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42d54dde-dc25-5de7-9d28-d385600ad502 | court_cases | Calcutta High CourtEih Ltd vs Commissioner Of Income Tax on 28 April, 2011Author:Bhaskar BhattacharyaBench:Bhaskar Bhattacharya1
ITA No. 183 of 2002
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
EIH LTD. Appellant
Versus
COMMISSIONER OF INCOME TAX RespondentMr. J.P. Khaitan, Sr. Advocate
for the Appellant.Mr. R. N. Bandopadhyay with Mr.
P.Dhudhonia, Advocates for the
respondents.BEFORE:The Hon'ble JUSTICE BHATTACHARYA
The Hon'ble JUSTICE DR. SAMBUDDHA CHAKRABARTI
Date : 28th April, 2011.The Court :- This appeal is at the
instance of an assessee and is directed against an order
dated May 10, 2002 passed by the Income Tax Appellate
Tribunal, D Bench, Kolkta in M. A. No. 29 (Cal) of 2001
in I.T.A No. 3158(Cal) of 1992 for the assessment year
1986-98 thereby allowing an application for rectification
filed by the Revenue.2It appears from record that a Division Bench of
this Court has formulated the following substantial
question of law for decision in this appeal."Whether, the Tribunal had any jurisdiction to
pass the order dated May 10, 2002 appealed against
modifying and/or substituting paragraph 9 of its order
dated 30th June, 2000 when the question involved is
already pending adjudication before this Court in an
appeal, in exercise of its power to review of its
earlier order?"It appears from record that while disposing of
ITA No. 3158(Cal) of 1992 for the assessment year 1986-87
the Tribunal below held that hotel building is to be
treated as "plant" for the purpose of allowing
depreciation in terms ofsection 32of the Income Tax
Act.Being dissatisfied, the Revenue preferred an
appeal being ITA No. 478 of 2000 before this Court undersection 260(A)of the Act and after filing of such appeal
filed an application for rectification undersection
254(2)of the Act thereby alleging that there was an
error apparent on the face of the order of the Tribunal3in not taking note of a decision of the Supreme Court in
the case ofCommissioner of Income Tax vs. Anand Theatresreported in (2000) 244 ITR 192 (SC) in which the Supreme
Court took an opposite view holding that 'Hotel Building'
cannot be treated as 'plant' for the purpose of giving
benefit of depreciation undersection 32of the Act.By the order impugned in this appeal the
Tribunal has rectified that mistake holding that in view
of the aforesaid Supreme Court decision there was an
apparent mistake and thus revoked the relief granted to
the assessee by the order impugned.Being dis-satisfied, the assessee has come up
with the present appeal.Mr. Khaitan, learned Senior Advocate appearing
on behalf of the appellant, has taken a pure question of
law in support of this appeal. According to Mr. Khtitan,
the Revenue having already preferred an appeal against
the order of the Tribunal, the subsequent application for
rectification undersection 254(2)of the Act on the
selfsame point was not maintainable. According to Mr.
Khaitan the Tribunal should not have touched its order
once it is brought to its notice that the applicant for
rectification has already availed of the right of appeal
and such appeal was pending before the superior Court.4Mr. Banerjee, learned Counsel appearing on
behalf of the Revenue has, however, opposed the aforesaid
contention of Mr. Khaitan and has contended that the law
having given a concurrent remedy in favour of his client,
the Tribunal below was quite justified in allowing the
application for rectification notwithstanding the fact
that his client had already availed of the remedy of
appeal by preferring a regular appeal undersection
260(A)of the Act.After hearing learned Counsel for the parties
and after examining the provisions contained inSection
254(2)of the Act, we find that unlike the provision of
review contained insection 114of the Code of Civil
Procedure, there is no restriction of filing any
application for rectification after a party has availed
of the remedy of appeal against the selfsame order.
Therefore, the intention of the Legislation was to confer
concurrent remedy of both the appeal and the right of
rectification against selfsame order. We are, therefore,
unable to accept the extreme contention of Mr. Khaitan
that after a party has preferred an appeal undersection
260(A)of the Act, it cannot apply undersection 254(2)of the Act for rectification.5On merit we find that the ground of
rectification was a just ground for rectifying themistake in view of the fact that on the date of disposal
of the appeal before the Tribunal, i.e. 30th June, 2000,
the decision of the Supreme Court in the case ofAnand
Theatres(supra) was already in existence,the said
judgmentof the Supreme Court having been delivered on
May 12, 2000, although the decision was not reported on
that day.It is now settled law as held by the Supreme
Court in the case ofAssistant Commissioner of Income-tax
vs. Sourashtra Kutch Stock Exchange Limitedreported in
(2008) 305 ITR 227 that non-consideration of a decision
of jurisdictional Court or of Supreme Court should be
taken to be a 'mistake apparent from the record'.Therefore, the Tribunal below rightly rectified its
mistake once its attention was drawn to the binding
precedent of Supreme Court in case ofAnand Theatres(supra).We, thus, find no merit in this appeal and
consequently, the same is dismissed by answering the
formulated question in the affirmative against the
assessee.6In the facts and circumstances there will,
however, no order as to costs.Urgent photostat certified copy of this order, if
applied for, be supplied to the parties subject to
compliance with all requisite formalities.(BHATTACHARYA, J.)
