Highlights of this Issue

Monsoon Session 2021 of Parliament concluded; 20 Bills passed

Bills passed include the General Insurance Business (Nationalisation) Amendment Bill, 2021, the Tribunals Reforms Bill, 2021, and the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021.

The Constitution (127th Amendment) Bill, 2021 passed in Parliament

The Bill amends the Constitution to allow states and union territories to prepare their own list of socially and educationally backward classes, without consulting the National Commission for Backward Classes.

GDP grows at 20.1% in first quarter of 2021-22 on low base of last year
Gross Domestic Product (at constant 2011-12 prices) grew at 20.1% during the first quarter (April-June) of 2021-22 (year-on-year).  GDP had contracted by 24.4% during the first quarter of 2020-21.

National Monetisation Pipeline launched by central government

NITI Aayog launched the National Asset Monetisation Pipeline which aims to monetise assets worth almost six lakh crore rupees till 2024-25.

ZyCoV-D vaccine granted emergency use authorisation

As per the phase III clinical trials, the vaccine has 67% efficacy for symptomatic RT-PCR cases.   It will be administered in three doses to people of age 12 years and above.

Repo and reverse repo rates unchanged at 4% and 3.35% respectively
The Monetary Policy Committee kept repo and reverse repo rates unchanged at 4% and 3.35% respectively.  The Committee decided to continue with the accommodative stance of monetary policy.

Committees submit reports on various issues and implementation of schemes

These include reports examining schemes including the Pradhan Mantri Fasal Bima Yojana.  Reports on the impact of the COVID-19 pandemic on employment and learning gaps in education were also submitted.

TRAI recommendations on license regime based on different layers of telecom

TRAI recommended creating a separate authorisation level called access network provider authorisation within the Unified License to allow entities to operate in the network layer independently.

Plastic Waste Management (Amendment) Rules, 2021 notified

The 2021 Rules ban certain single-use plastic items (such as cutlery).  The minimum thickness of plastic carry bags, which used to be 50 microns, will increase to 75 microns this year and 120 microns next year.

Draft amendments on investigation and compensation for road accidents released

Draft amendments to fast-track investigations of road accidents released.  Draft schemes seeking to increase compensation for accidents leading to injury or death, and to establish a fund for victims of accidents released.

Drone Rules liberalising drone operations in India notified

The Drone Rules, 2021 replacing the Unmanned Aircraft System Rules, 2021. liberalise the regulation and operation of drones in India.

National Mission on Edible Oils - Oil Palm approved by Cabinet

Oil farmers will be provided with an assured price and assistance for inputs. Additional assistance for the North East and Andaman regions also outlined.  It will be applicable till 2037 and have an outlay of Rs 11,040 crore. 

Omir Kumar (omir@prsindia.org)

The Monsoon session of Parliament was held from July 19, 2021 to August 11, 2021, a total of 17 days.^[1]  The session was scheduled to end on August 13, 2021, but was curtailed by two days.   

During the session, Parliament passed 20 Bills (excluding two Appropriation Bills).   15 of these Bills were introduced during the session.  These include four Bills to replace Ordinances: the Tribunals Reforms Bill, 2021, the Insolvency and Bankruptcy Code (Amendment) Bill, 2021, the Essential Defence Service Bill, 2021, and the Commission for Air Quality Management in National Capital Region and Adjoining Areas Bill, 2021.  Other Bills passed in the session include the Constitution (One Hundred and Twenty-seventh Amendment) Bill, the Taxation Laws (Amendment) Bill, 2021, the General Insurance Business (Nationalisation) Amendment Bill, 2021, and the Juvenile Justice Amendment Bill, 2021.

For more details on legislative business taken up during the Monsoon Session 2021, please see here.  For details on the functioning of Parliament during the session, please see here

 

As of August 31, 2021, there were 3.28 crore confirmed cases of COVID-19 in India.[2]   Of these, 3.20 crore (97.5%) had been cured/discharged and 4.39 lakh (1.3%) persons had died.  As of August 31, 2021, 49 crore people have received the first dose of a vaccine, and 15 crore people have been fully vaccinated.[3]  For details on the number of daily cases in the country and across states, see here.  

With the spread of COVID-19, the central government has announced several policy decisions to contain the spread, and financial measures to support citizens and businesses who would get affected.  For details on the major notifications released by centre and the states, please see here.  Key announcements made in this regard in August 2021 are as follows.

Guidelines issued to state governments for management of COVID-19 pandemic

Shubham Dutt (shubham@prsindia.org)

In June 2021, the Ministry of Home Affairs had issued guidelines to state and union territory governments regarding the management of COVID-19 pandemic.[4]  These guidelines were earlier applicable till August 31, 2021.4  The applicability of these guidelines has been extended till September 30, 2021.[5]   Key features of the guidelines include: 

• Principles for relaxing restrictions: States and union territories with declining cases may relax lockdown restrictions at the district level.  The guidelines recommend implementing such measures based on: (i) the case positivity rate (the number of positive cases out of samples tested), and (ii) availability of health infrastructure (such as hospital beds and oxygen supply).
   
• Monitoring: The guidelines recommend states and union territories to regularly monitor districts with higher numbers of active cases per million population.  This would help predict the need for upgrading the health infrastructure.
   
• Management of COVID-19: The guidelines recommend various strategies to contain the spread of COVID-19, including: (i) adequate testing, (ii) planned vaccination with a focus on prompt coverage of priority groups, and (iii) following clinical management protocol and upgrading health infrastructure.

ZyCoV-D vaccine granted emergency use authorisation 

Aditya Kumar (aditya@prsindia.org)

The Drug Controller General of India (DCGI) granted emergency use authorisation to the vaccine - ZyCoV-D.[6]  It has been developed by Zydus Cadila in partnership with Department of Biotechnology.⁷  As per the phase III clinical trials, the vaccine has 66.6% efficacy for symptomatic RT-PCR cases.  The vaccine will be administered in three doses to people of age 12 years and above. 7

Guidelines and standard operating procedure for genomic surveillance for COVID-19 virus revised

Aditya Kumar (aditya@prsindia.org)

The Ministry of Health and Family Welfare revised guidelines and Standard Operating Procedure (SOP) on genomic surveillance for the COVID-19 virus.[7]  The initial guidelines were released in December 2020.[8]  The latest guidelines establish a three-component strategy for genome sequencing, consisting of: (i) screening and testing of international passengers, (ii) regular on-going surveillance in the community, and (iii) event-based surveillance.  Key features of the guidelines and SOP include: 

• Nodal officer: Each state must designate a nodal officer to coordinate activities between the state, sentinel sites (refers to RT-PCR test labs, secondary and tertiary care hospitals), genome sequencing laboratories, and the National Centre for Disease Control (NCDC).  These activities include: (i) sending samples from sentinel labs to genome sequencing labs, and (ii) identifying adequate number of sentinel sites in a state.
   
• Rapid response team: Each state is required to constitute a rapid response team.  These teams will conduct investigations if any mutation is detected in their respective states.  The investigation will include: (i) contact tracing of the case in which the mutation is detected, (ii) collection of samples of all family members of the person for genome sequencing, and (iii) providing daily status reports to NCDC.   A rapid response team will consist of a clinician, a microbiologist, and a member from Medical College (such as Community Medicine Department).  
   
• Review by states: States should regularly review all genome sequencing activities within their jurisdiction.  These activities include: (i) identification of adequate number of sentinel sites in the state based on certain factors (such as geographical and demographic representations), (ii) ensuring adequate samples for sequencing, and (iii) reviewing available state data (on matters such as variants of concern).

Guidelines for domestic inter-state travel revised

Rajat Asthana (rajat@prsindia.org) 

The Ministry of Health and Family Welfare issued revised guidelines for domestic inter-state travel, including advisories to passengers, operators of airlines, railways, ships, and buses.[9]  The guidelines came into effect from August 25, 2021.  Key features of the guidelines include:

• Advisory to states/UTs: The guidelines disallow prohibition on inter-state travel by air, rail, water, or road.  However, states are allowed to impose pre-entry requirement of negative COVID-19 test reports.  Further, states may exempt asymptomatic persons in possession of fully vaccinated certificate from the COWIN portal from the above requirements, provided 15 days have passed since the administration of the second dose.
   
• Advisory to Airports/Railway stations/Ports/Bus stations:   The guidelines mandate: (i) pre-departure thermal screening of all passengers, (ii) ensuring availability of an isolation room/ holding area (with working oxygen facility with trained personnel), and (iii) ensuring that disposal of masks, face shields and gloves is in accordance with the guidelines issued by the Central Pollution Control Board.   
   
• Advisory to Passengers:  The guidelines mandate passengers to use masks, maintain hand hygiene, and adhere to physical distancing norms.   In case a passenger develops a fever during or after travel, they are required to report the same to the travel attendant (cabin crew/ TTE/ bus conductor) or district and state authorities respectively.

Ban on scheduled international flights extended to September end

Rajat Asthana (rajat@prsindia.org)

The Directorate General of Civil Aviation (DGCA) extended the ban on scheduled international flights till September 30, 2021.[10]  The ban was initially imposed in March 2020.    Earlier, the ban was applicable till August 31, 2021.[11]  The restriction does not apply to cargo operations and flights specifically approved by the DGCA. 

 

Tushar Chakrabarty (tushar@prsindia.org

GDP grows at 20.1% in first quarter of 2021-22 on low base of last year

Gross Domestic Product (GDP) (at constant 2011-12 prices) grew at 20.1% during the first quarter (April-June) of 2021-22, over the corresponding period a year ago.[12]  Note that this high growth rate in the first quarter of 2021-22 is over a low base of last year, as GDP had contracted by 24.4% during the first quarter of 2020-21.  GDP grew at 1.6% during the fourth quarter (January-March) of 2020-21.

The main components of GDP are private consumption (spending by households on goods and services), government consumption (spending by government on goods and services), fixed capital formation (spending on investment such as construction, machinery), and net exports (exports minus imports).  Private consumption and gross fixed capital formation increased by 19.3% and 55.3% respectively, while government expenditure contracted by 4.8%.  While exports increased by 39.1%, imports increased by 60.2%, implying a decrease in net exports.

GDP across economic sectors is measured in terms of Gross Value Added (GVA).  Growth in all sectors was positive in the first quarter of 2021-22 over the corresponding quarter of 2020-21.   Construction sector registered the highest growth (68.3%) followed by manufacturing (49.6%).  Note that both these sectors had registered a significant contraction during the first quarter of 2020-21.

Table 1: Growth in GVA across sectors in Q1 of 2021-22 (%, year-on-year)

Sector	Q1  2020-21	Q4  2020-21	Q1  2021-22
Agriculture	3.5	3.1	4.5
Mining	-17.2	-5.7	18.6
Manufacturing	-36.0	6.9	49.6
Electricity	-9.9	9.1	14.3
Construction	-49.5	14.5	68.3
Trade	-48.1	-2.3	34.3
Financial services	-5.0	5.4	3.7
Public services	-10.2	2.3	5.8
GVA	-22.4	3.7	18.8
GDP	-24.4	1.6	20.1

Note: GVA is measured at base prices (2011-12).
 Sources: Ministry of Statistics and Programme Implementation; PRS.

Repo and reverse repo rates unchanged at 4% and 3.35% respectively 

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) released its third bi-monthly Monetary Policy Statement of 2021-22.[13]  The policy repo rate (the rate at which RBI lends money to banks) remain unchanged at 4%.  Other decisions of the MPC are as follows:

• The reverse repo rate (the rate at which RBI borrows money from banks) remains unchanged at 3.35%.
   
• 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) remains unchanged at 4.25%.
   
• The MPC also decided to continue with the accommodative stance of monetary policy as long as necessary to revive and sustain growth while ensuring that inflation remains within the target going forward.

Industrial production increased by 45% in the first quarter of 2021-22 over low base of last year

India’s Index of Industrial Production (IIP) registered a growth of 45% in the first quarter (April-June) of 2021-22 over the corresponding period in 2020-21.[14]   Note that such a high growth rate during this period may be due to a low base in the previous year as IIP had registered a significant contraction in the months of April (-57%), May (-33%), and June (-17%) of 2020-21 due to the national lockdown.

Mining, manufacturing, and electricity production registered a growth (year-on-year) in all months of the first quarter of 2021-22.  IIP had increased by 6% in the fourth quarter (January-March) of 2020-21.   

