We wrote a piece for ibnlive.com on the major differences between the government’s Lok Pal Bill, 2011 and the Jan Lok Pal Bill drafted by Anna Hazare’s group. The note is reproduced below. The streets are witnessing a demand that the government’s Lok Pal Bill be replaced by the Jan Lok Pal Bill (JLP) as drafted by the team led by Anna Hazare. There are several significant differences between the two bills. In this note, we describe the some of these differences. (See here for more on the Lok Pal Bill). First, there is a divergence on the jurisdiction of the Lok Pal. Both bills include ministers, MPs for any action outside Parliament, and Group A officers (and equivalent) of the government. The government bill includes the prime minister after he demits office whereas the JLP includes a sitting prime minister. The JLP includes any act of an MP in respect of a speech or vote in Parliament (which is now protected by Article 105 of the Constitution). The JLP includes judges; the government bill excludes them. The JLP includes all government officials, while the government bill does not include junior (below Group A) officials. The government bill also includes officers of NGOs who receive government funds or any funds from the public; JLP does not cover NGOs. Second, the two Bills differ on the composition. The government bill has a chairperson and upto 8 members; at least half the members must have a judicial background. The JLP has a chairperson and 10 members, of which 4 have a judicial background. Third, the process of selecting the Lok Pal members is different. The JLP has a two stage process. A search committee will shortlist potential candidates. The search committee will have 10 members; five of these would have retired as Chief Justice of India, Chief Election Commissioner or Comptroller and Auditor General; they will select the other five from civil society. The Lok Pal chairperson and members will be selected from this shortlist by a selection committee. The selection committee consists of the prime minister, the leader of opposition in Lok Sabha, two supreme court judges, two high court chief justices, the chief election commissioner, the comptroller and auditor general, and all previous Lok Pal chairpersons. The government bill has a simpler process. The selection will be made by a committee consisting of the prime minister, the leaders of opposition in both Houses of Parliament, a supreme court judge, a high court chief justice, an eminent jurist, and an eminent person in public life. The selection committee may, at its discretion, appoint a search committee to shortlist candidates. Fourth, there are some differences in the qualifications of a member of the Lok Pal. The JLP requires a judicial member to have held judicial office for 10 years or been a high court or supreme court advocate for 15 years. The government bill requires the judicial member to be a supreme court judge or a high court chief justice. For other members, the government bill requires at least 25 years experience in anti-corruption policy, public administration, vigilance or finance. The JLP has a lower age limit of 45 years, and disqualifies anyone who has been in government service in the previous two years. Fifth, the process for removal of Lok Pal members is different. The government bill permits the president to make a reference to the Supreme Court for an inquiry, followed by removal if the member is found to be biased or corrupt. The reference may be made by the president (a) on his own, (a) on a petition signed by 100 MPs, or (c) on a petition by a citizen if the President is then satisfied that it should be referred. The President may also remove any member for insolvency, infirmity of mind or body, or engaging in paid employment. The JLP has a different process. The process starts with a complaint by any person to the Supreme Court. If the court finds misbehaviour, infirmity of mind or body, insolvency or paid employment, it may recommend his removal to the President. Sixth, the offences covered by the Bills vary. The government bill deals only with offences under the Prevention of Corruption Act. The JLP, in addition, includes offences by public servants under the Indian Penal Code, victimization of whistleblowers and repeated violation of citizen’s charter. Seventh, the government bill provides for an investigation wing under the Lok Pal. The JLP states that the CBI will be under the Lok Pal while investigating corruption cases. Eighth, the government bill provides for a prosecution wing of the Lok Pal. In the JLP, the CBI’s prosecution wing will conduct this function. Ninth, the process for prosecution is different. In the government bill, the Lok Pal may initiate prosecution in a special court. A copy of the report is to be sent to the competent authority. No prior sanction is required. In the JLP, prosecution of the prime minister, ministers, MPs and judges of supreme court and high courts may be initiated only with the permission of a 7-judge bench of the Lok Pal. Tenth, the JLP deals with grievance redressal of citizens, in addition to the process for prosecuting corruption cases. It requires every public authority to publish citizen’s charters listing its commitments to citizens. The government bill does not deal with grievance redressal. Given the widespread media coverage and public discussions, it is important that citizens understand the differences and nuances. This may be a good opportunity to enact a law which includes the better provisions of each of these two bills.
Minimum Support Price (MSP) is the assured price at which foodgrains are procured from farmers by the central and state governments and their agencies, for the central pool of foodgrains. The central pool is used for providing foodgrains under the Public Distribution System (PDS) and other welfare schemes, and also kept as reserve in the form of buffer stock. However, in the past few months, there have been demands to extend MSP to private trade as well and guarantee MSP to farmers on all kinds of trade. This blogpost looks at the state of public procurement of foodgrains in India and the provision of MSP.