(DR. SAMBUDDHA CHAKRABARTI, J.)
dg/ |
3b172533-8942-532b-91e0-0af80a843912 | court_cases | Bombay High CourtRamnath S/O Mahadu Manal vs State Of Maharashtra on 16 March, 1999Equivalent citations: 1999CRILJ3986Author:J.A. PatilBench:J.A. PatilJUDGMENT
J.A. Patil, J.1. In Sessions Case No. 51 of 1993, the appellant/accused was tried on the charge of committing murder of Mangalabai w/o Ramrao Gaikwad by setting her on fire after pouring kerosene. The learned Sessions Judge, Aurangabad convicted the accused of the offence punishable underSection 302of the I.P.C. and sentenced him to life imprisonment. Feeling aggrieved by the said order, the accused has preferred this appeal.2. The prosecution case in brief is that the accused is a resident of Village Wahegaon, taluka Gangapur. He works as a mason. The deceased Mangalabai was his kept mistress and both'of them were residing together m a slum area in Indiranagar at Pandhapur, taluka Auraiigabad. The incident in question took place between 7 p.m. and 7.30 p.m. on 25-7-1992. According to the prosecution, the accused had disposed of four Gold beads belonging to Mangalabai and that led to a quarrel between the two. In the course of the quarrel, it is alleged, the accused poured kerosene on the person of Mangalabai and set her on fire. While doing so, the accused himself suffered some burn injures but, he managed to run away. Mangalabai who was on fire, began to shout and her shouts attracted the attention of the persons residing in the neighbourhood who rushed to the spot and appear to have put out the fire. Mangalabai is said to have disclosed to those persons that the accused had set her on fire.3. At the relevant time, Head Constable Jadhav P.W.4 along with Constable Kharat P.W.6 were on patrolling duty in the same area. On coming to know about the incident, both of them visited the house and arranged to carry Mangalabai to Ghati Hospital in a rickshaw. According to the prosecution, Mangalabai disclosed to these two policemen also that it was the accused who had set her on fire. In the Hospital also Mangalabai made the same disclosure to Dr. Tenkala P.W.I 1 who examined her. It appears that information about the admission of Mangabai in the hospital in burnt condition was given to Chhawani Police Station and, thereafter, A.S.I. Shinde P.W.13 was directed to make inquiry into the case. On the same night A.S.I. Shinde arranged to get a formal dying declaration Exh.30 of Mangalabai recorded through the Executive Magistrate Mehra P.W.9. In that statement also Mangalabai stated that she had a quarrel with the accused in connection with disposal of her gold weighing 4 Masas and that, the accused had, therefore, set her on fire. Mangalabai had sustained 100% of burns. She succumbed to the burn injuries on the same night at about 1.40 a.m.4. On the basis of the dying declaration of Mangalabai, A.S.I. Shinde lodged his formal complaint Exh.42 and handed over the investigation of the case to P.S.I. Wakade P.W.15. The accused was absconding since the incident. Therefore, search to trace him was undertaken by the police. On 27-7-1992 Head Constable Mahale P.W.12 was proceeding to Wahegaon in search of the accused. He was accompanied by one Constable. On the way near Wahegaon he saw the accused coming in a bullock cart. The accused had burns on his person. The local Police Patil appears to have identified the accused. Head Constable Mahale then brought the accused to Chhawani Police Station and produced him along with his report; Thereafter, the accused was sent to the Hospital for treatment. It was found that the accused had sustained 41 % of burn injuries. In due course, P.S.I. Wakade completed investigation and filed charge-sheet against the accused for the offence punishable underSection 302, I.P.C. in the Court of J.M.F.C, Aurangabad.5. During the trial in Sessions Court, the accused pleaded not guilty to the charge. His defence is one of total denial. He denied any concern with Mangalabai and further denied that he was residing with her at Indiranagar. The accused further denied to have set Mangalabai on fire. As regards the burn injuries suffered by him, the accused explained in his statement underSection 313of Cr. P.C. that the roof of his house at Wahegaon was leaking and that his mother and wife had asked him to fix a water-proof cloth from inside. According to him, he placed a tin on a hearth and climbed on it in order to fix a waterproof cloth. He further stated that at that time, the flames in the burning hearth rose up as a result of which his Paijama caught fire and he fell down. Thereafter, his father took him a bullock cart for being admitted in hospital at Gangapur. According to him, on the way the police met him and brought to the Police Station from where he was taken to Ghati Hospital. The; accused did not lead any evidence in his defence nor did he examine himself on oath.6. In support of its case the prosecution examined in all 15 witnesses. The entire case is based on circumstantial evidence. The learned Sessions Judge accepted the prosecution evidence and rejected the defence put up by the accused. He held that at the relevant time the accused was residing with, Mangalabai. The learned Judge accepted the dying declaration of Mangalabai as recorded by the Executive Magistrate Mehra as true and correct. He rejected the explanation given by the accused as to the burn injuries sustained by him. In this view of the matter, the learned Judge proceeded to convict and sentence the accused as stated above.7. Shri Vijay Sharma, the learned Advocate for the accused contended before us that the learned Sessions Judge was in error in placing reliance upon the dying declaration of Mangabai. According to him, the prosecution has suppressed the genesis of the incident. He pointed out that initially one Kadubai was named as the culprit. However, the Investigating Officer failed to make any inquiry. Shri Sharma pointed out that the dying declaration Exh.80 does riot bear any timing to show at what time it was recorded. He further pointed out that the certificate of fitness of Mangalabai to make a statement was given by the Doctor at 9.30 p.m. whereas the dying declaration Exh.80 came to be recorded much later. According to Shri Sharma, one