Figure 1: Growth in IIP in Q1 (April-June) of 2021-22   

 

Sources:  Ministry of Statistics and Programme Implementation; PRS.

Figure 2: Negative IIP growth in Q1 (April-June) of 2020-21

 Sources:  Ministry of Statistics and Programme Implementation; PRS.

Parliament passes Bill to nullify retrospective taxation imposed in 2012

Suyash Tiwari (suyash@prsindia.org)

The Taxation Laws (Amendment) Bill, 2021 was passed by Parliament.[15]  The Bill amends the Income Tax Act, 1961 (IT Act) and the Finance Act, 2012.  The 2012 Act amended the IT Act to impose tax liability on the income earned from the sale of shares of a foreign company on a retrospective basis (liability applicable to any transactions done before May 28, 2012).  The Bill nullifies this retrospective basis for taxation.  Key features of the Bill include:

• Tax on income earned from the sale of shares outside India: Under the IT Act, non-residents are required to pay tax on the income accruing through or arising from any business connection, property, asset, or source of income situated in India.  The 2012 Act clarified that if a company is registered or incorporated outside India, its shares will be deemed to be or have always been situated in India if they derive their value substantially from the assets located in India.  As a result, the persons who sold such shares of foreign companies before the enactment of the Act (i.e., May 28, 2012) also became liable to pay tax on income earned from such sale.
   
• The Bill nullifies this tax liability imposed on such persons provided they fulfil the following conditions:
  1. if the person has filed an appeal or petition in this regard, it must be withdrawn or the person must submit an undertaking to withdraw it,
  2. if the person has initiated or given notice for any arbitration, conciliation, or mediation proceedings in this regard, the notices or claims under such proceedings must be withdrawn or the person must submit an undertaking to withdraw them,
  3. the person must submit an undertaking to waive the right to seek or pursue any remedy or claim in this regard, which may otherwise be available under any law in force or any bilateral agreement,
  4. other conditions, as may be prescribed.

The Bill provides that if a concerned person fulfils the above conditions, all assessment or reassessment orders issued in relation to such tax liability will be deemed to have never been issued.  Further, if a person becomes eligible for refund after fulfilling the conditions, the amount will be refunded to him, without any interest.

For PRS summary of the Bill, please see here.

Parliament passes Bill to allow interim payment of bank deposit insurance

Suyash Tiwari (suyash@prsindia.org)

The Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 was passed by Parliament.[16]  The Bill amends the Deposit Insurance and Credit Guarantee Corporation Act, 1961.  The Act established the Deposit Insurance and Credit Guarantee Corporation (DICGC) to provide insurance for bank deposits and guarantee credit given by banks and financial institutions.  The Bill provides depositors with time-bound access to their insured deposit amount, in case they are restricted from accessing their bank deposits.

• Under the Act, DICGC is liable to pay the insured deposit amount to depositors of an insured bank.  Such liability arises when an insured bank undergoes: (i) liquidation (sale of all assets on closing down of the bank), (ii) reconstruction or any other arrangement under a scheme, or (iii) merger or acquisition by another bank, i.e., transferee bank.  Once DICGC makes the payment to the depositors, the liquidator or the insured or transferee bank (as the case may be) becomes liable to repay the same amount to the DICGC.  
   
• Interim payment to depositors: The Bill adds that DICGC will be liable to pay the insured deposit amount to depositors on an interim basis.  The liability will arise on the date the depositors are restricted from accessing their bank deposits.  This liability will arise if such restrictions get imposed under any order or scheme under the Banking Regulation Act, 1949.  This will also apply if such order or scheme is made before the enactment of the Bill, but the business of the insured bank remains suspended at the time of enactment.
   
• Timeline for interim payment: The Bill mandates DICGC to pay the insured amount to the depositors within 90 days from when such liability arises.  The date on which DICGC becomes liable to pay the depositors may be extended by an additional 90 days.  The extension may be given if RBI finds it expedient for finalising a scheme for the reconstruction, arrangement, merger, or acquisition of the insured bank.

For PRS summary of the Bill, please see here.

Bill to decriminalise certain offences under Limited Liability Partnership Act passed by Parliament

Tushar Chakrabarty (tushar@prsindia.org)
 
The Limited Liability Partnership (Amendment) Bill, 2021 was passed by Parliament.[17]  The Bill amends the Limited Liability Partnership Act, 2008.[18]  The Act provides for regulation of Limited Liability Partnerships (LLP).  LLP is an alternative corporate body form to traditional partnership firms.  Under LLP, a partner’s liabilities are limited to their investment in the business.  Key features of the Bill include:

• Certain offences decriminalised: The Act specifies the manner of operations of LLPs, and provides that violating these requirements will be punishable with a fine (ranging between Rs 2,000 and five lakh rupees).  These requirements include: (i) changes in partners of the LLP, (ii) change of registered office, (iii) filing of statement of account and solvency, and annual return, and (iv) arrangement between an LLP and its creditors or partners, and reconstruction or amalgamation of an LLP.  The Bill decriminalises these provisions and imposes a monetary penalty.
   
• Punishment for fraud: Under the Act, if an LLP or its partners carry out an activity to defraud their creditors, or for any other fraudulent purpose, every person party to it knowingly was punishable with imprisonment of up to two years and a fine between Rs 50,000 and five lakh rupees.  The Bill increases the maximum term of imprisonment from two years to five years. 
   
• Small LLP: The Bill provides for formation of a small LLP where: (i) the contribution from partners is up to Rs 25 lakh (limit may be increased up to five crore rupees by the central government through notification), and (ii) turnover for the preceding financial year is up to Rs 40 lakh (may be increased up to Rs 50 crore).  Central government may also notify certain LLPs as start-up LLPs.

For a PRS summary of the Bill, please see here.

General Insurance Business (Nationalisation) Amendment Bill, 2021 passed by Parliament

Tushar Chakrabarty (tushar@prsindia.org)

The General Insurance Business (Nationalisation) Amendment Bill, 2021 was passed by Parliament.[19]  The Bill amends the General Insurance Business (Nationalisation) Act, 1972.[20]  The Act nationalised all private companies undertaking general insurance business in India.  The Bill provides for a greater private sector participation in the public sector insurance companies regulated under the Act.  Key features of the Bill include:

• Government shareholding threshold: The Act required that central government’s shareholding in (i) General Insurance Corporation, (ii) National Insurance, (iii) New India Assurance, (iv) Oriental Insurance, and (v) United India Insurance should be at least 51%.  The Bill removes this threshold.
   
• Change in definition of general insurance business: The Act defined general insurance business as fire, marine or miscellaneous insurance business.  It excluded capital redemption and annuity certain business from the definition.  Capital redemption insurance involves payment of a sum of money on a specific date by the insurer after the beneficiary pays premiums periodically.  Under annuity certain insurance, the insurer pays the beneficiary over a period of time.  The Bill removes this definition and, refers to the definition provided by the Insurance Act, 1938.  Under the Insurance Act, general insurance business includes capital redemption and annuity certain insurance. 

For a PRS summary of the Bill, please see here.

Bill providing Pre-Packaged Insolvency Resolution passed by Parliament

Tushar Chakrabarty (tushar@prsindia.org)

The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 was passed by Parliament.[21]  The Bill amends the Insolvency and Bankruptcy Code, 2016, which provides for a time-bound process for resolving the insolvency of corporate debtors (within 330 days) called the Corporate Insolvency Resolution Process (CIRP).[22]  The Bill introduces an alternate insolvency resolution process for Micro, Small, And Medium Enterprises (MSMEs), called the pre-Packaged Insolvency Resolution Process (PIRP).  It replaces the Ordinance promulgated in April 2021.[23]  Key features of the Bill include:

• PIRP initiated by debtor: While CIRP can be initiated by both creditors and debtor itself, PIRP may be initiated only by the debtor.  For initiating PIRP, the debtor needs to obtain the approval of financial creditors who represent at least 66% of the financial debt.  The debtor should have a base resolution plan in place before seeking approval from its financial creditors.  During PIRP, the management of the company will remain with the debtor.
   
• Minimum default amount: Application for initiating PIRP may be filed in the event of a default of at least one lakh rupees.  The central government may increase the threshold of minimum default to up to one crore rupees through a notification.
   
• Proceedings under PIRP: The debtor will submit the base resolution plan to the resolution professional within two days of the commencement of PIRP.  A committee of creditors will be constituted within seven days of the PIRP commencement date to consider the base resolution plan.  The committee may provide the debtor with an opportunity to revise the plan.  The Resolution Professional (RP) may also invite resolution plans from other persons.  Alternative resolution plans may be invited if the base plan: (i) is not approved by the committee, or (ii) is unable to pay the debt of operational creditors (claims for provision of goods or services).
   
• A resolution plan must be approved by the committee (with at least 66% of the voting shares) within 90 days from the PIRP commencement date.  The resolution plan approved by the committee will be examined by the National Company Law Tribunal.  If no resolution plan is approved by the committee, the RP may apply for the termination of PIRP.  The authority must either approve the plan or order termination of PIRP within 30 days of receipt.  Termination of PIRP will result in the liquidation of the debtor.

For a PRS summary of the Bill, please see here.

Standing Committee report on implementation of the IBC submitted

Shruti Gupta (shruti@prsindia.org) 

The Standing Committee on Finance (Chair: Mr. Jayant Sinha) submitted its report on the implementation of Insolvency and Bankruptcy Code (IBC).[24]  The IBC was enacted in 2016 and provides a time-bound process for insolvency resolution of corporate debtors.[25]  Key observations and recommendations by the Committee include: 

• Implementation of IBC: The Committee noted that since the implementation of the IBC, between 2017 and 2020, the average time to resolve insolvency reduced from 4.3 years to 1.6 years.  The Committee observed that low recovery rates with delay in resolution process point towards a deviation from the original objectives of the Code.  For instance, haircuts (amount in dues forgone) of up to 95% were seen during the resolution process.  The Committee recommended strengthening creditor rights, and benchmarking haircuts based on global standards.
   
• Delays in National Company Law Tribunal (NCLT): The Committee noted that 13,170 IBC cases involving nine lakh crore rupees are pending before the NCLT.  71% of these cases have been pending for more than 180 days.  To address this delay, the Committee recommended: (i) creating dedicated benches for matters related to IBC, (ii) accepting applications by defaulters within 30 days of filing, and transferring control of the company to a resolution process, and (iii) filling in vacant positions within NCLT.  
   
• PIRP for all: The Committee recommended that Pre-Packaged Insolvency Resolution Process (PIRP) introduced for Micro, Small, and Medium Enterprises (MSMEs) should also be extended to corporates, after due review.   PIRP can only be initiated by the debtor, with prior approval of unrelated financial creditors.  The debtor continues to manage the company during PIRP, unlike Corporate Insolvency Resolution Process.
   
• MSMEs: The Committee noted that MSMEs were negatively impacted by the COVID-19 pandemic.  It observed that under the current mechanism, they are considered as operational creditors, whose claims are addressed after secured creditors.   The Committee recommended instituting additional protections for MSMEs, considering the current economic situation.   

For PRS summary of the report, please see here. 

National Monetisation Pipeline launched

Tushar Chakrabarty (tushar@prsindia.org)

NITI Aayog released the plan for monetisation of assets of the central government and public sector enterprises, called the National Monetisation Pipeline (NMP).[26]  Asset monetisation entails a limited period license/lease of a government-owned asset to a private entity for an upfront or periodic payment.  The asset will be handed back to the government after the contract period.  The ownership of the assets will continue to be with the public sector.  The pipeline estimates aggregate monetisation potential of about six lakh crore rupees between 2021-22 and 2024-25.  15% of the assets with an indicative value of Rs 0.88 lakh crore are to be monetised in the year 2021-22.  Key details of the plan include:

Sectors: Assets included under the NMP are from various sectors such as roads, railways, power, and telecom.  The list includes only brownfield (existing) infrastructure assets of the central government and the central public sector enterprises.  Collation of assets of state governments is currently ongoing, and it is envisaged to be included in the NMP in due course.

Table 2:  Sector-wise monetisation pipeline (in Rs crore)

Sectors	Monetisation Value	% share
Roads	1,60,200	26.8
Railways	1,52,496	25.5
Power Transmission	45,200	7.6
Power Generation	39,832	6.7
Telecom	35,100	5.9
Warehousing Assets	28,900	4.8
Mining	28,748	4.8
Natural Gas Pipelines	24,462	4.1
Petroleum Pipeline	22,504	3.8
Aviation	20,782	3.5
Urban Real Estate	15,000	2.5
Ports	12,829	2.2
Stadia	11,450	1.9
Total	5,97,503

Source: NITI Aayog; PRS.

