Highlights of this Issue

States/UTs permitted to discontinue containment measures

This has been done due to the steep decline in the number of COVID-19 cases, low daily positivity rate, and increased capacity of states/UTs for managing the pandemic.  Advisories by MoHFW will continue to apply.

Vaccination commences for children aged between 12-14 years

Corbevax, developed by Biological E Limited with support from the Department of Biotechnology, is being administered to 12-14 age group.  All persons over 60 years of age are now eligible for precautionary doses.

Budget session resumes after recess; five Bills introduced

Five Bills were introduced during the session, of which none have been passed by both Houses (excluding the Finance and Appropriation Bills).   Three Bills have been passed by Lok Sabha, and one in Rajya Sabha. 

Finance Bill, 2022 passed by Parliament

There is no change in income tax rates for individuals and corporations.  The income from transfer of crypto assets will be taxed at 30%.

Third Supplementary Demands for Grants for 2021-22 passed by Parliament

The third Supplementary Demands for Grants proposed an incremental cash outgo of Rs 1,07,408 crore.   The Ministry of Housing and Urban Affairs account for the highest net cash outgo.

The Delhi Municipal Corporation (Amendment) Bill, 2022 passed by Lok Sabha

The Bill seeks to amend the Delhi Municipal Corporation Act, 1957 to unify the three municipal corporations in Delhi.  It also reduces the number of seats in the new corporation from 272 to 250. 

The Criminal Procedure Identification Bill introduced in Lok Sabha

The Bill replaces the Identification of Prisoners Act, 1920.  It expands the categories of persons from whom identifiable information such as fingerprints and biological samples may be collected.  

Chartered Accountants Bill passed by Lok Sabha

The CA, the CWA, and the CS (Amendment) Bill, 2021 was passed in Lok Sabha.  The Bill seeks to strengthen the disciplinary mechanism and provide for time bound disposal of cases against members of these professions. 

Standing Committee on Sports submits Report on the National Anti-doping Bill

The Committee recommended setting up a mechanism for selecting the Chairperson the National Board set up under the Bill.  It also recommended that a distinction should be made between minor and major athletes. 

Current account deficit at 2.7% of GDP in third quarter of 2021-22

India’s current account deficit in third quarter of 2021-22 widened to USD 23 billion (2.7% of GDP) from USD 2.2 billion (0.3% of GDP) in the third quarter of 2020-21.

RBI issues directions for regulating microfinance loans

The regulations will apply to commercial banks, urban co-operative banks, and non-banking financial companies for loans given to households with annual income up to three lakh rupees.  

Census Rules amended to allow self-enumeration

The Census Rules, 1990 have been amended to permit persons to fill and submit the schedules containing questions themselves.  The schedules may be filled in either paper form or in electronic form.   

 

Parliament

Payoja Ahluwalia (payoja@prsindia.org)

Budget session 2022 resumes after recess

The budget session of Parliament began on January 29, 2022 and is scheduled to end on April 8, 2022.   The session was divided into two parts with a recess from February 12 to March 13.^[1],[2]   

In the second half of the session, the Finance Bill and Appropriation Bills were passed.  The Jammu and Kashmir budget was also passed.  Five Bills were introduced during the session, of which none have been passed by both Houses (excluding the Finance and Appropriation Bills).

The following Bills have been passed by Lok Sabha and are pending before Rajya Sabha: (i) The Constitution (Scheduled Tribes) Orders (Amendment) Bill, 2022, (ii) The Constitution (Scheduled Tribes) Orders (Amendment) Bill, 2022, and (iii) The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021.  

The Constitution (Scheduled Castes and Scheduled Tribes) Orders (Amendment) Bill, 2022 was passed by Rajya Sabha and is pending in Lok Sabha.  The Criminal Procedure (Identification) Bill, 2022 and the Constitution (Scheduled Castes and Scheduled Tribes) Orders (Second Amendment) Bill, 2022 were introduced and are pending in both Houses. 

For details of the planned legislative agenda for the session, see here.  

 

Union Budget 2022-23

Tushar Chakrabarty (tushar@prsindia.org)

Finance Bill, 2022 passed by Parliament

The Finance Bill, 2022 was passed by Parliament to give effect to the government’s financial proposals for 2022-23.[3]  Key features of the Bill include:

• Income tax rates: There is no change in income tax rates for individuals and corporations.

• Surcharge on Long Term Capital Gains (LTCG): Currently, the surcharge on LTCG on listed equities and equity mutual funds is capped at 15%.  The surcharge on other LTCG is 25% if total income is between two crore rupees and five crore rupees, and 37%, if it is above Rs five crore rupees.  The budget proposes to cap these at 15%.

• Tax on virtual digital assets: Income from the transfer of virtual digital assets such as cryptocurrencies and non-fungible tokens will be taxed at the rate of 30%.  Any loss incurred from such transfers cannot be set off against any income computed from virtual digital assets or any other income or carried forward to subsequent years.

• Central Bank Digital Currency: The Bill also amends the Reserve Bank of India (RBI) Act, 1934 to enable RBI to issue its digital currency. 

• Co-operatives: Alternate minimum tax for co-operatives will be reduced from 18.5% to 15%.   Surcharge will be reduced from 12% to 7% for co-operatives whose total income is between one crore and ten crore rupees.

Third Supplementary Demands for Grants for 2021-22 passed by Parliament

The third Supplementary Demands for Grants (DFG) for 2021-22 were passed by Parliament.[4]  The third Supplementary DFG proposed an incremental cash outgo of Rs 1,07,408 crore.  Note that first and second Supplementary Demand for Grants proposed an incremental cash outgo of Rs 23,675 crore and Rs 2,99,243 crore respectively.[5]^,[6]  Together, these three supplementary demands would imply an increase of 12.4% in the total expenditure of the central government as compared to the budget estimates for 2021-22 (Rs 34,83,236 crore).  As per revised estimates, in 2021-22, the total expenditure of the central government is expected to be Rs 37,70,000 crore (Table 1). 

Table 1: Net cash outgo proposed across key ministries under the third Supplementary Demands 2021-22 (Rs crore)

Ministry	Net Cash outgo proposed (Rs crore)
Total Expenditure	1,07,408
of which:
Housing and Urban Affairs	30,315
Finance	24,090
Chemicals and Fertilisers	15,016
Labour and Employment	10,261
Rural Development	9,668

Sources: Third Supplementary Demands for Grants 2021-22, Ministry of Finance; Union Budget Documents; PRS.

