The President addressed the Parliament after the 2009 Lok Sabha Elections on 4th June 2009. She also addressed Parliament on 22nd February 2010, as well as on 21st February 2011. The tables below highlight some items from the agenda of the central government as outlined in these speeches, as well as the initiatives undertaken with respect to these agenda items. Table 1: Some Items from the President’s Address to Parliament on 4th June 2009
| Agenda Items outlined in the President’s Speech | Current Status |
| Establishment of National Counter-Terrorism Centre | Proposed launch of NCTC in March 2011 on hold |
| Enactment of legislation for prevention of communal violence | Communal Violence Bill 2005 pending in Parliament. New bill drafted by NAC but not introduced in Parliament |
| Unique Identity Card scheme to be implemented in three years | Unique Identification Authority of India created under Planning Commission on 28 January 2009. Bill to give statutory status pending in Parliament |
| Establishment of a regulator for the pension sector | Bill introduced in Lok Sabha on 24 March 2011 |
| Convergence of NREGA with other programs; expansion of works permitted; independent monitoring and grievance redressal | |
| Rashtriya Swasthya Bima Yojana to cover all families below the poverty line in five years | |
| Enactment of Right to Free and Compulsory Education Bill | Bill passed in 2009 and brought into force on 1 April 2009 |
| Madhyamik Shiksha Abhiyan to universalize access to secondary education | Rashtriya Madhyamik Shiksha Abhiyan launched in March 2009 |
| National Mission for Female Literacy to make every woman literate in five years | National Literacy Mission recast in 2009 to focus on female literacy |
| Construction of 1.2 crore rural houses under Indira Awas Yojana in five years | |
| Introduction of Rajiv Awas Yojana for slum dwellers and urban poor | Phase I approved by Cabinet on 2 June 2011 |
| Enactment of National Food Security Act | Introduced in Lok Sabha on 22 December 2011 |
| Enactment of Amendment Bill to Land Acquisition Act and Rehabilitation and Resettlement Bill | Land Acquisition, Rehabilitation and Resettlement Bill 2011 introduced in Lok Sabha on 7 September 2011 |
| Enactment of Women’s Reservation Bill | Passed by Rajya Sabha, pending in Lok Sabha |
| Constitutional Amendment for 50 percent reservation for women in panchayats and urban local bodies | Two Bills introduced in Lok Sabha in November 2009; both pending in Parliament |
| Amendment of RTI to provide for disclosure by government in all non-strategic areas | |
| Model Public Services Law to be drawn up in consultation with states | Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievance Bill, 2011 introduced in Lok Sabha on 20 December 2011 |
| Introduction of Goods and Services Tax | Constitutional Amendment Bill introduced in Lok Sabha on 22 March 2011 |
| National Council for Human Resources in Health | Introduced in Rajya Sabha on 22 December 2011 |
| National Council for Higher Education | Bill introduced in Rajya Sabha on 28 December 2011 |
*Note: Blank cells indicate that PRS has not been able to find official information in the public domain. Table 2: Some Items from the President’s speech to Parliament on 22nd February 2010
| Agenda Items outlined in the President’s Speech | Current Status |
| Introduction of legislation to ensure food security | Introduced in Lok Sabha on 22 December 2011 |
| Rural teledensity of 40 percent by 2014 | Rural teledensity of 33% as of February 2011 |
| Introduction of Rajiv Awas Yojana for urban poor and slum dwellers | Phase I approved by Cabinet on 2 June 2011 |
| Disposal of remaining claims under the Scheduled Tribes and Other Traditional Forest Dwellers Act | |
| Introduction of amendment to the Wakf Act | Passed by Lok Sabha; pending in Rajya Sabha |
| Enactment of Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill, 2005 | Pending in Rajya Sabha since 2005 |
| Enactment of Women’s Reservation Bill | Passed by Rajya Sabha; pending in Lok Sabha |
| Constitutional amendments for 50 percent reservation for women in panchayats and urban local bodies | Two Bills introduced in Lok Sabha in November 2009; both pending in Parliament |
| Establishment of National Council for Higher Education and Research | Higher Education and Research Bill, 2011 introduced in Rajya Sabha on 28 December 2011 |
| Legislation for facilitating participation of foreign academic institutions in the education sector | Foreign Educational Institutions Bill, 2010 introduced in Lok Sabha on 3 May 2010 |
| Voting rights for Indian citizens living abroad | Bill passed. NRIs can vote at the place of residence that is mentioned in their passport |
Table 3: Some Items from the President’s speech to Parliament on 21st February 2011
| Agenda Items outlined in the President’s Speech | Current Status |
| Enactment of Food Security Law | Introduced in Lok Sabha on 22 December 2011 |
| Whistleblower Bill | Bill passed by Lok Sabha; pending in Rajya Sabha |
| Enactment of Judicial Standards and Accountability Bill | Introduced in Lok Sabha on 1 December 2010 |
| Enactment of new Mines and Minerals Bill | Introduced in Lok Sabha on 12 December 2011 |
| Rural teledensity of 40 percent by 2014 | Rural teledensity of 33% as of February 2011 |
| Construction of 1.2 crore rural houses during 2009-14 | |
| Enactment of Women’s Reservation Bill | Passed by Rajya Sabha; pending in Lok Sabha |
| Introduction of Bill regarding protection of children from sexual offences | Introduced in Rajya Sabha on 23 March 2011 |
| Introduction of Biotechnology Regulatory Authority of India Bill | Not introduced till date |
