PolicyRethinking education: The draft NEP 2016Roopal Suhag- October 3, 2016The Ministry of Human Resource Development released the draft National Education Policy, 2016 in July this year.[1]The Ministry was receiving comments on the draft policy until the end of September 2016.  In this context, we provide an overview of the proposed framework in the draft Policy to address challenges in the education sector. The country’s education policy was last revised in 1992.  It outlined equitable access to quality education, with a common educational structure of 10+2+3 years.  The draft Policy 2016 aims to create an education system which ensures quality education and learning opportunities for all.  The focus areas of intervention of the draft Policy are: (i) access and participation, (ii) quality of education, (iii) curriculum and examination reforms, (iv) teacher development and management and (v) skill development and employability.  Through these key interventions, the draft Policy provides a framework for the development of education in the country over the next few years.  We discuss the key areas of intervention below.Access and participationPresently in the country, enrolment at pre-school levels for children between the ages of 3- 5 years is low.  38% of children in this age bracket are enrolled in pre-school education in government anganwadi centres, while 27% of the children are not attending any (either government or private) pre-school.[2]In contrast, the enrolment rate in primary education, which is class 1-5, is almost 100%.  However, this reduces to 91% in classes 6-8 and 78% in classes 9-12.[3]The trend of lower enrolment rates is seen in higher education (college and university level), where it is at 24%.[4]Due to low enrolment rates after class 5, transition of students from one level to the next is a major challenge.  Figure 1 shows the enrolment rates across different education levels. With regard to improving participation of children in pre-school education, the draft Policy aims to start a program for children in the pre-school age group which will be implemented in coordination with the Ministry of Women and Child Development.  It also aims to strengthen pre-school education in anganwadis by developing learning materials and training anganwadi workers.  Presently, the Right to Education (RTE) Act, 2009 applies to elementary education only.  To improve access to education, the draft Policy suggests bringing secondary education under the ambit of the RTE Act.  However, a strategy to increase enrolment across different levels of education has not been specified.Quality of educationA large number of children leave school before passing class eight.  In 2013-14, the proportion of students who dropped out from classes 1-8 was 36% and from classes 1-10 was 47%.3Figure 2 shows the proportion of students who exited the school system in classes 1-8 in 2008-09 and 2013-14. Among the population of children who stay in school, the quality or level of learning is low.  The Economic Survey 2015-16 noted that the proportion of class 3 children able to solve simple two-digit subtraction problems fell from 26% in 2013 to 25% in 2014.  Similarly, the percentage of class two children who cannot recognize numbers up to 9 increased from 11.3% in 2009 to 19.5% in 2014.[5]To address the issue of learning levels in school going children, the draft Policy proposes that norms for learning outcomes should be developed and applied uniformly to both private and government schools.  In addition, it also recommends that the existing no-detention policy (promoting all students of a class to the next class, regardless of academic performance) till class 8  be amended and limited to class 5.  At the upper primary stage (class six onward), the system of detention should be restored.Curriculum and examination reformsIt has been noted that the current curriculum followed in schools does not help students acquire relevant skills which are essential to become employable.  The draft Policy highlights that the assessment practices in the education system focus on rote learning and testing the students’ ability to reproduce content knowledge, rather than on understanding. The draft Policy aims to restructure the present assessment system to ensure a more comprehensive evaluation of students, and plans to include learning outcomes that relate to both scholastic and co-scholastic domains.  In order to reduce failure rates in class 10, the Policy proposes to conduct examination for the subjects of mathematics, science and English in class 10 at two levels.  The two levels will be part A (at a higher level) and part B (at a lower level).  Students who wish to opt for a vocational stream or courses for which mathematics, science and English are not compulsory may opt for part B level examination.Teacher development and managementIt has been observed that the current teacher education and training programs are inadequate in imparting the requisite skills to teachers.  The mismatch between institutional capacity to train teachers and required supply in schools results in a shortage of qualified teachers.  At the level of classes 9-12, the Rashtriya Madhyamik Shiksha Abhiyan prescribes a teacher-pupil ratio of 1:30.[6]However, some states have a higher teacher-pupil ratio: Chhattisgarh (1:45), Bihar (1:57) and Jharkhand (1:68).3In various central universities, the total number of sanctioned teaching posts is 16,339, of which 37% are lying vacant.[7]The draft Policy recommends that state governments should set up independent teacher recruitment commissions to facilitate transparent, merit based recruitment of principals, teachers, and other academic staff.  For teacher development, a Teacher Education University should be set up at the national level to focus on teacher education and faculty development.  In addition, the draft Policy also states that all teacher education institutes must have mandatory accreditation.  To ensure effective teacher management, periodic assessment of teachers in government and private schools should be carried out and linked to their future promotions and increments.Skill development and employabilityIt has been noted that the current institutional arrangements to support technical and vocational education programs for population below 25 years of age is inadequate.  The social acceptability of vocational education is also low.  Presently, over 62% of the population in the country is in the working age-group (15-59 years).[8]Only 10% of this workforce (7.4 crore) is trained, which includes about 3% who are formally trained and 7% who are informally trained.