cannot be certain that Mangalabai was in a fit mental condition to make a statement. He posed a question as to how the thumb impression of Mangalabai on the dying declaration Exh.80 could be obtained when as per the medical evidence, she had sustained 100% of burns. Shri Sharma also drew our attention to the fact that both, the Constable Kharat and Head Constable Jadhav did not make any report to the police station after Mangalabai was admitted in the hospital. This conduct on their part, Shri Sharma submitted, was inconsistent with their claim that Mangalabai had disclosed to them that the accused had set her on fire. Smt. Rasal, learned A.P.P. supported the order of conviction and sentence passed against the accused and submitted that there is absolutely no reason as to why independent witnesses should deposed against the accused.8. As already stated, the whole prosecution case is based on circumstantial evidence which consists of the following facts :1. That, at the relevant time the accused and the deceased Mangalabai were residing together as husband and wife in the house of Sunderabai Sirsath where the incident took place.2. That, on 25-7-1992 at about 7.30 p.m. Mangalabai suffered 100% of burn injuries and she died on the same night due to the said burn injuries.3. That, immediately after the incident and prior to her death Mangalabai made disclosures to several persons to the effect that it was the accused who had set her on fire.4. That, the accused himself had suffered 41 % of burn injuries which were caused at a point of time when Mangalabai had sustained burn injuries-9. We shall now refer to the evidence produced by the prosecution in relation to each of the abovementioned circumstances. Deceased Mangalabai was a married woman of about 45 years and she was having two major sons. It appears from the evidence of P.I. Wakade that her husband was residing at Newasa. However, she was not residing with her husband. According to the prosecution, Mangalabai was residing with the accused as his kept mistress and that both of them started living together in the house of Sundarabai Sirsath since about two months prior to the incident. Accused has denied his concern with Mangalabai and further denied the fact that he was residing with her in the house of Sunderabai Sirsath. The denial made by the accused in this respect is however, found to be without any force in view of the positive evidence of prosecution witnesses namely, P.W.I Ashok, P.W.2 Sangita, P.W.3 Chandrabhagabai, P.W.5 Dr. Bhimrao Jadhav and P.W.7 Sundarabai-the landlady. It is true that all, except Dr. Bhimrao Jadhav, were treated as hostile witnesses by the prosecution since they did not state anything about the disclosure made by Mangalabai after the incident. Nevertheless, their evidence clearly shows that at the time of the incident, the accused was residing with Mangalabai. P. W. 1 Ashok is a Washerman who carries his laundry business at a short distance from the place of the incident. He has stated that at the relevant time, he heard noise of a female person and also saw a crowd of people in front of the house of the accused. He pleaded ignorance about the relationship between the accused and the Mangalabai and stated that he did not listen to what she was shouting. P.W.2 Sangita is a school going girl who was residing with her mother Chandrabhagabai in a house which is at a distance of about 10-15 feet from the house where the accused was residing. Sangita stated that the accused was residing in a room in the house of Sundarabai Sirsath. She further stated that the accused was doing occupation of mason while his wife Sangita used to accompany him for labour work. P.W.5 Chandrabhagabai is the mother of Sangita and she also stated that Mangalabai had come to reside in her locality only two months prior to the incident. She further stated that Mangalabai was residing in the said house with her husband. She identified the accused as being the same person who was residing with Mangalabai. P.W.5 Dr. Bhimrao Jadhav is a private Medical Practitioner who had his dispensary in the same locality. He also stated that the accused was residing with a woman, whose surname was Gaikwad, in the house of Sunderabai Sirsath. The prosecution also examined the landlady P.W.7 Sunderabai Sirsath who stated that she owns a house at Pandharpur and that, through Chandrabhagabai she had given one of her rooms to one Mistri on rental basis. She further stated that the said Mistri was residing with his wife in the said house since about two months prior to the incident. Initially, Sundarabai showed some hesitation to identify the accused but, in the cross-examination, she volunteered that the other tenant residing in her rooms was in the relation of the accused sitting in the dock. Thus, taking into consideration the evidence of all these five witnesses, it is absolutely clear that it was the accused who was residing with Mangalabai in the house of Sundarabai Sirsath where the incident of burning took place.10. Coming to the next circumstance relied upon by the prosecution, it is the fact that Mangalabai had sustained 100% burn injuries and she died due to the same. In this respect, the evidence of Constable Kharat P.W.6 shows that he carried Mangalabai in burnt condition in a rickshaw and brought her to Ghati Hospital on the same night. The evidence of Dr. Tenkale P.W. 11 shows that Mangalabai was admitted in the Hospital at 8.45 p.m. On examining her, he found that she had 97% superficial and deep burns. The evidence of Dr. Paul P.W. 10 is to the effect that Mangalabai had suffered 100% burns and that she died at about 1.40 a.m. on the same night. The prosecution has produced the postmortem report Exh. 10 which was admitted by the defence underSection 294of Cr. P.C. The said report shows that the post-mortem examination of the dead body of Mangalabai was carried on 27-7-1992 and at that time 100% superficial to deep degree burns were found on her body surface. The burns over chest, abdomen and thighs were superficial. The post-mortem report further mentions that the burnt skin was peeled off at places in flaps leaving reddish inflamed tissues beneath. Carbon depositions were seen over cheeks, neck, chest and abdomen. The burn