Monetisation models: The NMP will allow various models for asset monetisation including: (i) direct contractual approach involving concession/contract between a public entity and identified private sector developer/ investor (includes public private partnership models), and (ii) structured financing models for long-term fund generation through capital markets or through a pool of investors (includes infrastructure investment trusts, real estate investment trusts).

Draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 released

Tushar Chakrabarty (tushar@prsindia.org)

The Reserve Bank of India (RBI) released the draft Foreign Exchange Management (Non-debt Instruments - Overseas Investment) Rules, 2021 and draft Foreign Exchange Management (Overseas Investment) Regulations, 2021 under the Foreign Exchange Management Act, 1999.[27]^,[28]  The draft Rules and Regulations seek to liberalise the regulatory framework for investment and acquisition of immovable properties outside India by Indian residents.   Currently, these aspects are regulated by the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 and Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India) Regulations 2015.[29]^,[30]  Key features of the draft rules and regulations include:

• Applicability: The draft Rules and Regulations will apply to any investment made by a person resident in India in a foreign entity engaged in a bona fide business activity, directly or through a step-down subsidiary.  Bona fide business activity includes those which are legally permissible both in India and the host country.  RBI may fix a ceiling for the total aggregate outflow during a financial year on account of such overseas investment.  It may also fix a ceiling beyond which amount of financial commitment by an Indian entity in a financial year will require prior approval.
   
• Restricted sectors: Under the 2004 regulations, no Indian entity can make any direct investment in a foreign entity engaged in real estate business or banking business.   The draft Rules modify this list to exclude banking business and include gambling and financial products linked to the Indian rupee, except for products offered in an International Financial Services Centre.  
   
• Acquisition of immovable property: Under the 2015 regulations, a person resident in India can acquire immovable property outside India by way of: (i) gift, (ii) inheritance, (iii) purchase out of foreign exchange held in resident foreign currency account, or (iv) jointly with a relative who is a person resident outside India, provided there is no outflow of funds from India.  The draft regulations also permit an individual resident in India to acquire such property from a person resident outside India through purchase out of the remittances sent under the Liberalised Remittance Scheme.  Under the scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both.  Such property can also be purchased from the proceeds from sale of assets.

e-RUPI launched by National Payments Corporation of India

Tushar Chakrabarty (tushar@prsindia.org)

The National Payments Corporation of India (NPCI) launched a voucher-based payments system to promote cashless transactions called e-RUPI.[31]  It will function as a pre-paid digital voucher which the beneficiary may access or get on their phone in the form of a message or QR code.  The vouchers may be redeemed at any centre that accepts it.  e-RUPI does not require the beneficiary to have a bank account.   The beneficiary need not own a smartphone or have an internet connection to access the voucher.

RBI releases Financial Inclusion Index

Tushar Chakrabarty (tushar@prsindia.org)

The Reserve Bank of India (RBI) introduced a Financial Inclusion Index (FII) to capture the extent of financial inclusion across the country.[32]  The FII includes details of banking, investments, insurance, postal, and pension sector.  It captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.  The index comprises three broad parameters: (i) access (35% weight), (ii) usage (45%), and (iii) quality (20%).  FII has been constructed without any base year.  The annual FII for the period ending March 2021 is 53.9 as compared to 43.4 for the period ending March 2017.  FII will be published every year in July.

Comments invited on the report of the expert committee constituted by RBI on urban co-operative banks 

Tushar Chakrabarty (tushar@prsindia.org)

RBI released report of the expert committee (Chair: Mr. N.S. Vishwanathan) on Urban Co-Operative Banks (UCBs) for public feedback.[33]  The Committee has given recommendations on functioning, regulation, and supervision of UCBs.  Key recommendations include:

• Categories of UCBs: The Committee noted that given the heterogeneity in the sector, a tiered regulatory framework is required.  It recommended categorising UCBs into four tiers: (i) the first tier will include all unit UCBs, salary earner’s UCBs (irrespective of deposit size), and other UCBs with deposits up to Rs 100 crore, (ii) the second tier will include UCBs with deposits between Rs 100 crore and Rs 1,000 crore, (iii) the third tier will include UCBs with deposits between Rs 1,000 crore and Rs 10,000 crore, and (iv) the fourth tier will include UCBs with deposits more than Rs 10,000 crore.
   
• Umbrella organisation (UO): UO is a proposed apex entity of federating co-operatives.  In June 2019, RBI gave an in-principle approval to the National Federation of Urban Co-operative Banks and Credit Societies Ltd. to setup an UO in the form of a non-deposit taking non-banking financial company.   The UO would provide human resource, information technology and financial support to its members.  It will also provide value-added services like those related to treasury and foreign exchange.  UCBs can become members by buying shares in the UO.  The Committee recommended to set up an umbrella organisation (UO) for UCBs with minimum capital of Rs 300 crore.  
   
• Supervisory Action Framework (SAF): The SAF involves initiation of corrective action by UCB and/or supervisory action by RBI on breach of financial thresholds related to asset quality, profitability and Capital to Risk-Weighted Asset Ratio (CRAR).  The Committee suggested that SAF should consider only asset quality (net non-performing asset ratio) and CRAR.   SAF’s objective should be to find time-bound remedy for financial stress of a bank.  

Comments on the report are invited until September 30, 2021.   

SEBI reviews regulatory framework for promoter, promoter group

Tushar Chakrabarty (tushar@prsindia.org)

The Securities and Exchange Board of India (SEBI) reviewed the regulatory framework for promoter, promoter group and group companies under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.[34]^,[35]  Key changes are:

• Promoter:  SEBI noted that in recent years, several businesses with diversified shareholding and professional management are getting listed.  Many of such businesses are non-family owned and/or do not have a distinctly identifiable promoter group.  The 2018 regulations define promoter as a person who has: (i) been named as such in the offer document or in the annual return of the issuer (company issuing securities), (ii) control over the issuer (directly or indirectly), or (iii) in whose advice or directions the board of directors of the issuer is accustomed to act.   SEBI has given in-principle approval to shift from the concept of promoter to ‘person in control’ or ‘controlling shareholders’.  
   
• Lock-in of promoters’ shareholding:  Under the 2018 framework, minimum promoters’ contribution of 20% is locked in for three years from the date of commencement of commercial production or date of allotment in Initial Public Offer (IPO), whichever is later.  This will be reduced to 18 months from the date of allotment in IPO/further public offering in issues involving: (i) only an offer for sale (used by promoters to reduce their shareholding), (ii) only raising of funds for matters excluding capital expenditure, or (iii) both, fresh issues and offers for sale for matters other than capital expenditure.  In these cases, the promoter shareholding in excess of minimum promoter contribution shall be locked-in for a period of six months instead of the existing period of one year.
   
• Lock-in for other persons: Under the 2018 framework, the pre-IPO capital held by persons other than promoters is locked in for one year from the date of allotment in the IPO.  The lock-in period will be reduced to six months.  

 

Parliament passes Bill to prohibit strikes, lock-outs, and lay-offs in essential defence services

Suyash Tiwari (suyash@prsindia.org)

The Essential Defence Services Bill, 2021 was passed by Parliament.[36]  The Bill replaces an Ordinance promulgated in June 2021.[37]  The Bill allows the central government to prohibit strikes, lock-outs, and lay-offs in units engaged in essential defence services.   Key features include:

• Essential defence services: Essential defence services include any service in: (i) any establishment or undertaking dealing with production of goods or equipment required for defence related purposes, or (ii) any establishment of the armed forces or connected with them or defence.  These also include services that, if ceased would affect the safety of the establishment engaged in such services or its employees.  In addition, the government may declare any service as an essential defence service if stopping it would affect the: (i) production of defence equipment or goods, (ii) operation or maintenance of industrial establishments or units engaged in such production, or (iii) repair or maintenance of defence products.
   
• Strikes: Under the Bill, strike is defined as stopping of work by a body of persons acting together.  This includes: (i) mass casual leave, (ii) coordinated refusal of any number of persons to continue to work or accept employment, (iii) refusal to work overtime, where such work is necessary for maintenance of essential defence services, and (iv) any other conduct which results in, or is likely to result in, disruption of work in essential defence services.
   
• Prohibition on strikes, lock-outs, and lay-offs: Under the Bill, the central government may prohibit strikes, lock-outs, and lay-offs in units engaged in essential defence services.   The government may issue such order if it deems this to be necessary in the interest of: (i) sovereignty and integrity of India, (ii) security of any state, (iii) public order, (iv) public, (v) decency, or (vi) morality.  The prohibition order will remain in force for six months, and may be extended by six months.  The prohibition will not apply to lay-offs made due to power shortage or natural calamity, or lay-offs of temporary or casual workmen.
• Strikes and lock-outs that are declared or commence, whether before or after the prohibition order will be illegal.   Laying-off after the prohibition order will be illegal.

For a PRS summary of the Bill, please see here.

 

Parliament passes Bill to abolish certain appellate bodies and transfer their functions to existing judicial bodies

Aditya Kumar (aditya@prsindia.org)

The Tribunals Reforms Bill, 2021 was passed by Parliament.[38]  The Bill dissolves certain existing appellate bodies and transfer their functions (such as adjudication of appeals) to other existing judicial bodies.  The appellate bodies being abolished include: (i) Appellate Tribunal under the Cinematograph Act, 1952, (ii) Appellate Boards under the Trade Marks Act, 1999, The Copyright Act, 1957, and the Patents Act, 1970, and (iii) Airport Appellate Tribunal under the Airport Authority of India Act, 1994.  

The Bill replaces a similar Ordinance promulgated in April 2021.[39]  In July 2021, the Supreme Court had struck down certain provisions of the Ordinance.[40]  The Bill does not conform to the Court judgement.  Key features of the Bill include:

• Amendments to the Finance Act, 2017: The Finance Act, 2017 merged tribunals based on functional domain.[41]  It also empowered the central government to notify rules on: (i) composition of search-cum-selection committees, (ii) qualifications of tribunal members, and (iii) their terms and conditions of service (such as their removal and salaries).³⁹  The Bill removes these provisions from the Finance Act, 2017.  Provisions on the composition of selection committees, and term of office have been included in the Bill.  Qualification of members, and other terms and conditions of service will be notified by the central government.³⁹  
   
• Search-cum-selection committees: The Bill specifies separate search-cum-selection committees for central tribunals and state administrative tribunals.  The Chairman of these committees will have a second casting vote in case of a tie. 
   
• Eligibility and term of office: The Bill provides for a four-year term of office (subject to the upper age limit of 70 years for the Chairperson, and 67 years for members).³⁹  Further, it specifies a minimum age requirement of 50 years for appointment of a chairperson or a member.  In July 2021, the Supreme Court had struck down the provisions specifying a four-year term, and the minimum age requirement of 50 years for appointment of members.⁴¹

For a PRS analysis of the 2021 Ordinance, please see here.

 

The Constitution (127^th Amendment) Bill, 2021 passed in Parliament

Rajat Asthana (rajat@prsindia.org)

The Constitution (127^th Amendment) Bill, 2021 was passed by Parliament.  The Bill amends the Constitution to allow states and union territories to prepare their own list of socially and educationally backward classes.   Key features of the Bill are as follows: 

• List of socially and educationally backward classes: The National Commission for Backward Classes (NCBC) was established under the National Commission for Backward Classes Act, 1993.  The Constitution (102^nd Amendment) Act, 2018 gave constitutional status to the NCBC, and empowered the President to notify the list of socially and educationally backward classes for any state or union territory for all purposes.  The 2021 Bill amends this to provide that the President may notify the list of socially and educationally backward classes only for purposes of the central government.   This central list will be prepared and maintained by the central government.  Further, the Bill enables states and union territories to prepare their own list of socially and educationally backward classes.  This list must be made by law, and may differ from the central list.
   
• Consultation with the NCBC: Article 338B of the Constitution mandates the central and state governments to consult the NCBC on all major policy matters affecting the socially and educationally backward classes.  The Bill exempts states and union territories from this requirement for matters related to preparation of their list of socially and educationally backward classes.

For a PRS summary of the Bill, please see here. 