[9]In developed countries, skilled workforce is between 60-90% of the total workforce.[10]The draft Policy proposes to integrate skill development programs in 25% of schools and higher education institutions in the country.  This is in line with the National Skill Development and Entrepreneurship Policy that was released by the government in 2015. The draft Policy 2016 focuses on important aspects that have not been addressed in previous policies such as: (i) curriculum and examination reforms, and (ii) teacher development .  Although the Policy sets a framework for improving education in the country,  the various implementation strategies that will be put in place to achieve the education outcomes envisaged by it remains to be seen. For an analysis on some education indicators such as enrolment of students, drop-out rates, availability of teachers and share of government and private schools, please see our Vital Stats on the ‘overview of the education sector’here.[1]Some Inputs for Draft National Education Policy 2016, Ministry of Human Resource Development,http://mhrd.gov.in/sites/upload_files/mhrd/files/Inputs_Draft_NEP_2016.pdf.[2]Rapid Survey on Children, 2013-14, Ministry of Women & Child Development, Government of India,http://wcd.nic.in/sites/default/files/RSOC%20FACT%20SHEETS%20Final.pdf.[3]Secondary education in India, U-DISE 2014-15, National University of Educational Planning and Administration,http://www.dise.in/Downloads/Publications/Documents/SecondaryFlash%20Statistics-2014-15.pdf.[4]All India Survey on Higher Education 2014-15,http://aishe.nic.in/aishe/viewDocument.action?documentId=197.[5]Economic Survey 2015-16, Volume-2,http://indiabudget.nic.in/es2015-16/echapvol2-09.pdf.[6]Overview,  Rashtriya Madhyamik Shiksha Abhiyan, Ministry of Human Resource Development,http://mhrd.gov.in/rmsa.[7]“265thReport: Demands for Grants (Demand No. 60) of the Department of Higher Education”, Standing Committee on Human Resource Development, April 2013, 2015,http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20HRD/265.pdf.[8]“Ministry of Skill Development and Entrepreneurship: Key Achievements and Success Stories in 2015”, Ministry of Skill Development and Entrepreneurship, Press Information Bureau, December 15, 2015.[9]Draft Report of the Sub-Group of Chief Ministers on Skill Development, NITI Aayog, September 2015,http://niti.gov.in/mgov_file/Final%20report%20%20of%20Sub-Group%20Report%20on%20Skill%20Development.pdf.[10]Economic Survey 2014-15, Volume  2,http://indiabudget.nic.in/es2014-15/echapter-vol2.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»


MiscellaneousFinancial health of the Indian RailwaysPrachee Mishra- September 21, 2016Earlier today, the Union Cabinet announced the merger of the Railways Budget with the Union Budget.  All proposals under the Railways Budget will now be a part of the Union Budget.  However, to ensure detailed scrutiny, the Ministry’s expenditure will be discussed in Parliament.  Further, Railways will continue to maintain its autonomy and financial decision making powers.  In light of this, this post discusses some of the ways in which Railways is financed, and issues it faces with regard to financing.Separation of Railways Budget and its financial implicationsThe Railways Budget was separated from the Union Budget in 1924.  While the Union Budget looks at the overall revenue and expenditure of the central government, the Railways Budget looks at the revenue and expenditure of the Ministry of Railways.  At that time, the proportion of Railways Budget was much higher as compared to the Union Budget.  The separation of the Budgets was done to ensure that the central government receives an assured contribution from the Railways revenues.  However, in the last few years, Railways’ finances have deteriorated and it has been struggling to generate enough surplus to invest in improving its infrastructure. Indian Railways is primarily financed through budgetary support from the central government, its own internal resources (freight and passenger revenue, leasing of railway land, etc.), and external resources (market borrowings, public private partnerships, joint ventures, or market financing). Every year, all ministries, except Railways, get support from the central government based on their estimated revenue and expenditure for the year.  The Railways Ministry is provided with a gross budgetary support from the central government in order to expand its network.  However, unlike other Ministries, Railways pays a return on this investment every year, known as dividend.  The rate of this dividend is currently at around 5%, and also includes the interest on government budgetary support received in the previous years. Various Committees have observed that the system of receiving support from the government and then paying back dividend is counter-productive.  It was recommended that the practice of paying dividend can be avoided until the financial health of Railways improves.  In the announcement made today, the requirement to pay dividend to the central government has been removed.  This would save the Ministry from the liability of paying around Rs 9,700 crore as dividend to the central government every year.  However, Railways will continue to get gross budgetary support from the central government.Declining internal revenueIn addition to its core business of providing transportation, Railways also has several social obligations such as: (i) providing certain passenger and coaching services at below cost fares, (ii) running uneconomic branch lines (connectivity to remote areas), and (iii) granting concessions to various categories of people (like senior citizens, children, etc.).  All these add up to about Rs 30,000 crore.  Other inelastic expenses of Railways include pension charges, fuel expenses, lease payments, etc.  Such expenses do not leave any financial room for the Railways to make any infrastructure investments.In the last few years, Railways has been struggling due to a decline in its revenue from passenger and freight traffic.  In addition, the support from the central government has broadly remained constant. In 2015-16, the gross budgetary support and internal revenue saw a decline, while there was some increase in the extra budgetary resources (shown in Figure 1).   Railways’ internal revenue primarily comes from freight traffic (about 65%), followed by passenger traffic (about 25%).  About one-third of the passenger revenue comes from first class passenger traffic and the remaining two-third comes from second class passenger traffic.  