Key expenditure proposed to be financed under third supplementary demands include:

• Housing: Rs 30,170 crore has been approved to: (i) repay the loan taken by Building Materials and Technology Promotion Council for Pradhan Mantri Awas Yojana -Urban (PMAY-U) from National Small Saving Fund, and (ii) meet the targets under the Credit Linked Subsidy Scheme for economically weaker sections/lower income group category under PMAY-U.  PMAY-U seeks to provide pucca houses to all eligible urban households by 2022. 

• Fertiliser subsidy: Rs 14,000 crore has been approved for import of urea, and Rs 8,270 crore has been approved for indigenous urea subsidy.
• Finance: The government seeks approval of Rs 7,132 crore for meeting additional expenditure towards pensions and other retirement benefits.

 

COVID-19

As of March 31, 2022, there were 4.3 crore confirmed cases of COVID-19 in India.[7]   Of these, 4.25 crore (99%) had been cured/discharged and 5.2 lakh (1.2%) persons had died.  As of March 31, 2022, 98.7 crore people had received the first dose of a vaccine across age groups, of which 83 crore people had been fully vaccinated and 2.3 crore people have received the precautionary dose.[8]  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 the centre and the states, please see here.  Key announcements made in this regard in March 2022 are as follows.

States/UTs permitted to discontinue containment measures

Shubham Dutt (shubham@prsindia.org)

The Ministry of Home Affairs permitted all states/ UTs to discontinue issuing orders under the National Disaster Management Act, 2005 for containment of COVID-19.[9]^,[10]  This has been done due to the steep decline in the number of COVID-19 cases, low daily positivity rate, and increased capacity of states/UTs for managing the pandemic.  Since March 2020, the Ministry had been issuing such orders under the 2005 Act from time to time.  Last month, the Ministry had issued an order for gradually opening economic activities based on a risk assessment.[11]  

Advisories by the Ministry of Health and Family Welfare on containment measures (such as using face masks, and observing COVID appropriate behaviour) will continue to apply.  States/UTs may take prompt and proactive action at the local level if they observe a surge in cases.

Vaccination commences for children aged 12-14, precautionary doses for all over 60  

Shashank Srivastava (shashank@prsindia.org) 

COVID-19 vaccination commenced for children in the 12-14 age group.[12]  Corbevax, developed by Biological E Limited with support from the Department of Biotechnology, is being administered to this age group.  Note that Corbevax was given emergency use authorisation for restricted use in adolescents (age group 12-18 years) in February 2022.[13]   Covaxin is being administered for the 14-18 age group.¹²

Further, all persons over 60 years of age are now eligible for precautionary doses.¹²   Until February 2022, precautionary doses were being administered only to healthcare and frontline workers, and persons aged 60 years and above with co-morbidities.[14] 

Scheduled international flights commence  

Shashank Srivastava (shashank@prsindia.org) 

The Directorate General of Civil Aviation (DGCA) issued a notification to resume scheduled commercial international flights.[15]  In March 2020, due to the onset of the COVID-19 pandemic, scheduled international flights were suspended.[16]  The ban was extended several times since then. 

PMGKAY extended till September 2022 

Shashank Srivastava (shashank@prsindia.org) 

The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) has been extended till September 2022.[17]  The scheme was first announced in March 2020 as part of the relief package for the poor in light of the COVID-19 pandemic and the lockdown.  The scheme was operational during March-November 2020.  In April 2021, the scheme was reintroduced for the May-June 2021 period, and was then further extended till November 2021.[18]^,[19]  In November 2021, the scheme was extended till March 2022.[20] 

Under the scheme, every month, five kilograms of ration is provided free of cost to persons from poor families.  Benefits are provided to all beneficiaries in addition to their existing food grain entitlements under the National Food Security Act, 2013.

 

Macroeconomic Development

Tushar Chakrabarty (tushar@prsindia.org)

Current account deficit at 2.7% of GDP in third quarter of 2021-22

India recorded a current account deficit of USD 23 billion (2.7% of GDP) in the third quarter (October-December) of 2021-22, as compared to a deficit of USD 2.2 billion (0.3% of GDP) in the third quarter of last year.[21]  The widening of current account deficit was primarily due to higher trade deficit.   In the second quarter (July-September) of 2021-22, current account deficit was USD 9.9 billion (1.3% of GDP).

Net inflow in the capital account decreased to USD 23.2 billion as compared to USD 33.5 billion in the third quarter of 2020-21.  The capital account captures transactions that lead to a change in the asset/liability position of entities in India.  Net foreign direct investment recorded an inflow of USD 5.1 billion in third quarter of 2021-22 as compared to an inflow of USD 17.4 billion in the year ago period.  Foreign portfolio investment recorded a net outflow of USD 5.8 billion in third quarter of 2021-22 as compared to an inflow of USD 21.2 billion in the corresponding quarter in 2020-21. 

Foreign exchange reserves increased by USD 0.5 billion in the third quarter of 2021-22 as compared to USD 32.5 billion in the third quarter of 2020-21.

Table 2: Balance of payments, Q3 2021-22 (USD billion)

	Q3 2020-21	Q2 2021-22	Q3 2021-22
Current Account	-2.2	-9.9	-23.0
Capital Account	33.5	40.4	23.2
Errors and Omissions	0.6	0.7	0.3
Change in reserves	32.5	31.2	0.5

Sources: Reserve Bank of India; PRS.

 

Home Affairs

Lok Sabha passes Bill to unify Municipal Corporations in Delhi

Omir Kumar (omir@prsindia.org) 

The Delhi Municipal Corporation (Amendment) Bill, 2022 was passed by Lok Sabha.[22]  The Bill seeks to amend the Delhi Municipal Corporation Act, 1957 passed by Parliament.[23]  The Act was amended in 2011 by Delhi Legislative Assembly to trifurcate the erstwhile Municipal Corporation of Delhi into: (i) North Delhi Municipal Corporation, (ii) South Delhi Municipal Corporation, and (iii) East Delhi Municipal Corporation.[24]  The Bill seeks to unify the three corporations.  Key features of the Bill include:

• Unification of Municipal Corporations in Delhi:  The Bill replaces the three municipal corporations under the Act with one Corporation named the Municipal Corporation of Delhi.

