Yesterday the Rajya Sabha and Lok Sabha engaged in a debate on the President's speech, known as the Motion of Thanks. The President's speech is a statement of the legislative and policy achievements of the government during the preceding year and gives a broad indication of the agenda for the year ahead. Close to the end of the UPA government’s term, it would be useful to evaluate the status of the commitments made in the President’s addresses. (To know more about the significance of the President’s speech refer to this Indian Express article. To understand the broad policy and legislative agenda outlined in this year's address see this PRS Blog.) The President's speeches since the beginning of the 15th Lok Sabha in 2009, have addressed reforms to the financial and social sectors, improving accountability of public officials, and making the delivery of public services more efficient.  We analyse the status of each of these commitments. Accountability in governance processes In an effort to increase accountability and transparency in governance processes, the government introduced a number of Bills.

  • The the Lokpal and Lokayukta Bill and the Judicial Standards and Accountability Bill enable individuals to file complaints against judges and other government officials for corruption and misbehaviour.
  • The Whistleblowers Bill has been introduced to protect persons who are making disclosures on corruption, on the misuse of power and on criminal offences by public servants.

These bills have been passed by the Lok Sabha and are pending in the Rajya Sabha.  The government has recently approved amendments to the Lokpal Bill, which may be considered by the Rajya Sabha in the Budget session. Public service delivery In order to make public service delivery more efficient, the government introduced the Electronic Services Delivery Bill and the Citizen’s Charter Bill.

  • The Electronic Services Delivery Bill aims to deliver all government services electronically .
  • The Citizens Charter Bill creates a grievance redressal process for complaints against the functioning of any public authority.
  • Both Bills are pending in the Lok Sabha since introduction in December 2011.
  • Related initiatives include linking the delivery of public services to Aadhaar and moving towards the cash transfer of subsidies. On January 1, 2013, the government piloted cash transfers to deliver subsidies for scholarships and pensions.

Social sector reforms: land, food security and education Broad sectoral reforms have been undertaken in land acquisition, food security and education to aid development and economic growth.

  • Land:  In 2011, the government introduced the Land Acquisition, Rehabilitation and Resettlement Bill. The Standing Committee Report on the Bill was released in May last year, based on which the government circulated a list of amendments to the Bill in December 2012.
  • Education: Elementary and middle school education saw reform in 2009 with the passage of the Right to Education Act (RTE Act). This legislation provides every child between the age of six to fourteen years with the right to free and compulsory education. As per the law, by March 2013 all schools are to conform to the minimum standards prescribed. States have expressed concerns over their preparedness in meeting this requirement and it remains to be seen how the government addresses this issue.
  • Food security: The National Food Security Bill is pending in Parliament since 2011. The Bill seeks to make food security a legal entitlement, reform the existing Public Distribution System and explore innovative mechanisms such as cash transfer and food coupons for the efficient delivery of food grains. The Standing Committee gave its recommendations on the Bill in January this year.

Financial sector reforms In order to aid growth and encourage investments, the President had mapped out necessary financial sector reforms.

  • Taxation: The Direct Taxes Code has been introduced in Parliament to enhance tax realisation. However, even though the Standing Committee has presented its report, there has been little progress on the Bill. Efforts are underway to build political consensus on the Goods and Services Tax to rationalise indirect taxes.
  • Regulation of specific sectors: A bill to regulate the pension sector has been introduced in Parliament. Other financial sector reforms include a new Companies Bill, amendments to the Banking laws and a bill regulating the insurance sector.  Amendments to the banking laws have been approved by Parliament, while those to the Companies Bill have only been passed by the Lok Sabha.

In the backdrop of these legislations, it will be interesting to see the direction the recommendations of the Financial Sector Legislative Reforms Commission, responsible for redrafting all financial sector regulation, takes. Internal security The government is taking measures to deal with internal security concerns such as terrorism and naxalism. In 2009, the President mentioned that the government has proposed the setting up of a National Counter Terrorism Centre. However, this has been on hold since March 2011. At the beginning of the 15th Lok Sabha in June 2009, the President presented the 100 day agenda of the UPA II government, in his address. Of the eight bills listed for passing within 100 days, none have been passed. In addition, the President’s address in 2009 mentioned five other Bills, from which, only the RTE Act has been passed.  In the final year of its tenure, it needs to be seen what are the different legislative items and economic measures, on which the government would be able to build consensus across the political spectrum.  