injuries were found to be ante-mortem. The Medical Officer who carried post-mortem examination, opined the cause of death as "shock as a result of 100% superficial to deep degree burns". In view of this clear medical evidence, which is not at all disputed, it is obvious that Mangalabai died due to burn injuries sustained by her. However, this fact by itself would not be conclusive to establish the alleged guilt of the accused. It cannot be concluded that the death of Mangalabai was necessarily homicidal unless the other possibilities of her having received burn injuries in a suicidal attempt or accidental fire are ruled out.11. The prosecution has, therefore, relied upon the evidence regarding the dying declarations said to have been made by Mangalabai to various persons during the period of about 3 hours after the actual incident of burning. In all there are five dying declarations out of which four are oral while the fifth is reduced to formal writing by the Executive Magistrate Mehra P. W.9. The four oral dying declarations of Mangalabai are said to have been by her to Dr. Bhimrao Jadhav P.W.5. Constable Kharat P.W.6, Head Constable Jadhav P. W.4 and Dr. Tenkale P.W.11. Before turning to the actual evidence about the dying declarations, it would be advantageous to refer to the relevant case law.12. It is well-settled that great solemnity and sanctity is attached to the words of a dying person because a person on the verge of death is not likely to tell lies or to concoct a case so as to implicate an innocent person. The law regarding dying declaration has however, underwent a considerable change during the recent years. Earlier, the view was that a dying declaration cannot be acted upon and made basis of a conviction unless it is corroborated by other independent evidence.InRamnath v. State of M.P., it was observed (Para 12)-It is not safe to, convict an accused person merely on the evidence furnished by a dying declaration without further corroboration because such a statement is not made on oath and is not subjected cross-examination. The maker might be mentally or physically in a state of confusion and might well be drawing upon his imagination while he was making a declaration.The same view was followed in Khushalrao v. State of Bombay .InTarachand v. State of Maharashtra, it was; observed that a dying declaration is not to be believed merely because no possible reason can be given for accusing the accused falsely. It can only be believed if there are no grounds for doubting it at all.13. The insistence on having supportive evidence to corroborate the dying declaration seems to have been relaxed in the subsequent decisions of the Supreme Court and a view was taken that dying declaration if found to be genuine and reliable, can form the sole basis of conviction.InLallubhai v. State of Gujarat, a caution was given that a dying declaration must be closely scrutinised as to its truthfulness like any other important piece of evidence in the light of surrounding facts and circumstances of the case bearing in mind on the one hand that a statement is by a person who has not been examined in Court on oath and on the other hand, that the dying man is normally not likely to implicate an innocent person falsely.InState of Assam v. MafizuddinAIR 1983 SC 274: (1983 Cri LJ 426), it was held that there can be conviction on the basis of dying declaration and it is not at all necessary to have a corrobora-tion provided the Court is satisfied that the dying declaration is a truthful dying declaration and not vitiated in any other manner.In State of U.P. v. Ramsagar , it was observed (Para 13):-It is well-settled that dying declaration can be acted upon without corroboration. There is not even a rule of prudence which has hardened into a rule that a dying declaration cannot be accepted unless it is corroborated. The primary effort of the Court has to be to find out whether the dying declaration is true. If it is so, no question of corroboration arises. It is only if the circum-stances surrounding the dying declaration are not clear or convincing that a Court may for its assurance, look for, corroboration to the dying declaration.14. The evidence regarding the first oral dying declaration of Mangalabai is furnished by Bhimrao Jadhav P.W.5, a private Medical Practitioner of Pandharpur. His evidence shows that he was residing in the same locality. Bhimrao Jadhav has stated that in July, 1992 at evening time when Marathi news were being telecast, he heard shouts outside the house. He and his wife, therefore, came out of the house and saw a woman with fire on her person sitting in front of her house. Bhimrao Jadhav has further stated that the woman was saying that her husband had poured kerosene on her and that he had ran away by setting fire to her. According to him, she was also saying that her husband had disposed of her gold beads. Bhimrao Jadhav has not specifically mentioned the name of the woman. However, there is no difficulty in identifying the said woman as deceased Mangalabai. We have already referred to the evidence which clearly shows that Mangalabai was residing with the accused in the house of Sunderabai Sirsath. In the cross-examination, he admitted that the said woman was not in a position to move and that she was lying with her face down. However, he denied the suggestion that when she was lying down with her face downwards, she was not speaking anything. There is nothing in the cross-examination which can create a doubt about the credibility of this witness. In the first instance, he is a respectable and responsible person since he is a private Medical practitioner. His conduct of rushing to the spot on hearing the cries of the woman is quite natural since he was residing at a short distance from the place of incident. There is absolutely nothing in the cross-examination to indicate that he is on cross terms with the accused or that he was interested in Mangalabai. Thus, he is absolutely an independent witness. There is, therefore, hardly any reason to disbelieve his version when he states that the woman i.e. Mangalabai was saying that her husband had poured kerosene on her and set her on fire. It was pointed out that in the alleged disclosure, Mangalabai referred to her husband