• Powers of the Delhi government: The Act as amended in 2011 empowers the Delhi government to decide various matters under the Act.  These include: (i) total number of seats of councillors and number of seats reserved for members of the Scheduled Castes, (ii) division of the area of corporations into zones and wards, (iii) delimitation of wards, (iv) matters such as salary and allowances, and leave of absence of the Commissioner, (v) sanctioning of consolidation of loans by a corporation, and (vi) sanctioning suits for compensation against the Commissioner for loss or waste or misapplication of Municipal Fund or property.  Similarly, the Act mandates that the Commissioner will exercise his powers regarding building regulations under the general superintendence and directions of Delhi government.  The Bill instead empowers the central government to decide these matters.

• Number of councillors: The Act provides that the number of seats in the three corporations taken together should not be more than 272.  The 14^th Schedule to the Act specifies 272 wards across the three Corporations.  The Bill states that the total number of seats in the new Corporation should not be more than 250.

For PRS summary of the Bill, please see here.

The Criminal Procedure Identification Bill, 2022 introduced

Tanvi Vipra (tanvi@prsindia.org) 

The Criminal Procedure (Identification) Bill, 2022 was introduced in Lok Sabha.[25]  The Bill replaces the Identification of Prisoners Act, 1920.  The Act authorises the collection of certain identifiable information about specified persons such as convicts for investigation of crime.  The Bill expands the ambit of such details, and persons whose details can be taken.  It authorises the National Crime Records Bureau to collect, store, and preserve these details.

• Details about convicts and other persons: The Act permits the collection of photographs and specified details about convicts and other persons including finger impressions and footprint impressions. The Bill expands the list of details that can be collected.  It will now include: (i) palm-print impressions, (ii) iris and retina scans, (iii) behavioural attributes such as signature and handwriting, and (iv) other physical and biological samples such as blood, semen, hair samples, and swabs, and their analysis.

• Persons whose details may be taken:  As per the Act, the following persons may be required to give photographs and specified details: (i) persons convicted of certain offences (such as offences punishable with a minimum of one year of rigorous imprisonment), (ii) persons ordered to give security for good behaviour or maintaining peace under the Code of Criminal Procedure, 1973 (CrPC), and (iii) persons arrested in connection with an offence punishable with at least one year of rigorous imprisonment.  The Bill widens the ambit of such persons to include all convicts, arrested persons, as well as persons detained under any preventive detention law.  Arrested persons will not be obliged to give their biological samples unless they have committed an offence against a woman or a child, or an offence punishable with a minimum of seven years of imprisonment.

• Retention of details:  The Bill requires the details collected to be retained in digital or electronic form for 75 years from the date of collection. The record may be destroyed in case of persons who: (i) have not been previously convicted, and (ii) are released without trial, discharged, or acquitted by the court, after exhausting all legal remedies.

For PRS summary of the Bill, please see here.

AFSPA withdrawn from certain parts of Assam, Nagaland, and Manipur

Shubham Dutt (shubham@prsindia.org)

The Ministry of Home Affairs announced that the disturbed areas under the Armed Forces (Special Powers) Act, 1958 (AFSPA) in Assam, Nagaland, and Manipur will be reduced.[26]^,[27]  The reduction will take place with effect from April 1, 2022.  AFSPA empowers the governor of the state, or the central government, to declare the whole or part of any state as a disturbed area.[28]  In a disturbed area, officers of the armed forces have certain special powers.  These include the power to open fire at individuals violating any laws which prohibit: (i) an assembly of five or more persons, or (ii) the carrying of weapons.

The reduction in disturbed areas under AFSPA in the three states is captured below.

Table 3: Status of applicability of AFSPA in the states with effect from April 1, 2022

State	Applicability of AFSPA
	Withdrawn from	In force in
Assam	23 districts completely, one district partially	Nine districts completely, one district partially
Nagaland	15 police stations in seven districts	57 police stations in 13 districts
Manipur	15 police stations in six districts	82 police stations in 16 districts

Note: At present, all three states are declared disturbed areas (except the Imphal Municipal area of Manipur).  Areas where AFSPA remains in force are ‘disturbed areas’ for six months from April 1, 2022.  
Sources: Ministry of Home Affairs; PRS.

Census Rules, 1990 amended to permit self-enumeration

Shubham Dutt (shubham@prsindia.org)

The Ministry of Home Affairs amended the Census Rules, 1990.[29]^,[30]  The Rules provide details pertaining to the conduct of the Census, such as custody and disposal of census schedules, and release of the Census data.  Census schedules contain the questions asked as part of the census exercise.   Under the Rules, the census enumeration is only conducted through canvassing (i.e., census officers approach households and record persons’ answers on the schedules).[31]  The amendment allows self-enumeration, i.e., persons may fill up, complete and submit census schedules themselves.   Further, the amendment also permits the census schedules to be filled in paper form or in an electronic form. 

 

Finance

The CA, the CWA, and the CS (Amendment) Bill, 2021 passed in Lok Sabha

Omir Kumar (omir@prsindia.org)

The Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021 was passed in Lok Sabha.[32]  The Bill seeks to amend the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980.  The three Acts provide for the regulation of the professions of chartered accountants, cost accountants and company secretaries, respectively.  The Bill seeks to strengthen the disciplinary mechanism under these Acts, and provide for time bound disposal of cases against members of these professions.  Key features of the Bill include the following:

• Registration of firms: Currently, members of these professions are required to register with the respective institutes.  As per the Bill, firms will also be required to register with the Institutes by making an application to the respective Councils of the Institutes.  The Councils must maintain a register of firms containing details such as pendency of any actionable complaint or imposition of penalty against the firms. 

• Disciplinary Directorate: Under the Acts, the respective Councils of the three Institutes must each constitute a Disciplinary Directorate, headed by Director (Discipline) who is an officer of the Institute.  The Bill adds that each Directorate must also include at least two Joint Directors.

