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).
Today, the National Medical Commission Bill, 2019 was passed by Lok Sabha. It seeks to regulate medical education and practice in India. In 2017, a similar Bill had been introduced in Lok Sabha. It was examined by the Standing Committee on Health and Family Welfare, which recommended several changes to the Bill. However, the 2017 Bill lapsed with the dissolution of the 16th Lok Sabha. In this post, we analyse the 2019 Bill.
How is medical education and practice regulated currently?
The Medical Council of India (MCI) is responsible for regulating medical education and practice. Over the years, there have been several issues with the functioning of the MCI with respect to its regulatory role, composition, allegations of corruption, and lack of accountability. For example, MCI is an elected body where its members are elected by medical practitioners themselves, i.e., the regulator is elected by the regulated. Experts have recommended nomination based constitution of the MCI instead of election, and separating the regulation of medical education and medical practice. They suggested that legislative changes should be brought in to overhaul the functioning of the MCI.
To meet this objective, the Bill repeals the Indian Medical Council Act, 1956 and dissolves the current MCI.
The 2019 Bill sets up the National Medical Commission (NMC) as an umbrella regulatory body with certain other bodies under it. The NMC will subsume the MCI and will regulate medical education and practice in India. Under the Bill, states will establish their respective State Medical Councils within three years. These Councils will have a role similar to the NMC, at the state level.
Functions of the NMC include: (i) laying down policies for regulating medical institutions and medical professionals, (ii) assessing the requirements of human resources and infrastructure in healthcare, (iii) ensuring compliance by the State Medical Councils with the regulations made under the Bill, and (iv) framing guidelines for determination of fee for up to 50% of the seats in the private medical institutions.
Who will be a part of the NMC?
The Bill replaces the MCI with the NMC, whose members will be nominated. The NMC will consist of 25 members, including: (i) Director Generals of the Directorate General of Health Services and the Indian Council of Medical Research, (ii) Director of any of the AIIMS, (iii) five members (part-time) to be elected by the registered medical practitioners, and (iv) six members appointed on rotational basis from amongst the nominees of the states in the Medical Advisory Council.
Of these 25 members, at least 15 (60%) are medical practitioners. The MCI has been noted to be non-diverse and consists mostly of doctors who look out for their own self-interest over public interest. In order to reduce the monopoly of doctors, it has been recommended by experts that the MCI should include diverse stakeholders such as public health experts, social scientists, and health economists. For example, in the United Kingdom, the General Medical Council which is responsible for regulating medical education and practice consists of 12 medical practitioners and 12 lay members (such as community health members, administrators from local government).
What are the regulatory bodies being set up under the NMC?
The Bill sets up four autonomous boards under the supervision of the NMC. Each board will consist of a President and four members (of which two members will be part-time), appointed by the central government (on the recommendation of a search committee). These bodies are:
How is the Bill changing the eligibility guidelines for doctors to practice medicine?
There will be a uniform National Eligibility-cum-Entrance Test for admission to under-graduate and post-graduate super-speciality medical education in all medical institutions regulated under the Bill. Further, the Bill introduces a common final year undergraduate examination called the National Exit Test for students graduating from medical institutions to obtain the license for practice. This test will also serve as the basis for admission into post-graduate courses at medical institutions under this Bill. Foreign medical practitioners may be permitted temporary registration to practice in India.
However, the Bill does not specify the validity period of this license to practice. In other countries such as the United Kingdom and Australia, a license to practice needs to be periodically renewed. For example, in the UK the license has to be renewed every five years, and in Australia it has to renewed annually.
How will the issues of medical misconduct be addressed?
The State Medical Council will receive complaints relating to professional or ethical misconduct against a registered medical practitioner. If the medical practitioner is aggrieved of a decision of the State Medical Council, he may appeal to the Ethics and Medical Registration Board. If the medical practitioner is aggrieved of the decision of the Board, he can approach the NMC to appeal against the decision. It is unclear why the NMC is an appellate authority with regard to matters related to professional or ethical misconduct of medical practitioners.
It may be argued that disputes related to ethics and misconduct in medical practice may require judicial expertise. For example, in the UK, the regulator for medical education and practice – the General Medical Council (GMC) receives complaints with regard to ethical misconduct and is required to do an initial documentary investigation in the matter and then forwards the complaint to a Tribunal. This Tribunal is a judicial body independent of the GMC. The adjudication decision and final disciplinary action is decided by the Tribunal.
How does the Bill regulate community health providers?
As of January 2018, the doctor to population ratio in India was 1:1655 compared to the World Health Organisation standard of 1:1000. To fill in the gaps of availability of medical professionals, the Bill provides for the NMC to grant limited license to certain mid-level practitioners called community health providers, connected with the modern medical profession to practice medicine. These mid-level medical practitioners may prescribe specified medicines in primary and preventive healthcare. However, in any other cases, these practitioners may only prescribe medicine under the supervision of a registered medical practitioner.
This is similar to other countries where medical professionals other than doctors are allowed to prescribe allopathic medicine. For example, Nurse Practitioners in the USA provide a full range of primary, acute, and specialty health care services, including ordering and performing diagnostic tests, and prescribing medications. For this purpose, Nurse Practitioners must complete a master's or doctoral degree program, advanced clinical training, and obtain a national certification.
