Opposition Should Overcome Selective Amnesia Before Pitching for Select Committee on Insurance bill

   

                                                     (Image Courtesy: IndiaFirst Life Insurance)

The brewing political ruckus over Insurance Laws (Amendment) Bill 2008 has blurred the distinction between the fact and fiction. 

News stories indicate that nine political parties including Congress and its UPA allies have given a notice to the Rajya Sabha Chairman demanding that the Bill be referred to a Select Committee for scrutiny.

The Finance Minister Arun Jaitley is likely to introduce the revised Bill in Rajya Sabha on 4th August for which a four-hour discussion has been specified by the House’s Business Advisory Committee. He is expected to take the fizz out of the Opposition cacophony during the discussion as the new Government is on a strong footing as for as the facts and the domestic interests are concerned. 

The Opposition parties have contended that 97 official amendments to the Insurance Laws (Amendment) Bill 2008 (which is to be enacted as Insurance Laws (Amendment) Act 2014) have changed the character of the proposed law. It thus required fresh scrutiny and this should be done by a Select Committee.

The fact is that 88 official amendments were approved by the Cabinet during the UPA regime taking into account the recommendations and observations of Parliamentary Standing Committee (PSC) on Finance. Several changes are of “drafting nature”, which only implies an attempt to improve the text of the Bill.

The UPA and its outside allies should first overcome selective amnesia instead of demanding that the Bill be referred to the Select Committee. The Opposition should recall a release issued by Press Information Bureau on 4th October 2012, announcing the Cabinet decision to approve official amendments to the Bill. 

The release stated “Based on the recommendations of the Standing Committee on Finance, the Cabinet has approved amendments containing the following : The foreign equity cap is proposed to be kept at 49 per cent as provided in the Insurance Laws (Amendment) Bill, 2008 as against the 26 percent. This is done in order to meet the growing capital requirement of insurance companies.”

Thus the decision to hike insurance FDI ceiling to 49% was taken by UPA and reiterated by it in spite of PSC’s recommendation to keep the cap at 26%. 

Later, the UPA Government had sent notice to Rajya Sabha on several occasions to introduce the Bill with 88 official amendments, which are available in the public domain.

(http://www.prsindia.org/uploads/media/Insurance/Official%20amendments%20Insurance%20Laws%20Amendment%20Bill.pdf)

The last such notice was sent on 30th January 2014. The revised Bill, however, never, came up for introduction and discussion in the House.       

When Modi Government came to power, it mulled over the need to strike a balance between UPA Government’s resolve for 49% cap and PSC’s recommendation for retention of 26% ceiling, according to informed sources.  

The Finance Ministry discussed this issue with General Insurance Council, Life Insurance Council and representatives of insurance companies at a meeting held on 31st May 2014. 

According to informed sources, “it was unequivocally suggested by participants that the sector FDI limit needs to be raised to 49% from 26%, ideally without qualification. However, if felt necessary, the Government could impose safeguards like restriction of voting rights of foreign investors to 26%, requirement of the CEO/majority directors being Indian, etc. for a limited duration, subject to an early review.”

Thus, the strategy to balance the interest of foreign investors and insurance industry’s capital requirements, on the one hand, and the domestic concerns, on the other, emerged from within the industry.   

The NDA Government has accordingly decided to water down UPA’s unqualified FDI stance with safeguards as mooted by the industry. This should have actually appeased the Left parties, one of whose spokesperson has dubbed the revised bill as Modi Government’s “welcome gift to John Kerry, US Secretary of State.” 

The root cause of the row is the Modi Government's failure to put facts in public domain at appropriate time.  It is more tight-fisted than the UPA Government if the yardstick of putting information in public domain is concerned. This flaw led certain mainstream dailies into distorted reporting of the Cabinet decision to approve official amendments to the Bill and their placement in the Rajya Sabha. The news reports said Cabinet has approved increase in FDI in insurance companies from 26% to 49%. The fact is that this is already provided for in the the original 2008 Bill. The only significant news of the NDA Cabinet meeting should have been that it has decided to subject the proposed hike to stringent safeguards.   

Modi Government has thus substituted the provision of (7A)(b) of the Bill with the ones that provides for the FDI safeguards.

The original clause of the 2008 Bill reads as: “in which the aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed forty-nine per cent paid-up equity capital of such Indian insurance company.”

In the revised bill, this paragraph would be substituted with another one that reads as: “In which the aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed forty-nine percent paid equity capital of such insurance company, provided that the voting rights of such foreign shareholders shall not exceed twenty-six percent in the aggregate and the CEO of the said Indian insurance company, to be appointed by its Indian shareholders subject to approval of the competent authority, as may be prescribed, and the majority of the company’s directors, shall be Indian nationals.” 

Another important fact is that some official amendments envisage retention of the existing Sections of the Insurance Act that were proposed to changed under the original 2008 bill. 

A case in point is the official amendment for omission of clause 4 of the original bill. The revised clause reads as: “the existing section of the Act will be retained.” 