In 2015-16, Railways passenger traffic decreased by 4% and total passenger revenue decreased by 10% from the budget estimates.  While revenue from second class saw a decrease of 13%, revenue from first class traffic decreased by 3%.  In the last few years, Railways’ internal sources have been declining, primarily due to a decline in both passenger as well as freight traffic.Freight trafficThe share of Railways in total freight traffic has declined from 89% to 30% over the last 60 years, with most of the share moving towards roads (see Figure 2).  With regard to freight traffic, Railways generates most of its revenue from the transportation of coal (about 44%), followed by cement (8%), iron ore (7%), and food-grains (7%).  In 2015-16, freight traffic decreased by 10%, and freight earnings reduced by 5% from the budget estimates. The Railways Budget for 2016-17 estimates an increase of 12% in passenger revenue and a 0.26% increase in passenger traffic.  Achieving a 12% increase in revenue without a corresponding increase in traffic will require an increase in fares.Flexi fares and passenger trafficA few days ago, the Ministry of Railways introduced a flexi-fare system for certain categories of trains.  Under this system, the base fare for Rajdhani, Duronto and Shatabdi trains will increase by 10% with every 10% of berths sold, subject to a ceiling of up to 1.5 times the base fare.  While this could also be a way for Railways to improve its revenue, it has raised concerns about train fares becoming more expensive.  Note that the flexi-fare system will apply only to first class passenger traffic, which contributes to about 8% of the total Railways revenue.  It remains to be seen if the new system increases Railways revenue, or further decreases passenger traffic (people choosing other modes of travel, such as airways, if fares increase significantly). While the Railways is trying to improve revenue by raising fares, this may increase the financial burden on passengers.  In the past, various Parliamentary Committees have observed that the investment planning in Railways from the government’s side is politically driven rather than need driven.  This has resulted in the extension of uneconomic, un-remunerative, yet socially desirable projects in every budget.  It has been recommended that projects based on social and commercial considerations must be categorised separately in the Railways accounts, and funding for the former must come from the central or state governments.  It has also been recommended that Railways should bring in more accuracy in determining its public service obligations. The decision to merge the Railways Budget with the Union Budget seems to be on the lines of several of these recommendations.  However, it remains to be seen whether merging the Railway Budget with the Union Budget will  improve the transporter’s finances or if it would require bringing in more reforms.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»


MiscellaneousMaternity leave in India and other countriesPrianka Rao- August 11, 2016Earlier today, aBillto raise maternity benefits was introduced and passed in Rajya Sabha.  The Bill amends the Maternity Benefit Act, 1961.  The Act regulates the employment of women during the period of child birth, and provides maternity benefits.  The Act applies to factory, mines, plantations, shops and other establishments.Duration of maternity leave: The Act states that every woman will be entitled to maternity benefit of 12 weeks.  The Bill increases this to 26 weeks.  Further, under the Act, this maternity benefit should not be availed before six weeks from the date of expected delivery.  The Bill changes this to eight weeks. In case of a woman who has two or more children, the maternity benefit will continue to be 12 weeks, which cannot be availed before six weeks from the date of the expected delivery.Maternity leave for adoptive and commissioning mothers: Further, the Bill introduces a provision to grant 12 weeks of maternity leave to: (i) a woman who legally adopts a child below three months of age; and (ii) a commissioning mother.  A commissioning mother is defined as a biological mother who uses her egg to create an embryo implanted in another woman.  The 12-week period of maternity benefit will be calculated from the date the child is handed over to the adoptive or commissioning mother.Informing women employees of the right to maternity leave:The Bill introduces a provision which requires every establishment to intimate a woman at the time of her appointment of the maternity benefits available to her.  Such communication must be in writing and electronically.Option to work from home: The Bill introduces a provision that states that an employer may permit a woman to work from home.  This would apply if the nature of work assigned to the woman permits her to work from home.  This option can be availed of, after the period of maternity leave, for a duration that is mutually decided by the employer and the woman.Crèche facilities: The Bill introduces a provision which requires every establishment with 50 or more employees to provide crèche facilities within a prescribed distance.  The woman will be allowed four visits to the crèche in a day.  This will include her interval for rest. Various countries provide maternity leave.  However, the duration of leave varies across different countries.[i]We present a comparison of maternity leave available in different countries, as on 2014, below.Sources: International Labour Organisation Report (2014); PRS.[i]. “Maternity and Paternity at work: Legislation across countries”, International Labour Organisation Report (2014),http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_242615.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»