• Under the Acts, on receiving a complaint, the Director arrives at a prima facie opinion on the alleged misconduct.   Depending on the misconduct, the Director places the matter before the Board of Discipline or the Disciplinary Committee.  The Bill amends this to empower the Directorate to independently initiate investigations against members or firms.  The Director must decide whether a complaint is actionable within 30 days of receiving such complaint.  If the complaint is actionable, the Director must submit a preliminary examination report to the Board or the Committee (as the case may be), within 30 days.  Under the Acts, a complaint may be withdrawn if permitted by the Board or Committee.  The Bill provides that a complaint filed with the Directorate will not be withdrawn under any circumstances.

For a PRS summary of the Bill, see here.

Standing Committee submits report on chartered accountants bill

Tushar Chakrabarty (tushar@prsindia.org)

The Standing Committee on Finance (Chair: Mr. Jayant Sinha) submitted its report on the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Bill, 2021.[33]  The Bill seeks to amend the Chartered Accountants Act, 1949, the Cost and Works Accountants Act, 1959, and the Company Secretaries Act, 1980.  The three Acts provide for the regulation of the professions of chartered accountants, cost accountants and company secretaries, respectively.  Key observations and recommendations of the Committee include:

• Coordination committee: The Bill sets up a Coordination Committee headed by the Secretary of the Ministry of Corporate Affairs.  The president, vice-president and secretary of the three institutes will be members of the Coordination Committee.  Its functions will include: (i) quality improvement of academics, (ii) coordinating and collaborating among the professions, and (iii) making recommendations on regulatory policies for the professions.  The Standing Committee recommended that the Coordination Committee should be chaired by an eminent person from industry, business or finance.  The person will be nominated by the central government from a panel prepared by the respective councils of the three institutes.  Such a person must not be a member of the three institutes.  The Secretary of the Ministry of Corporate Affairs can be a member of the Committee. The Committee recommended renaming the Coordination Committee as the Governance Committee.  Its mandate should be expanded to include harmonious regulation, effective development, and disciplinary oversight.

• Multiple bodies for regulation: The Committee noted that the qualification and licensing of accountants in US, UK, and Canada is done by multiple bodies.  In India, ICAI has statutory monopoly power over the whole profession.  Thus, the scope for improving the quality and competency of the profession remains limited.   It observed that multiple bodies, on the lines of advanced countries, are needed to promote healthy competition and improve the credibility of financial reporting.  It also recommended setting up academic institutes for accounting for further development of accounting and finance profession.

For a PRS summary of the report, see here.

RBI issues directions for regulating microfinance loans

Tushar Chakrabarty (tushar@prsindia.org)

The Reserve Bank of India (RBI) issued the RBI (Regulatory Framework for Microfinance Loans) Directions, 2022.[34]  A microfinance loan is a collateral-free loan given to households with an annual income of up to three lakh rupees.  This will be irrespective of the end-use mode of application/processing/disbursal of the loan.  Regulated entities under these directions include: (i) commercial banks, (ii) urban co-operative banks, and (iii) non-banking financial companies.   The directions will be applicable from April 1, 2022.  Key features of the directions include:

• Repayment obligations: Each regulated entity must have a policy regarding the limit on the repayment of monthly loan obligations of a household as a percentage of the household’s monthly income.  This will be subject to a maximum limit of 50% of the monthly household income.  While computing loan repayment obligations, all outstanding loans of the household have to be taken into account.

• Pricing of loans: Regulated entities must also have a policy on the pricing of microfinance loans.  Such policy should include: (i) a well-documented interest rate model for determining an all-inclusive interest rate, (ii) delineation of components of interest rate (such as cost of funds, risk premium), and (iii) ceiling on the interest rate.  Interest rates and other charges should not be extortionary and will be subject to scrutiny by the RBI.  Any penalty for delayed payment will apply to the overdue amount and not the entire loan amount.  Any change in interest rate/charges must be informed to the borrower in advance and must be effective only prospectively.

• Recovery of loans: Each regulated entity has to formulate a mechanism for identifying borrowers facing repayment related difficulties.  Recovery will be made at a designated place decided mutually by the borrower and the regulated entity.  The regulated entity or its agent must not engage in harsh methods for recovery which includes: (i) use of threatening/abusive language, (ii) harassing friends and relatives of the borrower, and (iii) publishing the name of the borrowers.   

Cabinet approves setting up of National Land Monetisation Corporation

Tushar Chakrabarty (tushar@prsindia.org)

The Union Cabinet approved the setting up of the National Land Monetisation Corporation (NLMC).[35]  The NLMC will undertake the monetisation of surplus land and building assets of central public sector enterprises (CPSEs).  

NLMC will be wholly owned by the central government with an authorised share capital of Rs 5,000 crore.  It will also own, hold, manage, and monetise surplus land and building assets of CPSEs under closure and the surplus non-core land assets of CPSEs under strategic disinvestment.  NLMC will advise and support CPSEs and other government entities in the identification of surplus non-core assets and monetise them for maximum value realisation.  

The board of directors of the entity will consist of senior central government officers and eminent experts.   Professionals will be hired from the private sector for NLMC on a contract basis.  Further, the entity will be under the administrative control of the Department of Public Enterprises.

SEBI issues consultation paper on open offer price for disinvestment of PSUs

Tushar Chakrabarty (tushar@prsindia.org)

The Securities and Exchange Board of India (SEBI) issued a consultation paper on the determination of open offer price in case of disinvestment of public sector undertakings (PSUs).[36]  According to takeover regulations, shareholders must be provided with an opportunity (open offer) to exit their investment in the company being taken over (target company).  The price at which public shareholders are allowed to exit from the target company should not be lesser than that for the existing substantial shareholder.  

Procedure for open offer: In case of direct acquisition of a target company, the open offer price is based on certain parameters which include the volume weighted average market price of shares.  This is based on the market price as in 60 trading days preceding the date of the public announcement of the acquisition.  In cases of indirect acquisition, the 60-day trading period is calculated based on the date on which the primary acquisition is contracted and the date on which the decision is announced publicly, whichever is earlier.

Open offer for disinvestment of PSUs: SEBI noted that PSU’s strategic disinvestment is different from privately executed agreements.  The announcement of private transactions is made only on execution of binding agreements.   Thus, there is not much impact on trading price.  In strategic disinvestment of PSUs, the acquirer is identified months or years after the information regarding the sale is first made public.  This has an impact on the market price of the PSU.  In such a case, the open offer price for the prospective acquirer could be moving as the share price may be impacted by developments regarding the disinvestment.  