An amendment proposed in the original bill, for instance, would have enabled foreign insurers to operate in Special Economic Zones (SEZs) without being subject to regulatory control of Insurance Regulatory and Development Authority (IRDA). 

PSC, which recommended omission of Clause 4 and related clauses from the original bill, had pointed out that IRDA and domestic insurance industry had voiced grave concern over the proposed freedom to be granted to unregistered foreign insurers in SEZs. PSC actually did a meticulous job, leaving hardly any scope for setting up of Select Committee. 

When would Dr. Manmohan Singh shed his Modi phobia?

                                             Image Courtesy: PIB
The outgoing Prime Minister Dr. Manmohan Singh has been found wanting on many occasions. And he was found wanting too in his last address to the Nation that he delivered on 17th May 2014 before submitting his resignation to the President.
He today avoided mentioning Mr. Narendra Modi, who as Prime Ministerial candidate of BJP brought about a paradigm shift in the Indian polity. He lacked the courage to either acknowledge Mr. Modi’s achievement as a global marvel or to reiterate his outrageous perception about Mr. Modi as prospective Prime Minister.
On 3rd January 2014 at the televised national press conference, Dr. Singh had stated: “I have full confidence that the next Prime Minister will be from the UPA coalition, and that without discussing the merits of Mr. Narendra Modi, it will be disastrous for the country to have Shri Narendra Modi as the Prime Minister.” 
Answering a question on BJP’s allegation that he was the weakest PM, Dr. Singh had stated: “I do not believe that I have been a weak Prime Minister. That is for historians to judge. The BJP and its associates may say whatever they like. But if by “strong Prime Minister”, you mean that you preside over a mass massacre of innocent citizens on the streets of Ahmedabad, that is the measure of strength, I do not believe that sort of strength this country needs, least of all, in its Prime Minister.” (http://nareshminocha.com/index.php/polity/1613-pm-should-cast-off-modi-phobia-answer-his-failure-on-federalism)
By failing to make amends for his provocative allegations against Mr. Modi, he sounded hollow in his exit speech. He lacked conviction when he stated: “Today, as I prepare to lay down office, I am aware that well before the final judgment that we all await from the Almighty, there is judgment in the court of public opinion that all elected officials and governments are required to submit themselves to.”
He continued: “Fellow citizens, each one of us should respect the judgment that you have delivered. The just concluded elections have deepened the foundations of our democratic polity.”
Instead of pontificating to the public, Dr. Singh should have congratulated Mr. Modi and made amends for his “disastrous” comment, which was made not in the electoral heat but in a cool, intellectual ambience. He ought to have admitted that the electorate has given thumbs down to this remark. Had the PM done so, he would have respected the people’s verdict. He thus this time also failed to connect with the public.
The supporters of Dr. Singh would point out that he did congratulate Mr. Modi through the twitter. The tweet from PMO on the 16th May reads as: “Prime Minister Dr Manmohan Singh calls Shri Narendra Modi and congratulated him on his party's victory in the Lok Sabha elections.”
If a tweet can substitute what is said at a televised national event, then Dr. Singh could have very well delivered his listless, last address to the nation via the twitter, which is not accessed by majority of the electorate.
 By not forthrightly admitting that the public has proved him wrong, Dr. Singh has once again confirmed that he lacks statesmanship. (http://nareshminocha.com/index.php/polity/1177-public-expects-pm-to-rise-like-a-statesman-or-quit-naresh-minocha)
This reminds one of the famous quotes from the American author Dale Turner.   He once stated: “It is the highest form of self-respect to admit our errors and mistakes and make amends for them. To make a mistake is only an error in judgment, but to adhere to it when it is discovered shows infirmity of character.”
Dr. Singh infirmity is that he lacked intellectual honesty to stand up against what is wrong. He preferred to remain glued to the chair instead of risking his job by upholding his conviction.
Or, how does one explain his decision to acquiesce Rahul Gandhi’s diktat to increase in the ceiling on number of LPG cylinders to 12 from 9/family in January this year.
About two years back, Dr. Singh had strongly defended the Government’s decision to introduce the cap of 9 cylinders. Addressing the nation on 21st September 2012, PM had said: “Let me begin with the rise in diesel prices and the cap on LPG cylinders. We import almost 80% of our oil, and oil prices in the world market have increased sharply in the past four years. We did not pass on most of this price rise to you, so that we could protect you from hardship to the maximum extent possible. As a result, the subsidy on petroleum products has grown enormously.  It was Rs. 1 lakh 40 thousand crores last year.  If we had not acted, it would have been over Rs. 200,000 crores this year.”
He added: “Where would the money for this have come from? Money does not grow on trees. If we had not acted, it would have meant a higher fiscal deficit, that is, an unsustainable increase in government expenditure vis-a-vis government income. If unchecked, this would lead to a further steep rise in prices and a loss of confidence in our economy.”
Dr. Singh’s inability to uphold the stature of the chair he occupied not only led the public into losing confidence in his governance skills but also in his political leadership.
The verdict of scientifically minded historians and the Almighty on Dr. Singh’s prime ministership is unlikely to be different.
                                     

   Pawar gives credence to Jairam’s charge that Political Sherpas failed to communicate

                                                        Sharad Pawer  image courtesy: NCP

The Union Agriculture Minister Sharad Pawar or rather his Ministry has unintentionally substantiated the allegation that UPA top brass did not communicate effectively its achievements and this, in turn, has harmed its electoral prospects.

