News Feed for December

As per WCS, tiger population in India has increased in Nagerhole and Bandipur tiger reserves.

National Green Tribunal

Set up under the provisions of National Green Tribunal Bill, 2009

With his, India became the third such country after Australia and NZ to have a specialized court for environmental purposes.

The aim of this tribunal to

• uphold environmental laws (air and water pollution acts, EPA, Forest conservation act, BD act)
• provide citizens a right to environment

Main bench is at Bhopal with four circuit benches elsewhere.

2nd ARC

President set up this commission of inquiry to prepare a roadmap to reform the public administration system.

What is Ethics/ Ethical Behaviour?

What is Corruption?
from Latin word 'corruptus' meaning 'to break or destroy'
Ethics is from Greek work 'ethikos' meaning 'arising from habit'

Why fight against corruption is necessary?
Increasing public cynicism bodes ill for the whole democratic setup.

How to fight Corruption?
Two approaches -

1. Emphasis on values and character
2. Reward good elements and punish bad elements

Three factors for increased corruption in our society

1. Colonial mindset
2. Inequality
3. pre economic liberalization era (over centralization)

Political Funding system fuels corruption.

2 types of corruption - 

1. Extortionary Corruption (declining since liberalization)
2. Collusive Corruption (on a rise since liberalization) 

Initiatives at the global level 

-- UN efforts

Initiatives in India 

-- RTI

-- other initiatives

Much needs to be done

Ethics in business and citizen behaviour also

Corruption in Politics and Political System

• Criminalization of Politics
• Lure of Power
• Extravagant Expenditure

Foreign Trade

Foreign Trade (FY 2012-13)

Export Target : $ 360 bn

The 2% Interest Subsidy Scheme, which was to end in March 2013, has been extended for one more year. Also more sectors have been brought under this scheme.

SARFAESI Act

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2012

http://mrunal.org/2012/12/economy-sarfaesi-asset-reconstruction-company-arc-security-receipt-sr-qib-drt.html

KC Chakrabarty Committee on RRBs, 2009

RRBs are functioning poorly. Making loss

Recommendations - 

1. RRBs need capital infusion of Rs. 2200 crores by 2011-12.
2. Performance of RRBs need to be monitored by state level committees headed by finance secretaries of state governments along with NABARD officials.

The Banking Laws Amendment Bill, 2011

What is it ?
It governs all public sector and private sector banks. Important features of this amendment -
RBI Related

• RBI can remove the entire board of a bank (instead of CEO or one-two directors) in the event of not obeying rules and regulations
• RBI will be able to prevent Connected Lending by inspecting other business arms of the bank
• Unclaimed Accounts - Depositor Education and Awareness Fund - Committee to look after this
• If anyone wants to buy more than 5% of shares of any bank, then he or she needs to acquire a license from RBI subject to some conditions
• If primary cooperative societies want to continue with banking activities, they need to obtain a license from RBI
• RBI will be able to conduct special audits of cooperative banks as they are more prone to collapse and frauds
• If a bank fails to maintain a minimum prescribed CRR, then it has to pay penalty to RBI

Public Sector Banks (PSBs) Related

• Consolidation of Banks should be encouraged by simplifying the procedures in Banking Companies Acquisition and Transfer of Undertakings Act
• M&As will only need approval from RBI (no scrutiny from Competition Commission of India (CCI) anymore)
• PSBs can issue shares worth more than Rs. 3000 crores (current limit) with Bonus Shares and Rights Issue bu with approval from RBI and Union Govt.
• Voting rights of shareholders will 

Aadhar Enabled Direct Cash Transfer (DCT) System

Govt. Plans to deliver the benefits accruing from the various schemes to the bank accounts of the beneficiaries directly. It can be MNREGS wages or the cash substitution for the subsidized products.
Beneficiaries will be identified through Aadhar.


It will be launched in 43 districts on Jan 1st (originally 51- but 8 districts are not prepared due to assembly elections in Gujarat and HP)
As of now, pension and scholarship benefits will be transferred.

Aadhar and Bank account is a mandatory prerequisite for it.

PM has constituted a high powered National Committee on Direct Cash Transfers. This committee is expected to facilitate the whole process of identifying the beneficiaries and enabling them to avail benefits through this scheme. It will

• provide an overreaching vision and direction
• provide broad policy objectives and strategies
• suggest the extent and scope of this for various Govt programs and schemes
• coordinate activities of various ministries and agencies involved
• ensure the timely and efficient rollout of the scheme
• Review the progress during implementation 
• provide guidance for mid-course correction 
• Three mission-mode committees on 
• Technology
• Financial Inclusion
• Implementation

Issues -

1. Low penetration of Aadhar and financial inclusion issues.
2. Several logistical, technological and operational issues as seen during pilot projects in Jharkhand.
3. Money can be diverted to other consumptions.

