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The Finance Bill, 2017 is being discussed in Lok Sabha today. Generally, the Finance Bill is passed as a Money Bill since it gives effect to tax changes proposed in the Union Budget. A Money Bill is defined in Article 110 of the Constitution as one which only contains provisions related to taxation, borrowings by the government, or expenditure from Consolidated Fund of India. A Money Bill only needs the approval of Lok Sabha, and is sent to Rajya Sabha for its recommendations. It is deemed to be passed by Rajya Sabha if it does not pass the Bill within 14 calendar days.
In addition to tax changes, the Finance Bill, 2017 proposes to amend several laws such the Securities Exchange Board of India Act, 1992 and the Payment and Settlements Act, 2007 to make structural changes such as creating a payments regulator and changing the composition of the Securities Appellate Tribunal. This week, some amendments to the Finance Bill were circulated. We discuss the provisions of the Bill, and the proposed amendments.
Certain Tribunals to be replaced
Amendments to the Finance Bill seek to replace certain Tribunals and transfer their functions to existing Tribunals. The rationale behind replacing these Tribunals is unclear. For example, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) will replace the Airports Economic Regulatory Authority Appellate Tribunal. It is unclear if TDSAT, which primarily deals with issues related to telecom disputes, will have the expertise to adjudicate matters related to the pricing of airport services. Similarly, it is unclear if the National Company Law Appellate Tribunal, which will replace the Competition Appellate Tribunal, will have the expertise to deal with matters related to anti-competitive practices.
Terms of service of Tribunal members to be determined by central government
The amendments propose that the central government may make rules to provide for the terms of service including appointments, term of office, salaries and allowances, and removal for Chairpersons and other members of Tribunals, Appellate Tribunals and other authorities. The amendments also cap the age of retirement for Chairpersons and Vice-Chairpersons. Currently, these terms are specified in the laws establishing these Tribunals.
One may argue that allowing the government to determine the appointment, reappointment and removal of members could affect the independent functioning of the Tribunals. There could be conflict of interest if the government were to be a litigant before a Tribunal as well as determine the appointment of its members and presiding officers.
The Supreme Court in 2014, while examining a case related to the National Tax Tribunal, had held that Appellate Tribunals have similar powers and functions as that of High Courts, and hence matters related to their members’ appointment and reappointment must be free from executive involvement.[i] The list of Tribunals under this amendment includes several Tribunals before which the central government could be a party to disputes, such as those related to income tax, railways, administrative matters, and the armed forces Tribunal.
Note that a Bill to establish uniform conditions of service for the chairpersons and members of some Tribunals has been pending in Parliament since 2014.
Inclusion of technical members in the Securities Appellate Tribunal
The composition of the Securities Appellate Tribunal established under the SEBI Act is being changed by the Finance Bill. Currently, the Tribunal consists of a Presiding Officer and two other members appointed by the central government. This composition is to be changed to: a Presiding Officer, and a number of judicial and technical members, as notified by the central government.
Creation of a Payments Regulatory Board
Recently, the Ratan Watal Committee under the Finance Ministry had recommended creating a statutory Payments Regulatory Board to oversee the payments systems in light of increase in digital payments. The Finance Bill, 2017 seeks to give effect to this recommendation by creating a Payments Regulatory Board chaired by the RBI Governor and including members nominated by the central government. This Board will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems.
Political funding
The Finance Bill, 2017 proposes to make changes related to how donations may be made to political parties, and maintaining the anonymity of donors.
Currently, for donations below Rs 20,000, details of donors do not have to be disclosed by political parties. Further, there are no restrictions on the amount of cash donations that may be received by political parties from a person. The Finance Bill has proposed to set this limit at Rs 2,000. The Bill also introduces a new mode of donating to political parties, i.e. through electoral bonds. These bonds will be issued by banks, which may be bought through cheque or electronic means. The only difference between cheque payment (above Rs 20,000) and electoral bonds may be that the identity of the donor will be anonymous in the case of electoral bonds.
Regarding donations by companies to political parties, the proposed amendments to the Finance Bill remove the: (i) existing limit of contributions that a company may make to political parties which currently is 7.5% of net profit of the last three financial years, (ii) requirement of a company to disclose the name of the parties to which a contribution has been made. In addition, the Bill also proposes that contributions to parties will have to be made only through a cheque, bank draft, electronic means, or any other instrument notified by the central government.