Before discussing Agriculture Ministry’s belated disclosure that justifies the charge of UPA leadership was uncommunicative, recall what Union Rural Development minister Jairam Ramesh recently stated while bemoaning that top Congress leaders (effectively UPA top brass) were found lacking in political communication. 

Mr. Ramesh reportedly told PTI on 4th May: “I always believed that one of the foundations of politics is communication and communication from the very top...by the ‘sherpas’ alone. So, political communication is very, very important but unfortunately we were found lacking.”

Last month, the prime minister's communications adviser, Pankaj Pachauri stated: “The government is working. Its achievements are not reaching you. As for the media, the priorities are different.”

And now consider the proof of UPA sherpas being uncommunicative.  Mr. Pawar/Agriculture Ministry sat on two major overseas communications hailing India’s achievements for more than two years. These should have been flaunted as global certification of India’s sterling attainments on the farm front under the UPA Government. The impact of communicating what reputed, independent entities say about the success is far more important than blowing one's own trumpet in the form of UPA's report to the people.   

The communications addressed to Mr. Pawar are actually two separate letters from the chiefs of UN Food and Agriculture (FAO) and Manlia-based International Rice Research Institute (IRRI). 

Both FAO and IRRI had lauded India’s exceptional success on the food production front achieved due to joint efforts of all stakeholders especially the Eastern region and small and marginal farmers. The Agriculture Ministry has only now made the two letters public when the Sun has already set on the UPA and the Lok Sabha polls are in the last leg. 

The notings on the letters show that the decision to make the letters public was taken on 30th April/1st May 2014. It is important to observe that the letters were written during the tenure of Mr. Pawar as President of International Cricket Council. Mr. Pawar has often been criticized for allegedly giving more priority to cricket administration than to his ministerial portfolio.

In a letter dated 2nd March 2012, FAO Director General stated: “I would like to congratulate your Government’s achievement last year in stabilizing food prices, improving public distribution of food grains for ensuring access to food and nutrition, but especially the achievement of exceeding, for the first time in history, 100 million tons of rice production and 250 million tons of food grains. These are remarkable accomplishments of India’s Central, State and local governments, and especially of your small and marginal farmers. Particular gains in several Eastern States demonstrate the importance of government production programmes, infrastructure improvements, and supportive policies.”

Similarly, IRRI Director General, in a letter dated 23rd February 2012, stated: “We are thrilled to receive the information that the record rice harvest surpassing 100 million tons in India during Kharif 2011. I congratulate you and Indian agricultural officials and scientists for this remarkable achievement. This will have a very positive impact on regional and global food security.”  

The letter adds: “The most heartening aspect of increased rice production is the fact that a major contribution has come from eastern India, which is predominantly rainfed and stress-prone. The region was little affected by the first green revolution.”

If Pawar/Agriculture Ministry originally felt that it was not worthwhile to share international jubilation over good Indian news, then why it has now decided to put these letters in public domain (http://nfsm.gov.in/Circulars_Notifications/2014-15/FOODANDAGRICULTUREORGANIZATIONOFTHEUNITEDNATIONS.pdf)? 

Is it Mr. Pawar’s involvement in global cricket administration that made him overlook the importance of sharing the international recognition of Indian achievement with the public?  

                                               

Aadhar’s pure magic gone; Congress banks on rights & commissions gimmickry

Manifesto image: courtesy Congress

A Right for Everybody; A Commission for every issue. This is the key message of the Congress Party’s manifesto for the Lok Sabha polls.

The implied message is indeed a survival kit for the Congress that once dreamt of big-leap victory in the 2014 and 2019 elections on the strength of aadhar card-enabled delivery of services.   

The nursery rhyme ‘Humpty Dumpty had a great fall…’ appears to be now reverberating at Congress offices across the Nation.  The Congress, the country’s most Machiavellian Party, is now realizing that an average Indian cherishes dignified work.  

The humble voter cannot be always won (or rather bought) with freebies, notwithstanding rationalization of this practice by the Supreme Court. The apex court last year observed that electoral promises fall under the domain of Directive Principles of the Constitution and do not constitute corrupt practices.  It, however, directed the Election Commission (EC) to frame guidelines on drafting of manifestos and EC recently acted accordingly. 

EC should give verdict promptly on manifesto of each major party to show the extent of non-compliance with SC-mandated guidelines.  

Except for the realization that dole-outs have lost the sheen, there is no other plausible explanation for the Congress bigwigs’ failure to orchestrate their claims on Aadhar.

The name ‘Aadhar’ figures only twice in the Manifesto. So does the term ‘direct benefit transfer’. The term ‘cash transfer’ finds no mention.  As put by the Manifesto, “The Indian National Congress will ensure that all Indian residents have a unique Aaadhar number. This will serve as a proof of identity and proof of residence. It will also enable access to services (like opening a bank account) for a vast majority of Indians.”