and not to the accused. On this basis it was contended that the miscreant must be the husband of Mangalabai and not the accused. It is true that at the relevant time Mangalabai was residing with the accused as his kept mistress. It is therefore, not unnatural if she referred to the accused as her husband. But at the same time we cannot lose sight of the fact that her husband was alive. Therefore, reference to husband by Mangalabai does not necessarily mean the accused. The fact remains that Mangalabai did make a disclosure that she was set on fire after pouring kerosene on her body. However, to put the thing beyond reasonable doubt the prosecution will be required to show that the miscreant was no other person than the accused.15. The second and third dying declarations5 are said to have been made by Mangalabai to Constable Kharat P.W.6 and Head Constable Jadhav P. W.4 respectively. The evidence of both these witnesses is to the effect that on the relevant day at evening time, they were moving on patrolling duty and that, in the course of the said duty, they happened to come to the area in which Mangalabai was residing. According to them, there they received information that one woman residing in the house of Sundarabai had received burns. The evidence on record further shows that Head Constable Jadhav then deputed Constable Kharat to go and see as to what was the matter. Constable Kharat P.W.6 has stated that he went to the house and found that one woman had burns on her person and that, on enquiry she disclosed her name as Mangalabai. Constable Karat then stated about the disclosure made by Mangalabai in the following words :She stated before me that Mannal Mistri had disposed of her gold beads due to which there was a quarrel between the two, as a result of which Mannal Mistry became angry and poured kerosene on her and set her to fire....Constable Kharat has then stated that he went back to Head Constable Jadhav and told him what was stated to him. Thereafter, both of them again came back to the house of Mangalabai.16. The evidence of Head Constable Jadhav P.W.4 is also on the same lines on which Constable Kharat has deposed. He stated that on being informed by Constable Kharat, he immediately visited the spot and found that many people had gathered there. He further stated that the woman was seen outside her house and she was shouting in pains. About the disclosure made by the said woman, Head Constable Jadhav stated :She was uttering as if addressing to the people gathered and also told me when I enquired as to the cause of burns. She was saying that Mannal Mistry had disposed of her gold beads in the shop and, therefore, there was a quarrel and after that quarrel due to anger, Mannal Mistry poured kerosene and set fire to her.17. It will thus, be seen that both, Constable Kharat and Head Constable Jadhav clearly stated that Mangalabai made a disclosure to them soon after the incident and stated that Mannal Mistry had set her on fire after pouring kerosene. The evidence of both Constable Kharat and Head Constable Jadhav insofar as the same relates to alleged dying declaration made to them by Mangalabai, is attacked mainly on two grounds. The first is that admittedly.both these Police Officers did not make any report to their Police Station informing about the incident as well as the disclosure made to them by Mangalabai. In fact, a serious, cognizable offence of attempt to commit murder was disclosed to both of them and as such, they ought to have realised the gravity and necessity of giving information to the Police Station promptly. Head Constable Jadhav stated he did not make any entry in the police record regarding what Mangalabai had stated. Constable Kharat on the other hand, stated that he did not report for registering the crime as the same is registered after M.L.C. It was suggested to both these witnesses that they did not report the matter to the Police Station since no disclosure as alleged was made to them by Mangalabai. Although, both of them have denied the suggestion, still we do not find much force in the said denial. The conduct of both these witnesses in not reporting the matter to the Police Station, therefore, creates a doubt about their claim that Mangalabai had disclosed to them as to who had set her on fire. This doubt is further strengthened on account of the delay in recording their statements. As already pointed out, the statement of Constable Kharat came to be recorded on the seventh day after the incident whereas that of Head Constable Jadhav on the third day of the incident. The investigation of the case started on 26-2-1992' itself. No explanation has however, come forth from PSI Wakade P;W.15 as to why there was delay in recording the statements of these two witnesses. In view of the above-mentioned infirmities, the submission that no disclosure as alleged was made to Constable Kharat and Head Constable Jadhav, gains strength.18-19. The fourth dying declaration of Mangalabai is said to have been made to Dr. Terikale P. W. 11. His evidence is to the effect that at 8.45 P.M. the patient Mangalabai was brought by constable Kharat. Dr. Tenkale examined her and found that the patient had 97% superficial and deep bums. He stated that he took history from the patient and the gave the history of one Manal and Kadubai causing her burns. Dr. Tenkale has noted the said history in the M.L.C. register, a true copy of which was produced at Exh. 38. The history of the case is noted therein a "homicidal burn by Manal and Kadubai." It is for the first time that the name of one Kadubai as being the associate of the accused in the alleged crime was revealed. We shall refer to this aspect a little later. In the cross-examination, Dr. Tenkale admitted that there is no specific reference in the M.L.C. register that the history of the case was given by the patient herself. He denied the suggestion that the history of the case was given by Constable Kharat as well as one relative by name Raut. In examination-in-chief, he has however, stated that two or three persons were accompanying the patient. The statement of Dr. Tenkale was recorded by P.S.I. Wakade much later i.e. 4-1-1993. Taking all these facts into consideration, the claim of Dr. Tenkale that the