We wrote an FAQ on the Lok Pal Bill for Rediff.  http://www.rediff.com/news/special/special-parliamentary-committee-cannot-study-lokpal-bill-in-10-days/20110822.htm The Lok Pal Bill has been referred to the Standing Committee of Parliament on Personnel, Public Grievances, Law and Justice.  In this FAQ, we explain the process of these Committees. What is the role of such standing committees? The system of departmentally related standing committees was instituted by Parliament in 1993.  Currently, there are 24 such committees, organised on the lines of departments and ministries.  For example, there are committees on finance, on home affairs, on defence etc.  These standing committees examine Bills that are referred to them.  They also examine the expenditure plans of ministries in the Union Budget.  In addition, they may examine the working of the departments and various schemes of the government. How is the membership of these committees decided? Each committee has 31 members: 21 from Lok Sabha and 10 from Rajya Sabha.  Parties are allocated seats based on their strength in Parliament.  The final membership is decided based on the MP’s area of interest as well as their party’s decision on allocating the seats. Who chairs the committees? Of the 24 committees, 16 are administered by Lok Sabha and eight by Rajya Sabha.  The Chairperson is from the respective House.  Political parties are allocated the chairs based on their strength in Parliament.  Some committees such as home affairs, finance and external affairs are customarily chaired by a senior member of an opposition party. What will the Standing Committee do with the Lok Pal Bill? The Committee has invited comments and suggestions from the public on the Bill.  Comments can be sent to Mr. KP Singh, Director, Rajya Sabha Secretariat, 201, Second Floor, Parliament House Annexe, New Delhi -110001.  These may also be emailed to kpsingh@sansad.nic.in or rs-cpers@sansad.nic.in.  The Committee will examine the written memoranda.  They will also invite some experts and stakeholders for oral evidence.  Based on its examination, the committee will prepare a report with its recommendations on the various provisions of the Bill.  This report will be tabled in Parliament. Is the report decided by voting? No.  The committee tries to form a consensus while preparing the report.  However, if some members do not agree on any point, they may add a dissent note.  For example, the committee on the Civil Liability for Nuclear Damages Bill had dissent notes written by MPs from the left parties.  The Women’s Reservation Bill also had dissent notes from a couple of members. Are the committee’s recommendations binding? No.  The Committee system was formed recognising that Parliament does not have the time for detailed examination and public feedback on all bills.  Parliament, therefore, delegates this task to the committee which reports back with its recommendations.  It is the role of all MPs in each House of Parliament to examine the recommendations and move suitable amendments.  Following this, Parliament can vote on these amendments, and finalise the Bill. Can you give examples when the Committee’s work has resulted in significant changes? There are many such instances.  For example, the standing committee on science and technology examined the Civil Liability for Nuclear Damages Bill.  The committee made several recommendations, some of which increased the potential liability of suppliers of nuclear equipment in case of an accident.  All the recommendations were accepted.  Similarly, the Seeds Bill, which is currently pending in Rajya Sabha has seen several major recommendations by the Committee on Agriculture.  The government has agreed to move amendments that accept many of these recommendations. Are all Bills referred to Standing Committees? Most Bills are referred to such committees but this is not a mandatory requirement before passing a Bill.  In some cases, if a Bill is not referred to a committee and passed by one House, the other House may constitute a select committee for detailed examination.  Some recent examples include such select committees formed by the Rajya Sabha on the Prevention of Torture Bill, the Wakf Amendment Bill, and the Commercial Divisions of High Courts Bill.  There are also some instances when a Bill may be passed without the committee process. Is it a good idea to bypass the committee process? In general, this process provides a platform for various stakeholders to provide their inputs.  In the Lok Pal case, a few influential groups such as the India Against Corruption (IAC) and the National Campaign for People’s Right to Information (NCPRI) have voiced their views.  However, there may be other points of views of persons who do not have similar access to the media.  The Standing Committee provides equal opportunity to everyone to write in their memoranda.  It also allows parliamentarians to devote a significant amount of time to understand the nuances of a Bill and make suitable modifications.  Thus, the standing committee system is an opportunity to strengthen legislation in an informed and participatory manner. Is it feasible to compress this process within 10 days and get the Lok Pal Bill passed within the current session of Parliament? There should be sufficient time for citizens to provide inputs to the committee.  The committee has to examine the different points of view and find suitable provisions to achieve the final objectives.  For example, there are divergent views on the role of Lok Pal, its constitution, its jurisdiction etc.  The Committee has to understand the implications of the various proposals and then make its recommendations.  It has been given three months to do so.  Typically, most committees ask for an extension and take six to eight months.  It is not practical to expect this process to be over within 10 days. Should civil society demand that the government issue a whip and pass the Jan Lok Pal Bill? Everyone has the right to make any demand.  However, the government is duty bound to follow the Constitution.  Our Constitution has envisaged a Parliamentary system.  Each MP is expected to make up their minds on each proposal based on their perception of national interest and people’s will.  Indeed, one may say that the best way to ensure a representative system is to remove the anti-defection law, minimise the use of whips, and let MPs vote their conscience.  That may give us a more accountable government.