It adds: “The Indian National Congress is committed to using the Aapka Paisa Aapka Haath platform for all government programmes. Direct Benefit Transfer will ensure time-bound delivery of benefits at the individual’s doorstep, and remove corruption and leakages.”

Compare this subdued resolve with Eureka frenzy that gripped the Congress top brass in 2012-13.  Finance Minister P. Chidambaram had then dubbed Aadhaar-enabled cash transfers as “pure magic”. He now appears to be becoming wiser by the day. He has not only opted out from the electoral race but is also giving bytes of wisdom. The other day, for instance, he reportedly said that given a choice, people want jobs over subsidies. 

Congress Vice-President Rahul Gandhi also appears to be on the same wavelength, if his emphasis on employment generation is to be relied upon. Mr. Gandhi has thus refrained from reiterating what he said in December 2012. He had reportedly told Congress office-bearers that the direct cash transfer scheme was a “revolutionary step” which if  implemented properly would win the party not just the 2014 election but also the next one in 2019. 

A news report had quoted Mr. Gandhi as saying that every 10 years, the Congress comes up with a scheme that shakes up the nation, and the party is now giving a revolutionary delivery system to people in the 21st century.

Can the Congress shake the BJP now by dangling vaguely defined rights before the public and by promising several commissions to address issues faced by different groups.

To expose Congress gimmickry and falsehood on the rights, a detailed quote from the Manifesto is required. 

The Manifesto says: “We will endeavour to bring around two thirds of our population – the skilled hands that build India – into the middle class, through a package of basic rights for all workers – formal and informal, organized and unorganized, regular and contractual. Our aim will be to provide them and all low-income families with economic security and a minimum standard of living to uplift their condition. The charter of minimum socio-economic rights we will put in place includes: a. Right to Health b. Right to Pension c. Right to Homestead or Housing d. Right to Social Security e. Right to Dignity and humane working conditions f. Right to Entrepreneurship that will protect and assist all those who seek to become entrepreneurs.”

 It continues: “These new rights will supplement the other rights established under UPA-I and UPA-II - Right to Food; Right to Information; Right to Education; Right to Employment; Rights to fight corruption (Lokpal and Lokayuktas Act as well as Whistleblower Protection Act); Right to Identity (Aadhaar) and the Right to direct receipt of welfare benefits (Aapka Paisa, Aapke Haath – Direct Benefits Transfers).”

The Manifesto adds: “Together, these rights will provide an economic platform for people below the middle class to transform their lives and to transform India primarily through their own effort, not through any handouts of the government.”

The Congress affirms: “At the turn of the millennium, we brought about a ‘Regime of Rights’ marking a paradigm shift in India’s politics and development. Beginning with the Right to Information, Right to Work (Mahatma Gandhi National Rural Employment Guarantee Act), Right to Education and the Right to Food, we have launched a radical progressive economic and social development discourse.”

The Manifesto, does not say a word about lakhs of beggars including alms-seeking kids in cities.  They do not have Voter’s identity card and aadhar card. Hence, they do not figure in the political strategy of Congress and most of the other parties. The right to free and compulsory education is not implemented in their case. The mid-day meals are a dream for children who seek alms or ‘earn’ some money at all major traffic signal crossings in National Capital Region. They earn either by doing either modest stunts or by forcibly cleaning the cars waiting for green signal.   

While promising new rights and articulating existing ones in the Manifesto, the Congress failed to disclose that all this is provided for in the Indian constitution.  It is the Constitution that has specified the rights of citizens that have been effectively interpreted and enlarged by the judiciary over the years.

It also the Constitution that specifies the citizens’ duties, a subject which all political parties avoid for obvious reasons.  It is also the Constitution which defines the duties and responsibilities of the State. The fact is that the Executive at the Centre and at the States has failed to protect the rights of citizens especially the poorest ones. 

If the Congress High Command wants clarity on this issue, it should read a report captioned ‘Need for ameliorating the lot of the have-nots – Supreme Court’s Judgments’ that the Law Commission (LC) released in April 2009. Had the Party’s think-tank read this report and certain other documents that nail Congress Party’s wrong claims on certain statutory rights, the Manifesto would not have been loaded with lies and half-truths and self-praises. 

The LC Report says: “Every man and woman has the human right to a standard of

living adequate for health and well-being, to food, clothing, housing, medical care and social services. These fundamental human rights are defined in our Constitution. On 10 December 1948, the United Nations General Assembly adopted and proclaimed the Universal Declaration of Human Rights “as a common standard of achievement for all peoples and all nations”. 

The Report says: The right to be free from poverty includes:

The human right to an adequate standard of living;

The human right to work and receive wages that contribute to an adequate standard of living;

The human right to a healthy and safe environment;

The human right to live in adequate housing;

The human right to be free from hunger;

The human right to safe drinking water;

The human right to primary health care and medical attention in case of illness;

The human right to access to basic social services;

The human right to education;

The human right to be free from gender or racial discrimination;

The human right to participate in shaping decisions which affect oneself and one’s community.”