The Constitution (Scheduled Tribes) Order (Amendment) Bill, 2021 passed

Shruti Gupta (shruti@prsindia.org) 

The Constitution (Scheduled Tribes) Order (Amendment) Bill, 2021 was passed by Parliament.[42]  The Bill amends the Constitution (Scheduled Tribes) Order, 1950.[43]

The Constitution empowers the President to specify the Scheduled Tribes (STs) in various states and union territories.  Further, it permits Parliament to modify this list of notified STs.   The Bill gives effect to modifications proposed by the state of Arunachal Pradesh.

For a PRS summary of the Bill, please see here.

Report on implementation of the Rights of Persons with Disabilities Act, 2016 released

Shubham Dutt (shubham@prsindia.org)

The Standing Committee on Social Justice and Empowerment (Chair: Mrs. Rama Devi) submitted its report on Assessment of Scheme for Implementation of the Rights of Persons with Disabilities Act, 2016 (SIPDA).[44]  SIPDA, an umbrella scheme funded and implemented by the central government, provides financial assistance to implement various components of the Rights of Persons with Disabilities Act, 2016.  These components include: (i) creation of barrier free environment, (ii) Accessible India campaign, and (iii) district disability rehabilitation centres.   Key observations and recommendations include:

• Fund allocation for SIPDA: The Committee noted that sub-schemes under SIPDA have more than doubled (from six to thirteen) between 2016-17 and 2021-22.  However, in this period, the budgetary allocation for SIPDA has only increased by 9%.
   
• Further, SIPDA gets a single allocation of funds annually, which is divided among different sub-schemes.  If a sub-scheme receives less funding proposals, the unutilised funds of such sub-scheme may be transferred to other sub-schemes receiving higher proposals.   This diversion of funds may dilute the objectives of SIPDA, under which all sub-schemes play a distinct role for empowering disabled persons.  The Committee recommended the Department of Empowerment of Persons with Disabilities to re-examine its decision of having a single allocation for SIPDA vis-à-vis separate allocations for each sub-scheme.
   
• Barrier free environment for disabled persons: The Creation of Barrier Free Environment sub-scheme seeks to enable access to infrastructure for disabled persons.  The Committee noted that since 2017-18, only 11 states/union territories have applied for and received grants under this sub-scheme.  It recommended: (i) expediting pending proposals by states, and (ii) expanding coverage of this sub-scheme in other states.
   
• Accessible India Campaign: The Accessible India Campaign is aimed at ensuring universal access for disabled persons to certain pre-identified buildings and places (such as airports and railway stations).  The Committee noted that since its launch in December 2015, only about 30% of the buildings and 65% of the websites identified under this campaign have been made accessible to disabled persons, despite extending the target date from July 2016 to June 2022.  It recommended adhering to deadlines without further extensions, and invoking penalties under the Act if timelines are not met.

For a PRS summary of the report, see here. 

Guidelines for assessing the extent of certain disabilities under the Rights of Persons with Disabilities Act amended

Shashank Srivastava (shashank@prsindia.org) 

The Ministry of Social Justice and Empowerment amended the guidelines for assessing the extent of disabilities under the Rights of Persons with Disabilities Act, 2016.[45]  Earlier, the guidelines provided that for a disability certificate in case of disabilities caused due to blood disorders, there will be a periodic review of the disease at a minimum interval of one year (for patients not having severe disability with a score above 80%).[46]  The amended guidelines extend this review period to an interval of three years.  

Certain government establishments exempted from provisions of Rights of Persons with Disabilities Act, 2016

Omir Kumar (omir@prsindia.org)

The Ministry of Social Justice and Empowerment issued notifications exempting certain government establishments from certain provisions of the Rights of Persons with Disabilities Act, 2016.[47]  These provisions mandate reservation for and non-discrimination against disabled persons in government employment.  The exemptions under the notifications are as follows:

• The Act requires all government establishments to reserve a minimum of 4% of the total vacancies for each post for persons with benchmark disabilities.[48]  A person is said to have a benchmark disability if he/she has: (i) a disability that has been defined in measurable terms under the Act, or (ii) at least 40% of a disability that has not been defined in measurable terms, as certified by a certifying authority.  The notifications exempt from the reservation requirement all posts of the: (i) Indian Police Service, (ii) Delhi, Andaman and Nicobar Islands, Lakshadweep, Daman and Diu and Dadra and Nagar Haveli Police Service, (iii) Indian Railway Protection Force Service, and (iv) combatant personnel of the Central Armed Police Forces.
   
• Further, the Act provides that no government establishment will discriminate against disabled persons in matters of employment.   The notifications exempt all posts of combatant personnel of the Central Armed Police Forces from this provision.   

 

The National Commission for Indian System of Medicine (Amendment) Bill, 2021 passed by Parliament

Aditya Kumar (aditya@prsindia.org)

The National Commission for Indian System of Medicine (Amendment) Bill, 2021 was passed by Parliament.[49]  It amends the National Commission for Indian System of Medicine Act, 2020.[50]  The 2020 Act replaced the Indian Medicine Central Council Act, 1970.[51]  The 1970 Act set up the Central Council of Indian Medicine to regulate the education and practice of the Indian Medicine system (includes Ayurveda, Yoga, Naturopathy).  

The 2020 Act replaces the Council with a National Commission for regulating education and practice of the Indian medicine system.   Since, the establishment of the National Commission was taking time, the 1970 Act was not repealed immediately with passage of the 2020 Act.  In September 2020, the 1970 Act was amended to provide for a Board of Governors, constituted by the central government, to temporarily exercise the powers of the Council till its reconstitution.  

The National Commission was constituted on June 11, 2021, and on the same date, the 1970 Act was repealed.50  The 2021 Bill specifies that all powers and functions of the Board of Governors (as under the 1970 Act) will be deemed to have been done under the 2020 Act and will continue to remain in force.50 

For a PRS summary of the Bill, please see here.

The National Commission for Homoeopathy (Amendment) Bill, 2021 passed by Parliament

Aditya Kumar (aditya@prsindia.org)

The National Commission for Homoeopathy (Amendment) Bill, 2021 was passed by Parliament.[52]  It amends the National Commission for Homoeopathy Act, 2020.[53]

The 2020 Act replaced the Homoeopathy Central Council Act, 1973.[54]  The 1973 Act set up the Central Council of Homeopathy for regulating homoeopathic education and practice.  The 2020 Act replaced the Council with a national commission for regulating homoeopathic education and practice.  Note that the 1973 Act was to be repealed on a date notified by the central government. 

Before the 2020 Act was passed, the 1973 Act was amended in 2018 to provide for the reconstitution of the Central Council.[55]  The amendments specified that till the Council was reconstituted, its powers would be exercised by a Board of Governors, constituted by the central government.56  Since, establishment of the National Commission was taking time and the Central Council was not reconstituted, the Board continued to function.

The National Commission for Homoeopathy was constituted on July 5, 2021 to supersede the Central Council, and on the same date, the 1973 Act was repealed.53  The 2021 Bill specifies that all powers exercised and functions performed by the Board of Governors (as under the 1973 Act) will be deemed to have been done under the 2020 Act and will continue to remain in force.53 

For a PRS summary of the Bill, please see here.

Report on the National Institute of Pharmaceutical Education and Research (Amendment) Bill, 2021 submitted

Shruti Gupta (shruti@prsindia.org) 

The Standing Committee on Chemicals and Fertilisers (Chair: Ms. Kanimozhi Karunanidhi) submitted its report on the National Institute of Pharmaceutical Education and Research (Amendment) Bill, 2021.[56]  The Bill amends the National Institute of Pharmaceutical Education and Research Act, 1998.[57]  The 1998 Act established the National Institute of Pharmaceutical Education and Research (NIPER), Punjab and declared it as an Institution of National Importance. [58]

Key observations and recommendations by the Committee include: 

• Governors: The 1998 Act required the Board of Governors of a NIPER to have at least one public person or social worker from Scheduled Caste or Scheduled Tribe.  The Bill proposes to remove this requirement.  The Committee recommends reconsidering this omission to ensure social inclusion.
   
• Members of Parliament in the Council: The Bill seeks to establish a Council to coordinate activities among NIPERs to ensure development of education and research, and maintain standards.  It proposes to include three Members of Parliament (MPs) as members in the Council.   The Committee recommended ensuring that MPs nominated as members have prior exposure to the medical or pharmaceutical fields.

• Appointment of Directors: The Bill empowers the Board of Governors to appoint a Director of a NIPER after approval of the President of India.  The Committee noted that NIPERs are based on the model of Indian Institutes of Technology, where the Council appoints Directors after approval from the President of India.  It recommended following this procedure for NIPERs.    

• Delay in approvals: The Committee observed that of the seven established NIPERs, only NIPER, Mohali has a finished campus.  The Committee noted that proposals to create five more NIPERs (at Madurai, Jhalawar, Nagpur, New Raipur, and Bengaluru) have been pending since 2012.  The Committee recommended the Ministry of Finance to expedite approval processes for construction of permanent campuses for all NIPERs.

For PRS summary of the report, please see here. 

 

Bill to regulate inland vessels and their movement passed by Parliament 

Rajat Asthana (rajat@prsindia.org) 

The Inland Vessels Bill, 2021 was passed by Parliament.[59]  It replaces the Inland Vessels Act, 1917.[60]  The Act provides for the regulation of inland vessel navigation by states including the registration of vessels, and safe carriage of goods and passengers.  The Bill introduces a uniform regulatory framework for inland vessel navigation across the country.  Key features of the Bill include: 

• Mechanically propelled inland vessels: The Bill defines such vessels to include ships, boats, sailing vessels, container vessels, and ferries.  For such vessels, the central government will prescribe the: (i) classification, (ii) standards of design, construction, and crew accommodation, and (iii) type and periodicity of surveys. Construction or modification of the vessels will require prior approval of a designated authority, which will be prescribed by the central government. 
   
• Operation: To operate in inland waters, all such vessels must have a certificate of survey, and a certificate of registration. Vessels with Indian ownership must be registered with the Registrar of Inland Vessels (appointed by the state government). The registration certificate will be valid across the country.  The certificate of survey will be granted by state governments, in a form as prescribed by the central government.  This certificate will indicate the inland water zones (areas of operation to be demarcated by states) for such vessels. The vessels must also have an insurance policy to cover liability for death, injury, or damage caused due to the usage of the vessel (including accidental pollution). 
   
• Database on inland vessels: The central government will maintain an electronic centralised record of data on inland vessels. These records will include information on: (i) registration of vessels, (ii) crew and manning, and (iii) certificates issued. 

For a PRS summary of the Bill, please see here

Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 passed by Parliament

Omir Kumar (omir@prsindia.org)

The Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 was passed by Parliament.^[61]  The Bill amends the Airports Economic Regulatory Authority of India Act, 2008.  The 2008 Act established the Airport Economic Regulatory Authority (AERA).  AERA regulates tariffs and other charges (such as airport development fees) for aeronautical services rendered at major airports in India.  The Bill allows the central government to group airports and notify the group as a major airport.  This implies that AERA will regulate tariffs at these notified airports.

For PRS summary of the Bill, please see here.

Committee submits report on the functioning of Airports Authority of India

Shashank Srivastava (shashank@prsindia.org) 

The Standing Committee on Transport, Tourism and Culture (Chair: T.G. Venkatesh) submitted its report on Functioning of Airports Authority of India (AAI).[62]  AAI is a statutory authority under the Ministry of Civil Aviation, which is responsible for the integrated development, expansion and modernisation of air traffic services, passenger terminals, and cargo services in the country.   It operates and maintains 136 airports in the country, of which 110 are operational.  Key observations and recommendations of the Committee include: 

• Air traffic management: The Committee observed that there has been a continuous growth in air traffic in the country over the past few years.  It noted that it is essential to adopt best practices regarding air navigation services to reduce congestion at airports. Therefore, the Committee recommended: (i) constituting a high powered committee for flexible air space management to reduce flight time, fuel consumption and carbon emission, (ii) establishing a high level committee with the Indian Air Force for filtering the navigation and landing related aspects of the Modernisation of Military Airfields project, and (iii) upgrading infrastructure for helicopter and seaplane operations to enhance regional connectivity.
   
• Enhancing supporting infrastructure: The Committee took note of issues related to lack of adequate infrastructure of airports like non-availability of land, delays due to compliance of regulations by the airport operators, large number of institutional clearances, and lack of connectivity to airports.  To address these issues, the Committee recommended: (i) ensuring sufficient space for commercial shops, parking spaces and, hotels near airports, (ii) setting up single window clearance mechanisms for timely grant of project clearances, and (iii) conducting Maintenance, Repair and Overhaul infrastructure workshops.