patient Mangalabai herself gave the history, of the burns, becomes difficult of acceptance.20. The mainstay of the prosecution is the dying declaration recorded by the Executive Magistrate Mehra P.W. 9. The same is produced at Exh. 30 and therein Mangalabai is said to have disclosed that the accused Manal had kept her since about two months and that, there was a quarrel with him in connection with the disposal of a 4 Masas of Gold and that, therefore, he had set her on fire. Since the said dying declaration is reduced to writing, it becomes necessary to examine the evidence of Executive Magistrate carefully. According to him, after being requested to record the dying declaration of a woman admitted in Ghati Hospital, he went there in a rickshaw at about 10 P.M. or 10.30 P.M. Thereafter, he enquired with Dr. Paul about the patient and gave him a letter whether the said patient was in a condition to speak. Mehra has stated that the letter was also given by A.S.I. Shinde and that, the junior of Dr. Paul had certified on it that the woman was in a condition to speak. According to Mehra, he was then shown the said woman who had burn on her person. He stated that he put the said woman certain questions and found that she had answered the same clearly. According to him, at that time nobody was by the side of the woman. He further stated that he then recorded her statement, read it over to her and obtained her thumb impression below it. Thereafter, he handed over that statement to A.S.L Shinde and did not retain copy of it with him.21. Shri Sharma, the learned Advocate for the appellant/accused submitted that there are certain infirmities in the dying declaration (Exh. 30) which make the same unacceptable. The first is that the dying declaration (Exh. 30) does not bear any endorsement of the Doctor certifying that Mangalabai was in a fit condition to make a statement. The dying declaration (Exh. 30) does not bear any timing as to when the recording thereof was started and when it was completed. Since Mehra came in the Hospital at about 10 or 10.30 P.M. and required some time to make preliminary inquiry with the Doctor, it is obvious that the said statement could not have been recorded before 10.30 P.M. The certificate of fitness that Mangalabai was in a fit condition to make a statement was given by Dr. Paul P.W. 10 at 9.30 P.M. as is seen from the endorsement below the letter (Exh. 32) addressed to A.S.I. Shinde. This certificate would, therefore, at the most show that Mangalabai was conscious and in a condition to make a statement at 9.30 P.M. but, it cannot be presumed that she continued to be so after one hour when the dying declaration (Exh. 30) came to be recorded. It does not appear from the evidence of Mehra that any Medical Officer was present near Mangalabai when he recorded her statement. Mehra has stated that since he was told by Doctor that certification was already done, he did not feel it necessary to obtain it again. It cannot be said that the explanation given by Mehra for his failure to obtain due certification of the Medical Officer below Exh. 30 is, in any way, satisfactory. It cannot be ignored that Mangalabai had sustained 100% of burn injuries and that her condition was deteriorating. She succumbed to the burn injuries at 1.40 A.M. Having regard to these facts, it was, therefore, necessary for Mehra to have obtained fresh certification from the doctor to the effect that Mangalabai was conscious and in a fit condition to make a statement and that she continued to be so till the recording was completed.22. Smt. Rasal, learned A.P.P. drew our attention to the dying declaration Exh. 30 and pointed out that the Executive Magistrate Mehra had put certain preliminary questions to Mangalabai to ascertain whether she was in fit condition to make a statement. The questions put to Mangalabai relate to her marriage, parental home, place of her in-laws, occupation of her husband and children. Mehra has stated that Mangalabai answered the questions clearly but, she was repeatedly asking for water. On the basis of this evidence, Smt. Rasal, submitted that Mangalabai was conscious and in a fit condition to make a statement at the relevant time. We are however, not very much impressed by this submission for the simple reason that the law as settled by the Apex Court does not dispense with the certification by the Doctor as to the consciousness and fitness of the concerned persons to make statement when the same is reduced to writing. Shri Sharma referred to the decision inIrappa v. State of Karnataka1998 Cri LJ 1806 (Kant), wherein the following observations were made (at p. 1809 of Cri LJ):It is an essential requirement and one on which could be no matter of compromise that the condition of the patient at the time when the dying declaration was made has to be assessed by the Doctor concerned and certified on the document at that very point of time. The Courts can never accept a situation whereby this very vital requirement is by-passed and the prosecution attempt to get over the infirmity by examining the Doctor at a much later point of time in order to try and cover up the lacuna. It is a well accepted position in law that where the condition of a patient is so serious, that is the Doctor must certify the consciousness levels. There can be no dispute about the fact that the patient in such cases is undergoing a lot of physical pain that the mental condition of the patient is also not very certain having regard to the nature of the injuries and the consequences thereof, but what is most important is that the Courts have always taken note of the fact that as soon as a seriously injured person is brought to the hospital, the formal treatment is commenced, the most important of which is the administration of tranquillizers and pain-killers for purposes of controlling the trauma and reducing the pain. It is a medically accepted fact that these drugs have attendant side effects, the most important of which is drowsiness and it is for this reason that the Courts insist that the Doctor has got to certify that the patient was not only conscious but also was in a position to speak and was in a mentally fit condition to make a statement. The law with regard to dying declaration invariably