LegislationRoad to Raisina: How the President of India will be electedTrina Roy- June 20, 2017Yesterday, the BJP announced its candidate for the upcoming election of the President, which is scheduled to be held on July 17.  In light of this, we take a look at the manner in which the election to the office of the President is conducted, given his role and relevance in the Constitutional framework.In his report to the Constituent Assembly, Jawaharlal Nehru had explained, “we did not want to make the President a mere figurehead like the French President.  We did not give him any real power but we have made his position one of great authority and dignity.”  His comment sums up the role of the President as intended by our Constitution framers.  The Constituent Assembly was clear to emphasise that real executive power would be exercised by the government elected directly by citizens.  It is for this reason that, in performing his duties, the President functions on the aid and advise of the government.However, it is also the President who is regarded as the Head of the State, and takes the oath to ‘protect and defend the Constitution and law’ (Article 60 of the Constitution).  In order to elect a figure head who would embody the higher ideals and values of the Constitution, the Constituent Assembly decided upon an indirect method for the election of the President.The President is elected by an Electoral College.  While deciding on who would make up the electoral college, the Constituent Assembly had debated several ideas.  Dr. B.R Ambedkar noted that the powers of the President extend both to the administration of the centre as well as to that of the states.  Hence, in the election of the President, not only should Members of Parliament (MPs) play a part, but Members of the state legislative assemblies (MLAs) should also have a voice.  Further, in relation to the centre, some members suggested that the college should comprise only members of the Lok Sabha since they are directly elected by the people.  However, others argued that members of Rajya Sabha must be included as well since they are elected by members of directly elected state assemblies.  Consequently, the Electoral College comprises all 776 MPs from both houses, and 4120 MLAs from all states.  Note that MLCs of states with legislative councils are not part of the Electoral College.Another aspect that was discussed by the Constituent Assembly was that of the balance of representation between the centre and the states in the Electoral College.  The questions of how the votes of MPs and MLAs should be regarded, and if there should be a consideration of weightage of votes were raised.  Eventually, it was decided that a ‘system of Proportional Representation’ would be adopted, and voting would be conducted according to the ‘single transferable vote system’.Under the system of proportional representation, the total weightage of all MLA votes equals the total value of that of the MPs.  However, the weightage of the votes of the MLAs varies on the basis of the population of their respective states.  For example, the vote of an MLA from Uttar Pradesh would be given higher weightage than the vote of an MLA from a less populous state like Sikkim.Under the single transferable vote system, every voter has one vote and can mark preferences against contesting candidates.  To win the election, candidates need to secure a certain quota of votes.  A detailed explanation of how this system plays out is captured in the infographic below.Sources: Constitution of India; ECI Handbook; PRS.Coming to the Presidential election to be held next month, the quota of votes required to be secured by the winning candidate is 5,49,452 votes.  The distribution of the vote-share of various political parties as per their strength in Parliament and state assemblies looks like this:As shown in the infographic, the NDA and its allies approximately have 48% of the vote share.This includes parties like the BJP, Telugu Desam Party (TDP), Shiv Sena, Shiromani Akali Dal, among others.Note that the last date for filing nominations is June 28th.  In the next few days, political parties will be working across party lines to build consensus and secure the required votes for their projected candidates.[The infographic on the process of elections was created by Jagriti Arora, currently an Intern at PRS.]ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


LegislationOverview of the Legal Issues around AadhaarAnviti Chaturvedi- June 10, 2017Yesterday, the Supreme Court delivered its first verdict in a series of legal challenges that have been made against the Aadhaar project.[1]In the present matter, the court was examining whether a provision of the Finance Act, 2017 that made Aadhaar mandatory for filing of income tax returns and applying for Permanent Account Number (PAN) cards was constitutionally valid.  The court has upheld the validity of this provision, subject to a few qualifications.  Below, we discuss the background of the Aadhaar project, why the courts have stepped in to examine its legality, and some aspects of the recent judgement.What is Aadhaar about, and how is it being used?Earlier, various identity proofs were required for access to governments benefits, subsidies and services, such as a ration card, driving license or voter id.  However, as these proofs could be easily duplicated or forged, there was leakage of benefits and subsidies to ineligible beneficiaries.  The Aadhaar project was initiated in 2009 to address these problems.  It was envisaged as a biometric-based unique identity number that could help identify eligible persons.  It was thought to be a more reliable identity proof, because it sought to authenticate a person’s identity based on their unique biometrics, like fingerprints and iris scans.1In 2016, Parliament enacted the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 to provide legislative backing to the project.  This Act allowed Aadhaar to be used for authentication purposes by the central and state government, as well as by private bodies and persons.[2]Under its provisions, government has been issuing various notifications making Aadhaar mandatory for government projects, such as LPG subsidies and Mid-Day Meal scheme.[3]In addition, in 2017, Parliament passed the Finance Act to amend the Income Tax Act, 1961, and made Aadhaar mandatory for filing of income tax returns, and applying for PAN.[4]What is the information collected under Aadhaar?To obtain an Aadhaar number, a person is required to submit their : (i) biometric information (photograph, 10 fingerprints, scans of both irises), and (ii) demographic information (name, date of birth, gender, residential address) to the Unique Identification Authority of India (UIDAI).[5]The Aadhaar number, the demographic and biometric information (called identity information) is together stored in the Central Identities Data Repository.  In addition, every time a person’s identity is authenticated using Aadhaar, information related to the authentication request is recorded as well.How is this information protected?While India does not have a comprehensive law on privacy and data security, the Aadhaar Act, 2016 has some protections.  For example, it prohibits UIDAI and its officers from sharing a person’s identity information and authentication records with anyone.  It also forbids a person authenticating another person’s identity from collecting or using their information without their consent.  Other protections include prohibitions against publicly displaying a person’s Aadhaar number and sharing of a person’s fingerprints and iris scans with anyone.  Note that there are penalties prescribed for violation of these provisions as well.[6]However, the Act permits information be disclosed in the interest of national security and on the order of a court.[7]The UIDAI authority has been made responsible for the operation and maintenance of the Aadhaar database, and for laying down the security protocols for its protection.[8]Why did the courts step in?Even as Aadhaar is being rolled out, with about 111 crore of the 125 crore population already on the database, there are several important constitutional and legal questions around the unique identity project.