MCI%20Report%20.pdf.

[4] “Report no. 92: Functioning of the Medical Council of India”, Standing Committee on Health and Family Welfare, March 8, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Health%20and%20Family%20Welfare/92.pdf

[5] “Report of the Committee to Advise on Renovation and Rejuvenation of Higher Education”, Ministry of Human Resource Development, 2009, http://mhrd.gov.in/sites/upload_files/mhrd/files/document-reports/YPC-Report.pdf.