The Chemical Weapons Convention (Amendment) Bill, 2010 (the Bill) was recently passed by the Lok Sabha without any amendment.  The Chemical Weapons Convention Act, 2000 (the Act) was enacted to give effect to the United Nations Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction (the CWC).  The CWC aims to eliminate chemical weapons by prohibiting their development, acquisition, stockpiling, transfer or use by State Parties. The 188 State Parties of the CWC are required to take the steps necessary to prohibit these activities within their jurisdiction. India signed the Convention on January 14, 1993. The Bill was introduced in the Rajya Sabha on April 16, 2010 by the Minister of State in the Ministry of Chemicals and Fertilizers, Mr. Srikant Kumar Jena.  The Standing Committee submitted its report on August 3, 2010. This Bill was passed by the Rajya Sabha on May 3, 2012 with some amendments based on the recommendations of the Standing Committee.  The recommendations of the standing committee and the subsequent amendments made by the Rajya Sabha are as follows:

  • The Act disallows any person from transferring or receiving specified toxic chemicals from a citizen of a non-State Party.  The Bill changes this position by prohibiting transfer or receipt of the specified toxic chemicals from a non-State Party to the Convention.  The Committee recommended that the provision should clearly prohibit transfer or receipt from both non-State Parties and citizens of non-State Parties.  The Rajya Sabha has made the corresponding amendment to the Bill.
  • The Act mandates the registration of persons engaged in the production, transfer, or use of any toxic chemical.  The Bill makes registration mandatory, subject to certain threshold limits that are prescribed, for manufacturers of specified chemicals.  The Committee observed that this would make registration mandatory only for those manufacturers who cross the specified limit.  Thus, the Committee asked the government to consider a two-step process of compulsory registration of all manufacturers, followed by a declaration of those crossing the threshold limits.  This recommendation has not been accepted by the Rajya Sabha.  Hence, only those persons whose production of toxic chemicals exceeds the threshold would be required to register.
  •  The Act established a National Authority to implement the provisions of the Convention.  It empowers the central government to appoint officers of the National Authority as enforcement officers. The Bill broadens the central government’s power by allowing it to appoint any of its officers as enforcement officers.  The Committee recommended that eligibility criteria, such as technical qualifications and expertise, for these officers should be set under the rules.  The Committee also recommended that officers should be given suitable training before their appointment.  The Rajya Sabha has incorporated the suggestion of prescribing eligibility criteria under the Bill.

The Lok Sabha passed the Bill on August 30, 2012 without any amendments.  The standing committee report and its summary may be accessed here and here.

Reports suggest that a debt restructuring plan is being prepared for power distribution companies (discoms) in seven states - Uttar Pradesh, Punjab, Rajasthan, Haryana, Andhra Pradesh, Tamil Nadu and Madhya Pradesh.  According to some estimates, the combined outstanding debt for discoms is Rs 2 lakh crore.  Discoms have been facing heavy losses.  According to a Planning Commission Report, the cost of supplying electricity increased at a rate of 7.4 per cent annually between 1998-99 and 2009-10.  The average tariff has also increased at an annual rate of 7.1 per cent over the same period.  However, the report shows that the average tariff per unit of electricity has consistently been much lower than average cost of supply per unit.  Between 2007-08 and 2011-12, the gap between average cost and average tariff per unit of electricity was between 20 and 30 per cent of costs.

Average cost and average tariff per unit of electricity (Rs per kWh)

Year

Unit cost

Average tariff per unit

Gap between cost and tariff

Gap as percentage of unit cost

2007-08

4.04

3.06

0.98

24%

2008-09

4.6

3.26

1.34

29%

2009-10

4.76

3.33

1.43

30%

2010-11

4.84

3.57

1.27

26%

2011-12

4.87

3.8

1.07

22%

Source: “Annual Report 2011-12 on the Working of State Power Utilities and Electricity Departments”, Planning Commission State discoms have been losing money due to higher costs than revenues, as well as high transmission and distribution (T&D) losses.  The commercial losses for discoms in India (after including subsidies) increased from Rs 16,666 crore in 2007-08 to Rs 37,836 crore in 2011-12. Reports suggest that the restructuring plan being prepared will be worth Rs 1.2 lakh crore in short-term liabilities.  Half of the proposed amount would be issued as bonds by the discoms, backed by a state government guarantee.  Banks and financial institutions would reschedule the remaining Rs 60,000 crore of debt, with a moratorium of three years on payment of the principal amount.  State governments that adopt the financial restructuring plan would not recover any loans given to discoms before they start showing profits. Under a proposed transition finance mechanism, the central government would reimburse 25 per cent of the principal amount of bonds to states that fully implement the plan.  Also, states that achieve a reduction in T&D losses above a targeted level in three years may be given grants.  Newspaper reports also suggest that states will have to prepare plans for eliminating the gap between the average cost and average tariff per unit of electricity.