The report notes: “To make right to life meaningful and effective, the Supreme Court put up expansive interpretation and brought within its ambit a myriad of rights. Various laws have been enacted to eradicate poverty: some of them directly deal with them and some of them indirectly. Nevertheless, their tardy implementation makes us lag behind in effectively dealing with the problem.”

It adds: “In spite of the constitutional safeguards and State legislative intervention in favour of the poor and the needy, their socio-economic condition is deteriorating. Social and economic equality still remains a mirage for them.”

LC thus recommended that “the Union and the State Governments should accord top priority to implementation of the judgments rendered by our Supreme Court in their letter and spirit in order that the lot of the have-nots is ameliorated.”

Why has the UPA not issued the action taken report (ATR) on this report? Why has it not transformed Law Commission into a statutory body? Is it due to the fact that LC stands for the truth that the Congress in particular and politicians in general find unpalatable? 

Apart from the Constitution and the judiciary, non-congress Governments at the Centre and the States have contributed to articulation of different rights, both statutory & non-statutory. A lot of facts are available in the public domain to counter the Congress’ proprietary rights over the Aam Aadmi’s rights. 

Coming to the issue of Commissions, the Congress has made a crass attempt to woo different sections of the society by promising to set up statutory or non-statutory commissions. 

The Manifesto says: “The Indian National Congress will establish Special Commissions for Scheduled Castes, Scheduled Tribes and Other Backward Classes to identify communities within each group which have not benefited from reservations and other affirmative action programmes and which need to be given a special focus.”

This promise is like adding salt in the wounds of SCs/STs. Many recommendations made for protection of their rights and for development made by National Commission for Scheduled Castes (NCSC) and National Commission for Scheduled Tribes have not been acted upon. 

UPA’s lip-service towards SCs/STs gets further confirmed by the fact it has not made public the annual reports of these two statutory commissions for the last several years! One can write a thesis on this. 

When UPA is not sincere about its constitutional and statutory obligations towards SCs/STs and their institutions, the other marginalized sections of the society are unlikely to get carried away by the Manifesto’s promise to “strongly protect the interests of the Other Backward Classes, especially those amongst them that are most deprived.”

It says: “We will establish a new commission to inquire into the condition of the most backward and marginalized Other Backward Class communities who have not adequately received the benefits of government programmes; and will recommend corrective measures.”

The Manifesto has also promised to set up a ‘National Commission for Students’, a ‘National Youth Commission’, ‘National Commission for Ex-Servicemen’ and a commission on labour law reforms. 

Why the existing Governance mechanism has not been used effectively by the UPA to solve the problems faced by different sections of the society? If the existing institutions have failed to deliver the desired services, what is the guarantee that the new ones would also not turn out to be white elephants. 

The suspicion would appear justified if we take into account another ridiculous claim made by the Congress. The Manifesto says: “The Indian National Congress will ensure that the recommendations of the second Administrative Reforms Commission (ARC) are implemented in letter and spirit and monitored at every step.”

The fact is that the UPA Government had put in public domain in 2010-11 its decision to reject several crucial recommendations made by ARC!  The disclosure is made in the action taken report (ATR) on each specific recommendation made in 12 of the 15 reports submitted by ARC. 

The UPA has, however, till today not made public its decision on the recommendations of the remaining three reports which are the most sensitive and crucial ones. 

The three reports are: ‘Public Order’ report submitted in June 2007, ‘Refurbishing Personnel Administration – Scaling New Heights’ report released in December 2008 and the report titled ‘Combating Terrorism-Protecting by Righteousness’ that was released in June 2008. This is yet another proof of the Congress’ disrespect for the right to information.

In its zeal to woo voters, the Congress perhaps forgot to mention that it has been sitting of the recommendations of   Commission on Centre-State Relations (CCSR) that submitted its seven-volume report in April 2010. CCSR had its origin in National Common Minimum Programme (NCMP), the agenda for UPA-I that was unveiled in May 2004.
NCMP stated: "The Sarkaria Commission had last looked at the issue of Centre-State relations over two decades ago. The UPA government will set up a new Commission for this purpose keeping in view the sea-changes that have taken place in the polity and economy of India since then."

After this analysis, the discerning voter should decide what to make of the Party’s claim which reads as: “For the Indian National Congress, a Manifesto is more than a catalogue of promises and pledges to be forgotten after elections are over.”

AAI’s staff pampering to come under Cabinet lens

The Union Government has created islands of prosperity for its regular employees including the ones in its public enterprises (PEs).  

Apart from insulating them against inflation through the mechanism of dearness allowance, the Government regularly ushers in new pay structures under the garb of restructuring and rationalization.

One such instance of mollycoddle on which the Cabinet would have to take a call sooner or later is the issue of regularization of weird allowances and special increments given by Airports Authority of India (AAI) to its staff over 17 years. 

AAI wants the Cabinet to resolve these as it has voiced helplessness in implementing a Government diktat to recover special increments from its staff paid since 1997!