SEBI’s Primary Market Advisory Committee has recommended doing away with the 60-days’ volume-weighted average market price parameter for calculating open offer price in cases of PSU disinvestments.  The acquirer will have to upfront disclose the negotiated price for direct and indirect acquisitions.   Comments on the proposal have been invited by April 15, 2022.

 

Tribal Affairs 

Bill to recognise Gond community as a scheduled tribe in Uttar Pradesh introduced 

Tanvi Vipra (tanvi@prsindia.org) 

The Constitution (Scheduled Tribe and Scheduled Caste) Orders (Second Amendment) Bill, 2022 was introduced in Lok Sabha.[37]  The Bill seeks to amend the Constitution (Scheduled Tribes) (Uttar Pradesh) Order, 1967 (ST Order) and the Constitution (Scheduled Castes) Order, 1950 (SC Order) with respect to its application to Uttar Pradesh.  The Bill amends the SC order to exclude the Gond community as a Scheduled Caste in four districts of Uttar Pradesh: (i) Chandauli, (ii) Kushinagar, (iii) Sant Kabir Nagar, and (iv) Sant Ravidas Nagar.  It amends the ST order to recognise Gond community as a Scheduled Tribe in these four districts.

For a PRS Bill Summary, please see here.

Two Bills to amend lists of SCs and STs in Jharkhand and Tripura passed by one house

Shubham Dutt (shubham@prsindia.org) 

The Constitution (Scheduled Castes and Scheduled Tribes) Orders (Amendment) Bill, 2022 was passed in Rajya Sabha.^[38]  The Bill includes certain communities in the list of STs in Jharkhand.  These are the Deshwari, Ganjhu, Dautalbandi (Dwalbandi), Patbandi, Raut, Maajhia, Khairi, Tamaria, and Puran communities.  Further, the Bill omits the Bhogta community from the list of SCs in Jharkhand.  The community is instead being included in the list of STs in the state.

The Constitution (Scheduled Tribes) Order (Amendment) Bill, 2022 was passed in Lok Sabha.^[39]  The Bill includes the Darlong community as a sub-tribe of the Kuki tribe in the list of STs in Tripura.

For a PRS summary of the Bills, please see here and here respectively.

 

Sports

Omir Kumar (omir@prsindia.org) 

Standing Committee submits Report on the National Anti-doping Bill, 2021 

The Standing Committee on Education, Women, Children, Youth, and Sports (Chair: Dr. Vinay P. Sahasrabuddhe) submitted its Report on the National Anti-Doping Bill, 2021.[40]  The Bill was introduced in Lok Sabha on December 17, 2021 and was referred to the Committee on December 25, 2021.  The Bill provides for constituting National Anti-doping agency as a statutory body.  Key observations and recommendations of the Committee include:

• Selection mechanism for the National Board: The Bill provides for the constitution of the National Board for Anti-Doping in Sports. Functions of the Board include making recommendations to the government on anti-doping regulation and ensure compliance of international commitments on anti-doping.  The Board will oversee the activities of the National Anti-Doping Agency (NADA) and issue directions to it.  The Board will consist of a Chairperson and two members appointed by the central government.  The Committee recommended that a mechanism may be laid down for selection and appointment of the Chairperson and members of the Board.  This will ensure proper vetting of the person(s) appointed by the central government.  Note that currently the Bill does not provide for a selection process for appointments to the Board.

• Protective mechanism for minor athletes: The Committee noted that the Bill does not make any distinction between minor and adult athletes.  The World Anti-Doping Code (WADA Code) states that the protected class of athletes (includes athletes below 16 years of age, amongst others) may be given a lesser number of sanctions.  The Committee recommended that the distinction between a minor and major athlete should be made in the Rules to ensure the protective mechanism for minor athletes.     

• Awareness around anti-doping: The Committee noted that large scale awareness, education, and information is required for athletes, coaches, support personnel, and medical practitioners to eliminate the prevalence of doping in sports.  Therefore, it recommended that a dedicated institute should be set up to undertake research, awareness initiatives, develop educational content, and run courses (diploma/degrees) to promote anti-doping measures outlined in the Bill.   

For a PRS summary of the report, see here.

 

Transport  

Comments invited on draft Inter-Country Non-Transport Vehicle Rules, 2022

Tanvi Vipra (tanvi@prsindia.org) 

The Ministry of Road Transport and Highways notified the draft Inter-Country Non-Transport Vehicle Rules, 2022.^[41]   Non-transport vehicle refers to a motor vehicle that is not a public service vehicle, goods carriage, and educational institution bus, or private service vehicle.⁴¹  

The draft Rules have been framed under the provisions of the Motor Vehicles Act, 1988.^[42]   The 1988 Act empowers the central government to regulate: (i) motor vehicles brought temporarily into India, and (ii) ownership and operation of motor vehicles by persons temporarily residing in India.⁴² 

As per the draft Rules, a non-transport vehicle registered in another country will be considered under the effective control of the person driving it, when it enters India.⁴¹  Key features of the Rules are:

• Restrictions on vehicles: Motor vehicles which are not registered in India will not be allowed to transport local passengers and goods within the territory of India.

• Requirement of documents: The following documents shall be carried in the vehicle during the stay in India: (i) a valid registration certificate, (ii) a valid driving license or international driving permit, (iii) a valid insurance policy, and (iv) a valid pollution under control (PUC) certificate.  A PUC certificate is only required if it is applicable in the origin country. 

Comments are invited until April 15, 2022.

Draft amendments to rules for registration of vehicle scrapping facilities notified 

Tanvi Vipra (tanvi@prsindia.org) 

The Ministry of Road Transport and Highways notified the draft Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility Amendment) Rules, 2022.^[43]  The draft Rules have been framed under the provisions of the Motor Vehicles Act, 1988.⁴²  The 1988 Act empowers the central government to prescribe the manner of recycling of motor vehicles which have exceeded their life.

The draft Rules propose amendments to the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021.  These Rules provide for the procedure to establish a registered vehicle scrapping facility (RVSF), which would be authorised to carry out dismantling and scrapping operations. 

The 2022 Rules introduce undertakings by a vehicle owner and an RVSF operator at the time of vehicle submission.  The draft Rules also introduce a Transfer Certificate of Deposit to ensure a digital proof of the transaction.  The entire process is to be linked on VAHAN, an online portal with a centralised register for vehicle data.  