Further Reading - 

http://www.thehindu.com/opinion/lead/the-siren-song-of-cash-transfers/article1504114.ece

http://www.thehindu.com/opinion/op-ed/no-need-for-hype-but-certainly-a-hope/article4185360.ece

http://www.thehindu.com/opinion/lead/the-promise-of-unconditional-money/article4167818.ece

Foreign Direct Investment (FDI)

Investment can be in domestic currency or in foreign currency (will be converted into domestic currency ultimately).

Investment in foreign currency -

1. Direct Investment (FDI)
2. Indirect Investment (FII)

Sector	FDI Allowed
Asset Reconstruction Company	74%(FDI+FII)
Wholesale	100% (FDI)
Single Brand Retail	100% (FDI)
Multi-brand Retail	51% (FDI)

Department of Industrial Policy and Promotion (DIPP) under Ministry of Commerce and Industry is the nodal agency regarding FDI.
Foreign Investment Promotion Board (FIPB) can clear investment applications up to Rs. 1200 crores after which it has to be CCEA. Govt. set up this to speed of FDI clearance.
Govt. had relaxed the mandatory 30% local sourcing clause in September.

Top sources for FDI

1. Mauritius
2. Singapore
3. UK
4. The Nederlands

Top sectors receiving FDI

1. Services 
2. Automobiles
3. Pharma
4. Construction Development

Public Distribution System (PDS)

What is it ?

It is a scheme by Central Govt.

What it does ?

Central Govt, through Fair Price Shops(FPS) provides subsidized food-grains to beneficiaries every month. For this purpose, beneficiaries are divided into APL, BPL, and Antodaya Anna Yojna groups.

Issues plaguing PDS

1. Targeting errors
2. Leakage and diversion

Recents Events

National Transparency Portal for PDS 

• It is launched by Ministry of Consumer Affairs
• It will be a single platform for all PDS related information
• It will help in bringing transparency and efficiency

Chhattisgarh Example

National Food Security Bill

• Proposes food-grain entitlements up to 75% of the rural and 50% of the urban population.
• At least 46% of the rural and 25% of the urban population will be designated as priority household.
• Priority households will be entitled to 7 kgs of food-grains per person per month. General household will get at least 3 kgs.
• Central Govt. will determine the %age of households at state level and state will identify those households
• Grievance redressal mechanism will be set up at district, state and central level.
• Proposes reform to TPDS

Issues 

• The bill classifies beneficiaries into 3 groups. The process of identifying and placing the beneficiaries into their respective groups may lead to inclusion or exclusion errors.
• 
  

Public Procurement Bill, 2012

CBD : COP-11

http://www.thehindu.com/todays-paper/tp-features/tp-openpage/beware-the-loss-of-biodiversity/article3928218.ece

Anti-Corruption

Constitutional & Legal Provisions (Static part from M Laxmikanth)

Central Vigilance Commission (CVC)

Intro : Agency to prevent corruption at the central govt level. Created by an executive resolution in 1964 on the recommendations of K Santhanam Committee on Prevention of Corruption (1962-64)

It was given legal status in 2003.

Composition : CVC + not more than 2 VCs

Appointment : By President on recommendation of a committee consisting of PM, FM and leader of the opposition in the LS.

Tenure : 4 years or till the age of 65.  Not eligible for reappointment under state and central govt

Removal : By President How?

Salary, Allowances and Conditions of Service : For CVC, it is like UPSC chairman; For VC, it is like other members of UPSC

Functions :

Jurisdiction : 

Working :

Similarly State Vigilance Commissions

Central Information Commission (CIC)

Intro : Created by the provisions of the RTI Act, 2005

Composition : CIC + not more than 10 ICs

Appointment : By President on recommendation of a committee consisting of PM, leader of the opposition in the LS and a Union cabinet minister nominated by the PM.

Tenure : 5 years or till the age of 65. Not eligible for reappointment under state and central govt

Removal : By President How?

Salary, Allowances and Conditions of Service : For CIC, it is like UPSC chairman; For IC, it is like other members of UPSC

Functions :

State Information Commission (CIC)

Intro : Created by the provisions of the RTI Act, 2005

Composition : CIC + not more than 10 ICs

Appointment : By President on recommendation of a committee consisting of PM, leader of the opposition in the LS and a Union cabinet minister nominated by the PM.

Tenure : 5 years or till the age of 65. Not eligible for reappointment under state and central govt

Removal : By President How?

Salary, Allowances and Conditions of Service : For CVC, it is like UPSC chairman; For VC, it is like other members of UPSC

Functions :

Lokpal & Lokayuktas

Anti-Defection Law

The 52nd Amendment Act of 1985 made provisions for disqualifying members of Parliament or state legislature in case of they defecting to another political party.

It has made changes to Art. 100, 101, 190 & 191 and inserted 10th schedule.