lays down that the dying declaration must be in the form of question and answers and preferably recorded in the words of the patient. The principal reason for this is because a Court will be able to independently assess from the nature of the answers to precisely what was the condition of the patient. The contemporaneous certificate from the Doctor is more important because the Doctor would be in a position to indicate as to whether the mind of the patient was clear and whether having regard to the overall condition, the patient understood the questions and was in a position to give correct answer.InAkbar Ashraf Khan v. State of Maharashtra1995 Cri LJ 3575, the fact were that although the Medical Officer had given a separate certificate that the victim was in a fit mental condition to give a dying declaration still, the Executive Magistrate who recorded the same had failed to obtain the endorsement of the Medical Officer below it certifying that the victim was in a fit condition throughout the time she made the dying declaration. This was one of the grounds on which the dying declaration came to be rejected.InMadhukar v. State of Maharashtra1998 All MR (Cri) 1508, to which one of us (Barde, J.) was a party 1, did not accept the dying declaration of the deceased inter alia on the grounds that no certificate of doctor that the deceased was conscious to give a statement, was obtained.23.InJagga Singh v. State of Punjab, the conviction of the accused for the offence underSection 302was based mainly on the dying declaration of the deceased but, the Supreme Court while setting aside the conviction, pointed out that there was an important infirmity in the dying declaration which was recorded by the Assistant Sub-Inspector who failed to obtain endorsement of the Doctor who was present at that time, that the deceased was in a fit condition to make a statement. The Supreme Court observed that it is a settled law that for a dying declaration to provide the basis for convic tion, the same has to be beyond any reproach.In Kishoridas v. State of West Bengal 1997 Cri LJ 315 (Cal), there were two dying declarations made by the deceased to the Magistrate and to the Investigating Officer but, none of them bore any endorsement of the Doctor about the physical and mental condition of the deceased to make statements.Relying upon the Supreme Court's decisions inJagga Singh v. State of Punjab(supra) and Maniram v. State of Madhya Pradesh , the; Division Bench of the Calcutta High Court declined to rely upon the said dying declarations. All these decisions which were cited before us by Shri Sharma thus, make it clear that it is abso-lutely necessary to have an endorsement of the Medical Officer on the statement of the deceased to show that the deceased was throughout in a fit condition to make a statement. In the instant case, the certificate of fitness (Exh. 32) of Mangalabai as issued by Dr. Paul P.W. 10 relates to her condition which existed about more than one hour prior to the actual recording of the statement (Exh. 30) by the Executive Magistrate Mehra. Therefore, that certificate cannot be of any use to prove the condition of fitness or otherwise of Mangalabai one hour later.24. The dying declaration (Exh. 30) bears thumb impression of Mangalabai. We have checked the same and we found that the thumb impression shows the ridges and curves. Shri Sharma submitted that Mangalabai had sustained 100% of burn injuries. He, therefore, questioned as to how in such a condition her thumb impression showing ridges and curves could have been obtained on Exh. 30. There is no explanation on this point coming forth from the Executive Magistrate Mehra. Shri Sharma drew our attention to the decision inState Of Punjab v. Gian Kaur, wherein the Medical evidence was that the deceased had 100% burns but, her dying declaration bore thumb mark having clear ridges and curves. It was found that there was no satisfactory explanation as to how such a thumb mark could appear on the dying declaration particularly, when there was evidence of the Doctor that both the thumbs of the deceased were burnt. The Supreme Court, therefore, upheld the view taken by the High Court in not placing reliance upon the dying declaration.25. In view of the above mentioned infirmities in the dying declaration (Exh. 30), we are of the opinion that the same cannot be relied upon. The learned Sessions Judge has not taken into consideration the above mentioned infirmities and, therefore, fallen into error to rely upon the same.26. The foregoing discussion thus, makes it clears that the dying declaration (Exh. 30) which is reduced to writing is not free from doubts and as such unworthy of reliance. As regards the four oral dying declarations all, except the one made before Bhimrao Jadhav P.W. 5, are of doubtful nature. The dying declaration made by Mangalabai to Bhimrao Jadhav P.W. 5 does not clearly establish that it was the accused who had set her on fire. The reference made by Mangalabai to her husband does not pule out the possibility that it was her husband who had set her on fire. In short, all the aforesaid mentioned five dying declarations cannot be relied upon to hold the accused responsible for having set Mangalabai on fire.27. The last circumstance relied upon by the prosecution is that the accused himself had suffered viz of burn injuries. In this respect, the evidence of Dr. More P.W. 8 shows that the accused was admitted in the hospital on 27-7-1997 at 10 P.M. and that, on examination it was found that he had 41% burn injuries on his right upper extremities, both (lower extremities etc. The accused has tried in his statement underSection 313, of Cr.P.C to explain his bum injuries by stating that he had placed a tin on a burning hearth and that, he climbed on it in order to fix a water proof cloth to prevent the roof from leaking. According to him, the flames rose up as a result of which his Paijama caught fire and he suffered burn injuries. We do not think that this sort of explanation can be treated as true and genuine. No sane person would place a tin on burning hearth and climb on it to repair the ceiling. We have, therefore, no hesitation to discard this explanation as untrue. Smt. Rasal, pointed out from the evidence of Dr. More