[9][10]While yesterday’s judgement addresses one of these issues, other questions remain unresolved.  A description of the key legal questions is provided below.Privacy:It has been argued that the collection of identity data without adequate safeguards interferes with the fundamental right to privacy protected under Article 21 of the Constitution.  Article 21 guarantees right to life and personal liberty.  In August 2015, a three judge bench of the Supreme Court passed an order stating that a larger bench must be formed to decide the questions of: (i) whether right to privacy is a fundamental right, and (ii) whether Aadhaar violates this right.[11]However, the court has not set up a larger bench to hear these petitions till June 2017.[12]Mandatory vs voluntary:Another question before the court is whether Aadhaar can be made mandatory for those government benefits and services, that citizens are entitled to under law.  In 2015, the Supreme Court passed some interim orders stating that: (i) Aadhaar cannot be made mandatory for providing citizens with benefits and entitlements, and (ii) it can only be used for seven schemes including PDS distribution of foodgrains and kerosene, LPG distribution scheme, MGNREGA wage payments, and Prime Minister’s Jan Dhan Yojana.11Subsequently, Parliament enacted the Aadhaar Act, 2016, and the government has been issuing notifications under it to make Aadhaar mandatory for various schemes.3In light of this, more petitions have been filed challenging these notifications.[13]Judgements on these petitions are awaited as well.Linking Aadhaar with PAN:In 2017, after Parliament made Aadhaar mandatory for filing of tax returns and applying for PAN under the Income Tax Act, 1961, fresh petitions were filed in the Supreme Court.  The new provision stated that if a person failed to link their PAN with the Aadhaar number by a date notified by the central government, their PAN will be invalidated.  The government said this will decrease the problem of multiple PAN cards obtained under fictitious names and consequent tax fraud and tax evasion, because Aadhaar will ensure proper identification.1,[14]However, the petitioners argued that this may interfere with a person’s fundamental rights, such as their right to practice any profession, trade or business and right to equality.  It is this question that has been addressed in the new judgement.1Money Bill:The fourth question is related to the manner in which the Aadhaar Act, 2016 was passed by Parliament.  The Act was passed as a Money Bill.  A Money Bill only needs to be passed by Lok Sabha, while Rajya Sabha may make non-binding recommendations on it.  In case of the Aadhaar Act, Rajya Sabha made some recommendations that were rejected by Lok Sabha.  It has been argued before the courts that the Aadhaar Act does not qualify as a Money Bill because it contains provisions unrelated to government taxation and expenditure.13,[15]What has the judgement held?The Supreme Court has held that the new provision of the Income Tax Act that makes Aadhaar mandatory for income tax assessees is not in violation of the fundamental right to equality, or the fundamental right to practice one’s profession or trade.  The petitioners had argued that the new provision discriminates between individual and non-individual assessees (e.g. companies or firms), because it only seeks to address tax fraud by individuals.  They had also contended that Aadhaar could not address the problem of tax fraud through duplicate PANs because there was evidence to show that people had multiple Aadhaar numbers as well.  The court rejected these arguments (as well as arguments related to freedom to carry on business), stating that Aadhaar is perceived as the best method of eliminating duplicate PANs, and therefore there is reasonable rationale behind linking the PAN database with Aadhaar.1The court decided not to examine questions related to human dignity and privacy, on the ground that issues affecting Article 21 will be examined by a larger bench to be set up by the court.  However, it granted relief to people, who have not enrolled for Aadhaar, by stating that their PAN cards cannot be invalidated till the time when the matter is finally decided by such a bench.This, in effect, means that the debate around constitutionality and legality of the Aadhaar project will remain ongoing till a judgement is finally pronounced on whether Aadhaar is in violation of right to privacy under Article 21.[1]Binoy Viswam vs Union of India, Supreme Court, Writ Petition (Civil) No. 247 of 2017,http://www.sci.gov.in/pdf/jud/wc24717_Sign.pdf.[2]Sections 7, 8 and 57, Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.[3]Unstarred Question No. 4126, Lok Sabha, March 27, 2017; Unstarred Question No. 1209, Lok Sabha, February 9, 2017; S.O. 371 (E), Ministry of Consumer Affairs, Food and Public Distribution, February 8, 2017,http://dfpd.nic.in/writereaddata/Portal/Magazine/Document/1_211_1_aadhaar-notification.pdf; S.O. 369 (E), Ministry of Agriculture and Farmers Welfare, February 8, 2017,http://www.egazette.nic.in/WriteReadData/2017/174076.pdf.[4]The Finance Bill, 2017,http://www.prsindia.org/billtrack/the-finance-bill-2017-4681/.[5]Regulations 3 and 4, Aadhaar (Enrolment and Update) Regulations, 2016.[6]Sections 28-47, Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.[7]Section 33, Section 23, Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.[8]Section 23, Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.[9]“UIDAI achieves 111 crore mark on Aadhaar generation; Unique identity covers over 99 percent adult residents of India”, Press Information Bureau, January 27, 2017.[10]Justice K. Puttaswamy (Retd) and Another vs Union of India and Others, Supreme Court, Writ Petition (Civil) No. 494 of 2012; Jairam Ramesh vs Union of India, Writ Petition (Civil) 231 of 2016; S.G. Vombatkere and Another vs Union of India and Others, Supreme Court, Writ Petition (Civil) 797/ 2016; “Aadhaar: What are the pending cases before the Supreme Court”, Indian Express, May 31, 2017,http://indianexpress.com/article/india/aadhaar-what-are-the-pending-cases-before-the-supreme-court/.[11]Justice K. Puttaswamy (Retd) and Another vs Union of India and Others, Supreme Court, Writ Petition (Civil) No. 494 of 2012, September 23, 2013, August 11, 2015, October 15, 2015.[12]“The Aadhaar/ PAN Judgement”, Indian Constitutional Law and Philosophy Blog,https://indconlawphil.wordpress.com/2017/06/09/the-aadhaarpan-judgment/.[13]“Aadhaar: What are the pending cases before the Supreme Court”, Indian Express, May 31, 2017,http://indianexpress.com/article/india/aadhaar-what-are-the-pending-cases-before-the-supreme-court/.[14]Uncorrected Lok Sabha Debates, March 22, 2017, Pg. 240,http://164.100.47.193/newdebate/16/11/22032017/Fullday.pdf.ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


LegislationThe financial health of Air IndiaPrachee Mishra- May 31, 2017Recently there have been news reports about the NITI Aayog submitting its recommendations on improving the financial health of Air India to the Ministry of Finance.[1],[2]The Civil Aviation Ministers have also mentioned that the Ministry will soon propose a roadmap for the rejuvenation of the national airline.  While the NITI Aayog report is not out in the public domain yet, we present a few details on the financial health of the airline.Finances of Air IndiaIn 2015-16, Air India earned a revenue of Rs 20,526 crore and registered losses of Rs 3,837 crore.  As of March 31, 2015, the total debt of Air India was at Rs 51,367 crore.[3]This includes Rs 22,574 crore outstanding on account of aircraft loans.  The figure below shows the losses incurred by Air India in the last few years (2007-16).According to the Ministry of Civil Aviation, reasons for Air India’s losses include: (i) the adverse impact of exchange rate variation due to the weakening of Indian Rupee, (ii) high interest burden, (iii) increase in competition, especially from low cost carriers, and (iv) high fuel prices.[4]The National Transport Development Policy Committee (NTDPC), in its report in 2013, had observed that with the increase in the number of airlines in the market, Air India has been struggling to make a transition from a monopoly market to a competitive one.