In law, the addition or deletion a single punctuation or a single word can have a major impact on the effect of that law.  One such example can be seen from the recommended changes in the Civil Liability for Nuclear Damage Bill, 2010 by Parliament’s Standing Committee. The Civil Liability for Nuclear Damage Bill, 2010 was introduced in the Lok Sabha on May 7, 2010.  The Bill was referred to the Parliamentary Committee on Science and Technology, Environment and Forests, which submitted its report on the Bill yesterday (August 18, 2010).  The Committee has made a number of recommendations regarding certain clauses in the Bill (See summary here).  One of these may have the effect of diluting the provision currently in the Bill.  The main recommendations pertain to:

  • Preventing the entry of private operators.
  • Allowing the government to increase the total liability for a nuclear incident by notification, but not decrease it.
  • Increasing the liability of the operator to Rs 1,500 crore from Rs 500 crore.
  • Increasing the time limit for claiming compensation to 20 years from 10 years.
  • Changing the provision giving operators a right of recourse against persons actually responsible for causing damage.

Clause 17 of the Bill which gives operators a right of recourse against those actually causing damage had been opposed as it was felt that it was not strong enough to hold suppliers liable in case the damage was caused by them.  Clause 17 gave a right of recourse under three conditions.  The exact clause is reproduced below: The operator of a nuclear installation shall have a right of recourse where — (a) such right is expressly provided for in a contract in writing; (b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment or services, or of his employee; (c) the nuclear incident has resulted from the act of commission or omission of a person done with the intent to cause nuclear damage. Under this clause, a right of recourse exists when (a) there is a contract giving such a right, or (b) the supplier acts deliberately or in a grossly negligent manner to cause nuclear damage, or (c) a person causes nuclear damage with the intent to do so.  If any of the three cases can be proved by the operator, he has a right of recourse. The Committee has stated that “Clause 17(b) gives escape route to the suppliers of nuclear materials, equipments, services of his employees as their willful act or gross negligence would be difficult to establish in a civil nuclear compensation case.” It recommended that Clause 17(b) should be modified to cover consequences “of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or service.” The Committee also recommended another change in Clause 17.  It recommended that clause 17(a) may end with “and”. This provision may dilute the right of recourse available to operators.  The modified clause 17 would read as: The operator of a nuclear installation shall have a right of recourse where — (a) such right is expressly provided for in a contract in writing; and, (b) the nuclear incident has resulted as a consequence of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or services.; (c) the nuclear incident has resulted from the act of commission or omission of a person done with the intent to cause nuclear damage. This implies that for Clauses 17(b) or (c) to be applicable, the condition specified in clause 17(a) has to be compulsorily satisfied.  Two examples highlight the consequence of the recommended change in Clause 17(a) of the Bill:

  1. A person X deliberately commits sabotage in a nuclear plant and causes damage.  Under the Bill, the operator has recourse under Clause 17(c).  If the recommendation regarding clause 17 is accepted, the operator may also have to also prove the existence of a pre-existing contract with X in addition to clause 17(c).
  2. If a supplier supplies defective equipment, but does not have a contract in writing stating that he will be liable for damage caused by defective equipment, the operator may not have a right of recourse against the supplier under 17(b).

The effect of the changes recommended by the committee may thus dilute the provision as it exists in the Bill.  The table below compares the position in the Bill and the position as per the Standing Committee’s recommendations:

Right of recourse - The Bill gives operators a right to recourse under three conditions:  (a) if there is a clear contract; (b) if the damage is caused by someone with intent to cause damage; (c) against suppliers if damage is caused by their wilful act or negligence. In the Bill the three conditions are separated by a semi-colon.  The Committee recommended that the semi-colon in clause 17(a) should be replaced by “and”. This might imply that all three conditions mentioned need to exist for an operator to have recourse.
Right to recourse against suppliers exists in cases of “willful act or gross negligence on the part of the supplier”. (Clause 17) The Committee felt that the right of recourse against suppliers is vague.  It recommended that recourse against the supplier should be strengthened.  The supplier is liable if an incident has occurred due to (i) defects, or (ii) sub-standard material, or (iii) gross negligence of the supplier of the material, equipment or services. The variance with the Convention continues to exist.