These are challenging times for chit fund operators. A scam involving the Saradha group allegedly conning customers under the guise of a chit fund, has raised serious questions for the industry. With a reported 10,000 chit funds in the country handling over Rs 30,000 crore annually, chit fund proponents maintain that these funds are an important financial tool. The scam has also sparked responses from both the centre and states: the Finance Ministry, Ministry of Corporate Affairs and SEBI have all promised to act and the West Bengal Assembly has passed The West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013, with Odisha and Haryana considering similar legislation. What is a chit fund? A chit fund is a type of saving scheme where a specified number of subscribers contribute payments in instalment over a defined period. Each subscriber is entitled to a prize amount determined by lot, auction or tender depending on the nature of the chit fund. Typically the prize amount is the entire pool of contribution minus a discount which is redistributed to subscribers as a dividend. For example, consider an auction-type chit fund with 50 subscribers contributing Rs 100 every month. The monthly pool is Rs 5,000 and this is auctioned out every month. The winning bid, say Rs 1000, would be the discount and be distributed among the subscribers. The winning bidder would then receive Rs 4,000 (Rs 5,000 – 1,000) while the rest of subscribers would receive Rs 20 (1000/50). Winners cannot enter the auction again and will be liable for the monthly subscription as the process is repeated for the duration of the scheme. The company managing the chit fund (foreman) would retain a commission from the prize amount every month. Collectively, the subscribers to a chit fund are referred to as a chit group and a chit fund company may run many such groups. What are the laws governing chit funds? Classifying them as contracts, the Supreme Court has read chit funds as being part of the Concurrent List of the Indian Constitution; hence both the centre and state can frame legislation regarding chit funds. States like Tamil Nadu, Andhra Pradesh and Kerala had enacted legislation (e.g The Kerala Chitties Act, 1975 and The Tamil Nadu Chit Funds Act, 1961) for regulating chit funds. Chit Funds Act, 1982 In 1982, the Ministry of Finance enacted the Chit Funds Act to regulate the sector. Under the Act, the central government can choose to notify the Act in different states on different dates; if the Act is notified in a state, then the state act would be repealed[i]. States are responsible for notifying rules and have the power to exempt certain chit funds from the provisions of the Act. Last year the central government, notified the Act in Arunachal Pradesh, Gujarat, Haryana, Kerala and Nagaland. Under the Act, all chit funds require previous sanction from the state government. The capital requirement for establishing chit funds is Rs 1 lakh and at least 10% of profits should be transferred to a reserve fund. The amount of discount (i.e. the bid) is capped at 40% of the total chit fund value. States may appoint a Registrar who would be responsible for regulation, inspection and dispute settlement in the sector. Any grievances over decisions made by the Registrar can be subject to appeals directed to the state government. Chit fund managers are required to deposit the entire value of the chit fund (can be done in 50% cash and 50% bank guarantee) with the Registrar for the duration of the chit cycle. Prize Chits and Money Circulation Schemes (Banning) Act, 1978 The Prize Chits and Money Circulation Schemes (Banning) Act, 1978 defines and prohibits any illegal chit fund schemes (e.g. schemes where auction winners are not liable to future payments). Again, the responsibility for enforcing the provisions of this Act lies with the state government. Reports suggest that the government is discussing amendments to this Bill in the wake of the chit fund scam. West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013 Last month the West Bengal Assembly passed the West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013. This was a direct response to the chit fund scam in West Bengal. While not regulating chit funds directly, the Act regulates and restricts financial establishments to curb any unscrupulous activity with regards to deposits. Chit funds are specifically included under the definition of deposits. The state government will appoint a competent authority to conduct investigations. What is the role of RBI and SEBI? The Reserve Bank of India (RBI) is the regulator for banks and other non banking financial companies (NBFCs) but does not regulate the chit fund business. While chit funds accept deposits, the term ‘deposit’ as defined under the Reserve Bank of India Act, 1934 does not include subscriptions to chits. However the RBI can provide guidance to state governments on regulatory aspects like creating rules or exempting certain chit funds. As the regulator of the securities market, SEBI regulates collective investment schemes. But the SEBI Act, 1992 specifically excludes chit funds from their definition of collective investment schemes. In the recent case with Sarada Group, the SEBI investigation discovered that Sarada were, in effect, operating a collective investment scheme without SEBI’s approval.
[i] The central act repeals the Andhra Pradesh Chit Funds Act, 1971; the Kerala Chitties Act, 1975, the Maharashtra Chit Funds Act, 1974’, the Tamil Nadu Chit Funds Act, 1961 (applicable in Chandiragh and Delhi), the Uttar Pradesh Chit Funds Act, 1975, Goa, Daman and Diu Chit Funds Act, 1973 and Pondicheery Funds Act, 1966.