AAI has also expressed its inability to scrap six special allowances given to its staff. These benefits are over and above the allowances with a ceiling equivalent to 50% of the basic salary prescribed by Department of Public Enterprises (DPE).

The six special perks are: general proficiency allowance given to all employees excluding air traffic controllers (ATC) and Communication Navigational and Surveillance (CNS) executives; instruction allowance given to instructors at AAI training centres; proficiency allowance given to CNS executives; stress allowance given to both ATCs and CNS executives; flying allowance given to AAI pilots of flight inspection unit and rating allowance provided to ATCs. 

In June 2012, DPE stated no allowances other than the ones specified in its memo issued in November 2008 are allowed above the 50% ceiling. The Ministry of Civil Aviation (MCA) had later asked AAI to explain why it had retained six special allowances in spite of DPE’s instructions. 

AAI justified its allowances by drawing parallel with four special allowances that DPE allows outside the 50% ceiling. These are: North-East allowance that is limited to 12.5% of the basic pay, underground mines allowance capped at 15% of the basic pay, difficult and far-flung area allowance limited to 10% of the basic pay and non-practicing allowance for medical officers limited to 25% of the basic pay. 

AAI has told MCA that for want of resolution of the issue of special allowances, performance-related pay as provided for by DPE in its November 2008 memo has not been implemented for AAI staff.  

AAI has dubbed special allowances as legacy issues that have their origin in the birth of AAI in 1995 through merger of International Airports Authority of India (IAAI) and National Airports Authority (NAA).  It believes that withdrawal of the six allowances would demotivate its employees and might trigger industrial unrest. 

After the merger, NAA executives were given one to two increments as “personal pay” and non-executives were given one increment with effect from 1st April 1996. IAAI executives, on the other hand, were given higher pay scale and non-executives one increment. 

After the wage revision with effect from 1st January 1997, the executives from both NAA and IAAI were given two increments in the revised pay scales and non-executives were provided with three increments.   

Records show that AAI board at that time took these decisions to avoid industrial unrest. It did not consult DPE on these giveaways.  

In January 2013, DPE directed MCA/AAI to recover excess payments given as additional increments from AAI staff. AAI expressed its inability to recover monetary benefits given since 1997. It also pointed out that some of the beneficiaries had retired and the employees had also paid income tax on the additional income resulting from increments. 

On 30th December 2013, MCA asked AAI to get the approval of its board of directors on regularization of special allowances and increments. After this, MCA would take AAI’s issues to the Cabinet for resolution. 

With the announcement of election dates, UPA Government would be leaving this matter as yet another headache for the new Government.  

UPA’s policy paralysis impedes certain private sector defence projects

Entry of several private sector companies in the defence sector has been delayed due to UPA’s failure to clarify the applicability of the existing ban on foreign institutional investment (FII) in this arena. 

The companies whose applications are pending include Tata Advanced Materials Limited (TAPL), Tech Mahindra Limited, Bharat Forge Limited,  Punj Lloyd Industries Limited, Reliance Aerospace Technologies Private Limited (RATPL), Rossell India Limited  Elcome Marine Services Limited and Zen Technologies Ltd.   

The ban has even led to hold-up of the proposals of 100%-owned subsidiaries of Indian blue-chip companies that have small FIIs stake by virtue of their being listed on the stock market. 

Even a fourth-tier subsidiary of a company with non-controlling FII investment has to cool its heels for an industrial licence due the Government’s inability to sort out this policy glitch, according to informed sources. 

Under the existing policy, the Government allows 26% foreign direct investment (FDI) in defence sector companies. FDI above this level requires approval by Cabinet Committee on Security on case to case basis. The policy has put a blanket ban on FIIs’ investment through portfolio investment in defence companies. 

An inconsequential FII stake of 2.15% is adequate for the Government to sit over applications for grant of industrial licence to produce defence gear.   

The case of RATPL smacks of paranoia over FII’s remote control over defence sector. This is akin to Aam Aadmi leader Arvind Kejriwal’s paranoid contention that it is RIL Chairman Mukesh Ambani and not the Prime Minister Dr. Manmohan Singh that runs the Central Government. 

RATPL is 100%-owned subsidiary of Reliance Strategic Investments Limited (RSIL), which in turn, is a wholly owned subsidy (WOS) of Reliance Industrial Investments and Holdings Limited (RIIHL), which is a WOS of Reliance Industries Limited (RIL) in which FIIs hold 17% stake.  

RATPL, which filed its application in May 2012, intends to manufacture aircraft parts and accessories such as pylons of combat aircraft. 

The differential treatment of FDI and FII and maintenance of separate ceilings for these two types of investments have complicated the foreign investment climate. The dichotomy has persisted notwithstanding Finance Minister P. Chidambaram’s advocacy to abolish the distinction between foreign direct investment and foreign institutional investment (FII) since 2006.

Prior to the imposition of ban FII investment in defence sector in August 2013, the policy did not distinguish between FDI and FII in this area. 

This has led to instances where certain companies, already holding approvals for manufacture of defence items, cannot get fresh licences pending amendment of the policy. 