Draft amendments to rules for regulation, and control of Automated Testing Stations notified

Tanvi Vipra (tanvi@prsindia.org) 

The Ministry of Road Transport and Highways notified the draft Central Motor Vehicles (Second Amendment) Rules, 2022.[44]  The draft Rules have been framed under the provisions of the Motor Vehicles Act, 1988.42  The 1988 Act empowers the central government to prescribe rules for recognition, regulation, and control of automated testing stations (ATS).⁴²  Automated testing stations carry out various tests to check the fitness of a vehicle.   Key features of the draft Rules are:

• Establishing ATS: The 1989 Rules specify that the infrastructure requirements for ATS.[45]  The draft Rules seek to add an additional requirement, which is that the premises where the ATS is to be housed shall either be owned or taken on lease or hired by the owner for at least ten years.⁴¹ 

• Pan-India testing: The 1989 Rules specify the process and procedure for testing the fitness of a vehicle.⁴⁵  The draft Rules seek to introduce that ATS may test vehicles registered in any state or union territory.⁴¹  

• Transmission of testing results: The 1989 Rules specify that all automated test results (including visual checks and photographs) shall be automatically transmitted to a central server installed in the ATS.⁴⁵  The draft Rules clarify that that it is the results from the testing equipment that must be automatically transmitted.⁴¹  Comments are invited until April 24, 2022. 

Report on Progress made in Implementation of Sagarmala Projects released

Rajat Asthana (rajat@prsindia.org) 

The Standing Committee on Transport, Tourism and Culture (Chair: Mr. T.G. Venkatesh) presented its report on ‘Progress made in Implementation of Sagarmala Projects’.[46]  Key observations and recommendations submitted by the Committee include:  

• Delay in implementation: The Committee noted that in the past year, only one more port modernisation project had been completed.  The Committee was concerned to know that no progress had been made on the all-weather all-cargo Vadhavan port.  Further, the Committee noted that port modernisation projects under Sagarmala have seen a cost escalation of Rs 20,000 crore.  To ensure speedy modernisation of ports, the Committee recommended the Ministry of Ports, Shipping and Waterways to enumerate the port-wise reasons for delays and steps being taken to address these delays.

• Enhancing port productivity:  The Committee noted that out of total capacity at major ports (2,500 million tonnes), only 1,248 million tonnes of cargo was moved across all major ports.  Further, during 2020-21, the average turnaround time of ships at major ports was 56 hours, while the pre-berthing waiting period was 26 hours.   Internationally, the turnaround time of a ship is less than 24 hours, and there is nearly no pre-berthing detention.   The number of moves handled per hour per container vessel at Indian ports (50-200) was also lower compared to other international ports (200-300).  To improve port productivity, the Committee recommended: (i) mechanisation and adoption of technology, (ii) development of ancillary services within port premises, and (iii) increasing the depth of the navigation channels, and modernising berthing for better capacity utilisation. 

For a PRS summary of the report, see here.

Report on Issues related to Security in Civil Aviation Sector released

Payoja Ahluwalia (payoja@prsindia.org) 

The Standing Committee on Transport, Tourism, and Culture (Chair: T. G. Venkatesh) presented its report on ‘Issues related to Security in Civil Aviation Sector’.[47]  Key observations and recommendations of the Committee include:

• Security manpower at airports: The Committee noted that out of 118 operational airports, only 64 airports are under Central Industrial Security Force (CISF) cover, while 54 airports have no such cover.  The Committee recommended that the central government should aim to bring all the operational airports under CISF security cover. 

• The Committee noted that there are 1,166 vacancies in the CISF, which is deployed at airports.  The Committee recommended that the full sanctioned strength of CISF should be provided at airports in the country.  The Committee also recommended the Ministry of Civil Aviation to establish dedicated institutions across the country to cater to needs for increased security manpower for the aviation sector.  The Committee also recommended that periodic surveys should be carried out to assess the changing threat perception at all airports in the country.  According to the results of the survey, trained security personnel should be provided at airports in a time-bound manner.

For a PRS summary of the report, see here.

Report on Issues related to Safety in Civil Aviation Sector released

Rajat Asthana (rajat@prsindia.org)

The Standing Committee on Transport, Tourism and Culture (Chair: Mr. T.G. Venkatesh) presented its report on ‘Issues related to Safety in Civil Aviation Sector’.[48]  Key observations and recommendations of the Committee include:  

• Vacancies of Air Traffic Controllers (ATCOs): The Committee noted that ATCOs play a critical role in ensuring safe aircraft operations.  The Committee noted the backlog in filling vacancies of ATCOs.   To keep up with the increasing requirement of ATCOs at upcoming airports, the Committee recommended addressing procedural issues in recruiting ATCOs.

• Airworthiness of aircraft engines: The Committee observed that compliance with all safety, and maintenance regulations for aircraft engines was critical, from a safety point of view.  To ensure airworthiness of aircraft engines, the Committee recommended making provisions to impose heavy penalty on airline operators, which are found to be violating rules in this regard.

For a PRS summary of the report, see here.

 

Tourism

Comments invited on Draft Report on National Digital Tourism Mission

Omir Kumar (omir@prsindia.org)

The Ministry of Tourism invited comments on the Draft Report on National Digital Tourism Mission (NDTM).[49]  The NDTM Mission seeks to harness the potential of digitisation in the tourism sector by facilitating exchange of information and services.  The draft report lays down certain principles and standards for the implementation of NDTM.   Key features and recommendations of the Draft Report are as follows: 

• Information exchange in the tourism sector: The Report noted that there is an information gap in the tourism sector due to the sector being fragmented (public sector and private sector).   There is a need for standardised data exchange amongst all stakeholders.  The digital ecosystem of the tourism sector may comply with certain principles which include: (i) treating data as an asset, and promoting data marketplaces for innovation, research, and permitted commercial purposes, (ii) laying down policies regulating data sharing, and (iii) designing a privacy policy conforming to the principles of privacy by design. 

• Institutional framework and funding for NDTM: The Report recommended establishing a dedicated body to house the NDTM.  It recommended the Ministry of Tourism to fund the NDTM for the initial 4-5 years, before moving to a self-sustained revenue generating not-for-profit model.   Further, a dedicated Program Management Unit may be set up, staffed with specialised consultants for the development of a roadmap for NDTM implementation.

