On Wednesday, the government promulgated an Ordinance to ban electronic cigarettes in India. In this context, we look at what are electronic cigarettes, what are the current regulations in place, and what the Ordinance seeks to do.
What are electronic cigarettes?
The Ordinance defines electronic cigarettes (e-cigarettes) as battery-operated devices that heat a substance, which may or may not contain nicotine, to create vapour for inhalation. These e-cigarettes can also contain different flavours such as menthol, mango, watermelon, and cucumber. Usually, e-cigarettes are shaped like conventional tobacco products (such as cigarettes, cigars, or hookahs), but they also take the form of everyday items such as pens and USB memory sticks.
Unlike traditional cigarettes, e-cigarettes do not contain tobacco and therefore are not regulated under the Cigarettes and Other Tobacco Products Act, 2003. This Act regulates the sale, production, and distribution of cigarettes and other tobacco products in India, and prohibits advertisement of cigarettes.
What are the international regulations for e-cigarettes?
India is a signatory to the WHO Framework Convention on Tobacco Control (WHO FCTC) which was developed in response to the globalisation of the tobacco epidemic. In 2014, the WHO FCTC invited all its signatories to consider prohibiting or regulating e-cigarettes in their countries. This was suggested due to emerging evidence on the negative health impact of these products which could result in lung cancer, cardiovascular diseases, and other illnesses associated with smoking.
Since then, several countries such as Brazil, Mexico, Singapore, and Thailand have banned the production, manufacture, and sale of e-cigarettes. Recently, the states of New York and Michigan in USA banned the sale of flavoured e-cigarettes. Whereas, in UK, the manufacture and sale of e-cigarettes has been allowed based on certain conditions. Further, the advertisement and promotion, and the levels of nicotine in e-cigarettes is also regulated.
Prior to the Ordinance, were e-cigarettes regulated in India?
In August 2018, the Ministry of Health and Family Welfare had released an advisory to all states requiring them to not approve any new e-cigarettes and restrict the sale and advertisements of e-cigarettes. Based on this advisory, 15 states including Delhi, Maharashtra, and Uttar Pradesh have since banned e-cigarettes. However, this advisory was challenged in the Delhi High Court in March 2019, which subsequently imposed a stay on the ban.
What does the Ordinance do?
The Ordinance prohibits the production, manufacture, import, export, transport, sale, distribution and advertisement of e-cigarettes in India. Any person who contravenes this provision will be punishable with imprisonment of up to one year, or a fine of one lakh rupees, or both. For any subsequent offence, the person will be punishable with an imprisonment of up to three years, along with a fine of up to five lakh rupees.
Additionally, storage of e-cigarettes will be punishable with an imprisonment of up to six months, or a fine of Rs 50,000 or both. Once the Ordinance comes into force (i.e., on September 18, 2019), the owners of existing stocks of e-cigarettes will have to declare and deposit these stocks at the nearest office of an authorised officer. Such an authorised officer may be a police officer (at least at the level of a sub-inspector), or any other officer as notified by the central or state government.
Note that, the Ordinance does not contain any provisions regarding possession or use of e-cigarettes. The Ordinance will be in force for the next six months, and must be approved by Parliament within six weeks of the commencement of the next session of Parliament. If it is not passed within this time frame, it will cease to be in force.
The core group of secretaries on disinvestment has recently approved the disinvestment of five public sector undertakings (PSUs). This includes the entire shareholding of the government in four PSUs: Bharat Petroleum Corporation (BPCL), Shipping Corporation of India (SCI), North Eastern Electric Power Corporation (NEEPCO) and THDC (operates and maintains the Tehri Hydro Power Complex), and 30% of the shareholding in Container Corporation of India Limited (Concor). The government currently holds 54.8% of Concor, so the sale will reduce its stake below 25%.
Over the last few years, the government has removed legislative barriers towards privatisation of several other PSUs. This raises the question whether the government plans to privatise them.