The most bizarre case is that of TAPL in which a non-resident Indian holds 90 shares as a portfolio investment! In January 2012, the company had applied for licence to produce aircraft parts at Bangalore in Karnataka. 

In June 2013, Foreign Investment Promotion Board (FIPB) section in Finance Ministry is understood to have informed TAPL that its application did not involved foreign portfolio investment. The proposal thus does not fall under the purview of FDI policy. TAPL might thus approach Department of Industrial Policy (DIPP) and Promotion, which houses ILC secretariat, for issue of licence on merit.

In its meeting held in October 2013, ILC deferred a decision TAPL’s application and suggested that DIPP and Department of Defence Production should give their comments on applicability of FII ban in this case.  

ILC clubbed TAPL’s case and certain other pending proposals involving FII investment at its last meeting in December 2013. It decided that in the case of TAPL, RATPL and two other cases, DIPP’s foreign collaboration division should clarify the policy interpretation. 

In the cases involving both FII investment and NRI investments, ministries of Finance, Commerce & Industry and Defence should take a joint call.  

Another bizarre instance in point is that of Zen Technologies, which already produced and supplied several simulators to armed forces. In the DIPP record, combined FII & NRI stake in the company is 2.15%. The latest shareholding pattern, however, shows that FIIs have only 0.03% stake in Zen.  

FII investment in certain companies precedes the opening up of defence sector to private investment in 2001.  

Madam Soniaji, please check facts & take back your RTI brag

"We are the Party that is responsible for the historic RTI Act. We pursued this because we believe that ultimately in transparency lies the solution to the problem. The RTI Act is the single most important reason why citizens of our country feel empowered to fight corruption,” stated Congress President Sonia Gandhi at AICC meeting held on 17th January 2014. 
This patently wrong claim has been made on earlier occasions too by various stalwarts of the Congress party and the UPA.  RTI is thus becoming yet another example of modern history being distorted through orchestrated disinformation. The fact is that Congress Party is not the first entity that either ushered in or struggled for the Right to Information (RTI) / Freedom of Information (FOI) legislation.
 The credit on this count should go to all entities across the political spectrum that pitched for this transparency initiative over the last several decades. 

The credit for being prime-mover of transparency legislation should perhaps go to late G. C. Bhattacharya of Democratic Socialist Party, who had moved The Freedom of Information Bill, 1983 in Rajya Sabha way back in December 1983, when Soniaji had not entered politics. 

Moving this private members’ bill, Mr. Bhattacharya had stated: “Sir, I beg to move for leave to introduce a Bill to provide for certain agencies to ensure freedom of having access to and obtaining public information for the citizen and for matters connected therewith.”

On 22nd December 1983, he had also moved another anti-corruption bill, The Civil Servants (Disclosure and Scrutiny of Financial Assets) Bill, 1983. 

We can leave aside the efforts of journalistic fraternity and other public affairs professionals to avoid mix-up with the Freedom of Press. 

The FOI subject has figured in both the houses of Parliament over the years. It is here pertinent to recall a Rajya Sabha question put by Atal Bihari Vajpayee, Ashwani Kumar and late Pramod Mahajan during the Rajiv Gandhi regime.

In a three-part question dated 14 August 1986, the MPs had asked what steps the Government is taking to grant freedom of information in the country. And the stock official reply was that “The information is being collected and will be laid on the Table of the House.”

Another significant milestone in RTI domain was the setting up of an inter-ministerial task force (IMTF) in the late eighties or nineties when the Congress was not in power at the Centre.

Answering a question on IMTF in Rajya Sabha in September 1991, the then Minister of State for Home Affairs, M.M. Jacob, said: “The Inter-Ministerial Task Force which was set up to go into the entire question regarding Right to Information has since submitted its Report.”

He continued: “Its recommendations reflect on the one hand, the need for a more purposeful information dissemination system and on the other a close and comprehensive look on issues relating to security clarification and privacy. In view of the importance and complexity of the subject, formulation of definite views on the issues involved in the matter would necessarily take time.”

It is here pertinent to note that the Congress Government under the Prime Ministership of P.V. Narasimha, did not let the idea of RTI bloom into a law. 

The turning point, however, came in June 1996 when the 13-party United Front coalition unveiled its common minimum programme (CMP). 

As put by CMP, “The Official Secrets Act will be reviewed and amended in tune with the need for openness and transparency in governance. A Bill on Freedom of Information will be introduced within six months to give the people access to information at all levels.”

In January, 1997 the United Front Government set up a Working Group on Right to Information and Transparency to examine the feasibility and need for a full-fledged law. In its report submitted in May 1997, it recommended a draft Freedom of Information Bill. Soon thereafter, the Centre discussed the draft Freedom of Information Act with the States at Chief Ministers’ conference. 

Rest is history. Several States seized the initiative and enacted their own laws. Goa was perhaps the first State to enact RTI law. As put by the NDA Government’s reply to a question raised in Rajya Sabha in December 2000, “The Government of Tamil Nadu, Goa, Rajasthan and Maharashtra have enacted the Right to Information Act”. Of these, only the Goa Right to Information Act, 1997 and Rajasthan Right to Information Act, 2000 contain provisions for imposing penalties on persons who fail to furnish information within the time specified or furnish any false information.”

