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The recent 2G-controversy and the related debate over the role of the PAC as opposed to the JPC also raises a broader Issue regarding the general scrutiny of government finances by Parliament. Oversight of the government’s finances involves the scrutiny of the government’s financial proposals and policies. The Indian Constitution vests this power with the Parliament by providing that (a) taxes cannot be imposed or collected without the authority of law, and (b) expenditure cannot be incurred without the authorisation of the legislature. The Indian Parliament exercises financial oversight over the government budget in two stages: (1) at the time of presentation of the annual budget, and (2) reviewing the government’s budget implementation efforts through the year. The Parliament scrutinises the annual budget (a) on the floor of the House, and (b) by the departmentally related standing committees. Scrutiny on the floor of the House The main scrutiny of the budget in the Lok Sabha takes place through: (a) General discussion and voting: The general discussion on the Budget is held on a day subsequent to the presentation of the Budget by the Finance Minister. Discussion at this stage is confined to the general examination of the Budget and policies of taxation expressed during the budget speech. (b) Discussion on Demand for Grants: The general discussion is followed by a discussion on the Demand for Grants of different ministries. A certain number of days or hours are allocated for the discussion of all the demands. However, not all the demands are discussed within the allotted number of days. The remaining undiscussed demands are disposed of by the Speaker after the agreement of the House. This process is known as the ‘Guillotine’. Figure 1 shows the number of Demands discussed and guillotined over the last five years. It shows that nearly 90% of the Demands are not discussed every year. Some Important Budget Documents Annual Financial Statement – Statement of the estimated receipts and expenditure of the government. Demand for Grants –Expenditure required to be voted by the Lok Sabha. A separate Demand is required to be presented for each department of the government. Supplementary Demand for Grants – Presented when (a) authorized amounts are insufficient, or (b) need for additional expenditure has arisen. Finance Bill – Details the imposition of taxes, the rates of taxation, and its regulation. Detailed Demand for Grants – Prepared on the basis of the Demand for Grants. These show further break-up of objects by expenditure, and also actual expenditure in the previous year. For more details see detailed note on Financial Oversight by Parliament here.
The Tribunals Reforms Bill, 2021 was introduced in Lok Sabha today. It seeks to dissolve certain existing appellate bodies and transfer their functions (such as adjudication of appeals) to existing judicial bodies (mainly high courts) (see Table 1). It also amends the Finance Act, 2017, to bring certain provisions (such as qualifications, appointments, term of office, salaries and allowances of tribunal members) under the purview of the Bill. Currently, these provisions are notified through Rules under the Finance Act, 2017.
Note that the 2017 Act reorganised the Indian tribunal system to ensure uniformity in their administration by amalgamating certain tribunals based on the similarity in their functional domain. It also delegated powers to the central government to make Rules to provide for the qualifications, appointments, term of office, salaries and allowances, removal, and other conditions of service for chairpersons and members of these tribunals.
This Bill replaces an Ordinance with similar provisions that was promulgated in April 2021. The 2021 Ordinance was challenged in the Supreme Court over its compliance with past Supreme Court judgements. In July 2021, the Court struck down certain provisions of the Ordinance, such as the four-year term of office for members, and the minimum age bar of 50 years to be appointed as a member of a tribunal. Table 2 shows a detailed comparison of key provisions of the 2021 Bill with the 2021 Ordinance and the principles laid down by the Supreme Court in its judgement. The Bill does not conform to the judgement of the Supreme Court and retains the provisions of the Ordinance that were struck down by the Court.
For an analysis of the 2021 Ordinance, please see our note here. For more details on the evolution of the tribunal system in India, please see our note.