LegislationDebt recovery in India : The 2016 Bill and what it seeks to doVatsal Khullar- August 4, 2016The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 is listed for discussion in Rajya Sabha today.[i]The Bill aims to expeditiously resolve cases of debt recovery by making amendments to four laws, including the (i) Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and (ii) the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.Recovery of Debts Due to Banks and Financial Institutions Act, 1993The 1993 Act created Debt Recovery Tribunals (DRTS) to adjudicated debt recovery cases.  This was done to move cases out of civil courts, with the idea of reducing time taken for debt recovery, and for providing technical expertise.  This was aimed at assisting banks and financial institutions in recovering outstanding debt from defaulters. Over the years, it has been observed that the DRTs do not comply with the stipulated time frame of resolving disputes within six months. This has resulted in delays in disposal, and a high pendency of cases before the DRTs. Between March 2013 and December 2015, the number of pending cases before the DRTs increased from 43,000 to 70,000.  With an average disposal rate of 10,000 cases per year, it is estimated that these DRTs will take about six to seven years to clear the existing backlog of cases.[ii]Experts have also observed that the DRT officers, responsible for debt recovery, lack experience in dealing with such cases.  Further, these officers are not adequately trained to adjudicate debt-related matters.[iii]The 2016 Bill proposes to increase the retirement age of Presiding Officers of DRTs, and allows for their reappointment.  This will allow the existing DRT officers to serve for longer periods of time.  However, such a move may have limited impact in expanding the pool of officers in the DRTs. The 2016 Bill also has a provision which allows Presiding Officers of tribunals, established under other laws, to head DRTs.  Currently, there are various specialised tribunals functioning in the country, like the Securities Appellate Tribunal, the National Company Law Tribunal, and theNational Green Tribunal.  It remains to be seen if the skills brought in by officers of these tribunals will mirror the specialisation required for adjudicating debt-related matters. Further, the 1993 Act provides that banks and financial institutions must file cases in those DRTs that have jurisdiction over the defendant’s area of residence or business.  In addition, the Bill allows cases to be filed in DRTs having jurisdiction over the bank branch where the debt is due. The Bill also provides that certain procedures, such as presentation of claims by parties and issue of summons by DRTs, can now be undertaken in electronic form (such as filing them on the DRT website).Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002The 2002 Act allows secured creditors (lenders whose loans are backed by a security) to take possession over a collateral security if the debtor defaults in repayment.  This allows creditors to sell the collateral security and recover the outstanding debt without the intervention of a court or a tribunal. This takeover of collateral security is done with the assistance of the District Magistrate (DM), having jurisdiction over the security.  Experts have noted that the absence of a time-limit for the DM to dispose such applications has resulted in delays.[iv]The 2016 Bill proposes to introduce a 30-day time limit within which the DM must pass an order for the takeover of a security.  Under certain circumstances, this time-limit may be extended to 60 days. The 2002 Act also regulates the establishment and functioning of Asset Reconstruction Companies (ARCs).  ARCs purchase Non-Performing Assets (NPAs) from banks at a discount.  This allows banks to recover partial payment for an outstanding loan account, thereby helping them maintain cash flow and liquidity.  The functioning of ARCs has been explained in Figure 1.It has been observed that the setting up of ARCs, along with the use out-of-court systems to take possession of the collateral security, has created an environment conducive to lending.[iii]However, a few concerns related to the functioning of ARCs have been expressed over the years.  These concerns include a limited number of buyers and capital entering the ARC business, and high transaction costs involved in the transfer of assets in favour of these companies due to the levy of stamp duty.[iii]In this regard, the Bill proposes to exempt the payment of stamp duty on transfer of financial assets in favour of ARCs.  This benefit will not be applicable if the asset has been transferred for purposes other than securitisation or reconstruction (such as for the ARCs own use or investment).  Consequently, the Bill amends the Indian Stamp Act, 1899. The Bill also provides greater powers to the Reserve Bank of India to regulate ARCs.  This includes the power to carry out audits and inspections either on its own, or through specialised agencies. With the passage of the Bankruptcy Code in May 2016, a complete overhaul of the debt recovery proceedings was envisaged.  The Code allows creditors to collectively take action against a defaulting debtor, and complete this process within a period of 180 days.  During the process, the creditors may choose to revive a company by changing the repayment schedule of outstanding loans, or decide to sell it off for recovering their dues. While the Bankruptcy Code provides for collective action of creditors, the proposed amendments to the SARFAESI and DRT Acts seek to streamline the processes of creditors individually taking action against the defaulting debtor.  The impact of these changes on debt recovery scenario in the country, and the issue of rising NPAs will only become clear in due course of time.[i]Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016,http://www.prsindia.org/administrator/uploads/media/Enforcement%20of%20Security/Enforcement%20of%20Security%20Bill,%202016.pdf.[ii]Unstarred Question No. 1570, Lok Sabha, Ministry of Finance, Answered on March 4, 2016.[iii]‘A Hundred Small Steps’, Report of the Committee on Financial Sector Reforms, Planning Commission, September 2008,http://planningcommission.nic.in/reports/genrep/rep_fr/cfsr_all.pdf.[iv]Financial Sector Legislative Reforms Commission, March 2013,http://finmin.nic.in/fslrc/fslrc_report_vol1.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»


ConstitutionKey amendments proposed to the Constitution Amendment Bill on GSTPrianka Rao- August 2, 2016Yesterday, the government circulated certain official amendments to the Constitution (122ndAmendment) Bill, 2014 on GST.  The Bill is currently pending in Rajya Sabha.  The Bill was introduced and passed in Lok Sabha in May 2015.  It was then referred to a Select Committee of Rajya Sabha which submitted its report in July 2015.  With the Bill listed for passage this week, we explain key provisions in the Bill, and the amendments proposed.What is the GST?Currently, indirect taxes are imposed on goods and services.  These include excise duty, sales tax, service tax, octroi, customs duty etc.  Some of these taxes are levied by the centre and some by the states.  For taxes imposed by states, the tax rates may vary across different states.  Also, goods and services are taxed differently. The Goods and Services Tax (GST) is a value added tax levied across goods and services at the point of consumption.  