Is MSP applicable for all crops?
The central government notifies MSP for 23 crops every year before the Kharif and Rabi seasons based on the recommendations of the Commission for Agricultural Costs and Prices, an attached office of the Ministry of Agriculture and Farmers’ Welfare. These crops include foodgrains such as cereals, coarse grains, and pulses. However, public procurement is largely limited to a few foodgrains such as paddy (rice), wheat, and, to a limited extent, pulses (Figure 1).
Figure 1: Percentage of crop production that was procured at MSP in 2019-20
Sources: Unstarred Question No. 331, Lok Sabha, September 15, 2020; PRS.
Since rice and wheat are the primary foodgrains distributed under PDS and stored for food security, their procurement level is considerably high. However, the National Food Security Act, 2013 requires the central and state governments to progressively undertake necessary reforms in PDS. One of the reforms requires them to diversify the commodities distributed under PDS over a period of time.
How does procurement vary across states?
The procurement of foodgrains is largely concentrated in a few states. Three states (Madhya Pradesh, Punjab, and Haryana) producing 46% of the wheat in the country account for 85% of its procurement (Figure 2). For rice, six states (Punjab, Telangana, Andhra Pradesh, Chhattisgarh, Odisha, and Haryana) with 40% of the production have 74% share in procurement (Figure 3). The National Food Security Act, 2013 requires the central, state, and local governments to strive to progressively realise certain objectives for advancing food and nutritional security. One of these objectives involves geographical diversification of the procurement operations.
Figure 2: 85% wheat procurement is from three states (2019-20)
Sources: Department of Food and Public Distribution; PRS.
Figure 3: 76% of the rice procured comes from six states (2019-20)
Sources: Department of Food and Public Distribution; PRS.
Is MSP mandatory for private trade as well in some states?
MSP is not mandatory for purchase of foodgrains by private traders or companies. It acts as a reference price at which the government and its agencies procure certain foodgrains from farmers.
In September 2020, the central government enacted a new farm law which allows anyone with a PAN card to buy farmers’ produce in the ‘trade area’ outside the markets notified or run by the state Agricultural Produce Marketing Committees (APMCs). Buyers do not need to get a license from the state government or APMC, or pay any tax to them for such purchase in the ‘trade area’. These changes in regulations raised concerns regarding the kind of protections available to farmers in the ‘trade area’ outside APMC markets, particularly in terms of the price discovery and payment. In October 2020, Punjab passed a Bill in response to the central farm law to prohibit purchase of paddy and wheat below MSP. Any person or company compelling or pressurising farmers to sell below MSP will be punished with a minimum of three-year imprisonment and a fine. Note that 72% of the wheat and 92% of the rice produced in Punjab was purchased under public procurement in 2019-20.
Similarly, in November 2020, Rajasthan passed a Bill to declare those contract farming agreements as invalid where the purchase is done below MSP. Any person or company compelling or pressurising farmers to enter into such an invalid contract will be punished with 3 to 7 years of imprisonment, or a fine of minimum five lakh rupees, or both. Both these Bills have not been enacted yet as they are awaiting the Governors’ assent.
How has MSP affected the cropping pattern?
According to the central government’s procurement policy, the objective of public procurement is to ensure that farmers get remunerative prices for their produce and do not have to resort to distress sale. If farmers get a better price in comparison to MSP, they are free to sell their produce in the open market. The Economic Survey 2019-20 observed that the regular increase in MSP is seen by farmers as a signal to opt for crops which have an assured procurement system (for example, rice and wheat). The Economic Survey also noted that this indicates market prices do not offer remunerative options for farmers, and MSP has, in effect, become the maximum price that the farmers are able to realise.
Thus, MSP incentivises farmers to grow crops which are procured by the government. As wheat and rice are major food grains provided under the PDS, the focus of procurement is on these crops. This skews the production of crops in favour of wheat and paddy (particularly in states where procurement levels are high), and does not offer an incentive for farmers to produce other items such as pulses. Further, this puts pressure on the water table as these crops are water-intensive crops.
To encourage crop diversification and thereby reduce the consumption of water, some state governments are taking measures to incentivise farmers to shift away from paddy and wheat. For example, Haryana has launched a scheme in 2020 to provide Rs 7,000 per acre to those farmers who will use more than 50% of their paddy area (as per the area sown in 2019-20) for other crops. The farmers can grow maize, bajra, pulses, or cotton in such diversified area. Further, the crop produce grown in such diversified area under the scheme will be procured by the state government at MSP.