[5]These struggles have been primarily regarding improving its efficiency, and competing with the private airlines.Turnaround Plan and Financial RestructuringIn order to bail out the company, the government had approved the Turnaround Plan (TAP) and Financial Restructuring Plan (FRP) of Air India in April 2012.[6]Under the plans, the government would infuse equity into Air India subject to meeting certain milestones such as Pay Load Factor (measures capacity utilisation), on time performance, fleet utilisation, yield factor (average fare paid per mile, per passenger), and rationalisation of the emolument structure of employees.7The equity infusion included financial support towards the repayment of the principal, as well as the interest payments on the government loans for aircraft acquisition.  Under the TAP/FRP, the central government was to infuse Rs 30,231 crore till 2020-21.  As of 2016-17, the Ministry has infused an equity amount of Rs 24,745 crore.[7]In 2017-18, the Ministry has allocated Rs 1,800 crore towards Air India which is 67% of the Ministry’s total budget for the year.[8]However, this amount is 30% lower than the TAP commitment of Rs 2,587 crore.3In 2016-17, while Air India had sought and equity infusion of Rs 3,901 crore, the government approved Rs 2,465 crore as the equity infusion.[9]The Standing Committee on Transport, Tourism, and Culture examining the 2017-18 budget estimates noted that reducing the equity infusion in Air India might adversely affect the financial situation of the company.[10]It recommended that the government must allocate the amount committed under TAP.  The Ministry had also observed that due to reduction of equity infusion, Air India has to arrange funds through borrowing which costs additional amount of interest to be paid by the government.[11]As per the Ministry, Air India has achieved most of the targets set out in TAP.[12]Despite running into losses, it achieved an operating profit of Rs 105 crore in FY 2015-16.[13]Air India’s performance in some of the segments are provided in the table below.Table 1: Air India’s performance2011-122014-15Overall Network On Time Performance (measures adherence to time schedule)68.2%72.7%Passenger Load Factor (measures capacity utilisation of the airline)67.9%73.7%Network Yield achieved (in Rs/ RPKM)*3.744.35Number of Revenue Passengers (in million)13.416.9Operating Loss (in Rs crore)5,1392,171* Note: RPKM or Revenue Passenger Kilometre performed refers to number of seats for which the carrier has earned revenue.Sources: Lok Sabha Questions; PRS.The NTDPC had observed that with its excessive and unproductive manpower, failure to invest in the technology required to keep it competitive, and poor operations, Air India’s future looks risky.  It had also questioned the rationale for a national airline.  It had suggested that the government must frame a decisive policy with regard to Air India, and clarify its future accordingly.5It had recommended that Air India’s liabilities should be written off and be dealt with separately, and the airline should be run on complete operational and financial autonomy.5Need for competitive framework in the sectorWith the entrance of several private players in the market, the domestic aviation market has grown significantly in the last decade.  The market share of an airline is directly related to its capacity share in the market.  While private carriers have added capacity in the domestic market, the capacity induction (adding more aircrafts) of Air India has not kept up with the private carriers.  This has resulted in decrease in market share of Air India from 17% in 2008-09 to 14% in 2016-17.[14]The Committee looking at the competitive framework of the civil aviation sector had observed that the national carrier gets preferential treatment through access to government funding, and flying rights.[15]It had recommended that competitive neutrality should be ensured between private carriers and the national carrier, which could be achieved by removing the regulations that provide such preferential treatment to Air India.  The NTDPC had also noted that the presence of a state-owned enterprise should not distort the market for other private players.6It had recommended that the Ministry should consider developing regulations that improve the overall financial health of the airline sector.While Air India’s performance has improved following the TAP, along with the equity infusion from government, its debt still remains high and has been gradually increasing.  In light of this, it remains to be seen what the government will propose with regard to the rejuvenation of the national airline, and ensure a competitive and fair market for all the players in the airline market.[1]“Govt to prepare Air India revival plan within 3 months, amid calls for privatization”, Livemint, May 31, 2017,http://www.livemint.com/Politics/0koi5Hyidj1gVD3wOWTruM/Govt-says-all-options-open-for-Air-India-revival.html.[2]“Air India selloff: Fixing airline’s future is more important than past”, Financial Express, May 31, 2017,http://www.financialexpress.com/opinion/why-fixing-air-indias-future-more-important-than-past/693777/.[3]Lok Sabha Questions, Unstarred question no 382, Ministry of Civil Aviation, February 25, 2016,http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=28931&lsno=16.[4]Lok Sabha Questions, Unstarred question no 353, Ministry of Civil Aviation, November 17, 2016,http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=40733&lsno=16.[5]“Volume 3, Chapter 3: Civil Aviation”, India Transport Report: Moving India to 2032, National Transport Development Policy Committee, June 17, 2014,http://planningcommission.nic.in/sectors/NTDPC/volume3_p1/civil_v3_p1.pdf.[6]“Government Approves Financial Restructuring and Turn Around Plan of Air India”, Press Information Bureau, Cabinet Committee on Economic Affairs (CCEA), April 12, 2012,http://pib.nic.in/newsite/PrintRelease.aspx?relid=82231.[7]Lok Sabha Questions, Unstarred question no 472, Ministry of Civil Aviation, April 6, 2017,http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=51752&lsno=16.[8]Notes on Demands for Grants 2017-18, Demand no 9, Ministry of Civil Aviation,http://indiabudget.nic.in/ub2017-18/eb/sbe9.pdf.[9]Lok Sabha Questions, Unstarred question no 4809, Ministry of Civil Aviation, March 30, 2017,http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=51108&lsno=16.[10]“244threport: Demand for Grants (2017-18) of Ministry of Civil Aviation”, Standing Committee on Transport, Tourism and Culture, March 17, 2017,http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Transport,%20Tourism%20and%20Culture/244.pdf.[11]“218threport: Demand for Grants (2015-16) of Ministry of Civil Aviation”, Standing Committee on Transport, Tourism and Culture, April 28, 2015.[12]Lok Sabha Questions, Unstarred question no 307, Ministry of Civil Aviation, February 25, 2016,http://164.100.47.190/loksabhaquestions/annex/7/AU307.pdf.[13]Lok Sabha Questions, Unstarred question no 1566, Ministry of Civil Aviation, March 9, 2017,http://www.loksabha.nic.in/Members/QResult16.aspx?qref=47532.[14]Lok Sabha Questions, Unstarred question no 312, Ministry of Civil Aviation, March 23, 2017,http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=49742&lsno=16.[15]Report of the Committee Constituted for examination of the recommendations made in the Study Report on Competitive Framework of Civil Aviation Sector in India, Ministry of Civil Aviation, June 2012,http://civilaviation.gov.in/sites/default/files/moca_001870_0.pdf.ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