The idea of a GST regime is to subsume most indirect taxes under a single taxation regime.  This is expected to help broaden the tax base, increase tax compliance, and reduce economic distortions caused by inter-state variations in taxes.What does the 2014 Bill on GST do?The 2014 Bill amends the Constitution to give concurrent powers to Parliament and state legislatures to levy a Goods and Services tax (GST).  This implies that the centre will levy a central GST (CGST), while states will be permitted to levy a state GST (SGST).  For goods and services that pass through several states, or imports, the centre will levy another tax, the Integrated GST (IGST). Alcohol for human consumption has been kept out of the purview of GST.  Further, GST will be levied on 5 types of petroleum products at a later date, to be decided by the GST Council.  The Council is a body comprising of Finance Ministers of the centre and all states (including Delhi and Puducherry).  This body will make recommendations in relation to the implementation of GST, including the rates, principles of levy, etc.  The Council is also to decide the modalities for resolution of disputes that arise out of its recommendations. States may be given compensation for any revenue losses they may face from the introduction of the GST regime.  Such compensation may be provided for a period of up to five years. Further, the centre may levy an additional tax, up to 1%, in the course of interstate trade.  The revenues from the levy of this tax will be given to the state from where the good originates.  Expert bodies like the Select Committee and the Arvind Subramanian Committee have observed that this provision could lead to cascading of taxes (as tax on tax will be levied).[i]It also distorts the creation of a national market, as a product made in one state and sold in another would be more expensive than one made and sold within the same state.What are the key changes proposed by the 2016 amendments?The amendments propose three key changes to the 2014 Bill.  They relate to (i) additional tax up to 1%; (ii) compensation to states; and (iii) dispute resolution by the GST Council.Additional tax up to 1% on interstate trade:The amendments delete the provision.Compensation to states: The amendments state that Parliamentshall, by law, provide for compensation to states for any loss of revenues, for a period which may extend to five years. This would be based on the recommendations of the GST Council.  This implies that (i) Parliament must provide compensation; and (ii) compensation cannot be provided for more than five years, but allows Parliament to decide a shorter time period.  The 2014 Bill used the term ‘may’ instead of ‘shall’.   The Select Committee had recommended that compensation should be providedfor a period of five years.  This recommendation has not been addressed by the 2016 amendments.Dispute resolution: The GST Council shall establish a mechanism to adjudicate any dispute arising out of its recommendations. Disputes can be between: (a) the centre vs. one or more states; (b) the centre and states vs. one or more states; (c) state vs. state.  This implies that there will be a standing mechanism to resolve disputes.These amendments will be taken up for discussion with the Bill in Rajya Sabha this week.  The Bill requires a special majority for its passage as it is a Constitution Amendment Bill (that is at least 50% majority of the total membership in the House, and 2/3rds majority of all members present and voting).  If the Bill is passed with amendments, it will have to be sent back to Lok Sabha for consideration and passage.  After its passage in Parliament, at least 50% state legislatures will have to pass resolutions to ratify the Bill. Once the constitutional framework is in place, the centre will have to pass simple laws to levy CGST and IGST.  Similarly, all states will have to pass a simple law on SGST.  These laws will specify the rates of the GST to be levied, the goods and services that will be included, the threshold of the turnover of businesses to be included, etc.  Note that the Arvind Subramanian Committee, set up by the Finance Ministry, recommended the rates of GST that may be levied.  The table below details the bands of rates proposed.Table1: Rates of GST recommended by Expert Committee headed by Arvind SubramanianType of rateRateDetailsRevenue Neutral Rate15%Single rate which maintains revenue at current levels.Standard Rate17-18%Too be applied to most goods and servicesLower rates12%To be applied to certain goods consumed by the poorDemerit rate40%To be applied on luxury cars, aerated beverages, paan masala, and tobaccoSource: Arvind Subramanian Committee Report (2015)Several other measures related to the back end infrastructure for registration and reporting of GST, administrative officials related to GST, etc. will also have to be put in place, before GST can be rolled out.[For further details on the full list of amendments, please seehere.  For other details on the GST Bill, please seehere.]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 Bihar Prohibition and Excise Bill, 2016: An analysisVatsal Khullar- August 1, 2016The Bihar Prohibition and Excise Bill, 2016 was introduced and debated in the Bihar Legislative Assembly today.  The Bill creates a framework for the levy of excise duty and imposes a prohibition on alcohol in Bihar.  In this context, we examine key provisions and some issues related to the Bill. Prohibition on the manufacture, sale, storage and consumption of alcohol was imposed in Bihar earlier in 2016, by amending the Bihar Excise Act, 1915.  The Bill replaces the 1915 Act and the Bihar Prohibition Act, 1938.  Key features of the Bill include:Prohibition:The Bill imposes a prohibition on the manufacture, bottling, distribution, transportation, collection, storage, possession, sale and consumption of alcohol or any other intoxicant specified by the state government.  However, it also allows the state government to renew existing licenses, or allow any state owned company to undertake any of these activities (such as manufacture, distribution, etc.).Excise revenue:The Bill expects to generate revenue from excise by levying (i) excise duty on import, export, manufacture, etc. of alcohol, (ii) license fee on establishing any manufactory, distillery, brewery, etc., (iii) fee on alcohol transit through Bihar, and (iv) fee on movement of alcohol within Bihar or import and export from Bihar to other states, among others.Excise Intelligence Bureau:The Bill provides for the creation of an Excise Intelligence Bureau, which will be responsible for collecting, maintaining and disseminating information related to excise offences.  