Aadhaar mandatory for PAN and Income Tax
Amendments to the Finance Bill, 2017 make it mandatory for every person to quote their Aadhaar number after July 1, 2017 when: (i) applying for a Permanent Account Number (PAN), or (ii) filing their Income Tax returns. Persons who do not have an Aadhaar will be required to quote their Aadhaar enrolment number indicating that an application to obtain Aadhaar has been filed.
Every person holding a PAN on July 1, 2017 will be required to provide the authorities with his Aadhaar number by a date and in a manner notified by the central government. Failure to provide this number would result in the PAN being invalidated.
The Finance Bill, 2017 is making structural changes to some laws. Parliamentary committees allow for a forum for detailed scrutiny, deliberations and public consultation on proposed laws. The opportunity to build rigour into the law-making process is lost if such legislative changes are not examined by committees
[i] Madras Bar Association vs. Union of India, Transfer Case No. 150 of 2006, Supreme Court of India, September 25, 2014 (para 89).
Recently, the Standing Committee on Health and Family Welfare submitted its report to the Parliament on the National Commission for Human Resource for Health Bill, 2011. The objective of the Bill is to “ensure adequate availability of human resources in the health sector in all states”. It seeks to set up the National Commission for Human Resources for Health (NCHRH), National Board for Health Education (NBHE), and the National Evaluation and Assessment Council (NEAC) in order to determine and regulate standards of health education in the country. It separates regulation of the education sector from that of professions such as law, medicine and nursing, and establishes professional councils at the national and state levels to regulate the professions. See here for PRS Bill Summary. The Standing Committee recommended that this Bill be withdrawn and a revised Bill be introduced in Parliament after consulting stakeholders. It felt that concerns of the professional councils such as the Medical Council of India and the Dental Council of India were not adequately addressed. Also, it noted that the powers and functions of the NCHRH and the National Commission on Higher Education and Research (to be established under the Higher Education and Research Bill, 2011 to regulate the higher education sector in the country) were overlapping in many areas. Finally, it also expressed concern over the acute shortage of qualified health workers in the country as well as variations among states and rural and urban areas. As per the 2001 Census, the estimated density of all health workers (qualified and unqualified) is about 20% less than the World Health Organisation’s norm of 2.5 health workers per 1000 population. See here for PRS Standing Committee Summary. Shortfall of health workers in rural areas Public health care in rural areas is provided through a multi-tier network. At the lowest level, there are sub health-centres for every population of 5,000 in the plains and 3,000 in hilly areas. The next level consists of Primary Health Centres (PHCs) for every population of 30,000 in the plains and 20,000 in the hills. Generally, each PHC caters to a cluster of Gram Panchayats. PHCs are required to have one medical officer and 14 other staff, including one Auxiliary Nurse Midwife (ANM). There are Community Health Centres (CHCs) for every population of 1,20,000 in the plains and 80,000 in hilly areas. These sub health centres, PHCs and CHCs are linked to district hospitals. As on March 2011, there are 14,8124 sub health centres, 23,887 PHCs and 4809 CHCs in the country.[i] Sub-Health Centres and Primary Health Centres