LegislationGST rates and anti-profiteeringVatsal Khullar- May 24, 2017Over the last two months, the centre and over 15 states have passed laws to levy the Goods and Services Tax (GST).  Under these laws, tax rates recommended by the GST Council will be notified by the government.  The Council met in Srinagar last week to approve rates for various items.  Following this decision, the government has indicated that it may invoke provisions under the GST laws to monitor prices of goods and services.[1]This will be done by setting up an anti-profiteering authority to ensure that reduction in tax rates under GST results in a fall in prices of goods and services.  In this context, we look at the rates approved by the GST Council, and the role of the proposed authority to ensure that prices of various items do not increase under GST.Q. What are the tax rates that have been approved by the Council?The Council has classified various items under five different tax rates: (i) 5%, (ii) 12%, (iii) 18%, (iv) 28%, and (v) 28% with an additional GST compensation cess (see Table 1).[2],[3],[4]While tax rates for most of the goods and services have been approved by the Council, rates for some remaining items such as biscuits, textiles, footwear, and precious metals are expected to be decided in its next meeting on June 3, 2017.Table 1: Tax rates for goods and services as approved by the GST Council5%12%18%28%28% + CessGoodsTea and CoffeeMedicinesEdible OilsButter and CheeseSanitary NapkinsMobile PhonesDry FruitsTractorsAgarbattiToothpasteSoap BarsComputersChocolateShampooWashing MachineAir Conditioner (AC)Aerated Drinks + 12% CessSmall Cars + 1% or 3% Cess (depending on petrol or diesel engine)Big Cars + 15% CessServicesTransport by railAir transport by economy classAir transport by business classNon-AC Restaurant without liquor licenseRestaurant with liquor licenseAC RestaurantOther services not specified under any other rate (such as telecommunication and financial services)Entertainment (such as cinemas and theme parks)GamblingRestaurants in 5 star hotelsSource: GST Council Press Release, Central Board for Excise and Customs.Q. Will GST apply on all goods and services?No, certain items such as alcohol for human consumption, and petroleum products such as petrol, diesel and natural gas will be exempt under GST.  In addition to these, the GST Council has also classified certain items under the 0% tax rate, implying that GST will not be levied on them.  This list includes items of daily use such as wheat, rice, milk, eggs, fresh vegetables, meat and fish.  Some services such as education and healthcare will also be exempt under GST.Q. How will GST impact prices of goods and services?GST subsumes various indirect taxes and seeks to reduce cascading of taxes (tax on tax).  With greater efficiency in the supply of products, enhanced flow of tax credits, removal of border check posts, and changes in tax rates, prices of goods and services may come down.[5],[6],[7]Mr Arun Jaitley recently stated that the Council has classified several items under lower tax rates, when compared to the current system.[8]However, since some tax rates such as VAT currently vary across states, the real impact of GST rates on prices may become clear only after its roll-out.  For example, at present VAT rates on smart phones range between 5-15% across states.  Under GST they will be taxed at 12%.[9]As a result while phones may become marginally cheaper in some states, their prices may go up in some others.Q. What happens if tax rates come down but companies don’t reduce prices?Few people such as the Union Revenue Secretary and Finance Ministers of Kerala and Jammu and Kashmir have expressed concerns that companies may not lower their prices despite a fall in tax rates, in order to increase their profits.  The Revenue Secretary also stated that the government had received reports of few businesses increasing their product prices in anticipation of GST.[10]To take care of such cases, the GST laws contain a provision which allows the centre to constitute an anti-profiteering authority.  The authority will ensure that a reduction in tax rates under GST is passed on to the consumers.  Specific powers and functions of the authority will be specified by the GST Council.[11],[12]Q. Are there any existing mechanisms to regulate pricing of products?Various laws have been enacted over the years to control the pricing of essential items, or check for unfair market practices.  For example, the Essential Commodities Act, 1955 controls the price of certain necessary items such as medicines, food items and fertilisers.[13]Parliament has also created statutory authorities like the Competition Commission of India to check against unfair trade practices such as cartelisation by businesses to inflate prices of goods.  Regulators, such as the National Pharmaceutical Pricing Authority, are also responsible for regulating prices for items in their sectors.Q. Could there be some challenges in implementing this mechanism?To fulfil its mandate, the anti-profiteering authority could get involved in determining prices of various items.  This may even require going through the balance sheets and finances of various companies.  Some argue that this is against the idea of prices being determined by market forces of demand and supply.[14]Another aspect to consider here is that the price of items is dependent on a combination of factors, in addition to applicable taxes.  These include the cost of raw material, technology used by businesses, distribution channels, or competition in the market.Imagine a case where the GST rate on a category of cars has come down from the current levels, but rising global prices of raw material such as steel have forced a manufacturer to increase prices.  Given the mandate of the authority to ensure passing of lower tax rates to consumers, will it also consider the impact of rising input costs deciding the price of an item?  Since factor costs keep fluctuating, in some cases the authority may find it difficult to evaluate the pricing decision of a business.Q. Have other countries tried to introduce similar anti-profiteering frameworks?Some countries such as Malaysia have in the past introduced laws to check if companies were making unreasonably high profits after the roll-out of GST.[15]While the law was supposed to remain in force for a limited period, the deadline has been extended a few times.  In Australia, during the roll out of GST in the early 2000s, an existing authority was entrusted with the role of taking action against businesses that unreasonably increased prices.[16]The authority also put in place a strategy to raise consumer awareness about the available recourse in cases of price exploitation.With rates for various items being approved, and the government considering a mechanism to ensure that any inflationary impact is minimised, the focus now shifts to the implementation of GST.  This includes operationalisation of the GST Network, and notification of rules relating to registration under GST and payment of tax.  The weeks ahead will be crucial for the authorities and various taxpayers in the country to ensure that GST is successfully rolled out from July 1, 2017.[1]After fixing rates, GST Council to now focus on price behaviour of companies, The Hindustan Times, Ma 22, 2017,http://www.hindustantimes.com/business-news/after-fixing-rates-gst-council-to-now-focus-on-price-behaviour-of-companies/story-fRsAFsfEofPxMe2IXnXIMN.html.[2]GST Rate Schedule for Goods, Central Board of Excise and Customs, GST Council, May 18, 2017,http://www.cbec.gov.in/resources//htdocs-cbec/gst/chapter-wise-rate-wise-gst-schedule-18.05.2017.pdf.[3]GST Compensation Cess Rates for different supplies, GST Council, Central Board of Excise and Customs, May 18, 2017,http://www.cbec.gov.in/resources//htdocs-cbec/gst/gst-compensation-cess-rates-18.05.2017.pdf.[4]Schedule of GST Rates for Services as approved by GST Council, GST Council, Central Board of Excise and Customs, May 19, 2017,http://www.cbec.gov.in/resources//htdocs-cbec/gst/Schedule%20of%20GST%20rates%20for%20services.pdf.[5]GST rate impact: Here’s how the new tax can carry a greater punch, The Financial Express, May 24, 2017,http://www.financialexpress.com/economy/gst-rate-impact-heres-how-the-new-tax-can-carry-a-greater-punch/682762/.[6]“So far, the GST Council has got it right”, The Hindu Business Line, May 22, 2017,http://www.thehindubusinessline.com/opinion/the-gst-council-has-got-it-right/article9709906.ece.[7]“GST to cut inflation by 2%, create buoyancy in economy: Hasmukh Adhia”, The Times of India, May 21, 2017,http://timesofindia.indiatimes.com/business/india-business/gst-to-cut-inflation-by-2-create-buoyancy-in-economy-hasmukh-adhia/articleshow/58772448.cms.[8]GST rate: New tax to reduce prices of most goods, from milk, coal to FMCG goods, The Financial Express, May 19, 2017,http://www.financialexpress.com/economy/gst-rate-new-tax-to-reduce-prices-of-most-goods-from-milk-coal-to-fmcg-goods/675722/.