It will be headed by the Excise Commissioner.Penalties and Offences:The Bill provides penalties for various offences committed under its provisions.  These offences include consuming alcohol, possession or having knowledge about possession of alcohol and mixing noxious substances with alcohol.  In addition, the Bill provides that if any person is being prosecuted, he shall be presumed to be guilty until his innocence is proven.The Bill also allows a Collector to impose a collective fine on a group of people, or residents of a particular village, if these people are repeat offenders.Process to be followed for offencesThe Bill outlines the following process to be followed in case an offence is committed:If a person is found to have committed any offence under the Bill (such as consumption, storage or possession of alcohol), any authorised person (such as the District Collector, Excise Officer, and Superintendent of Police) may take action against the offender.The Bill allows an authorised person to arrest the offender without a warrant.  Alcohol, any material or conveyance mode used for the offence may be confiscated or destroyed by the authorised person.  In addition, the premises where alcohol is found, or any place where it is being sold, may be sealed.Under the Bill, the offender will be tried by a Sessions Court, or a special court set up by the state.  The offender may appeal against the verdict of the special court in the High Court.Some issues that need to be consideredFamily members and occupants as offenders:For illegal manufacture, possession or consumption of alcohol by a person, the Bill holds the following people criminally liable:Family members of the person (in case of illegal possession of alcohol). Family means husband, wife and their dependent children.Owner and occupants of a land or a building, where such illegal acts are taking place.The Bill presumes that the family members, owner and occupants of the building or land ought to have known that an illegal act is taking place.  In all such cases, the Bill prescribes a punishment of at least 10 years of imprisonment, and a fine of at least one lakh rupees.These provisions may violate Article 14 and Article 21 of the Indian Constitution.  Article 14 of the Constitution provides that no person will be denied equality before law.  This protects individuals from any arbitrary actions of the state.[1]It may be argued that imposing criminal liability on (i) family members and (ii) owner or occupants of the building, for the action of another person is arbitrary in nature.Article 21 of the Constitution states that no person can be deprived of their life and personal liberty, except according to procedure established by law.  Courts have interpreted this to mean that any procedure established by law should be fair and reasonable.[2]It needs to be examined whether presuming that (i) family members of an offender, and (ii) owner or occupant of the building knew about the offence, and making them criminally liable, is reasonable.Bar on Jurisdiction for confiscated items:The Bill allows for the confiscation of: (i) materials used for manufacturing alcohol, or (ii) conveyance modes if they are used for committing an offence (such as animal carts, vessels).  It provides that no court shall have the power to pass an order with regard to the confiscated property.  It is unclear what judicial recourse will be available for an aggrieved person.Offences under the Bill:The Bill provides that actions such as manufacturing, possession or consumption of alcohol will attract an imprisonment of at least 10 years with a fine of at least one lakh rupees.  One may question if the term of imprisonment is in proportion to the offence committed under the Bill.Note that under the Indian Penal Code, 1860 an imprisonment at least 10 years is attracted in crimes such as use of acid to cause injury, or trafficking of a minor.  Other states where a prohibition on alcohol is imposed provide for a lower imprisonment term for such offences.  These include Gujarat (at least seven years) and Nagaland (maximum three years).[3]Note:  At the time of publishing this blog, the Bill was being debated in the Legislative Assembly.[1]E.P. Royappa v State of Tamil Nadu, Supreme Court, Writ Petition No. 284 of 1972, November 23, 1973.[2]Maneka Gandhi v Union of India, AIR 1978 SC 597.[3]Gujarat Prohibition Act, 1949,http://www.prohibition-excise.gujarat.gov.in/Upload/06asasas_pne_kaydaao_niyamo_1.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»


LegislationDeclaration of assets under the Lokpal Act explainedPrianka Rao- July 28, 2016A Bill to amend the Lokpal and Lokayuktas Act, 2013 was introduced and passed in Lok Sabha yesterday.  The Bill makes amendments in relation to the declaration of assets of public servants, and will apply retrospectively.Declaration of assets under the Lokpal Act, 2013The Lokpal Act, 2013 provides for a mechanism to inquire into corruption related allegations against public servants.  The Act defines public servants to include the Prime Minister, Union Ministers, Members of Parliament, central government and Public Sector Undertakings employees, and trustees and officials of NGOs that receive foreign contribution above Rs 10 lakhs a year, and those getting a certain amount of government funding. [A June 2016 notification set this amount at Rs. 1 crore.] The Lokpal Act mandates public servants to declare their assets and liabilities, and that of their spouses and dependent children.  Such declarations must be filed by July 31stevery year.  They must also be published on the website of the Ministry by August 31st.2014 amendments proposed to the Lokpal ActIn December 2014, a Bill to amend the 2013 Act was introduced in Lok Sabha.  Among other things, the Bill sought to modify the provision related to declaration of assets by public servants.  The Bill required that the public servant’s declaration contain information of all his assets, including: (i) movable and immovable property owned, inherited, acquired, or held on lease in his or another’s name; and (ii) debts and liabilities incurred directly or indirectly by him.  The Bill also said that declaration requirements for public servants under the Representation of the People Act, 1951 (for MPs), All India Services Act, 1951 (for senior civil servants), etc. would also apply. The Standing Committee that examined this Bill, in 2015, had recommended that the public servants should declare the assets and liabilities to their Competent Authority.  For example, for an MP, the competent authority would be the Speaker of Lok Sabha or Chairman of Rajya Sabha.  