For a PRS summary of the report, see here.

Report submitted on promotion of infrastructure in India’s Maritime Sector

Omir Kumar (omir@prsindia.org)

The Standing Committee on Transport, Tourism and Culture (Chair: Mr. T.G. Venkatesh) submitted its report on the Promotion of Infrastructure in India's Maritime Sector.^[63]  The Committee examined the infrastructure of the Indian maritime sector.  Key observations and recommendations of the Committee include:

• Sagarmala Programme: The Sagarmala Programme was launched by the central government in March 2015.  It aims to reduce logistics cost for foreign and domestic trade, with minimal infrastructure investment.  The programme includes: (i) reducing cost of transporting domestic cargo, (ii) optimising container movement, and (iii) improving export competitiveness. The Committee noted that since 2015, only 172 projects (worth Rs 88,000 crore) out of 802 projects (worth Rs 5.5 lakh crore) under the Sagarmala programme have been completed.  To improve the speed of completing projects, the Committee suggested increasing the fund utilisation. 
   
• Port Modernisation: The Committee noted the lack of capacity at Indian ports to handle large cargo loads on account of increasing trade.  To increase cargo handling capacity, the Committee recommended: (i) enhancing the minimum draft (minimum depth of water needed by a vessel for safe navigation) of Indian ports by dredging to handle larger vessels, and (ii) implementing modern cargo handling techniques for increased capacity at existing ports (especially for dry cargo).
   
• Ship Repair Industry: The Committee noted that 341 ships (out of 706) were repaired in private shipyards in 2018-19. Taking note of the negative impact of yard closures due to the COVID-19 pandemic on the ship repair industry, the Committee recommended: (i) supporting indigenous manufacturers of shipbuilding parts under Make in India campaign, (ii) granting deemed export status to ship repair industry, and (iii) developing programmes aimed at generating revenue and employment in the ship repair industry.

For a PRS report summary, please see here.

The Drone Rules, 2021 notified

Rajat Asthana (rajat@prsindia.org)

The Ministry of Civil Aviation has notified the Drone Rules, 2021.[64]  These Rules have been published under the Aircraft Act, 1934 and replace the Unmanned Aircraft System (UAS) Rules, 2021.[65]  The 1934 Act regulates production, possession, operation, and sale of civilian aircraft in India.[66]  The UAS Rules regulated the ownership and operation of remotely operable and autonomous aircraft in India.⁶⁶ The Drone Rules reduce the approvals and restrictions involved in operating drones in India. Key features of the new Rules include: 

• Manufacturing, import and operational requirements:  The UAS Rules mandated that any person intending to import or operate an unmanned aircraft system must obtain a certificate of manufacture and airworthiness from Director General of Civil Aviation.  The Drone Rules remove the requirement of any certificate for operating or importing drones.  The import of drones will be regulated by the Director General of Foreign Trade (or any other entity authorised by the central government).
   
• Transferring drones: The UAS Rules mandated seeking approval from the Director General for transfer of drones to another person in India.  The 2021 Rules specify that a drone owner willing to sell, lease, gift or transfer drones to another person will be required to provide certain details (like unique identification number of the UAS) on the digital sky platform.   Digital sky platform refers to the online platform hosted by the DGCA for various activities related to the management of unmanned aircraft system activities in India.
   
• Regulation of airspace: Under the UAS Rules, areas where drone operations are prohibited include: (i) a five km radius around six major international airports, (ii) different areas around border, civilian and military installation of strategic significance, and (iii) notified ecologically sensitive areas.   The 2021 Rules removes this list and enable the central government to publish a dynamic, machine-readable, airspace map for drone operations in India.  The map will segregate the Indian airspace into red, yellow, and green zones.   Prior permission will be required for drone operations in red and yellow zones.

Comments invited on draft regulation for examining aviation personnel for consumption of psychoactive substances

Rajat Asthana (rajat@prsindia.org)

The Directorate General of Civil Aviation released the draft procedure for examining aviation personnel for consumption of psychoactive substances.[67]  The draft regulation has been published under the Aircraft Rules, 1937.[68]  The Rules prohibit all technical and operating aircraft crew members from consuming alcoholic drinks, sedatives, narcotics or stimulant drugs before and during a flight.  Key features of the draft regulations are:

• Testing procedure:  All scheduled commercial aircraft operators and air navigation service providers will be required to undertake random drug testing among flight crew members and air traffic controllers for consumption of psychoactive substances (like cannabis, cocaine, opioids etc.).  The testing must annually cover at least 5% of the employees of an organisation.
   
• Specific provisions for certain personnel: The regulations mandate organizations to ensure that crew members, air traffic control officers, maintenance engineers, trainee pilots and instructors are mandatorily tested: (i) before employment, (ii) before admitting a trainee pilot in a flying training organisation, and (iii) in follow-up testing of confirmed cases. 
   
• Action on positive cases:  The regulations mandate two tests: a screening test and a confirmatory test.  If the screening test gives a positive result, the employee will be removed immediately from safety sensitive duty, till a confirmatory report is received.  In case of a positive confirmatory test, the concerned person will be referred to a de-addiction centre.  An employee will return to duty if he tests negative for consumption of psychoactive substance.  A repeat offence after returning to duty shall entail suspension of license for a period of three years. A third offence shall entail license cancellation. 

Comments on the draft regulations are invited till September 24, 2021.

Draft schemes on investigation and settlement of hit and run cases released 

Shruti Gupta (shruti@prsindia.org) 

The Ministry of Road Transport and Highways released draft schemes and draft amendments to the Central Motor Vehicles Rules, 1989 on investigation of, and compensation for victims of hit and run accidents.[69]^,[70]^,[71]  Key features of the draft schemes and amendments include: 

Compensation scheme for road accident victims

The draft scheme seeks to increase compensation in cases which result in grievous injuries or death.[72]  Key features include.70

• Committees: The draft Rules propose to establish District Level Committees responsible for reviewing the scheme’s implementation, encourage publicity, and ensure awareness of rights among claimants.  The draft Rules also seek to establish a Standing Committee which may guide District Level Committees.  The Standing Committee will review the scheme’s working and recommend amendments to increase efficient disbursals and prevent fraud.  
   
• Compensation: The central government has proposed enhancing compensation in cases of: (i) grievous hurt from Rs. 12,500 to Rs. 50,000, and (ii) death from Rs 25,000 to two lakh rupees.73   Compensation must be disbursed within 15 days of a sanction order by the District Level Committee. 

Scheme proposing to establish accident fund

The proposed fund will provide aid to victims of road accidents through compensation, treatment for accidents, and other purposes.71  The Scheme proposes to replace the Solatium Scheme, 1989, under which a fund provides compensation for hit and run accidents.  The fund will be registered as a public charitable trust and have three accounts operated by the General Insurance Corporation of India (Table 3)

Table 3: Accounts under proposed accident fund

Account	Funding
Treatment of victims of accidents by insured vehicles	Contributions by insurance companies
Treatment of victims of hit and run accidents and those caused by uninsured vehicles	Fees from National Highways Budgetary grants Fines under Motor Vehicles Act
Compensation for victims of hit-and-run cases, based on the Hit and Run Motor Accidents Scheme, 2021	Balance of 1989 scheme Specified percentage of total third-party premium collected by insurance companies

Sources: G.S.R. 527 (E), Gazette of India, Ministry of Road Transport and Highways, August 2, 2021; PRS. 

Amendments exempting battery-operated vehicles from registration charges notified

Shruti Gupta (shruti@prsindia.org) 

The Ministry of Road Transport and Highways released amendments to the Central Motor Vehicles Rules, 1989, framed under the Motor Vehicles Act, 1988.[73]^,[74]  The Rules detail requirements for licensing of drivers, and design, maintenance, and registration of motor vehicles, among others.^[75]  The amendments exempt owners of battery-operated vehicles (electrical vehicles powered by rechargeable batteries) from paying fees for: (i) a new registration certificate, (ii) renewal of a registration certificate, and (iii) the assignment of a new registration mark.  

Amendments including certain vehicles within schemes for renting motorcycles and cabs notified

Shruti Gupta (shruti@prsindia.org) 

The Ministry of Road Transport and Highways notified amendments to Rent a Motor Cab and Rent a Motorcycle Schemes.[76]^,[77]  The schemes regulate the business of renting motor-cabs and motorcycles, respectively.[78]^,[79]  The schemes provide for: (i) grant of license, (ii) duties and responsibilities of persons renting vehicles, and (iii) powers of licensing authorities. 

The schemes are applicable for vehicles which are required to obtain permits and licenses to operate.  The amendments include some categories of motor-cabs and motorcycles within the scheme which have been exempted from permit requirements under the Motor Vehicles Act, 1988.[80]   These include battery operated vehicles, and vehicles operating on fuels including methanol and ethanol. 

New Bharat (BH)-Series vehicle registration system notified  

Rajat Asthana (rajat@prsindia.org) 

The Ministry of Road Transport and Highways notified amendments to the Central Motor Vehicles Rules, 1989, framed under the Motor Vehicles Act, 1988.82^,81  The 1989 Rules detail requirements for application of vehicle registration, and issue of certificate of registration.84  The 2021 amendments introduce a national vehicle registration mark, the Bharat (BH)-Series for certain individuals.[81] Key features of the amendments include:

• Application for registration:   The 1989 Rules mandate persons applying for registration of a vehicle to submit certain documents (like sale and insurance certificates).  For applicants of the BH-Series registration mark, the 2021 Rules specify: (i) applicants working in the private sector to submit a working certificate, and (ii) government employees to submit an official identity card.
   
• Exemption from assignment of new registration mark:  For transferring the vehicle's registration from one state to another, the 1989 Rules mandated applicants to submit a No Objection Certificate from the state where the vehicle was originally registered.  The 2021 amendments exempt vehicles registered under the BH-Series from this requirement.  To avail this exemption, the Rules require vehicle owners to intimate the registering authority of their place of residence.

Electronic monitoring and enforcement of road safety

Shashank Srivastava (shashank@prsindia.org) 

The Ministry of Road Transport and Highways notified amendments to the Central Motor Vehicles Rules, 1989, framed under the Motor Vehicles Act, 1988.[82]  The 1989 Rules detail the procedure for issuing challans and their payment.[83]  The 2021 amendments introduce provisions for electronic monitoring of roads. [84]  Key features of the amendments are:. 

• Placement of electronic devices: The 2021 amendments mandate state governments to place electronic enforcement devices (like speed camera, CCTVs, speed gun, body wearable cameras) at: (i) high-risk and high-density corridors on national and state highways, and (ii) critical junctions in major cities with more than one million population.  Further, the rules mandate that: (i) the placed devices should not obstruct the normal traffic flow, and (ii) warning signals should be explicitly placed before the monitored stretches.

• Body wearable devices: The 2021 rules enable use of body wearable cameras by officials authorised by the respective state governments.  However, the offender shall be notified that he is being recorded by the body wearable camera or dashboard camera (which may be placed on the dashboard of a police vehicle).

• Issuing challan: Footage from an electronic enforcement device having electronic stamp for location, date and time, can be used to issue challan for various offences.  Further, all issued challans would be accompanied with photographic evidence, date, time, place of the offense, and other parameters.

Draft model concession agreement for redevelopment of railway stations released

Saket Surya (saket@prsindia.org)

The Railway Board released the draft of the model concession agreement for the re-development of railway stations for public feedback.[85]  Key provisions under the concession agreement are:

• Scope of agreement: The concessionaire will develop station buildings, parking facilities, and parcel facilities.  This will include the construction of facilities such as ticketing counters, cloakrooms, waiting rooms, and refreshment facilities.  Land, as well as airspace, may also be earmarked for station estate development.  Station estate development will involve building roads, electric supply, water supply, and sewerage.  The concessionaire will be responsible for the operation and maintenance of the station as well as the station estate.
   
• Financial terms: The concessionaire will pay a concession fee to the Rail Land Development Authority, as agreed in the contract.  The Authority will levy a station development fee on the passengers.  The revenue collected through this fee will be paid to the concessionaire, after applying a rebate agreed by the concessionaire.  The concessionaire will have the sole right: (i) to charge platform tickets to the visitors and parcel handling charges, (ii) over any revenue generated from commercial exploitation of the project assets, including any revenue from sub-licensees and services provided by it such as advertisements, co-branding, and parking.
   
