The results of General Election 2019 were declared last week concluding the process for electing the 17th Lok Sabha.  Immediately after the results, the previous Lok Sabha was dissolved.  The next couple of days will witness several key events such as swearing-in ceremony of the Prime Minister and Cabinet, and the first session of the 17th Lok Sabha.  In the first session, the newly elected MPs will take their oaths, the Speaker of the 17th Lok Sabha will be elected, and the President will address a joint sitting of Parliament.   In this blog, we explain the process and significance of the events that will follow in the days to come.

Key Events in the First Session of the 17th Lok Sabha

The Bharatiya Janta Party has emerged as the single largest party and the leader of the party will be sworn-in as the Prime Minister.  As per Article 75(1) of the Constitution, the other ministers are appointed by the President on the advice of the Prime Minister.  The 91st Amendment to the Constitution limits the total size of the Council of Ministers to 15% of the total strength of the House (i.e., 81 Ministers).  As per media reports, swearing-in of the Council of Ministers is scheduled for May 30, 2019.

How is the schedule for first session decided?

The 17th Lok Sabha will commence its first session in the first week of June.  The exact date of commencement of the first session and the schedule of key events in the session, including the date of President’s address, is decided by the Cabinet Committee on Parliamentary Affairs.  This Committee will be set up after the swearing in of the Council of Ministers.  The previous Lok Sabha had commenced on June 4, 2014 and its first session had six sitting days (June 4, 2014 to June 11, 2014). 

Who presides over the first session?

Every proceeding of the House is presided by a Speaker.  The Office of the Speaker becomes vacant immediately before the first meeting of a new Lok Sabha.  Therefore, a temporary speaker, known as the pro-tem Speaker, is chosen from among the newly elected MPs.  The pro-tem Speaker administers oath/affirmation to the newly elected members, and also presides over the sitting in which the new Speaker is elected.  The office of the pro-tem Speaker ceases to exist when the new Speaker is elected.  

How is the pro-tem speaker chosen?

Once the new government is elected, a list containing the names of the senior-most members of the House is prepared.  The seniority is decided by total tenure as a member of either Lok Sabha or Rajya Sabha.  The Prime Minister then identifies a Member from the list who acts as the Speaker pro-tem.  Three other members are also identified before whom other members may take oath/affirmation.

How is the new Speaker chosen?

Any member may give notice of a motion that another Member be chosen as the Speaker of the House.  The motions are then moved and voted upon.  After the results are announced, the Speaker-elect is felicitated by leaders of all political parties, including the Prime Minister and Leader of the Opposition.  From then, the new Speaker takes over the proceedings of the House.

An understanding of the Constitution, the Rules of Procedure, and conventions of Parliament is considered a major asset for the Speaker.  While this might indicate that a Speaker be one of the senior-most members of the House, this has not always been the norm.  There have been occasions in the past where the Speaker of the House was a first-time MP.  For instance, Mr. K.S. Hegde, the Speaker of the sixth Lok Sabha and Mr. Bal Ram Jakhar, the Speaker of the seventh Lok Sabha were both first time MPs

What is the role of the Speaker in the House?

The Speaker is central to the functioning of the legislature.  The proceedings of the House are guided by the Rules of Procedure and the final authority for the interpretation and implementation of these rules rests with the Speaker.  The Speaker is responsible for regulating the discussion in the House and maintaining order in the House.  For instance, it is the Speaker’s discretion on whether to allow a member to raise a matter of public importance in the House.  The Speaker can suspend a sitting member for obstructing the business of the House, or adjourn the House in case of major disorder.

The Speaker is also the chair of the Business Advisory Committee, which is responsible for deciding the business of the House and allocating time for the same.  The Speaker also chairs the General Purposes Committee and the Rules Committee of the Lok Sabha and appoints the chairpersons of other committees amongst the members.  In the past, Speakers have also been instrumental in strengthening the Committee system.  Mr. Shivraj Patil, the Speaker of the 10th Lok Sabha, played a key role in the initiation of 17 Departmental Standing Committees, therefore strengthening Parliament’s control over the functioning of different ministries of the government.

Since the Speaker represents the entire House, the office of the Speaker is vested with impartiality and independence.  The Constitution and the Rules of Procedure have prescribed guidelines for the Speaker’s office to ensure such impartiality and independence.  Dr. N. Sanjiva Reddy, the Speaker of the fourth Lok Sabha, formally resigned from his political party as he was of the opinion that the Speaker belongs to the whole House and should therefore remain impartial.  As per Article 100 of the Constitution, the Speaker does not exercise vote on any matter being voted upon, in the first instance.  However, in case there’s a tie during the voting, the Speaker exercises her vote. 

What does the President’s Address entail?

The election of the Speaker is followed by the President’s Address.  Article 87 of the Constitution requires the President to address both Houses at the beginning of the first session after each general election.  The President also addresses both the Houses at the beginning of the first session of each year.  The President’s address highlights the initiatives of the government from the previous year, and mentions the policy priorities for the upcoming year.  After the address, the ruling party moves a Motion of Thanks to the President’s address in both Houses of Parliament.  In the Motion of Thanks, MPs may move amendments to the motion, which are then put to vote. 