Such declarations should then be forwarded to the Lokpal to keep in a fiduciary capacity.  Both these authorities would be competent to review the returns filed by the public servants.  In light of such double scrutiny, the Committee recommended that public disclosure of such assets and liabilities would not be necessary. Further, the Committee also noted that family members of public servants are not obliged to disclose assets acquired through their own income. These disclosures may be in violation of Article 21 (right to privacy) or 14 (right to equality) of the Constitution.  However, the public servant must declare assets and liabilities of his dependents, and those acquired by him in the name of another.  This Bill is currently pending in Lok Sabha.The 2016 Bill and its position on declaration of assetsThe Amendment Bill, that was introduced and passed by Lok Sabha yesterday, replaces the provision under the Lokpal Act, 2013 related to the declaration of assets and liabilities by public servants.  While the new provision also mandates public servants to declare their assets and liabilities, it does not specify the manner of such declaration.  The Bill states that the form and manner of such declarations to be made by public servants will be prescribed by the central government.  Therefore, if passed by Parliament, the effect of the amendments will be the following:Trustees and officers of certain NGOs will continue to be regarded as public servants for the purposes of the Prevention of Corruption Act, 1988 and the Lokpal Act, 2013. There is no differentiation in the treatment of government servants and trustees of NGOs.The requirement for declaring assets and liabilities will continue to be applicable.However, the Act will no longer require assets and liabilities of spouses and dependent children of public servants to be declared. It also removes the mandatory disclosure on the Ministry’s website.That said, the details of the disclosure to be made will be notified by the central government.It is not clear whether the earlier notification will automatically lapse, or whether it needs to be rescinded in light of the new amendments.These implications will apply only if the Bill is passed by Rajya Sabha and gets the President’s assent before July 31, 2016.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»


Miscellaneous7th Pay Commission's review of central government salariesVatsal Khullar- June 30, 2016The Union Cabinet approved the implementation of Seventh Pay Commission recommendations yesterday.  The Commission was tasked with reviewing and proposing changes to the pay, pension and efficiency of government employees. These recommendations will apply to 33 lakh central government employees, in addition to 14 lakh armed forces personnel and 52 lakh pensioners.  This will take effect from January 1, 2016.Pay, Allowances and Pension of central government employeesIn relation to an employee, the Commission proposed to increase (i) the minimum salary to Rs 18,000 per month, and (ii) the maximum salary to Rs 2,50,000 per month. It also recommended moving away from the existing system of pay bands and grade pay, which is used to determine an employee’s salary.  Instead, it proposed a new pay matrix which will take into account the hierarchy of employees, and their pay progression during the course of employment.  The Commission also suggested that this matrix should be reviewed periodically, with a frequency of less than 10 years. The Pay Commission also suggested a linkage between performance and remuneration of an employee.  For this, it proposed the introduction of performance related pay which will be based on an annual appraisal of the employee.  In addition, it recommended that annual increments of an employee should be withheld, if he is unable to meet the benchmark required for regular promotion or career progression. The Commission also sought to abolish or merge some of the allowances that may be given to employees by various government departments.  It suggested that, of the 196 allowances that exist, 52 should be abolished and 36 should either be merged under existing heads, or be included under proposed allowances.  Some of these allowances involved payment of a meagre amount of close to Rs 100 per month. In addition, the rates of House Rent Allowance (HRA) were revised.  The Commission proposed a methodology to increase the HRA rates every time the Dearness Allowance given to employees increased to 50% or 100%.  Dearness Allowance is given to employees in lieu of increases in the cost of living, on account of inflation. The Commission had also proposed a new methodology for computing pension for pensioners who retired before January 1, 2016.  This is aimed at bringing parity between past and current pensioners.  As part of the new methodology, two options for calculation of pension have been prescribed, and the pensioner may opt for either one.Financial Impact on the governmentThe implementation of the Seventh Pay Commission recommendations is expected to cost the government Rs 1,02,100 crore.  Of this amount, 72% will be borne by the central government, and 28% by the railways. As a result, the overall expenditure is expected to increase by 23.6%, with a 16% increase in expenses on pay, 63% in allowances and 24% in pension.Addressing the issue of vacancyAs of 2014, the central government had a job vacancy of 18.5%.[i]These vacancies may need to be filled or abolished, if required, to reduce redundancy.[ii]It may be noted that the Second Administrative Reforms Commission had observed that reducing the number of government employees is necessary for modern and professional governance.  Further, it had expressed concern that the increasing expenditure on salaries of government employees may be at the cost of investment in priority areas such as infrastructure development and poverty alleviation.[iii]Inducting specialised personnel in the governmentThe Second Administrative Reforms Commission had also observed that some senior positions in the central government require specific skill sets (including technical and administrative know-how).[iii]One way of developing these skill-sets is to recruit personnel directly into these departments so that they can over a period of time develop the required skills.  For example, personnel from the Central Engineering Service (Roads) may aspire and be qualified to hold senior positions in the Ministry of Road, Transport and Highways or a body like the National Highways Authority of India. However, another view is that special skill-sets may be inducted in the government through lateral entry of experts from outside government.  