• Support to tourism enterprises: NDTM will support small and medium enterprises in the tourism sector (such as accommodation and mobility providers), while on-boarding from multiple platforms.  Further, NDTM will also ensure fair price mix, to increase the quality of service and help regulate monopolies.

Report on Development of Tourism Infrastructure released

Rajat Asthana (rajat@prsindia.org) 

The Standing Committee on Transport, Tourism and Culture (Chair: Mr. T.G. Venkatesh) presented its report on ‘Development of Tourism Infrastructure in the country’.[50]  Key observations and recommendations of the Committee include:  

• Establishment of a tourism police: The Committee noted that safety of domestic and foreign tourists is important for projecting the country as a favourable tourist destination.  It recommended establishing and deploying a tourism police in every tourist space, as a separate wing of the police force.   As law and order is a State subject, the Committee recommended that the Ministry of Home Affairs should issue an advisory to state governments for creating a tourism police.  

• Improving connectivity:  The Committee noted the importance of connectivity among roads, railway, ports, and air, to boost the competitiveness of Indian tourism across the world.  To achieve this, the Committee recommended: (i) expediting funding from the Central Road Fund for connectivity projects, (ii) developing port cities for their lower logistical costs, better infrastructure, and employment generation ability, and (iii) promoting seaplane services to enhance air connectivity to remote, religious, and unexplored places near water bodies.

• Improved public amenities The Committee noted that public amenities such as public toilets, drinking water, standardised signage, souvenir shops, and accessibility provisions improve the likelihood of tourists choosing to visit a destination.  The Committee recommended the Ministry to ensure the establishment such public amenities by business houses under Corporate Social Responsibility.  It also noted the importance of haats for promoting tourism during festivals, which also support indigenous artisans. 

For a PRS summary of the report, see here.

Pharmaceuticals

Guidelines for strengthening the pharmaceutical industry released

Tanvi Vipra (tanvi@prsindia.org) 

The Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilisers has notified guidelines for the scheme ‘Strengthening of Pharmaceuticals Industry’ (SPI).[51]  The objective of the scheme is to: (i) strengthen the existing infrastructure facilities by creation of common facilities, and (ii) upgrade the production facilities of small and medium enterprises up to required regulatory standards.  Key features of the guidelines include:

Sub-Scheme	Incentive
APICF	Supporting pharma clusters for creation of common facilities with the focus (in decreasing priority) on R&D Labs, Testing Laboratories, Effluent Treatment Plants, Logistic Centres and Training Centres
PTUAS	Supporting small and medium enterprises through: (i) interest subvention of a maximum of 5% per annum (6% in case of units owned and managed by SC/STs), or (ii) Credit linked Capital subsidy of 10%
PMPDS	Supporting activities such as preparation of study reports on topics important to Indian pharmaceutical industry, and organising events (such as seminars, workshops and conferences)

          Sources: Ministry of Chemicals and Fertilisers; PRS. 

Approach paper on National Medical Devices Policy 2022 released

Payoja Ahluwalia (payoja@prsindia.org) 

The Department of Pharmaceuticals issued an approach paper on the draft of the National Medical Devices Policy, 2022 for public feedback.[53]  The Department noted that a wide range of regulatory approvals has been necessitated for the industries related to the medical devices sector.  This has led to high compliance and regulatory burden.  Further, the availability of skilled manpower remains a challenge in the development of the medical device sector in India.  The Department noted that a holistic policy is needed to accelerate the growth of this sector and hence the formulation of the National Medical Devices Policy, 2022 is proposed.  The key policy interventions proposed as part of this new policy are: 

• Regulatory streamlining: An online single window portal of the central licensing authority should be developed.   This portal will assist in filing applications for a medical device manufacturing license, import license, and clinical investigation, and integrate all key stakeholders involved in the regulatory processes.  For quality compliance and standardization, the adoption of the Global Medical Devices Nomenclature or Universal Medical Device Nomenclature System should be promoted.

• Establishing medical parks:  Medical device parks with common infrastructure facilities and additional accredited testing laboratories should be set up.                                                   

• Facilitating research and development: A fund for encouraging joint research involving existing industry players, academic institutions, and start-ups should be set up.  Centres of Excellence (CoE) should be designated in premier academic and research institutions.  The CoEs will support product development, validation, and certification of the medical uses of the devices.

• Human resource development: The approach paper proposes to set up National Institutes of Medical Devices Education and Research as Institutes of National Importance.

• Marketing of medical devices: The Department will propose and work with the industry to implement a Uniform Code for medical device marketing practice.  This will be aimed at ensuring ethical marketing of medical devices.

Standing Committee submits report on the Availability of Medicines and Medical Devices for COVID Management 

Shashank Srivastava (shashank@prsindia.org) 

The Standing Committee on Chemicals and Fertilizers (Chair: Ms Kanimozhi Karunanidhi) presented its report on ‘Availability of Medicines and Medical Devices for COVID Management’.[54]  The Department of Pharmaceuticals (DoP) is responsible for industry promotion for pharmaceutical industry.  It also works to augment the production and supply of essential drugs required for management of COVID-19.  Key observations and recommendations of the Committee include the following:

• Availability of medicines: The Committee noted that listing of drugs for COVID-19 management and prescribing them under the National Treatment Protocol is done by the Ministry of Health and Family Welfare (MoHFW).  The DoP has no role in framing of the National Treatment Protocol.  Currently, the Central Drugs Control Organisation (CDSCO) updates the MoHFW about the production capacity and availability of the drugs.  Based on inputs from MoHFW from time to time, the DoP augments the production and supply of the essential drugs required for management of COVID-19.  The Committee recommended that the DoP should be involved in determining the National Treatment Protocol, to initiate the coordination between DoP and MoHFW in the planning stage.  Further, it recommended conducting a daily review of medicines and medical devices required by all states or union territories by DoP and MoHFW.
• Price control of medicines: Currently, the National Pharmaceutical Pricing Authority (NPPA) fixes the ceiling price of scheduled medicines specified under the Drugs (Prices Control) Order, 2013 (DPCO).   All manufacturers of scheduled medicines have to sell their products within the ceiling price fixed by the NPPA.   However, manufacturers of non-scheduled formulations are allowed to fix their own retail selling prices (provided that the price increase of such formulations is not more than 10% during the preceding 12 months).  The Committee recommended DoP and NPPA to frame a new price regime for COVID-19 specific medicines and medical devices, where no annual increase in prices may be allowed till the pandemic is entirely over in the country.  Further, the distinction between scheduled and non-scheduled drugs may be done away with.