[9]“Goods and Services Tax (GST) will lead to lower tax burden in several commodities including packaged cement, Medicaments, Smart phones, and medical devices, including surgical instruments”, Press Information Bureau, Ministry of Finance, May 23, 2017.[10]“GST Townhall: Main concern is consumer education, says Adhia”, Live Mint, May 24, 2017.[11]The Central Goods and Services Tax Act, 2017,http://www.prsindia.org/uploads/media/GST,%202017/Central%20GST%20Act,%202017.pdf.[12]Rajasthan Goods and Services Tax Bill, 2017; Madhya Pradesh Goods and Services Tax Bill, 2017; Uttar Pradesh Goods and Services Tax Bill, 2017; Maharashtra Goods and Services Tax Bill, 2017.[13]The Essential Commodities Act, 1955.[14]“GST rollout: Anti-profiteering law could be the new face of tax terror”, The Financial Express, May 23, 2017,http://www.financialexpress.com/opinion/gst-rollout-anti-profiteering-law-could-be-the-new-face-of-tax-terror/680850/.[15]Price Control Anti-Profiteering Act 2011, Malaysia.[16]ACCC oversight of pricing responses to the introduction of the new tax system, Australia Competition and Consumer Commission, January 2003,https://www.accc.gov.au/system/files/GST%20final%20report.pdf.ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


LegislationNon-tax proposals in the Finance Bill, 2017Tanvi Deshpande- March 22, 2017The Finance Bill, 2017 is being discussed in Lok Sabha today.  Generally, the Finance Bill is passed as a Money Bill since it gives effect to tax changes proposed in the Union Budget.  A Money Bill is defined in Article 110 of the Constitution as one whichonlycontains provisions related to taxation, borrowings by the government, or expenditure from Consolidated Fund of India.  A Money Bill only needs the approval of Lok Sabha, and is sent to Rajya Sabha for its recommendations.  It is deemed to be passed by Rajya Sabha if it does not pass the Bill within 14 calendar days.In addition to tax changes, the Finance Bill, 2017 proposes to amend several laws such the Securities Exchange Board of India Act, 1992 and the Payment and Settlements Act, 2007 to make structural changes such as creating a payments regulator and changing the composition of the Securities Appellate Tribunal.  This week, some amendments to the Finance Bill were circulated.  We discuss the provisions of the Bill, and the proposed amendments.Certain Tribunals to be replacedAmendments to the Finance Bill seek to replace certain Tribunals and transfer their functions to existing Tribunals.  The rationale behind replacing these Tribunals is unclear.  For example, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) will replace the Airports Economic Regulatory Authority Appellate Tribunal.  It is unclear if TDSAT, which primarily deals with issues related to telecom disputes, will have the expertise to adjudicate matters related to the pricing of airport services.  Similarly, it is unclear if the National Company Law Appellate Tribunal, which will replace the Competition Appellate Tribunal, will have the expertise to deal with matters related to anti-competitive practices.Terms of service of Tribunal members to be determined by central governmentThe amendments propose that the central government may make rules to provide for the terms of service including appointments, term of office, salaries and allowances, and removal for Chairpersons and other members of Tribunals, Appellate Tribunals and other authorities.  The amendments also cap the age of retirement for Chairpersons and Vice-Chairpersons.  Currently, these terms are specified in the laws establishing these Tribunals.One may argue that allowing the government to determine the appointment, reappointment and removal of members could affect the independent functioning of the Tribunals.  There could be conflict of interest if the government were to be a litigant before a Tribunal as well as determine the appointment of its members and presiding officers.The Supreme Court in 2014, while examining a case related to the National Tax Tribunal, had held that Appellate Tribunals have similar powers and functions as that of High Courts, and hence matters related to their members’ appointment and reappointment must be free from executive involvement.[i]The list of Tribunals under this amendment includes several Tribunals before which the central government could be a party to disputes, such as those related to income tax, railways, administrative matters, and the armed forces Tribunal.Note that aBillto establish uniform conditions of service for the chairpersons and members of some Tribunals has been pending in Parliament since 2014.Inclusion of technical members in the Securities Appellate TribunalThe composition of the Securities Appellate Tribunal established under the SEBI Act is being changed by the Finance Bill.  Currently, the Tribunal consists of a Presiding Officer and two other members appointed by the central government.  This composition is to be changed to: a Presiding Officer, and a number of judicial and technical members, as notified by the central government.Creation of a Payments Regulatory BoardRecently, the Ratan Watal Committee under the Finance Ministry had recommended creating a statutory Payments Regulatory Board to oversee the payments systems in light of increase in digital payments.  The Finance Bill, 2017 seeks to give effect to this recommendation by creating a Payments Regulatory Board chaired by the RBI Governor and including members nominated by the central government.  This Board will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems.Political fundingThe Finance Bill, 2017 proposes to make changes related to how donations may be made to political parties, and maintaining the anonymity of donors.Currently, for donations below Rs 20,000, details of donors do not have to be disclosed by political parties.  Further, there are no restrictions on the amount of cash donations that may be received by political parties from a person.  The Finance Bill has proposed to set this limit at Rs 2,000.  The Bill also introduces a new mode of donating to political parties, i.e. through electoral bonds.  These bonds will be issued by banks, which may be bought through cheque or electronic means.  The only difference between cheque payment (above Rs 20,000) and electoral bonds may be that the identity of the donor will be anonymous in the case of electoral bonds.Regarding donations by companies to political parties, the proposed amendments to the Finance Bill remove the: (i) existing limit of contributions that a company may make to political parties which currently is 7.5% of net profit of the last three financial years, (ii) requirement of a company to disclose the name of the parties to which a contribution has been made.  In addition, the Bill also proposes that contributions to parties will have to be made only through a cheque, bank draft, electronic means, or any other instrument notified by the central government.Aadhaar mandatory for PAN and Income TaxAmendments to the Finance Bill, 2017 make it mandatory for every person to quote their Aadhaar number after July 1, 2017 when: (i) applying for a Permanent Account Number (PAN), or (ii) filing their Income Tax returns.  Persons who do not have an Aadhaar will be required to quote their Aadhaar enrolment number indicating that an application to obtain Aadhaar has been filed.Every person holding a PAN on July 1, 2017 will be required to provide the authorities with his Aadhaar number by a date and in a manner notified by the central government.  Failure to provide this number would result in the PAN being invalidated.The Finance Bill, 2017 is making structural changes to some laws.  Parliamentary committees allow for a forum for detailed scrutiny, deliberations and public consultation on proposed laws.  The opportunity to build rigour into the law-making process is lost if such legislative changes are not examined by committees[i]Madras Bar Association vs. Union of India, Transfer Case No. 150 of 2006, Supreme Court of India, September 25, 2014 (para 89).ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