After months of discussion,  the issue of FDI in retail is being deliberated in the Lok Sabha today.  In September 2012, the Cabinet had approved 51% of FDI in multi-brand retail (stores selling more than one brand).  Under these regulations, foreign retail giants like Walmart and Tesco can set up shop in India.  Discussions on permitting FDI in retail have focused on the effect of FDI on unorganised retailers, farmers and consumers. Earlier, the central government commissioned the Indian Council for Research on International Economic Relations (ICRIER) to examine the impact of organised retail on unorganised retail. The Standing Committee on Commerce also tabled a report on Foreign and Domestic Investment in the Retail Sector in May, 2009 while the Department of Industrial Policy and Promotion (DIPP) released a discussion paper examining FDI in multi-brand retail in July, 2010.  Other experts have also made arguments – both in support of, and in opposition to, the move to permit FDI in retail sales. The table below summarises some of these arguments from the perspective of various stakeholders as collated from the above reports examining the issue.

Stakeholder

Supporting arguments (source)

Opposing arguments (source)

Unorganised retail
  • No evidence of impact on job losses (ICRIER).
  • The rate of closure of unorganised retail shops (4.2%) is lower than international standards (ICRIER).
  • Evidence from Indonesia and China show that traditional and modern retail can coexist and grow  (Reardon and Gulati).
  • Majority of small retailers keen to remain in operation even after emergence of organised retail (ICRIER).
  •  Unorganised retailers in the vicinity of organised retailers saw their volume of business and profit decline but this effect weakens over time (ICRIER).
  • Other studies have estimated that traditional fruit and vegetable retailers experienced a 20-30% decline in incomes with the presence of supermarkets (Singh).
  • There is potential for employment loss in the value chain. A supermarket may create fewer jobs for the volume of produce handled (Singh).
  • Unemployment to increase as a result of retailers practicing product bundling (selling goods in combinations and bargains) and predatory pricing (Standing Committee).
Farmers
  • Significant positive impact on farmers as a result of direct sales to organised retailers.  For instance, cauliflower farmers receive a 25% higher price selling directly to organised retailers instead of government regulated markets (mandis).  Profits for farmers selling to organised retailers are about 60% higher than when selling to mandis (ICRIER).
  • Organised retail could remove supply chain inefficiencies through direct purchase from farmers and investment in better storage, distribution and transport systems.  FDI, in particular, could bring in new technology and ideas (DIPP).
  •  Current organised retail procures 60-70% from wholesale markets rather than farmers. There has been no significant impact on backend infrastructure investment (Singh).
  • There are other issues like irrigation, technology and credit in agriculture which FDI may not address (Singh).
  • Increased monopolistic strength could force farmers to sell at lower prices (Standing Committee).
Consumers
  • Organised retail lowers prices. Consumer spending increases with the entry of organised retail and lower income groups tend to save more (ICRIER).
  • It will lead to better quality and safety standards of products (DIPP).
  •  Evidence from some Latin American countries (Mexico, Nicaragua, Argentina), Africa (Kenya, Madagascar) and Asia (Thailand, Vietnam, India) reveal that supermarket prices for fruits and vegetables were higher than traditional retail prices (Singh).
  • Even with lower prices at supermarkets, low income households may prefer traditional retailers because they live far from supermarkets, they can bargain with traditional retailers and buy loose items (Singh).
  • Monopolistic power for retailers could result in high prices for consumers.

Source: ICRIER [1.  "Impact of Organized Retailing on the Unorganized Sector", ICRIER, September 2008]; Standing Committee [2.  "Foreign and domestic investment in retail sector", Standing Committee on Commerce, May 13, 2009]; Singh (2011) [3. "FDI in Retail: Misplaced Expectations and Half-truths",  Sukhpal Singh, Economic and Political Weekly, December 17, 2011];  Reardon and Gulati (2008)  [4. "Rise of supermarkets and their development implications," IFPRI Discussion Paper, Thomas Reardon and Ashok Gulati, February 2008.]; DIPP [5. "Discussion Paper on FDI in Multi-brand Retail Trading", Department of Industrial Policy and Promotion, July 6, 2010]