• Prices of oxygen concentrators: The Committee noted that the price range of oxygen concentrators is still on the higher side.  It recommended DoP and NPPA to consider capping of the prices of various types of oxygen concentrators so as to make them affordable.  Further, pharma PSUs under DoP may consider manufacturing the same.   Further, the Committee recommended that medical devices such as ventilators and concentrators should be covered under National List of Essential Medicines for effective price control.   

For a PRS summary of the report, see here.

 

Petroleum 

Shashank Srivastava (shashank@prsindia.org) 

Standing Committee submits Report on the National Gas Grid

The Standing Committee on Petroleum and Natural Gas (Chair: Mr Ramesh Bidhuri) presented its report on ‘National Gas Grid including PNG and CNG’.[55]  Key observations and recommendations of the Committee include the following:

• Demand and supply of natural gas: The Committee observed that share of natural gas in total energy mix currently in India is only 6%, much lower than the global average of 24.2%.  It recommended: (i) increasing the blocks awarded for exploration, (ii) intensifying activities for exploration and production from already discovered fields, (iii) pursuing diplomatic efforts to expedite construction of transnational pipelines from neighbouring regions, and (iv) entering into longer term contracts with countries for import of natural gas/liquefied natural gas (LNG) at economic cost.  Further, incentives like tax breaks may be provided for exploitation of unconventional hydrocarbons in awarded blocks. 

• Gas grid infrastructure: The Committee noted that at present, about 20,227 km of natural gas pipelines are operational, while projects for an additional 15,500 km of pipelines are being executed.  The Committee took note of the delays in various projects (such as Haldia – Jagdishpur pipeline) due to: (i) demands for higher land compensation by farmers, (ii) issues of right of use, and (iii) multiplicity of agencies involved in granting clearances and permissions.  To expedite the expansion of the gas grid, the Committee recommended the Ministry to: (i) issue a blanket approval for pipeline laying with a half-yearly or yearly reconciliation mechanism, (ii) develop a single window fast track system to reduce time to process permissions, (iii) evolve a better coordination mechanism with state governments, (iv) review pending litigation, and (iv) undertake periodic review to avoid delays. 

• Capacity utilisation of pipelines: The Committee noted that capacity utilisation of existing natural gas pipelines is on the lower side, with some of them operating at 10% to 20% level of utilisation.  Further, pipelines operating for over 10 years have been constrained by limited availability of domestic gas.  The Committee recommended that immediate steps must be taken to expedite enhancement of domestic production through exploitation of unconventional sources and interconnecting various pipelines.

For a PRS summary of the report, see here.

 

Mining

Omir Kumar (omir@prsindia.org) 

Report on Development of Aluminium and Copper Industries released 

The Standing Committee on Coal, Mines and Steel (Chair: Mr. Rakesh Singh) submitted its report on ‘Development of Aluminium and Copper Industries in the Country’.[56]  The Ministry of Mines is responsible for survey, exploration, and mining of all minerals, other than natural gas, petroleum, atomic minerals, and coal.  Key observations and recommendations of the Committee include:

• Aluminium production capacity: Aluminium is the second largest metal market in the world after iron and steel.  The Indian primary aluminium (aluminium produced directly from mined ore) market consists of three major producers: (i) National Aluminium Company Limited (NALCO), (ii) Hindalco Industries, and (iii) Vedanta Limited.   These three have a total production capacity of about four million tonne.  The Committee noted that presently NALCO is the only public sector enterprise producing bauxite and primary aluminium in India.  Further, it noted that the aluminium sector has not been able to achieve its desired level of production with respect to its installed capacity.  The Committee recommended the Ministry to improve the physical performance of the sector thereby allowing India to be self-reliant for aluminium.

• Development of copper: The Committee observed that India has very limited known reserves of exploitable copper ore and currently its copper share of world's reserve is only 0.31%.  It noted that Hindustan Copper Limited (public sector enterprise) plans to increase its mining capacity: (i) from current level of 4.0 million tonne per annum to 12.2 million tonne in Phase–I (under implementation), and (ii) from 12.2 million tonne per annum to 20.2 million tonne in Phase-II.  The Committee recommended the Ministry to prepare a holistic plan to ensure a proportionate increase in production of copper ore on an yearly basis in order to meet the targets.  

For a PRS summary of the report, see here.

 

Education

Tanvi Vipra (tanvi@prsindia.org) 

Guidelines for awarding PhD with a four-year undergraduate degree notified

The University Grants Commission (UGC) has notified Draft University Grants Commission (Minimum Standards and Procedures for Award of PhD Degree) Regulations, 2022.[57]  The draft regulations have been framed under the provisions of the University Grants Commission Act, 1956.[58]  The 1956 Act empowers the UGC to regulate the minimum standards of instruction for the grant of any degree by any university.⁵⁸  The regulations apply to all universities, and every degree-granting autonomous college or affiliated college allowed to offer PhD programmes.  Key features of the guidelines include:  

• Eligibility criteria: Candidates who have completed a two-semester or a four-semester Master’s degree after a four-year undergraduate degree, with minimum qualifying marks (55%) are eligible to pursue a PhD.  Candidates who have cleared the M.Phil coursework with at least 55% marks are eligible for admission to the PhD programme.  Additionally, a candidate having a minimum CGPA of 7.5 out of 10 in their four-semester Bachelor’s degree (with a research component) will also be eligible for a PhD.

• Relaxations: A relaxation of 5% marks may be allowed for candidates from the SC/ST/OBC (non-creamy layer)/Differently-abled/EWS categories, or for those who had obtained their master’s degree before September 19,1991. 

• Procedure for admission: Universities shall admit PhD scholars through a National Eligibility Test (NET) or an entrance test conducted at the level of individual universities.  60% of total vacant seats will be filled from NET/Junior Research Fellow qualified students, and the remaining 40% through the university entrance test on the basis of interviews conducted by the institute.