• Dispute resolution: In case of any disputes between parties to this agreement, the dispute may be referred to the Dispute Resolution Board.  The decisions of the Board will be binding unless the same is revised in a conciliation/arbitration tribunal.

Comments on the draft are invited until September 3, 2021.   

 

Aditya Kumar (aditya@prsindia.org)

Bill to set up a Commission for air quality management in NCR and adjoining areas passed by Parliament

The Commission for Air Quality Management in  National Capital Region and Adjoining Areas Bill, 2021 was passed by Parliament.[86]  The Bill replaces an Ordinance with similar provisions promulgated in April 2021.[87]  Note that a similar Ordinance, which was promulgated in October 2020 lapsed in March 2021.[88] The Bill provides for the constitution of a Commission for better co-ordination, research, identification and resolution of problems related to air quality in the National Capital Region (NCR) and adjoining areas.  Adjoining areas are defined as areas in Haryana, Punjab, Rajasthan, and Uttar Pradesh, adjoining the National Capital Territory of Delhi and NCR, where any source of pollution may cause adverse impact on air quality in the NCR.  The Bill also dissolves the Environment Pollution (Prevention and Control) Authority for the NCR constituted in 1998.  Key features of the Bill include:⁸⁷

For a PRS summary of the Bill, please see here.

Plastic Waste Management (Amendment) Rules, 2021 notified

The Ministry of Environment, Forest and Climate Change notified the Plastic Waste Management (Amendment) Rules, 2021.[89]  The draft Rules were released in March 2021 for public comments.[90]  The 2021 Rules amend the Plastic Waste Management Rules, 2016.[91] The Rules provide for reduction of plastic waste.  Key amendments include: 

• Ban on plastic items: The 2021 Rules impose a ban on the manufacture, sale and use of certain single-use plastic items across the country from July 1, 2022.⁹⁰  Single use plastic items are those which are used only once before being recycled or disposed.90  These items include: (i) plastic cutlery (such as spoons), (ii) ear buds with plastic sticks, (iii) plastic sticks for balloons, (iv) plastic flags, (v) candy sticks, and (vi) plastic banners with thickness less than 100 microns.
   
• Thickness of carry bags: As per the 2016 Rules, the thickness of plastic carry bags (except those made up of compostable plastic) at least 50 microns.⁹²  The 2021 Rules increase the minimum thickness of such bags to 75 microns with effect from September 30, 2021.⁹⁰  This will further increase to 120 microns from December 31, 2022.⁹⁰  Further, the 2021 Rules add that the thickness of non-woven plastic carry bags must be at least 60 grams per square meter (GSM).⁹⁰  Non-woven plastic bags are those made by pressing plastic threads together by machine, which form a weave like texture.

 

Bill to establish a central university in Ladakh passed by Parliament

Omir Kumar (omir@prsindia.org)

The Central Universities (Amendment) Bill, 2021 was passed by Parliament.  It amends the Central Universities Act, 2009.[92]  The 2009 Act provides for the establishment of Central Universities for teaching and research in various states.  The Bill provides for the establishment of the Sindhu Central University in the union territory of Ladakh.

For PRS summary of the Bill, see here. 

Standing Committee submits report on learning gaps due to school lockdown and plans for reopening of schools 

Shruti Gupta (shruti@prsindia.org) 

The Standing Committee on Education, Women, Children, Youth, and Sports (Chair: Dr. Vinay Sahasrabuddhe) submitted a report on learning gaps due to school lockdown, and plans for re-opening schools.[93]  Key observations and recommendations include: 

• Bridging learning gaps:  The Committee noted that school closures had negatively impacted learning outcomes (in reading, writing, and arithmetic).   To bridge gaps in student learning outcomes, it recommended: (i) undertaking assessment of learning outcomes to understand learning gaps, (ii) developing expert-led bridge courses and accelerated learning programmes to address learning gaps, (iii) instituting personalised remedial classes for students with learning gaps, (iv) encouraging parental engagement and collaborative learning through peers, and (v) creating communication channels for clearing doubts. 
   
• Re-opening guidelines: To enable opening of schools, it recommended: (i) initiating vaccination for students, teachers, and allied staff, (ii) adhering to COVID-19 protocols by holding classes in shifts to maintain social distancing,  (iii) providing face masks and sanitisers to students, especially those from economically weaker sections, (iv) ensuring strict enforcement of these by measures by undertaking, and (v) providing incentives (like study material, food, and digital devices) to re-enrol students who may have dropped out.   
   
• Remote learning: The Committee noted that digital mode of education would continue to be the ‘new normal’ even after the pandemic.  It recommended: (i) increasing investment in electrical (including non-conventional sources), communication (satellite TV and radio), and digital infrastructure to enable access to digital education, (ii) distributing subsidised internet connections and content pre-loaded devices to students from backward sections of society, and (iii) developing tools for monitoring students' learning progress and interactive learning (through virtual reality and augmented reality). 

For a PRS summary of the Report, please see here.

 

Shashank Srivastava (shashank@prsindia.org) 

Coconut Development Board (Amendment) Bill, 2021 passed by Parliament

The Coconut Development Board (Amendment) Bill, 2021 was passed by Parliament.[94]  The Bill amends the Coconut Development Board Act, 1979.  The Act established the Coconut Development Board for the development of the coconut industry.  The Bill amends the composition of the Coconut Development Board to improve its management and administration.  Key features of the Bill include:

• Functions of the board: Under the Act, the Board may recommend measures to improve the marketing of coconut and its products in India.  The Bill adds that the Board may also recommend measures for improving the marketing of coconut and its products outside India.

• The Act allows the Board to finance suitable schemes, in consultation with the central and state governments, to improve the quality and increase the production of coconut.  This would apply to areas where coconut is grown on a large scale.  The Bill amends this provision to extend such financing to all coconut producing state.
   
• Changes to the management: Under the Act, the Chairman of the Board, who also functions as the Chief Executive Officer (CEO), is appointed by the central government.  The Bill separates the post of Chairman and CEO.  

For PRS summary of the Bill, please see here. 

Report submitted on procurement, storage and distribution of foodgrains

Suyash Tiwari (suyash@prsindia.org)

The Standing Committee on Food, Consumer Affairs, and Public Distribution (Chair: Mr. Sudip Bandyopadhyay) submitted its report on the subject ‘Procurement, Storage, and Distribution of Foodgrains by Food Corporation of India’.[95]  The procurement, storage, and distribution of foodgrains is undertaken by the Food Corporation of India (FCI), along with state governments’ agencies.  Key observations and recommendations of the Committee include:

• Procurement: The Committee observed that most of the procurement operations for foodgrains are carried out by state agencies.  The share of FCI in direct procurement is less than five percent.  It recommended the central government and FCI to assist the state governments in creation of adequate infrastructure for effective procurement.
   
• Decentralised procurement: Under the decentralised procurement scheme, the state governments utilise the foodgrains procured from within the state for distribution under various schemes.  The excess foodgrains are given to FCI for storage or distribution to other states.  The scheme: (i) reduces cost of transportation, (ii) encourages procurement in non-traditional states, and (iii) enables procurement of local foodgrains, which may be more suited to local taste.
   
• The Committee observed that even after 23 years of inception of the scheme, it has been undertaken by only eight states in case of wheat, and 15 states in case of rice.  It noted that the scheme has contributed remarkably to an increase in efficiency of the Public Distribution System (PDS), by making it possible to supply foodgrains suited to local taste.  The Committee recommended the Department of Food and Public Distribution to encourage adoption of the scheme in non-traditional states.  The Department and FCI should also take steps for timely creation of necessary infrastructure for this purpose, in coordination with the state governments.
   
• Storage capacity: The Committee noted that despite various audits for optimum utilisation of storage capacity, the utilisation of hired storage facilities is still very high.   Meanwhile, the FCI-owned facilities remain under-utilised.  It recommended FCI to maximise utilisation of owned facilities before hiring.  Hiring should be done only if absolutely necessary to minimise the cost incurred in paying rent.

For a PRS report summary, please see here.

Standing Committee submits report evaluating the Pradhan Mantri Fasal Bima Yojana 

Shruti Gupta (shruti@prsindia.org) 

The Standing Committee on Agriculture (Chair: Mr. P. C. Gaddigoudar) submitted a report evaluating Pradhan Mantri Fasal Bima (PMFBY).  Under PMFBY, farmers are provided with insurance cover for crops against all non-preventable natural risks.  Key observations and recommendations of the Committee include:

• Participation of states: The Committee noted that some recent revisions in the scheme guidelines may lead state governments to withdraw from it.  The Committee has recommended revising amendments which: (i) prohibit states which delay the release of subsidies (beyond specified timeline) from participating in the scheme, and (ii) mandate state governments to bear the entire subsidy for areas/ crops which have a higher premium rate than the specified rates.  The Committee further noted that several states such as Bihar and West Bengal have withdrawn from the scheme and recommended enacting measures to increase participation by states.

• Insurance companies: The Committee observed that insurance companies are required to have a functioning office in each tehsil.  However, they are non-existent in several districts.  It noted that these offices are crucial for farmers to mitigate the problems faced in availing the scheme benefits and suggested uploading the contact details of their officials on the insurance portal.

• Corporate Social Responsibility (CSR): The Committee noted that the scheme does not mandate insurance companies to spend the share of their profits going towards CSR in the districts from where profits are earned.  The Committee recommended adding a provision to enable this.   

• Delays in settlement: The Committee recognised delays in settlement of insurance claims as one of the biggest challenges in implementation of the scheme.  It noted that the delays may be due to factors such as: (i) late release of yield data and premium subsidy by states, (ii) yield-related disputes between insurance companies and states, and (iii) non-receipt of account details of farmers.   It recommended addressing these issues using technology and the coordination of all institutional mechanisms.   It also recommended implementing a timeline for settlement of claims by insurance companies.  

For a PRS summary of the Bill, please see here.

Standing Committee submits report on Pradhan Mantri Awaas Yojana – Gramin: PMAY (G)

Shashank Srivastava (shashank@prsindia.org) 

The Standing Committee on Rural Development (Chair: Mr. Prataprao Jadhav) submitted its report on the subject ‘Pradhan Mantri Awaas Yojana – Gramin: PMAY (G)’ on August 5, 2021.[96]   PMAY (G) was launched in April 2016, aiming to provide “housing for all” in rural areas by 2022, i.e., a pucca house with basic amenities to all households living without a house or in kutcha houses.  The Committee noted that out of the combined phase 1 and 2 target, only 51% houses have been completed as on August 31, 2020.  Key observations and recommendations of the Committee include:

• Selection of beneficiaries: Observing that out of the total 4.3 crore persons earmarked for the scheme, only 2.32 crore have become eligible after verification by Gram Sabhas, the Committee noted the possibility of a politically motivated approach in identification of beneficiaries.  Further, 1.36 crore eligible households have been rejected by Gram Sabhas on grounds of migration and death.  The Committee expressed that both these grounds of exclusion from beneficiary list cannot be supported as: (i) migrants eventually return to their villages, and (ii) transfer of ownership can be resorted to in case of deaths.   
                                                                               
• To ensure proper identification of beneficiaries, the Committee recommended: (i) downsizing the role of Gram Sabhas and Panchayats in identification of beneficiaries and roping in private/ non-governmental bodies for verification and authentication, (ii) incorporation of a block development officer for oversight, and (iii) to transfer ownership of the housing unit to a nominee after the death of a beneficiary.

• Financial assistance: The Committee took note of the problems faced by beneficiaries in availing loan of Rs 70,000 for construction of houses due to high collateral requirements, and high interest rates.  Further, it observed the need to re-examine the need for additional finance to meet construction expenses.  The Committee recommended the Ministry: (i) to provide a better loan product with minimum collateral requirements and lower interest rates, and (ii) to increase the unit assistance by ten thousand rupees (based on the present price index) for both plain and hilly areas due to increased transportation costs over the years. 

For a PRS summary of the report, see here.

Cabinet approves the scheme National Mission on Edible Oils – Oil Palm

Shruti Gupta (shruti@prsindia.org) 

The Union Cabinet approved the scheme National Mission on Edible Oils – Oil Palm.[97]  The scheme seeks to increase the production of crude palm oil in the country and decrease the dependence on imports.  Presently, 98% of India’s demand for crude palm oil is met through imports.  Key features of the scheme include:

• Price assurance: The oil palm farmers produce Fresh Fruit Bunches (FFBs) from which oil is extracted by the industry.  The prices of FFBs are linked to international crude palm oil prices and, thus, subject to variations.  Under the scheme, farmers will be provided an assured viability price for FFBs.  The viability price will be revised every year based on the average crude palm oil prices of the last five years and the wholesale price index.  Industries will also be mandated to pay a minimum price for FFBs.  In case this is lower than the assured price, the difference will be met through viability gap funding.  Farmers will be credited with this using direct benefit transfers.   State governments adopting this will be required to enter into Memorandums of Understanding with the central government. 
   