Table 1: State-wise comparison of vacancy in PHCs
Doctors at PHCs |
ANM at PHCs and Sub-Centres |
|||||
State | Sanctioned post | Vacancy | % of vacancy | Sanctioned post | Vacancy | % of vacancy |
Chhattisgarh | 1482 | 1058 | 71 | 6394 | 964 | 15 |
West Bengal | 1807 | 801 | 44 | 10,356 | NA | 0 |
Maharashtra | 3618 | 1326 | 37 | 21,122 | 0 | 0 |
Uttar Pradesh | 4509 | 1648 | 36 | 25,190 | 2726 | 11 |
Mizoram | 57 | 20 | 35 | 388 | 0 | 0 |
Madhya Pradesh | 1238 | 424 | 34 | 11,904 | 0 | 0 |
Gujarat | 1123 | 345 | 31 | 7248 | 817 | 11 |
Andaman & Nicobar Isld | 40 | 12 | 30 | 214 | 0 | 0 |
Odisha | 725 | 200 | 28 | 7442 | 0 | 0 |
Tamil Nadu | 2326 | 622 | 27 | 9910 | 136 | 1 |
Himachal Pradesh | 582 | 131 | 22 | 2213 | 528 | 24 |
Uttarakhand | 299 | 65 | 22 | 2077 | 0 | 0 |
Manipur | 240 | 48 | 20 | 984 | 323 | 33 |
Haryana | 651 | 121 | 19 | 5420 | 386 | 7 |
Sikkim | 48 | 9 | 19 | 219 | 0 | 0 |
Meghalaya | 127 | 23 | 18 | 667 | 0 | 0 |
Delhi | 22 | 3 | 14 | 43 | 0 | 0 |
Goa | 46 | 5 | 11 | 260 | 20 | 8 |
Karnataka | 2310 | 221 | 10 | 11,180 | 0 | 0 |
Kerala | 1204 | 82 | 7 | 4232 | 59 | 1 |
Andhra Pradesh | 2424 | 76 | 3 | 24,523 | 2876 | 12 |
Rajasthan | 1478 | 6 | 0.4 | 14,348 | 0 | 0 |
Arunachal Pradesh | NA | NA | NA | NA | NA | 0 |
Assam | NA | NA | NA | NA | NA | 0 |
Bihar | 2078 | 0 | NA | NA | NA | 0 |
Chandigarh | 0 | 0 | NA | 17 | 0 | 0 |
Dadra & Nagar Haveli | 6 | 0 | NA | 40 | 0 | 0 |
Daman & Diu | 3 | 0 | NA | 26 | 0 | 0 |
Jammu & Kashmir | 750 | 0 | NA | 2282 | 0 | 0 |
Jharkhand | 330 | 0 | NA | 4288 | 0 | 0 |
Lakshadweep | 4 | 0 | NA | NA | NA | 0 |
Nagaland | NA | NA | NA | NA | NA | 0 |
Puducherry | 37 | 0 | NA | 72 | 0 | 0 |
Punjab | 487 | 0 | NA | 4044 | 0 | 0 |
Tripura | NA | NA | NA | NA | NA | 0 |
India | 30,051 | 7,246 | 24 | 1,77,103 | 8,835 | 5 |
Sources: National Rural Health Mission (available here), PRS.Note: The data for all states is as of March 2011 except for some states where data is as of 2010. For doctors, these states are Bihar, UP, Mizoram and Delhi. For ANMs, these states are Odisha and Uttar Pradesh. |
Community Health Centres
Table 2: Vacancies in CHCs of medical specialists
Surgeons | Gynaecologists | Physicians | Paediatricians | |
State |
% of vacancy |
|||
Andaman & NicobarIsland | 100 | 100 | 100 | 100 |
Andhra Pradesh | 74 | 0 | 45 | 3 |
Arunachal Pradesh | NA | NA | NA | NA |
Assam | NA | NA | NA | NA |
Bihar | 41 | 44 | 60 | 38 |
Chandigarh | 50 | 40 | 50 | 100 |
Chhattisgarh | 85 | 85 | 90 | 84 |
Dadra & Nagar Haveli | 0 | 0 | 0 | 0 |
Daman & Diu | 0 | 100 | 0 | 100 |
Delhi | 0 | 0 | 0 | 0 |
Goa | 20 | 20 | 67 | 66 |
Gujarat | 77 | 73 | 0 | 91 |
Haryana | 71 | 80 | 94 | 85 |
Himachal Pradesh | NA | NA | NA | NA |
Jammu & Kashmir | 34 | 34 | 53 | 63 |
Jharkhand | 45 | 0 | 81 | 61 |
Karnataka | 33 | NA | NA | NA |
Kerala | NA | NA | NA | NA |
Lakshadweep | 0 | 0 | 100 | 0 |
Madhya Pradesh | 78 | 69 | 76 | 58 |
Maharashtra | 21 | 0 | 34 | 0 |
Manipur | 100 | 94 | 94 | 87 |
Meghalaya | 50 | NA | 100 | 50 |
Mizoram | NA | NA | NA | NA |
Nagaland | NA | NA | NA | NA |
Odisha | 44 | 45 | 62 | 41 |
Puducherry | 0 | 0 | 100 | NA |
Punjab | 16 | 36 | 40 | 48 |
Rajasthan | 57% | 46 | 49 | 24 |
Sikkim | NA | NA | NA | NA |
Tamil Nadu | 0 | 0 | 0 | 0 |
Tripura | NA | NA | NA | NA |
Uttar Pradesh | NA | NA | NA | NA |
Uttarakhand | 69 | 63 | 74 | 40 |
West Bengal | 0 | 57 | 0 | 78 |
India | 56 | 47 | 59 | 49 |
Sources: National Rural Health Mission (available here), PRS. |
[i]. “Rural Healthcare System in India”, National Rural Health Mission (available here).