LegislationDemonetisation of old notes: The proposed law explainedVatsal Khullar- February 7, 2017The Specified Bank Notes (Cessation of Liabilities) Bill, 2017 is being discussed in Parliament today.[1]The Bill replaces an Ordinance promulgated on December 30, 2016 to remove the Reserve Bank of India’s  (RBI) liability and central government’s guarantee to honour the old Rs 500 and Rs 1,000 notes which were demonetised on November 8, 2016 through a notification.[2]These notes were allowed to be deposited in banks by December 30, 2016.  In light of this, we explain the provisions of the Bill and possible implications.What does the Bill say?Under the RBI Act, 1934, RBI is responsible for issuing currency notes, and is liable to repay the holder of a note upon demand.  The Bill provides that, from December 31, 2016, RBI would no longer be liable to repay holders of old notes of Rs 500 and Rs 1,000, the value of these notes.[3]Further, the old notes will no longer be guaranteed by the central government.Can a person keep old notes?A person will be prohibited from holding, transferring or receiving the old notes from December 31, 2016 onwards.  It exempts some people from this prohibition including: (i) a person holding up to 10 old notes (irrespective of denomination), and (ii) a person holding up to 25 notes for the purposes of study, research or numismatics (collection or study of coins or notes).What happens if a person continues to hold old notes after December 30, 2016?Any person holding the old notes, except in the circumstances mentioned above, will be punishable with a fine: (i) which may extend to Rs 10,000, or (ii) five times the value of notes possessed, whichever is higher.Are there any issues with this provision?There may be two issues.No window to deposit old notes before imposing penalty:The notification of November 8thallowed old currency notes to be deposited till December 30, 2016 and specified that people unable to deposit them till this date would be given an opportunity later.2However, the Ordinance which came into force on December 31, 2016 made it an offence to hold old currency notes from that day onwards and imposed a penalty.  This overnight change did not provide a window for a person holding the notes on that day to exchange or deposit them.  Therefore, not only did the holder lose the monetary value of the notes but he was also deemed to have committed an offence.  This implies that a person who had the notes did not have an opportunity to avoid committing an offence and attracting a penalty.Unclear purpose behind penalty on possessing old notes:The purpose and the objective behind imposing a penalty for the possession of old currency notes is unclear.  One may draw a comparison between holding an invalid currency note, and an expired cheque since both these instruments are meant to complete transactions.  Currently, a cheque becomes invalid three months after being issued.  However, holding multiple expired cheques does not attract a penalty.Is it still possible to deposit old notes?The government has specified a grace period under the Bill to allow: (i) Indian residents who were outside India between November 9, 2016 to December 30, 2016 to deposit these notes till March 31, 2017, and (ii) non-residents who were outside India during this period to deposit notes till June 30, 2017.  The government may exempt any other class of people by issuing a notification.  In addition, RBI has permitted foreign tourists to exchange Rs 5,000 per week.  No other person can exchange or deposit old notes after December 30, 2016.Would this satisfy Constitutional norms?While the notification issued on November 8 specified that after December 30, 2016, any person unable to exchange or deposit old notes would be allowed to do so at specified RBI offices, the Bill does not provide such a facility except in the circumstances discussed above.On may question whether this violates Article 300A of the Constitution, which states that no person will be deprived of his property except by law.  Though this Bill will be a “law”, one may want to think about whether its provisions meet the standards of due process and are not arbitrary.  Given that earlier notifications had indicated that a facility for exchanging or depositing old notes would be provided after December 30, 2016, would the action of not providing such facility under the Bill qualify as an arbitrary action which violates due process?[4]A few examples will be useful in examining this question.Case 1:  A person unable to deposit notes due to poor healthA person may have been unable to deposit old currency notes owing to various reasons such as poor health, old age or disability till the deadline of December 30, 2016.  The Bill does not provide any facility for such persons to deposit old notes, except if they were not in India during the period between November 8 and December 30, 2016.Case 2: A person without a bank accountA person without a bank account may have held over Rs 4,500 in old currency notes.  The notification (and future modifications) allowed a person to exchange up to Rs 4,500 over the counter once till November 24, 2016.[5]Such a person would have to incur a monetary loss if he possessed old notes above this value, given his inability to deposit them in a bank account.Case 3: Indian citizens living abroadThere may be Indians working or studying abroad holding old currency notes.  The government has notified the last date for depositing old notes for these non-resident Indians as June 30, 2017.[6]However, these people may not visit India between November 8, 2016 and June 30, 2017.  In such a scenario, these people may have to incur a monetary loss.Case 4: Foreign nationals entering India before demonetisationForeign tourists in the country may have held old currency notes before demonetisation on November 8, 2016.  Such tourists can only exchange old currency notes of up to Rs 5,000 per week till January 31, 2017.[7]Given that such foreigners may not have bank accounts in India, they may also suffer a monetary loss for whatever amount could not be exchanged within the period they were in India.  For example, a person who had Rs 10,000 and left India on November 13, 2016 would not have been able to get the value of notes they had, over Rs 5,000.In addition, Indian currency notes are used legally in neighbouring countries such as Nepal and Bhutan.  The Bill allows only Indian citizens to deposit old notes for an extended period under certain conditions.  However, it does not make any provisions for foreigners to deposit or exchange old notes held by them.  Such foreign nationals who are not Indian residents would not have bank accounts in India.[1]The Specified Bank Notes (Cessation of Liabilities) Bill, 2017,http://www.prsindia.org/uploads/media/Specified%20Bank%20notes/specified%20bank%20notes%20bill%202017-compress.pdf.[2]S. O. 3407 (E), Gazette of India, Ministry of Finance, November 8, 2016,http://finmin.nic.in/172521.pdf.[3]The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016,http://www.prsindia.org/uploads/media/Ordinances/Specified%20Bank%20Notes%20%28Cessation%20of%20Liabilities%29%20Ordinance,%202016.pdf.[4]Section 2 (ix) of the notification issued on November 8, 2016 (No. S. O. 3407 (E)) states that any person who is unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30th December, 2016, shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by it.[5]S. O. 3543 (E), Gazette of India, Ministry of Finance, November 24, 2016,http://finmin.nic.in/172740.pdf.[6]S. O. 4251 (E), Gazette of India, Ministry of Finance, December 30, 2016,http://dea.gov.in/sites/default/files/24Notification%2030.12.2016.pdf.[7]Exchange facility to foreign citizens, January 3, 2017,https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10815&Mode=0.ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»