• Inputs and interventions: The scheme provides assistance for inputs (such as planting materials) and interventions in cropping.  For instance, an assistance of Rs 29,000 per hectare will be provided for planting material for oil palm.  Seed gardens will be provided up to Rs 80 lakh for 15 hectares of land.  Further, Rs 250 will be given to farmers per plant for replanting and rejuvenating old gardens.
   
• Assistance to the North-East and Andaman regions: The scheme includes special provisions for the North-East and Andaman regions.  For instance, farmers from these regions will be given an additional 2% of the price of crude palm oil as part of the price assurance.  To encourage further investment, capital assistance will be given to the industries in the region based on their output capacity.  Further, special provisions have been made to enable integrated farming along with terrace cultivation and bio-fencing.

The scheme will be applicable till November 2037.  The scheme has a total outlay of Rs 11,040 crore, of which Rs 8,844 crore (80%) will be given by the central government, and the rest by the respective state governments.   

 

Tushar Chakrabarty (tushar@prsindia.org)

Remission of Duties and Taxes on Exported Products scheme notified

The Directorate General of Foreign Trade has notified the guidelines and rates for the scheme for Remission of Duties and Taxes on Exported Products.^[98]  Key features of the scheme include:

• Applicability:  The scheme will come into effect for all exports from January 1, 2021.  The scheme will not be available for certain categories of products including: (i) exports originating in other countries but trans-shipped through India, (ii) exports subject to minimum export price or export duty, (iii) products manufactured/exported by 100% export oriented units, and (iv) products manufactured/exported by units in free trade zones, export processing zones or special economic zones.
   
• Types of levies covered:  The scheme provides for refund of, currently unrefunded: (i) duties/taxes/levies on exported products, at the central, state and local level, including cumulative indirect taxes on goods and services used in production of the exported product, and (ii) indirect duties/taxes/levies in respect of distribution of exported products.  The rates mentioned under the scheme will be covering 8,555 tariff lines (product categories).
   
• Calculation of refund amount: Refund amount will be given at a notified rate as a percentage of freight on board value.  Rebate on certain export products will also be subject to cap on per unit value of the exported product.  For certain export items, a fixed quantum of rebate amount per unit may be notified.   Rebate under the scheme will be issued in the form of a transferable duty credit/electronic scrip which will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs.  The scrips can be used only for the payment of customs duty.

 

Standing Committee report on rising unemployment and loss of jobs submitted

Shruti Gupta (shruti@prsindia.org) 

The Standing Committee on Labour (Chair: Mr. Bhartruhari Mahtab) submitted its report on the impact of COVID-19 on rising unemployment and loss of jobs in organised and unorganised sectors.[99]  Key observations and recommendations by the Committee include:

• Informal sector: The Committee noted that 90% of workers in India are from the informal sector, which includes: (i) migrant workers, (ii) contract labours, (iii) construction workers, and (iv) street vendors.  The Committee observed that these workers were negatively impacted by the pandemic and recommended the central and state governments to undertake measures to: (i) encourage entrepreneurial opportunities, (ii) attract investment in traditional manufacturing sectors and developing industrial clusters, and (iii) strengthen social security measures.
   
• Workers impacted by pandemic: The Committee noted that the urban poor, female and casual workers were significantly impacted by the pandemic.  It recommended specific measures to address this impact within each group.  For instance, it suggested implementing schemes which provide shelter, access to business spaces, institutional credit, and cash grants to urban poor.  It also recommended building public works (such as schools, hospitals, and internal roads) to generate employment in urban areas.
   
• Availability of data: The Committee observed that accurate and timely data must be available to address the impact of the pandemic.  It noted that various reports are not released timely (such as the Periodic Labour Force Survey, last released for 2018-19).  Further, it observed that the development of a comprehensive National Database for Unorganised Workers has been delayed.  
   
• Benefit for workers: The Committee recommended launching publicity campaigns for schemes which require registration on a voluntary basis (such as the Pradhan Mantri Shram Yogi Maan-Dhan scheme).  It also suggested: (i) ensuring that all states integrate the One Nation One Ration Card plan, (ii) converting loan amounts into cash grants under schemes for the benefit of street vendors, and (iii) extending work allocation and validity of certain employment guarantee schemes (such as the Aatma Nirbhar Bharat Rojgar Yojana).  It recommended making access to healthcare a legal right. 

For PRS summary of the report, please see here. 

Portal launched for registration of unorganised workers

Tushar Chakrabarty (tushar@prsindia.org)

The central government launched the e-Shram portal for the registration of unorganised workers.[100]^,[101]  The portal seeks to register 38 crore unorganised workers, and allow them to avail social security schemes implemented by central and state governments.  Registration on the portal will be free and can be done online.  Registered workers will get an e-Shram card with unique universal account number and will be able to access the benefits of social security schemes through the card.  The portal will be managed by states and union territories for registration of unorganised workers. 

Every unorganised worker registered on the portal will be eligible for an accident insurance of two lakh rupees.  If a registered worker meets with an accident, he will be eligible to get two lakh rupees on death or permanent disability and one lakh rupees on partial disability.  

Benefits under National Pension Scheme for traders and self-employed persons to require Aadhaar

Shashank Srivastava (shashank@prsindia.org) 

The Ministry of Labour and Employment issued a notification requiring Aadhaar for availing benefits under the National Pension Scheme for Traders, Shopkeepers and Self-Employed Persons, 2019.[102]   Under the Scheme, beneficiaries are entitled to a minimum pension of Rs 3,000 per month after attaining the age of 60 years.

The notification requires persons to furnish proof of possession of Aadhaar or undergo Aadhaar authentication to avail benefits under the Scheme.  A person wanting to avail these benefits who does not possess an Aadhaar number (though entitled to obtain Aadhaar) will have to apply for Aadhaar enrolment.  Till the Aadhaar is assigned to an eligible beneficiary who has enrolled thus, he will receive benefits under the Scheme if he produces his Aadhaar Enrolment Identity Document slip along with either his PAN card, ration card, voter identity card, passport, driving license, bank passbook or certain other documents.  

In cases where Aadhaar authentication fails due to poor fingerprint quality, unsuccessful biometric authentication or otherwise, certain remedial mechanisms will be adopted for authentication.  These include: (i) providing for iris scanners along with fingerprint scanners, (ii) offline authentication systems such as Aadhaar One-Time Password or Time-based One-Time Password, and (iii) Quick Response (QR) code readers to verify the authenticity of physical Aadhaar letters through the QR code printed on them.   To ensure that no eligible beneficiary is deprived of benefits under the Scheme for want of Aadhaar, the Ministry will adopt a mechanism for handling exceptions.  This will include: (i) providing benefits based on certain alternate identification documents, and (ii) making special arrangements for enrolment of disabled persons and senior citizens.[103]

 

Tushar Chakrabarty (tushar@prsindia.org)

Standing committee report on flood management submitted 

The Standing Committee on Water Resources (Chair: Mr. Sanjay Jaiswal) submitted its report on the subject Flood Management in the Country including International Water Treaties in the field of Water Resource Management with particular reference to Treaty/Agreement entered into with China, Pakistan and Bhutan.^[104]  Key observations and recommendations by the Committee include:

• Flood control under concurrent list: The Committee noted that as per the Constitution, flood control falls under the jurisdiction of states.  However, since most rivers flow across multiple states, flood control measures taken by one state may have inter-state ramifications.  The Committee recommended the central government to build consensus on placing flood control and management under the Concurrent list of the Constitution.
   
• National Integrated Flood Management Group: The Committee recommended establishing the National Integrated Flood Management Group under the Ministry of Jal Shakti as an overarching body responsible for flood management.  The group may include concerned ministers of state governments as members and meet at least once a year.  It should be responsible for: (i) formulating strategies on prevention and mitigation of flooding, and (ii) supervise management of floods, including aspects controlled by states or local governments and which are under international linkages. 

For a PRS summary of the report, see here.

 

Shashank Srivastava (shashank@prsindia.org) 

Committee report on allotment of retail outlets and distributorships for LPG submitted

The Standing Committee on Petroleum and Natural Gas (Chair: Mr. Ramesh Bidhuri) submitted its report on the subject Allotment of Retail Outlets and LPG Distributorships.[105]  Key observations and recommendations of the Committee include: 

• Allotment process: Currently, Oil Marketing Companies (OMCs) select the dealers for their retail outlets through online applications.  The Committee noted that there have been many legal cases in courts challenging the allotment process.  Further, there is neither any feedback mechanism nor any study done regarding the efficacy of the process.  The Committee recommended the Ministry to develop a feedback system and conduct a study to streamline the allotment process.  A simple and transparent allotment procedure should be adopted to eliminate or reduce the number of cases.
   
• Of the 29,501 retail outlets approved since 2018, only one-third have been commissioned till July 1, 2021.  The Committee noted that the complexity of each location and delay in approvals from authorities make the allotment process tedious and cumbersome.  It recommended the Ministry to propose draft guidelines for state governments and set up a single window clearance system to ensure speedy approvals.  
   
• The Committee noted that the guidelines for allotment of retail outlets and LPG distributorships provide reservation for the SC, ST, and OBC categories.  It recommended the inclusion of the Economically Weaker Section (EWS) category in the guidelines.
   
• Marketing Discipline Guidelines (MDGs): MDGs have been in place since 1982 to enforce a greater degree of ethics and customer service in retail outlets.  The guidelines also stipulate a wide range of penal provisions such as suspension of sales/ supplies, imposition of fines, and terminations for malpractices.  The Committee noted instances when OMCs have used coercive tactics to enforce MDGs by imposing high penalties.  It recommended levying penalties in a consistent manner across the country.

For a PRS summary of the report, see here.

 

Aditya Kumar (aditya@prsindia.org)

Standing Committee report on tidal power development in India submitted

The Standing Committee on Energy (Chair: Mr. Rajiv Ranjan Singh) submitted its report on Tidal Power Development in India.[106]  Tidal energy refers to energy produced from the movement of ocean tides.  Key observations and recommendations of the Committee include:

• Assessing the potential of tidal energy: The Committee noted that theoretically, the potential of tidal and wave energy in India is 12.5 gigawatts and 41.3 gigawatts, respectively.  The potential for ocean-thermal has not been estimated till date.  The Committee recommended that the central government should assess the exploitable potential tidal, wave, and ocean energy.

• Cost of tidal power plant: The Committee noted that two tidal power plants were shut down in the past because of high cost.  These are: (i) 3.75 megawatt (MW) plant in West Bengal (cost Rs 63.5 crore per MW), and (ii) 50 MW plant in Gujarat (cost Rs 15 crore per MW).   It recommended that the central government should reassess the current cost of tidal power to determine its economic viability and benefits in long term.
   
• Setting up a pilot tidal power project: Tidal energy is not included in the 2022 renewable energy target (175 gigawatts) of India.  However, the Committee noted that all renewable sources of energy will be eligible for the 2030 target.  It recommended that the central government should set up a pilot tidal power project.   The project should be set up at a cost-effective location such as the Gulf of Kutch.

For a PRS summary of the report see here.

Standing committee report on development of coal blocks submitted

The Standing Committee on Energy (Chair: Mr. Rajiv Ranjan Singh) submitted its report on the subject “Development of Coal Blocks Allocated to Power Sector Companies”, on August 5, 2021.  Key observations and recommendations of the Committee include:

• Import of coal: The Committee noted that India imports a significant quantity of coal despite having abundant coal reserves.  It noted that a key reason for import is the superior quality of coal.  Further, certain thermal power plants are designed to use imported coal while some others require it for blending purposes.
   
• The Committee recommended that the import of coal should be eliminated in a phased manner.  This could be done by enhancing the quality of the indigenous coal and modifying the design of boilers in the power plants to make them compatible with indigenous coal. 
   
• Future of thermal power plants: The Committee noted that coal will remain the main source of power in this decade.    It noted there may be a 30% increase in the installed thermal power generation capacity of India by 2029-30 (from 205 Megawatt in 2020-21 to 267 Megawatt by 2029-30).  It also observed that currently, the thermal power plants are running at about half of their capacity. However, their capacity utilisation may be increased in future leading to an increase in coal requirement.  It recommended that the emissions from the thermal power plants should be reduced using advanced technologies. 