The President of India, Mr. Ram Nath Kovind will address Parliament in this first session of the 17th Lok Sabha.  During the 16th Lok Sabha, the first President’s address was held on June 9, 2014 and the last time he addressed Parliament was on January 31, 2019 (highlights of this address can be read here).

 

Sources: The Constitution of India; Rules and Procedure and Conduct of Business in Lok Sabha; Handbook on the Working of Ministry of Parliamentary Affairs; The website of Parliament of India, Lok Sabha; The website of Office of the Speaker, Lok Sabha.

Yesterday, the government circulated certain official amendments to the Constitution (122nd Amendment) Bill, 2014 on GST.  The Bill is currently pending in Rajya Sabha.  The Bill was introduced and passed in Lok Sabha in May 2015.  It was then referred to a Select Committee of Rajya Sabha which submitted its report in July 2015.  With the Bill listed for passage this week, we explain key provisions in the Bill, and the amendments proposed. What is the GST? Currently, indirect taxes are imposed on goods and services.  These include excise duty, sales tax, service tax, octroi, customs duty etc.  Some of these taxes are levied by the centre and some by the states.  For taxes imposed by states, the tax rates may vary across different states.  Also, goods and services are taxed differently. The Goods and Services Tax (GST) is a value added tax levied across goods and services at the point of consumption.  The idea of a GST regime is to subsume most indirect taxes under a single taxation regime.  This is expected to help broaden the tax base, increase tax compliance, and reduce economic distortions caused by inter-state variations in taxes. What does the 2014 Bill on GST do? The 2014 Bill amends the Constitution to give concurrent powers to Parliament and state legislatures to levy a Goods and Services tax (GST).  This implies that the centre will levy a central GST (CGST), while states will be permitted to levy a state GST (SGST).  For goods and services that pass through several states, or imports, the centre will levy another tax, the Integrated GST (IGST). Alcohol for human consumption has been kept out of the purview of GST.  Further, GST will be levied on 5 types of petroleum products at a later date, to be decided by the GST Council.  The Council is a body comprising of Finance Ministers of the centre and all states (including Delhi and Puducherry).  This body will make recommendations in relation to the implementation of GST, including the rates, principles of levy, etc.  The Council is also to decide the modalities for resolution of disputes that arise out of its recommendations. States may be given compensation for any revenue losses they may face from the introduction of the GST regime.  Such compensation may be provided for a period of up to five years. Further, the centre may levy an additional tax, up to 1%, in the course of interstate trade.  The revenues from the levy of this tax will be given to the state from where the good originates.  Expert bodies like the Select Committee and the Arvind Subramanian Committee have observed that this provision could lead to cascading of taxes (as tax on tax will be levied).[i]  It also distorts the creation of a national market, as a product made in one state and sold in another would be more expensive than one made and sold within the same state. What are the key changes proposed by the 2016 amendments? The amendments propose three key changes to the 2014 Bill.  They relate to (i) additional tax up to 1%; (ii) compensation to states; and (iii) dispute resolution by the GST Council.

  • Additional tax up to 1% on interstate trade: The amendments delete the provision.
  • Compensation to states: The amendments state that Parliament shall, by law, provide for compensation to states for any loss of revenues, for a period which may extend to five years. This would be based on the recommendations of the GST Council.  This implies that (i) Parliament must provide compensation; and (ii) compensation cannot be provided for more than five years, but allows Parliament to decide a shorter time period.  The 2014 Bill used the term ‘may’ instead of ‘shall’.   The Select Committee had recommended that compensation should be provided for a period of five years.  This recommendation has not been addressed by the 2016 amendments.
  • Dispute resolution: The GST Council shall establish a mechanism to adjudicate any dispute arising out of its recommendations. Disputes can be between: (a) the centre vs. one or more states; (b) the centre and states vs. one or more states; (c) state vs. state.  This implies that there will be a standing mechanism to resolve disputes.

These amendments will be taken up for discussion with the Bill in Rajya Sabha this week.  The Bill requires a special majority for its passage as it is a Constitution Amendment Bill (that is at least 50% majority of the total membership in the House, and 2/3rds majority of all members present and voting).  If the Bill is passed with amendments, it will have to be sent back to Lok Sabha for consideration and passage.  After its passage in Parliament, at least 50% state legislatures will have to pass resolutions to ratify the Bill. Once the constitutional framework is in place, the centre will have to pass simple laws to levy CGST and IGST.  Similarly, all states will have to pass a simple law on SGST.  These laws will specify the rates of the GST to be levied, the goods and services that will be included, the threshold of the turnover of businesses to be included, etc.  Note that the Arvind Subramanian Committee, set up by the Finance Ministry, recommended the rates of GST that may be levied.  The table below details the bands of rates proposed.

Table 1: Rates of GST recommended by Expert Committee headed by Arvind Subramanian
Type of rate Rate Details
Revenue Neutral Rate 15% Single rate which maintains revenue at current levels.
Standard Rate 17-18% Too be applied to most goods and services
Lower rates 12% To be applied to certain goods consumed by the poor
Demerit rate 40% To be applied on luxury cars, aerated beverages, paan masala, and tobacco
Source: Arvind Subramanian Committee Report (2015)

Several other measures related to the back end infrastructure for registration and reporting of GST, administrative officials related to GST, etc. will also have to be put in place, before GST can be rolled out. [For further details on the full list of amendments, please see here.  For other details on the GST Bill, please see here.]