ParliamentPresident’s Address 2014 to 2017: Plan vs. PerformanceRoopal Suhag- February 6, 2017Budget Session 2017 commenced with the President, Pranab Mukherjee, addressing a joint sitting of Parliament on January 31, 2017.  This address by the President highlights the legislative and policy activities and achievements of the government in the previous year.  In addition, it gives a broad indication of the government’s agenda for the year ahead.  The address is followed by a motion of thanks that is moved in each House by ruling party MPs.  This is followed by a discussion on the address and concludes with the Prime Minister replying to the points raised during the discussion.In the lower house, the motion of thanks has begun today.  It began in the upper house on February 2, 2017.  Lok Sabha and Rajya Sabha have allocated two and three days for the discussion, respectively.  In this context, we present an analysis of the salient points of the agenda proposed in the President’s address from 2014 to 2017 and the current status of its implementation.Policy priority stated in the President’s address (2014 to 2017)Current StatusMacroeconomyGDP growth has made India the world’s fastest growing economies, among large economies.Foreign exchange reserves have been at an all-time high, and inflation, current account deficit and fiscal deficit have consistently reduced since 2014.The GDP is estimated to grow at 7.1% in 2016-17, compared to its growth of 7.9% in 2015-16.[i]The Economic Survey 2016-17 has stated the GDP growth to be between 6.75% and 7.5% in 2017-18.[ii]The average CPI inflation declined from 5.6% in December 2015 to 3.4% in December 2016.[iii]In the same period, food inflation also decreased from 6.4% from 1.4%.3Current account deficit decreased from USD 14.7 billion in 2015-16 (April-September) to USD 3.7 billion in the corresponding period in 2016-17.[iv]Foreign exchange reserves presently stand at Rs 24,54,950 crore, an increase of Rs 1,02,130 crore from 2016.[v]Poverty eradication and financial inclusionThe Pradhan Mantri Jan Dhan Yojana was launched to provide universal access to banking facilities.  The coverage under the scheme is close to 100%.The proposed Postal Payment Bank of India will further boost financial inclusion.Presently, around 27 crore accounts have been opened under the scheme.[vi]However, out of these, 25% of the accounts are zero balance accounts.6The Indian Postal Payments Bank has started.[vii]The postal network with over 1.5 lakh post offices will also function as postal banks.7Agriculture and water securityPradhan Mantri Fasal Bima Yojanahas expanded risk-coverage, doubled the sum insured, and facilitated low premium for farmers.The government is also committed to implementation of Interlinking of Rivers Project.Pradhan Mantri Fasal Bima Yojanahas been implemented by 21 states.[viii]3.66 crore farmers have been covered under the scheme, out of a total of 11 crore farmers in the country.[ix]In April 2015, a Task Force was constituted on the Interlinking of Rivers Project.[x]The Task Force is yet to submit its report.  The sub-Committee on restructuring the National Water Development Agency in September 2015 had recommended that a National Interlinking of Rivers Authority should be created through an Act of Parliament.[xi]So far, further steps have not been taken in this regard.EnergyThe Electricity (Amendment) Bill, 2014 has been introduced to bring reforms in the electricity sector.Renewable energy capacity will manifold to 175 GW by 2022.The Electricity (Amendment) Bill, 2014 is pending in the Parliament.  The Standing Committee submitted its report on the Bill in May, 2015.[xii]As of December 2016, 51 GW of renewable energy has been generated in the country.[xiii]However, in 2016-17, only 26% of the target of the generation of renewable energy could be achieved.13Governance and legal reformsClose to 1,800 obsolete legislation are at various stages of repeal.My government is committed to providing 33% reservation to women in the Parliament and state Legislative Assemblies.Amendments to the Prevention of Corruption Act are also on the anvil.758 Appropriation Acts and 295 laws have been repealed.[xiv],[xv]No Bill in relation to providing 33% reservation to women has been introduced yet.The Prevention of Corruption (Amendment) Bill, 2013, is presently pending in Parliament.  The Standing Committee and Rajya Sabha Select Committee have submitted their reports on the Bill.DefenceOne Rank One Pension scheme will be implemented.Defence procurement procedure has been streamlined with a focus on indigenously designed, developed and manufactured weapon systems.Recognising the importance of coastal security, the government will set up a National Maritime Authority.The government will also build a National War Memorial to honour the gallantry of our soldiers.The implementation of One Rank One Pension scheme has been initiated.[xvi]In 2016-17, Rs 12, 456 crore was allocated to the scheme.[xvii]The Defence Procurement Policy 2016 added an additional category “Buy (Indian-Indigenously Designed, Developed and Manufactured) as the most preferred way of capital acquisition.[xviii]The National Maritime Authority and National War Memorial are yet to be established.EnvironmentFunds will be released to states and union territories for aggressive afforestation.To conserve the Himalayan ecology, a National Mission on Himalayas will be launched.Target for emission standards for motor vehicles has been drastically brought forward to achieve Bharat Stage –VI norm by 2021.Parliament passed the Compensatory Afforestation Fund Bill, 2015 in July 2016.[xix]The Bill establishes the National Compensatory Afforestation Fund and a State Compensatory Afforestation Fund for each state.  These Funds will be primarily spent on afforestation.The National Mission on Himalayas is yet to be launched.To make Bharat Stage-VI norms applicable by April 1, 2020, a draft notification was released in February 2016.[xx]Rural and Urban DevelopmentTo develop 300 rural growth clusters across the country, Shyama Prasad Mukherji Rurban Mission has also been launched.Mission Antyodaya, an intensive participatory planning exercise has been initiated.Annual action plan for 500 cities with an outlay of Rs 50,000 crore has been approved.To implement the Rurban mission, Rs 5,142 crore has been allocated for the period from 2015-16 to 2019-20.[xxi]Under Mission Antyodaya, the release of funds has been lower than the allocated amount in the last three years, from 2014-15 to 2016-17.[xxii]Under the Smart Cities Mission, Rs 4,572 has been released to 98 cities during the years 2015-16 and 2016-17.[xxiii]HealthMy government will formulate a New Health Policy and roll out a National Health Assurance Mission.Pradhan Mantri Bharatiya Jan Aushadi Pariyojana has been launched to ensure that the poor have access to quality medicines at affordable prices.A group was constituted in July 2014 to prepare a comprehensive background paper for the roll out of the National Health Assurance Mission.[xxiv]Further progress in this regard has not been made.The draft National Health Policy was released in December 2014 for public comments and suggestions.[xxv]The Policy has not been finalised yet.Under the Pradhan Mantri Bharatiya Jan Aushadi Pariyojana, Pradhan Mantri Bhartiya Janaushadhi Kendras are proposed to be opened in all 630 districts of the country.[xxvi]Women and child developmentA Bill to amend the Juvenile Justice Act has been introduced in Parliament to reform the law relating to juvenile offences.The Juvenile Justice (Care and Protection of Children) Bill, 2014 was passed by Parliament in December 2015.[xxvii]The Bill permits juveniles between the ages of 16-18 years to be tried as adults for heinous offences.[Sources: President’s Address to the Parliament from 2014 to 2017; PRS.]For important highlights from the President’s address in 2017, please seehere.  For an analysis of the status of implementation of the announcements made in the 2016 address, please seehere.[i]“Press note on First Revised Estimates of National Income, 2015-16”, Ministry of Statistics and Programme Implementation, January 31, 2017,http://mospi.nic.in/sites/default/files/press_release/nad_PR_31jan17.pdf.[ii]Economic Survey, 2016-17,http://finmin.nic.in/indiabudget2017-2018/e_survey.asp.[iii]“Press Release Consumer Price Index Numbers on Base 2012=100 for Rural, Urban and Combined for the Month of December 2016”, Ministry of Statistics and Programme Implementation, January 12, 2017,http://mospi.nic.in/sites/default/files/press_release/CPI_PR12jan17th.pdf[iv]“Developments in India’s Balance of Payments during the second quarter of 2016-17”, Reserve Bank of India, December 13, 2016,https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38884.