For PRS summary of the report, please see here.

Standing Committee report on delay in execution of power projects submitted

The Standing Committee on Energy (Chair: Mr. Rajiv Ranjan Singh) submitted its report on the subject “Delay in Execution/Completion of Power Projects by Power Sector Companies”, on August 5, 2021.[107]  The Committee observed that the delays in execution of power projects lead to significant time and cost overrun.  For example, the delay in execution of 12 hydro projects led to a cumulative time overrun of over 100 years, and a cost overrun of Rs 31,530 crore.  Key observations and recommendations of the Committee include:

The Committee recommended that during the contract formation stage, the project developer and contractor should exercise due diligence and carefully negotiate the contractual terms and conditions.   The contract document should contain suitable measures with strict norms and penalties for each level of activity in the contract.  Sub-sectoral limits for lending should be defined for lending to thermal power projects by banks on a priority basis.

The Committee recommended that apart from regular review meetings, an information technology (IT) based project management, monitoring, and follow-up system should be introduced at all project sites.  This system should have online connectivity with all stakeholders (such as suppliers, project developers, and contractors).

For PRS summary of the report, please see here.

Comments invited on Draft Electricity (Promoting renewable energy through Green Energy Open Access) Rules, 2021 

The Ministry of Power invited comments on the Draft Electricity (Promoting renewable energy through Green Energy Open Access) Rules, 2021.[108]  The draft Rules propose a framework for open access to renewable energy (from sources such as solar, wind, and waste-to-energy) for consumers.  Open access means allowing a consumer to purchase electricity from a utility of its choice, other than the utility having local area monopoly.  Only consumers with demand or sanctioned load of 100 kilowatts and more will be eligible under this framework.  Key features of the Rules include:  

• Nodal agency: The central government will notify a nodal agency, which will operate as the single window system for open access to renewable energy.  For the short term, the appropriate load dispatch centre must be notified as the nodal agency.  For the medium and long term, a state or central utility will be notified as the nodal agency.  Any eligible person will have to apply to the nodal agency for grant of open access.  
   
• Demand management: There will be no limit on the power supply for captive consumers of green energy open access.   However, the draft Rules recommend providing for a mechanism to avoid high variation in demand for a distribution licensee (such as minimum time for which consumer must not change the quantum of power consumed through open access).
   
• Cross subsidy surcharge: This surcharge for green energy open access consumers will not be increased beyond 50% of the surcharge fixed for the years in which the open access was granted.   This limit will be applicable for 12 years from the date of commissioning of a generating plant provided that the generating plant produces energy from renewable sources.  No cross-subsidy surcharge will apply to consumers of open access from waste-to-energy plants.

Comments on the draft Rules are invited until September 15, 2021.

Comments invited on proposed amendments to the Electricity (Late Payment Surcharge) Rules, 2021

The Ministry of Power has invited comments on the draft Electricity (Late Payment Surcharge) Amendment Rules, 2021.[109]  The draft Rules propose to amend the Electricity (Late Payment Surcharge) Rules, 2021.[110]  

The 2021 Rules provide for levying of late payment surcharge on overdue payments of distribution licensees to a generating company or a trading licensee or transmission company.   The 2021 Rules also provide for adjustment of any payment by the distribution licensee first towards the late payment surcharge and then towards monthly charges (starting from the longest overdue bill).111 

• Adjustment of payments: The draft Rules propose that the payments by the distribution licensee must be first made against oldest procurement followed by the payment for subsequent procurements.110  This will ensure that all old payments are done before a payment for any new procurement is made.110
   
• Freedom to sale power in case of default: Further, the draft Rules propose that a generating company may sell power to any other licensee or power exchange in the event of payment default by distribution licensees This will apply if the distribution licensee, with whom the generating company has the PPA, fails to pay any outstanding amount (including the late payment surcharge) after seven months of the due date as per the PPA.  In such cases, the generating company will retain the claim over the distribution licensee for the fixed charges and capacity charges.  The generating company will have to give a notice of 15 days for such claims.110 

Guidelines regarding transmission projects and transmission services issued

The Ministry of Power issued guidelines for: (i) encouraging competition in the development of transmission projects, and (ii) tariff-based competitive bidding for transmission services.[111]  Key features of the guidelines for the development of transmission projects include:¹¹²

• Formulation of plans: The guidelines specify some plans to be formulated by certain central authorities to develop a robust and integrated power system in India.  These include: (i) perspective plan for 15 years by Central Electricity Authority (CEA), (ii) short-term plan for five years by CEA, and (iii) network plan by Central Transmission Utility.  Once these plans are formulated, all transmission projects by the government will be covered under this scheme for competitive bidding (except those exempted from this coverage).  This will apply to all inter-state and intra-state transmission projects.
   
• Selection of project developers: The project developers will be identified through the tariff-based competitive e-reverse bidding process.  E-reverse bidding process refers to the process where a seller bids for the price at which he is willing to sell his goods.  All projects will be awarded on build, own, operate and transfer mode.   The contract period for: (i) inter-state transmission projects will be of 35 years, and (ii) intra-state projects may be of 35 years or as fixed by the long-term transmission customer or the bid process coordinator.

Key features of the guidelines for procurement of transmission services include: 

• Bid evaluation for transmission services: The procurement of the transmission services will be through a two-stage competitive bidding process.  In the first stage, the bids will be evaluated based on annual transmission charges to qualify for the second stage (e-reverse biding process).   In the e-reverse bidding process, the bidders will be required to bid at least 0.25% lower than the prevailing lowest bid.
   
• Bid evaluation committee: CEA will constitute an evaluation committee for evaluation of bids for inter-state transmission systems.  The Committee will consist of: (i) at least one representative from CEA, (ii) at least two representatives from regional power committees, and (iii) one independent member.  The state transmission utility or the state government will constitute the evaluation committee for intra-state transmission services. 

Timelines for the replacement of existing electricity meters with pre-paid smart meters notified

The Ministry of Power notified the timelines for the replacement of existing electricity meters with pre-paid smart meters.[112]   Pre-paid smart meters are technologically advanced meters (with features such as automatic meter reading) with pre-payment facility.  This means that a consumer pays in advance for using the electricity.  The advance payment is loaded in the meter as balance amount, which is deducted based on the electricity usage of the consumer.   Key features of the timelines are as follows:

In all other areas, the pre-paid meters must be implemented by March 2025.  In areas without a communication network, the concerned state electricity regulatory commission may allow the implementation of pre-paid meters.

All feeders must be metered by December 2022.  Following DTs are required to be metered by December 2023: (i) DTs in electrical divisions with more than 50% of consumers in urban areas, and AT&C losses at more than 15% in 2019-20, and (ii) DTs in all other electrical divisions with AT&C losses more than 25% in 2019-20.   All other DTs must be metered by March 2025.  DTs and high voltage distribution system with load less than 25 kilo Volt-ampere may be excluded from adherence to the timelines.

 

TRAI releases recommendations on license regime based on layers of telecom

Omir Kumar (omir@prsindia.org)

Telecom Regulatory Authority of India (TRAI) released its recommendations on unbundling of different layers of telecom through differential licensing.[113]^,[114]   Such a licensing system is expected to: (i) promote investments, ease of doing business, and innovation in the sector, and (ii) enable sharing and optimum utilisation of telecom resources.   Under the current framework, a Unified License is issued for providing all types of telecom services in the country.  A licensee may choose services (such as access, internet, or satellite communication) to be offered within the Unified License.  The Unified License regime does not create a distinction between different layers of telecom such as infrastructure, network, service, and application.  Following licenses have been introduced in recent years which provide for segregation to a certain extent: (i) Infrastructure Provider license, at infrastructure level, and (ii) Virtual Network Operator (VNO) License, at service level. TRAI noted that there is no provision for segregation of network layer under any of these licenses.  Key recommendations of TRAI on differential licensing include: 

• Segregation of network layer:  A separate authorisation level called Access Network Provider authorisation should be provided within Unified License.  Access Network Providers will provide network services on a wholesale basis to service delivery operators.  They will not be allowed to directly provide services to consumers under Unified License.   However, such network providers may obtain a VNO license to give services directly to consumers.
   
• These entities will be permitted to acquire spectrum through auctions and enter into spectrum trading.  They will also be permitted to share their resources with telecom service providers.  If a licensee with access service authorisation under the unified license wishes to migrate to a segregated network layer and service layer regime, it will be allowed.  License fees and spectrum charges applicable to network provider authorisation will be the same as those for access service authorisation.  
   
• Framework for VNO: A framework should be prescribed for requiring access network providers and unified licensees to provide wholesale services to VNOs in a transparent, fair, and non-discriminatory manner.

TRAI releases recommendations on the promotion of broadband connectivity

Saket Surya (saket@prsindia.org)

TRAI has released its recommendations on the roadmap to promote broadband connectivity and enhanced broadband speed.[115]   Note that National Digital Communications Policy 2018 aims to achieve provisioning of broadband for all by 2022.[116]  In light of this policy, the Department of Telecommunications had sought recommendations of TRAI on the subject.   Key recommendations of TRAI are as follows:

• Definition of broadband: Currently, in India, a broadband connection is defined to have a minimum download speed of 0.512 Mbps (Megabits per second) to an individual subscriber.  TRAI recommended raising it to two Mbps.
   
• Incentives to service providers: TRAI recommended that telecom licensees should be provided incentives to accelerate the growth of fixed-line broadband (provided to customer premises, i.e., a fixed location).  The incentive should be in form of certain exemptions in the license fee for at least five years.  TRAI recommended certain targets based on net increase in fixed-line broadband subscribers to avail incentive.  Cable operators interested in providing broadband services should be incentivised to establish last-mile linkage networks.  Interest subvention scheme should be considered for cable operators registered as Micro, Small, and Medium Enterprises.
   
• Incentives to subscribers: A pilot direct benefit transfer scheme should be considered for incentivising the use of fixed-line broadband services.   Under the scheme, a fixed-line broadband subscriber in rural areas (with adequate fixed-line capacity but less demand) should be reimbursed 50% of the monthly subscription charges, subject to a maximum of Rs 200.  
• Enhancement in speed: To enhance mobile broadband speed, the radio spectrum used for backhauling connectivity (high capacity lines) of cellular networks should be assigned to service providers on demand and in a timebound manner.
   
• Right of way: TRAI identified issues in right of way permissions as one of the major challenges in the creation of broadband infrastructure.  It recommended that a centrally sponsored scheme should be formulated to incentivise states for reforms in the right of way permissions.  Establishment of common ducts in roadways, rail, gas, and water pipelines should be promoted.

 

Saket Surya (saket@prsindia.org)

The SAMRIDH scheme to support startup accelerators launched

The Ministry of Electronics and Information Technology (MEITY) launched a new scheme called Startup Accelerators of MEITY for Production Innovation, Development, and Growth (SAMRIDH).[117]  The scheme will provide financial support to startup accelerators helping the product-based software startups to scale.   Accelerators are entities which support early-stage startups through education, mentorship, and financing.   The total financial outlay under the scheme is expected to be Rs 99 crore over three years.  Key features of the scheme are:

• Financial support: An accelerator will be provided with a budget of two lakh rupees per startup for supporting 5-10 startups in one cohort.   Further, MEITY Startup Hub (MSH) will commit an investment of up to Rs 40 lakh in a startup that is part of the accelerator’s cohort (in exchange for equity).  MSH is a nodal agency of the Ministry and will be the implementing agency for the scheme.  Equal matching investment will have to be made by the accelerator or investors in that startup.
   
• Selection procedure: An accelerator meeting the following criteria will be eligible for support under the scheme: (i) more than three years of experience in the business of incubation, and should have supported more than 50 startups, of which at least 10 must have received non-public investment, or (ii) should have experience of running at least three cohorts for startups engaged in activities targeted under the scheme.  The accelerator should demonstrate capabilities with regard to: (i) supporting startups for domestic and international market immersion, (ii) helping them connect with investors, and (iii) running programs in order to accelerate deep-tech software product startups.
   
• Services to be provided: The accelerator will be required to provide specified services to startups including: (i) expert assistance for market research and product positioning, (ii) mentorship through experts based on tech vertical, (iii) legal assistance on matters such as intellectual property and incorporation, and (iv) assistance in closing deals with investors.