Provisions

Disqualification : 

Exception :

Deciding Authority : 

Rule Making Power :

Evaluation :

Advantages :

Criticism : 

91st Amendment :

Relevant Bills (Dynamic part)

The Whistle Blower Protection Bill, 2011

The bill seeks to -

• Establish a mechanism so that complaint can be registered (by making a public interest disclosure to the central or state vigilance commission) against a public servant on allegations of corruption, willful misuse of power or any criminal offence.
• Safeguard the person who makes the complaint against victimisation.
• The Bill penalizes for knowingly making false complaints.
• Every complaint has to include the identity of the complainant.
• The vigilance commissioner cam disclose the identity to the head of the Department, if he deems it necessary. Any other disclosure is prohibited.

Issues - 

• The bill seeks to balance the victimisation of the complainant and undue harassment of a public official. It imposes penalty for false complaint. But there is no penalty for victimisation of the complainant.
• Through a Govt. resolution, CVC is designated to receive public interest disclosures. But there has been only few hundred complaints per year since then. The provisions of the bill is similar to that resolution. So, it remains to be seen the amount of change that the bill is envisioned to bring in.
• CVC can only make recommendations. He cannot impose any penalty unlike Karnataka or Delhi Lokayukta.
• The bill does not define victimization and has limited definition of disclosure unlike that in other countries such as USA, UK or Canada.
• The bill differs on many issues with the proposed bill of the Law Commission and 2nd ARC report.
• These include non-admission of anonymous complaints and lack of penalties for officials who victimize whistleblowers.

The Benami Transactions (Prohibition) Bill, 2011

Introduced by MoF in Aug, 2011 to replace the existing bill of 1988. The bill seeks to -

• prohibit benami transactions
• the bill defines benami transaction
• Committee has submitted its report

The Prevention of Bribery of Foreign Officials and Officials of Public International Organizations Bill, 2011

Introduced in LS by Ministor of State for Personnel, Public Grievance and Pensions, Mr. V. Narayansamy. The bill is necessitated by India's signing of UN convention against corruption.

The bill empowers central govt to enter into agreement with other countries for enforcing this law and exchange of investigative information.

The Right of Citizens to time bound delivery of goods and services and redressal of their grievances bill, 2011 

The Electronic Delivery of Services Bill, 2011

The bill requires - 

• Public authorities will have to provide all public services (except a) that cannot be provided electronically and b) that the authority decide to keep out of electronic medium after consultation with the commission) electronically within 8 years from the commencement of this bill.
•   Establishment of Central and State Electronic Service Delivery Commission to monitor compliance of govt departments, and hear representations.
• Public Authorities have to establish a mechanism to redress complaints.

Issues - 

• Information will be needed to be stored electronically. the bill is mute regarding the security of these information.

The Prevention of Money Laundering(Amendment) Bill, 2011

Introduced by MoF, this bill seeks to amend the 2002 bill on this subject matter.

The national Identification Authority of India Bill, 2010

More discussed here

The Public Procurement Bill, 2012

Introduced by MoF in LS. The bill seeks to 

• Regulate and ensure transparency in the procurement process.
• A public servant can be imprisoned up to 5 years for accepting bribe and vitiating the bidding process.
• The bill shall not apply to procurements less than 50 lakhs or procurements made for disaster management or procurements made for national security.
• Currently, there is no overreaching legislation covering public procurement. The General Financial Rules, 2005 govern the procurements at the center.
• The bill is based on the recommendations by the committee on public procurement headed by former bureaucrat Vinod Dhall.
• The bill is aimed at fair and equitable treatment of the bidders, competitive environment, enhancing efficiency and economy, and maintaining integrity and public confidence. 

New Urea Investment Policy

CCEA approved a Urea Investment policy.
Objective of this policy -

• India currently imports 30% of its Urea requirement
• Govt. wants to reduce this import dependency by incentivizing investments in setting up new plants and expanding existing capacity. 

Under this policy, Govt. will provide 10-12 percent of post tax return on fresh capital infused.

To ensure this return, Govt. will bear the whole cose of Natural Gas, the main raw material and which accounts around 80% of the total input cost.

Govt. currently controls the urea pricing.

National Investment Board

Prelude : Big investments in infra and industries were getting delayed after being stuck up in different ministries for clearance and approval. --> Project delayed and escalation in project cost --> Slowdown in Economy (all cascading effects)

So, Finance ministry came up with the idea of NIB. The idea was if all the matters related to approvals and clearances will be handed over to a separate authority (set up with the sole purpose of expediting things), things will move faster.

But, it was opposed vehemently by other ministries, especially the MoEF, because the NIB was taking away some of the environmental approvals.
Also, it feared that, if approving a project is going to be the sole motive of NIB, then other aspects will be compromised.

So, as a toned down measure, the cabinet has decided in favor of a CCI (Cabinet Committee on Investments) rather than setting up an NIB.

CCI will be a cabinet sub-committee having all the concerned ministries on the same table.
It will also subsume Cabinet Committee on Infrastructure.