[v]“Developments in India’s Balance of Payments during the second quarter of 2016-17”, Reserve Bank of India, December 13, 2016,https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=38884.[vi]Progress Report, Pradhan Mantri Jan Dhan Yojana (Last accessed on January 24, 2017),http://www.pmjdy.gov.in/account.[vii]“Cabinet approves setting up of India Post Payments Bank”, Cabinet, June 1, 2016.[viii]“Achievements of Ministry of Agriculture and Farmers Welfare”, Ministry of Agriculture, January 2, 2016.[ix]“Agricultural Statistics at a Glance 2015”, Department of Agriculture, Cooperation and Farmer’s Welfare, Ministry of Agriculture and Farmer’s Welfare,http://eands.dacnet.nic.in/PDF/Agricultural_Statistics_At_Glance-2015.pdf.[x]“Task Force on Interlinking Rivers Constituted”, Press Information Bureau, Ministry of Water Resources, April 14, 2015.[xi]Special Committee for Interlinking of Rivers, National Water Development Agency,http://www.nwda.gov.in/writereaddata/ilr/notification.pdf.[xii]Report No. 4, Standing Committee on Energy, ‘The Electricity (Amendment) Bill, 2014’, Lok Sabha, May 2015, Standing Committee on Energy,http://www.prsindia.org/uploads/media/Electricity/SC%20report-Electricity.pdf.[xiii]“Physical Progress (Achievements)”, Ministry of New and Renewable Energy,  March  30, 2015,http://mnre.gov.in/mission-and-vision-2/achievements/.[xiv]Appropriation Acts (Repeal) Act, 2016,http://lawmin.nic.in/ld/Act22of2016AppropriationActsrepeal.pdf.[xv]Repealing and Amending Act, 2016,http://lawmin.nic.in/ld/Act23of2016RepealingandAmending.pdf.[xvi]12(1)/2014/D (Pen/PoI)- Part II, Government of India, Ministry of Defence, Department of Ex- Servicemen Welfare, November 7, 2015,http://www.desw.gov.in/sites/upload_files/desw/files/pdf/OR OP-DESW-MOD.pdf.[xvii]Lok Sabha Unstarred Question 1696, Ministry of Defence, November 25, 2016,http://164.100.47.190/loksabhaquestions/annex/10/AU1696.pdf.[xviii]“Year End Review 2016”, Ministry of Defence, December 31, 2016,http://pib.nic.in/newsite/PrintRelease.aspx?relid=156049.[xix]The Compensatory Afforestation Fund Act, 2016,http://www.prsindia.org/uploads/media/Compensatory%20Afforestation/CAMPA%20act,%202016.pdf.[xx]Rajya Sabha Unstarred Question No 82, Ministry of Road Transport and Highways, April 25, 2016.[xxi]Rajya Sabha Unstarred Question No 914, Department of Rural Development, May 2, 2016 ,http://164.100.47.234/question/annex/239/Au914.pdf.[xxii]Lok Sabha Unstarred Question No 4443, Ministry of Housing and Urban Poverty Alleviation, December 14, 2016,http://164.100.47.190/loksabhaquestions/annex/10/AU4443.pdf.[xxiii]Lok Sabha Unstarred Question No 199, Ministry of Urban Development, November 16, 2016,http://164.100.47.190/loksabhaquestions/annex/10/AU199.pdf.[xxiv]“Rolling out of National Health Assurance Mission”, Press Information Bureau, Ministry of Health and Family Welfare, July 15, 2014.[xxv]Draft National Health Policy 2015, December 2014, Ministry of Health and Family Welfare,http://www.mohfw.nic.in/showfile.php?lid=3014.[xxvi]Pradhan Mantri Bharatiya Jan Aushadi Pariyojana guidelines,http://janaushadhi.gov.in/data/Individuals_December_2016.pdf.[xxvii]The Juvenile Justice (Care and Protection of Children) Act, 2015,http://www.prsindia.org/uploads/media/Juvenile%20Justice/Juvenile%20Justice%20Act,%202015.pdf.ParliamentFirst no-confidence motion of the 17th Lok Sabha discussed todayNiranjana Menon- August 8, 2023Discussion on the first no-confidence motion of the 17thLok Sabha began today.  No-confidence motions and confidence motions are trust votes, used to test or demonstrate the support of Lok Sabha for the government in power.  Article 75(3) of the Constitution states that the government is collectively responsible to Lok Sabha.  This means that the government must always enjoy the support of a majority of the members of Lok Sabha.  Trust votes are used to examine this support.  The government resigns if a majority of members support a no-confidence motion, or reject a confidence motion.So far, 28 no-confidence motions (including the one being discussed today) and 11 confidence motions have beendiscussed.  Over the years, the number of such motions has reduced.  The mid-1960s and mid-1970s saw more no-confidence motions, whereas the 1990s saw more confidence motions.Figure1: Trust votes in ParliamentNote: *Term shorter than 5 years; **6-year term.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.The no-confidence motion being discussed today wasmovedon July 26, 2023.  A motion of no-confidence is moved with the support of at least 50 members.   The Speaker has the discretion to allot time for discussion of the motion.  TheRules of Procedurestate that the motion must be discussed within 10 days of being introduced.  This year, the no-confidence motion wasdiscussed13 calendar days after introduction.  Since the introduction of the no-confidence motion on July 26, 12 Bills have been introduced and 18 Bills have been passed by Lok Sabha.  In the past, on four occasions, the discussion on no-confidence motions began seven days after their introduction.  On these occasions, Bills and other important issues were debated before the discussion on the no-confidence motion began.Figure2: Members rise in support of the motion of no-confidence in Lok SabhaSource: Sansad TV, Lok Sabha, July 26, 2023; PRS.Figure3: Number of days from introduction to discussion on no-confidence motionsNote: Number of days implies calendar days.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.On average, no-confidence motions (excluding the one being discussed today) have been discussed for 13 hours over three days.  Discussions have lasted longer than 20 hours on four instances, most recently in 2003.  Today’s no-confidence motion was allotted 12 hours discussion time by theBusiness Advisory Committee.Following the discussion, the motion is put to vote.  26 out of 27 no-confidence motions (excluding the one being discussed today) have been voted upon and rejected.  This means that no government has ever had to resign following a vote of no-confidence.   On one occasion, in 1979, the discussion on a no-confidence motion against the Morarji Desai government remained inconclusive.  He resigned before the motion was put to vote.  50% of all no-confidence motions (14 out of 28) were discussed between 1965 and 1975.  Of these, 12 were against governments headed by Indira Gandhi.Figure4: Duration of discussion on no-confidence motionsNote: This graph excludes the no confidence motion moved on July 26, 2023.Source: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.In comparison, confidence motions have a more varied history.  The first motion, brought in 1979 to demonstrate confidence in Charan Singh’s government, was not discussed at all.  The Prime Minister resigned before the discussion could take place.  Since then, 11 confidence motions have been discussed in Lok Sabha, with nine occurring in the 1990s.  During this period, several coalition governments were formed, and Prime Ministers sought to prove their majority throughconfidence motions.   These motions have been discussed, on average, for 12 hours over two days.Figure5: Duration of discussion of confidence motionsSource: Statistical Handbook 2021, Ministry of Parliamentary Affairs; PRS.Of the 11 confidence motions discussed in Lok Sabha, seven were accepted.  On three instances, governments had to resign as they could not prove that they had the support of the majority.  On one instance in 1996, the motion was not put to vote.  Following an eleven-hour discussion on this confidence motion, Prime Minister Atal Bihari Vajpayee announced his intention to resign on the floor of the House.  He resigned 16 days into his term.Vajpayee became Prime Minister again in 1999, and faced another confidence motion.   This time, it was put to vote.   The motion was defeated by a margin of one vote.  This has been the closest result on a trust vote in the history of Lok Sabha.  The next closest result was when a motion of no-confidence against P V Narasimha Rao’s government was defeated by 14 votes in 1993.  In most cases, results have been in favour of the government by a large margin.«12345678910»