In all eight States - Maharashtra, Tamil Nadu, Rajasthan, Karnataka, Jammu and Kashmir, Assam, Goa and Madhya Pradesh - had enacted their own RTI laws prior to the UPA Government enacting RTI Act, 2005 in 2005.  UPA time and again fails to mention the fact that it did this by merely repealing the BJP-led NDA’s Freedom of Information Act 2002.  

When RTI wave gained momentum after the emergence of the United Front, the Congress Party did not throw its weight behind RTI. The historic resolutions passed at Congress Plenary Session held in August 1997 thus make no mention about RTI/FOI. 

A lot more can be written about the half-hearted implementation of the RTI Act by the UPA Government. It is better to reserve other facts for another occasion when someone again tries to walk away with a claim that is contrary to the facts.  

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Tear gas story

                 

           Industrial licensing throws up another bizarre case 

It can happen only in India that embraced industrial liberalization in mid-1991 and later underwent many reforms:  A leading company applies for an industrial licence that has both civilian and defence applications. The key regulator says it should not be given licence as it is an arm. The Defence Ministry says the product in question is a dual use item, which does not require a defence industrial licence.

The irony is that the inter-agency discussion over the application has overlooked the fact the company is already manufacturing and marketing the same product to different Government entities for over two years. The opposing regulator had earlier approved the product from the technical angle! 

The company has flaunted its unlicensed product on its website and in the annual report. It says it acquired the technology from a Defence laboratory. The only other manufacturer, a government entity, is producing the item for decades without a licence.

 An inter-ministerial Industrial Licensing Committee (ILC) discussed the case twice last year but deferred it for want of comments from all relevant authorities.  It is yet to take a fresh call on the application.

According to authoritative source, ILC has, however, not yet been informed of the fact that the company is already producing the item for which a licence has been sought. And this fact is already available in public domain. It would thus be a case of post-facto approval, if it is given. 

The product, that is subject of the licensing row, is the tear gas shell, dubbed as mob dispersion device (MDD). The applicant is BSE-listed Premier Explosives Limited (PEL), a company that also produces propellants for the Space Department.

The bureaucratic rigmarole in this case started in March 2012 when PEL applied for industrial licence to manufacture one million MDD/year in Nalgonda district of Andhra Pradesh.  In the same month, Petroleum and Explosives Safety Organisation (PESO) turned down PEL’s plea for trial manufacture of tear gas shells .

The Explosives Section (EC) of the Department of Industrial Policy (DIPP) has agreed with PESO. EC believes that MDD is used for offence or defence. A MDD is fired with a weapon. It thus comes under the definition of ‘ammunition’ covered under Arms Act, 1959.

An authoritative source quoted EC as telling ILC that “it is desirable not to permit manufacture of such ammunition in the factory licensed under the Explosives Rules 2008.” 

The Department of Defence Production (DDP), on the other hand, has not shown any such concern. It has stated twice - in May 2012 and May 2013,that the manufacture of MDD does not require a defence industrial licence.

ILC, which considered PEL’s application twice in 2013 (in June and October) has been deferring a decision by harping on the fact the Ministry of Home Affairs (MHA) and Andhra Pradesh Government have not yet given their comments on the application. 

PESO-EC combine’s argument might not cut ice with the case at ILC as PEL manufacturing tear gas hand grenades, which are not fired with a weapon. Moreover, these grenades cannot be thrown back by the rioters at the police as they burn while releasing the tear gas. 

Unlike conventional tear gas shells that use certain chemicals, PEL’s product is based on oleo-resin (OR), a concentrated extract from red chillies.

PEL has listed several advantages of its MDD. It says: “The OR laden smoke causes irritation to eyes, nose and throat of the persons inhaling it. It will make the person to quickly retreat from the site. The OR vapour are not soluble in water. The wet cloth or water cannot be used as a defence by the mob. The irritation caused by OR laden smoke, however, like the effect of hot chillies is temporary and goes away.”

Another advantage of PEL’s MDDs is that OR is more irritating than ammonia gas, which only causes eyes to burn. There is no permanent damage from OR gas if a person inhales it. The company affirms its product is not lethal. 

PEL’s annual report for 2012-13 says: “our tear gas shells, introduced into market in 2011-12, have been finding wider acceptance by various government agencies, clocking higher revenues.”

Prior to PEL’s foray into MDD business, Border Security Force’s (BSF’s) Tear Smoke Unit (TSU), Tekanpur in Madhya Pradesh was the sole producer of a variety of tear gas shells. It operates under administrative control of MHA.

TSU stared its operations in mid-seventies with technology sources from Defence Research and Development Organisation (DRDO) and Ordnance Factories. Prior to setting up of TSU, police forces relied on imported tear gas shells for controlling unruly mobs.  The Unit, which has several innovative products to its credit, presently has expertise in manufacturing 60 types of munitions.

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