Table 1: Transfer of functions of key appellate bodies as proposed under the Bill
Appellate body |
Role |
Proposed entity |
Appellate Tribunal under the Cinematograph Act, 1952 |
Adjudication of appeals against the Board of Film Certification |
High Court |
Appellate Board under the Trade Marks Act, 1999 |
Adjudication of appeals against orders of the Registrar |
High Court |
Appellate Board under the Copyright Act, 1957 |
Adjudication of certain disputes and appeals against orders of the Registrar of Copyright. Disputes include those related to publications and term of the copyright |
Commercial Court or the Commercial Division of a High Court* |
Authority for Advance Rulings under the Customs Act, 1962 |
Adjudication of appeals against orders of the Customs Authority for advance rulings |
High Court |
Appellate Board under The Patents Act, 1970 |
Adjudication of appeals against decisions of the Controller on certain matters. Matters include applications for patents and restoration of patents. |
High Court |
Airport Appellate Tribunal under the Airports Authority of India Act, 1994 |
Adjudication of:
|
|
Airport Appellate Tribunal under the Control of National Highways (Land and Traffic) Act, 2002 |
Adjudication of appeals against orders of the Highway Administration on matters including, grant of lease or licence of highway land, removal of unauthorised occupation, and prevention of damage to highway. |
Civil Court# |
Appellate Tribunal under the Protection of Plant Varieties and Farmers' Rights Act, 2001 |
Adjudication of appeals against certain orders of Registrar or Plant Varieties and Farmer Rights Authority |
High Court |
Appellate Board under the Geographical Indications of Goods (Registration and Protection) Act, 1999 |
Adjudication of appeals against orders of the Registrar |
High Court |
Notes: * Constituted under the Commercial Courts Act, 2015; # Refers to a Civil Court of original jurisdiction in a district and includes the High Court in the exercise of its ordinary original civil jurisdiction.
Sources: The Tribunals Reforms Bill, 2021; Parent Acts of the appellate bodies; PRS.
Table 2: Key provisions in the 2021 Bill and the Ordinance vis-a-vis the Supreme Court judgements
Provisions |
2021 Ordinance |
Supreme Court Judgement of July 2021 |
2021 Bill |
Term of office of Chairperson and members |
Four-year term with eligibility for re-appointment. |
The Court stated that a short tenure of members (such as three years) along with provisions of re-appointment increases the influence and control of the Executive over the judiciary. In a short tenure, by the time the members achieve the required knowledge, expertise and efficiency, one term gets over. This prevents enhancement of adjudicatory experience, thereby, impacting the efficacy of tribunals. The Court struck down the provision of four -year term and reiterated its past judgements, which recommended a five-year term with eligibility for re-appointment. |
Same as that in Ordinance. |
Minimum age requirement for appointment of Chairperson and members |
50 years |
The Court observed that the minimum age requirement of 50 years violates past Court judgements, where the Court has stated that advocates with at least 10 years of relevant experience must be eligible to be appointed as judicial members, as that is the qualification required for a High Court judge. Such a high age limit also prevents the recruitment of young talent. The provision was struck down. |
Same as that in Ordinance. |
Time limit for appointments |
Preferably within three months from the date of the recommendations of the search-cum-selection committee. |
The Court noted that not mandating the central government to make appointments within three months (from the date of recommendation of the search-cum-selection committee) leads to delay in the appointment of members. This impacts the functioning and efficacy of tribunals. The provision was struck down over non-compliance with past judgements, which mandated the appointments to be made within three months. |
Same as that in Ordinance. |
Number of recommendations for a post |
Two names for each post. |
The Court stated that the recommendations for appointment of members by the search-cum-selection committee should be final. The Executive must not be allowed to exercise any discretion in matter of appointments in a tribunal. The Court struck down the provision and reiterated its past judgement, which specified that the selection committee must suggest one name for each post. The Committee may recommend one name in wait list. |
Same as that in Ordinance. |
Sources: The Tribunals Reforms Ordinance, 2021; The Tribunals Reforms Bill, 2021; Madras Bar Association vs Union of India, W.P.(C) No. 000502 of 2021; PRS.