This will allow for widening of the pool of candidates and greater competition for these positions.[iii]The Second Administrative Reforms Commission had also recommended that senior positions in the government should be open to all services. The last Pay Commission’s recommendations, in 2008, led to an increased demand in the automobile, consumer products and real estate related sectors.  With the Seventh Pay Commission’s recommendations expected to take effect from January 1, 2016, their impact on the economy and the consumer market will become known in due course of time.[i]Report of the Seventh Central Pay Commission, Ministry of Finance, 2015http://finmin.nic.in/7cpc/7cpc_report_eng.pdf.[ii]“Union govt has 729,000 vacancies: report”, Live Mint, November 30, 2015,http://www.livemint.com/Home-Page/X6U6xFe5oR2pW4simMmAhK/Union-govt-has-729000-vacancies-report.html.[iii]10th and 13th Reports of the Second Administrative Reforms Commission, 2008 and 2009.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»


MiscellaneousThe rise of Non Performing Assets in IndiaVatsal Khullar- May 11, 2016At noon today, the Finance Minister introduced a Bill in Parliament to address the issue of delayed debt recovery.  The Bill  amends four laws including the SARFAESI Act and the DRT Act, which are primarily used for recovery of outstanding loans.  In this context, we examine the rise in NPAs in India and ways in which this may be dealt with.I. An overview of Non-Performing Assets in IndiaBanks give loans and advances to borrowers which may be categorised as: (i) standard asset (any loan which has not defaulted in repayment) or (ii) non-performing asset (NPA), based on their performance.  NPAs are loans and advances given by banks, on which the borrower has ceased to pay interest and principal repayments.In recent years, the gross NPAs of banks have increased from 2.3% of total loans in 2008 to 4.3% in 2015 (see Figure 1 alongside*).  The increase in NPAs may be due to various reasons, including slow growth in domestic market and drop in prices of commodities in the global markets.  In addition, exports of products such as steel, textiles, leather and gems have slowed down.[i]The increase in NPAs affects the credit market in the country.  This is due to the impact that non-repayment of loans has on the cash flow of banks and the availability of funds with them.[ii]Additionally, a rising trend in NPAs may also make banks unwilling to lend.  This could be because there are lesser chances of debt recovery due to prevailing market conditions.[iii]For example, banks may be unwilling to lend to the steel sector if companies in this sector are making losses and defaulting on current loans. There are various legislative mechanisms available with banks for debt recovery.  These include: (i) Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (DRT Act) and (ii) Securitisation and Reconstruction of Financial Assets and Security Interest Act, 2002 (SARFAESI Act).  The Debt Recovery Tribunals established under DRT Act allow banks to recover outstanding loans.  The SARFAESI Act allows a secured creditor to enforce his security interest without the intervention of courts or tribunals.  In addition to these, there are voluntary mechanisms such as Corporate Debt Restructuring and Strategic Debt Restructuring, which   These mechanisms allow banks to collectively restructure debt of borrowers (which includes changing repayment schedule of loans) and take over the management of a company.II. Challenges and recommendations for reformIn recent years, several committees have given recommendations on NPAs. We discuss these below.Action against defaulters:Wilful default refers to a situation where a borrower defaults on the repayment of a loan, despite having adequate resources. As of December 2015, the public sector banks had 7,686 wilful defaulters, which accounted for Rs 66,000 crore of outstanding loans.[iv]The Standing Committee of Finance, in February 2016, observed that 21% of the total NPAs of banks were from wilful defaulters.  It recommended that the names of top 30 wilful defaulters of every bank be made public.  It noted that making such information publicly available would act as a deterrent for others.Asset Reconstruction Companies (ARCs):ARCs purchase stressed assets from banks, and try to recover them. The ARCs buy NPAs from banks at a discount and try to recover the money.  The Standing Committee observed that the prolonged slowdown in the economy had made it difficult for ARCs to absorb NPAs. Therefore, it recommended that the RBI should allow banks to absorb their written-off assets in a staggered manner.  This would help them in gradually restoring their balance sheets to normal health.Improved recovery:The process of recovering outstanding loans is time consuming. This includes time taken to resolve insolvency, which is a situation where a borrower is unable to repay his outstanding debt.  The inability to resolve insolvency is one of the factors that impacts NPAS, the credit market, and affects the flow of money in the country.[v]As of 2015, it took over four years to resolve insolvency in India.  This was higher than other countries such as the UK (1 year) and USA (1.5 years).  The Insolvency and Bankruptcy Code seeks to address this situation.  The Code, which was passed by Lok Sabha on May 5, 2016, is currently pending in Rajya Sabha. It provides a 180-day period to resolve insolvency (which includes change in repayment schedule of loans to recover outstanding loans.)  If insolvency is not resolved within this time period, the company will go in for liquidation of its assets, and the creditors will be repaid from these sale proceeds.[i]‘Non-Performing Assets of Financial Institutions’, 27thReport of the Department-related Standing Committee on Finance,http://164.100.47.134/lsscommittee/Finance/16_Finance_27.pdf.[ii]Bankruptcy Law Reforms Committee, November 2015,http://finmin.nic.in/reports/BLRCReportVol1_04112015.pdf.[iii]Volume 2, Economic Survey 2015-16,http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf.[iv]Starred Question No. 17, Rajya Sabha, Answered on April 26, Ministry of Finance.[v]Report of the Bankruptcy Law Reforms Committee, Ministry of Finance, November 2015,http://finmin.nic.in/reports/BLRCReportVol1_04112015.pdf. *Source:  ‘Non-Performing Assets of Financial Institutions’, 27thReport of the Department-related Standing Committee on Finance,http://164.100.47.134/lsscommittee/Finance/16_Finance_27.pdf; 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»