What was the Supreme Court’s order on privatisation of PSUs?
In 2003, a similar proposal had been raised by the government for the sale of its shareholding in HPCL and BPCL. This proposal was challenged in the Supreme Court on the grounds that it would violate the provisions of the laws that transferred ownership of certain assets to the government (which later formed these PSUs). For example, BPCL was formed by nationalising Burmah Shell in India through an Act of Parliament, and merging their refinery and marketing companies. The Court ruled that the central government cannot proceed with the privatisation of HPCL and BPCL (i.e., reduce its direct or indirect ownership below 51%) without amending the concerned laws. So the government continues to hold majority stake directly in BPCL, and indirectly in HPCL ( through ONGC, another PSU).
The five Companies approved for privatisation include BPCL and SCI (into which two nationalised companies, the Jayanti Shipping Company, and the Mogul Line Limited were merged). The relevant nationalisation Acts have been repealed over the last five years.
How did the government remove the legislative barriers for privatisation?
Between 2014 and 2019, Parliament passed six Repealing and Amending Acts which repealed around 722 laws. These included laws that had transferred the ownership of companies to the central government which later formed BPCL, HPCL, and OIL. These also repealed the laws that had transferred ownership of the companies to the central government which were later merged with the SCI. This implies that now the government can go ahead with the privatisation of these government companies as the conditions imposed by the Supreme Court’s order have been fulfilled. These Repealing and Amending Acts also repealed several other nationalisation laws that were later formed into PSUs. In the Table below, we have listed some of these companies. Note that the Law Commission of India (2014) had suggested the repeal of several of these laws (including the Esso Act, the Burmah Shell Act, the Burn Company Act) on the grounds that these laws do not serve any purpose with respect to the nationalised entity. However, it had suggested that a study of all the nationalisation Acts should be done before repealing these Acts, and if necessary a savings clause should be provided in the repealing Act.
Did Parliament scrutinise these Acts before passing them?
Many of these repeals were made through the Repealing and Amending Act, 2016. These include the Acts relating to BPCL, HPCL, OIL, Coal India Limited, SCI, National Textiles Corporation, Hindustan Copper and Burn Standard Company Limited. The Bill was not referred to a Parliamentary Standing Committee, and was passed after a cursory debate (50 minutes in Lok Sabha and 20 minutes in Rajya Sabha). Similarly, the two Acts passed in 2017, that enable privatisation of SAIL, PowerGrid, and State Trading Corporation were not examined by a Standing Committee.
So what comes next?
The repeal of these Acts have cleared the legislative hurdle for privatisation of these companies. That is, the government does not need prior approval of Parliament to sell its shareholding. Therefore, it is now up to the government to decide whether it wishes to privatise these entities.
A version of this article was published by the Business Standard on October 20, 2019.
Table 1: Some Nationalisation Acts repealed since 2014 (list not exhaustive)
|
Company |
Act being repealed |
Repealing Act |
|---|---|---|
|
Shipping Corporation Of India (SCI) |
The Jayanti Shipping Company (Acquisition of Shares) Act, 1971 |
Repealing and Amending Act, 2016 |
|
The Mogul Line Limited (Acquisition of Shares) Act, 1984 |
||
|
Bharat Petroleum Corporation Limited (BPCL) |
The Burmah Shell (Acquisition of Undertakings in India) Act, 1976 |
Repealing and Amending Act, 2016 |
|
Hindustan Petroleum Corporation Limited (HPCL) |
The Esso (Acquisition of Undertakings in India) Act, 1974 |
Repealing and Amending Act, 2016 |
|
The Caltex [Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited] Act, 1977 |
||
|
The Kosangas Company (Acquisition of Undertaking) Act, 1979 |
||
|
Coal India Limited (CIL) |
The Coking Coal Mines (Emergency Provisions) Act, 1971 |
Repealing and Amending Act, 2016 |
|
The Coal Mines (Taking Over of Management) Act, 1973 |
||
|
The Coking Coal Mines (Nationalisation) Act, 1972. |
Repealing and Amending (Second) Act, 2017 |
|
|
The Coal Mines (Nationalisation) Act, 1973. |
||
|
Steel Authority of India Limited (SAIL) |
The Bolani Ores Limited (Acquisition of Shares) and Miscellaneous Provisions Act, 1978 |
Repealing and Amending (Second) Act, 2017 |
|
The Indian Iron and Steel Company (Acquisition of Shares) Act, 1976 |
||
|
Power Grid Corporation of India Limited |
The National Thermal Power Corporation Limited, the National Hydroelectric Power Corporation Limited and the North-Eastern Electric Power Corporation Limited (Acquisition and Transfer of Power Transmission Systems) Act, 1993. |
Repealing and Amending (Second) Act, 2017 |
|
The Neyveli Lignite Corporation Limited (Acquisition and Transfer of Power Transmission System) Act, 1994. |
||
|
Oil India Limited (OIL) |
The Burmah Oil Company [Acquisition of Shares of Oil India Limited and of the Undertakings in India of Assam Oil Company Limited and the Burmah Oil Company (India Trading) Limited] Act, 1981 |
Repealing and Amending Act, 2016 |
|
State Trading Corporation of India Ltd. (STC) |
The Tea Companies (Acquisition and Transfer of Sick Tea Units) Act, 1985 |
Repealing and Amending Act, 2017 |
|
National Textile Corporation Limited (NTC) |
The Sick Textile Undertakings (Taking Over of Management) Act, 1972 |
Repealing and Amending Act, 2016 |
|
The Textile Undertakings (Taking Over of Management) Act, 1983 |
||
|
The Laxmirattan and Atherton West Cotton Mills (Taking Over of Management) Act, 1976 |
||
|
Hindustan Copper Limited |
The Indian Copper Corporation (Acquisition of Undertaking) Act, 1972 |
Repealing and Amending Act, 2016 |
|
Burn Standard Co Ltd |
The Burn Company and Indian Standard Wagon Company (Nationalisation) Act, 1976 |
Repealing and Amending Act, 2016 |
|
Indian Railways |
The Futwah-Islampur Light Railway Line (Nationalisation) Act, 1985 |
Repealing and Amending Act, 2016 |
|
Braithwaite & Co Limited, Ministry of Railways |
The Braithwaite and Company (India) Limited (Acquisition and Transfer of Undertakings) Act, 1976. |
Repealing and Amending (Second) Act, 2017 |
|
The Gresham and Craven of India (Private) Limited (Acquisition and Transfer of Undertakings) Act, 1977 |
||
|
Andrew Yule & Co. Ltd. |
The Brentford Electric (India) Limited (Acquisition and Transfer of Undertakings) Act, 1987 |
Repealing and Amending (Second) Act, 2017 |
|
The Transformers and Switchgear Limited (Acquisition and Transfer of Undertakings) Act, 1983 |
Repealing and Amending Act, 2019 |
|
|
Alcock Ashdown (Guj) Limited, Government of Gujarat Undertaking |
The Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973. |
Repealing and Amending Act, 2019 |
|
Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) |
The Bengal Chemical and Pharmaceutical Works Limited (Acquisition and Transfer of Undertakings) Act, 1980 |
Repealing and Amending (Second) Act, 2017 |
|
Organisations under Department of Pharmaceuticals |
The Smith, Stainstreet and Company Limited (Acquisition and Transfer of Undertakings) Act, 1977 |
Repealing and Amending (Second) Act, 2017 |
|
The Bengal Immunity Company Limited (Acquisition and Transfer of Undertakings) Act, 1984. |
Sources: Repealing and Amending Act, 2015; Repealing and Amending (Second) Act, 2015; Repealing and Amending Act, 2016; Repealing and Amending Act, 2017; Repealing and Amending (Second) Act, 2017; Repealing and Amending Act, 2019.