P.W. 8 that the burn injuries were suffered by the accused on 25-7-92 between 7 P.M. 8 P.M. It is not known on what basis Dr. More made such a statement because the history of the case noted by him in the M.L.C. Register, the extract of which is produced at Exh. 27 does not make any reference to the time or the place of burns. Dr. More has admitted this fact in his cross-examination. Consequently, it cannot be said that the burn injuries of the accused were caused at a point of time when the deceased had suffered the burn injuries.28. We have thus, dealt with all the places of circumstantial evidence on the basis of which the prosecution has tried to estiablish the guilt against the accused. We however, find that the prosecution has not succeeded in proving beyond the fact that Mangalabai and accused were residing together at the relevant time land that, on 25-7-1992 at about 7.30 P.M. Mangalabai suffered 100% burns which were caused due to pouring of kerosene on her person and setting her on fire. The prosecution has however, failed to prove the material fact that it was the accused who had set her on fire. The prosecution evidence no doubt, raises a suspicion, however strong it may be, cannot take place of the proof. There is some scope for entertaining a reasonable doubt, the benefit of which will have to be given to the accused. Before concluding, reference may be made to the complaint (Exh. 42) on the basis of which the crime was registered. The evidence of A.S.I. Shinde P.W. 13 shows that on the basis of the statement recorded by Mehra he lodged his complaint (Exh. 42). The learned Sessions Judge has treated the same as F.I.R. in this case. In our opinion, the same cannot however, be treated as F.I.R. The F.I.R. is information given first in point of time of a cognizable offence to the officer in charge of a Police Station. The complaint (Exh. 42) was recorded at 1.30 A.M. on 26-7-92. It is however, found that much prior to that a telephonic message was received by the Police Station from Ghati Hospital at 9.15 P.M. on 25-7-92 and the same was recorded at Sr. No. 44 in the Station Diary of the Police Station. On our direction the prosecution has produced the Station Diary containing the relevant entry and in view of our order the same has been marked as Exh. 49. The relevant entry clearly shows that information was given to the Police Station on Phone by a Head Constable attached to the Police Chowki in Ghati Hospital that Mangalabai w/o Ramrao Gaikwad was admitted in the Hospital by Constable Kharat and that, the said Mangala-bai disclosed that on 25-7-92 at 7 P.M. Maniyar Kadubai poured Kerosene on her and set her on fire. It is obvious that the information so recorded at Entry No. 44 is first in point of time and it discloses commission of a cognizable offence. Therefore, it would amount to F.I.R. This being the position, the contention of Shri Sharma that there was delay in sending the complaint (Exh. 42) to the Judicial Magistrate, loses to its weight.29. In the above mentioned station Diary, which deserves to be treated as F.I.R. there is reference to the name "Miniyer Kadubai" as being the person who had set Mangalabai on fire. It is not known as to who had disclosed the said name. The entry (Exh. 38) made by Dr. Tenkele P.W. 9 in the M.L.C. Register gives the history of the case as homicidal burns by Manal and Kadubai. It was contended before us that no action was taken against Kadubai though her name had transpired to be the miscreant. The evidence of P.S.I, Wakade P.W. 15 shows that he had recorded the statement of Kadubai. Any way, the mention of the name of Kadubai in the Station diary Entry No. 44 (Exh. 49) need not detain us as it is found that the prosecution has failed to prove beyond reasonable doubt that it was the accused who had set fire to Mangalabai.30. In the result, the appeal deserves to be allowed. Hence the Criminal Appeal No. 3 of 1994 is allowed and the order of conviction and sentence passed against the accused by the learned Sessions Judge is hereby set aside. The appellant/ accused is acquitted of the offence punishable underSection 301of I.P.C. He be forthwith released from Jail. If he is not required for the purpose of any other case. The order regarding disposal of Muddemal property is however, maintained. |
2daa436e-3e4c-5abc-b02f-c0c3149c0432 | court_cases | Jammu & Kashmir High Court - Srinagar BenchMst. Rafiqa Begum vs Stte Of J&K; & Ors on 8 August, 2017HIGH COURT OF JAMMU AND KASHMIR-
SRINAGAR
Case No: COD 289/2014 in LPA 185/2014 Dated : 08th of Aug. 2017
MST. RAFIQA BEGUM VERSUS STTE OF J&K & ORS
ORDER SHEET
CORAM:
HON'BLE MR. JUSTICE RAMALINGAM SUDHAKAR- JUDGE
HON'BLE MR. JUSTICE M.K.HANJURA- JUDGE
i. Whether to be approved for
reporting in NET : Yes/No.
ii. Whether to be approved for
reporting in Digest/Journal : Yes/No
FOR THE APPLICANT/s : MS. ARIFA JAN
FOR THE RESPONDENT/s: MR. M.A.RATHORE, AAG & S.H.THAKUR
(PER HANJURA-J)
01/ The applicant - Mst. Rafiqa Bano has filed an application
seeking the indulgence of this Court in condoning the delay of
01 year & 146 days in filing the Appeal on the grounds, inter alia,
that the applicant -appellant came to know about the judgement dated
02nd of May, 2013 of this Court, passed in SWP 1026/2008, only
when she filed the second writ petition (OWP 605/2013). The
applicant-appellant proceeds to state that that she was unaware of the
legal procedure and technicalities, which resulted in delay to file the
appeal against the order aforementioned. It is further pleaded in the
application by the applicant that no sooner did she get the opinion
from her lawyer, she decided to file the appeal. However, the
applicant further states that because of the ailing health of her
daughter, she was not able to file the appeal in time. It is also pleaded
in the application that the delay in filing the appeal was neither
deliberate nor willful and if the delay is not condoned, the applicant
will suffer an irreparable loss. The application is buttressed with an
affidavit.
02/ Learned counsel for the respondents have vehemently
resisted the application of the Appellant, primarily on the ground that
although the applicant has stated that she sought the opinion of the
counsel for filing the appeal, yet there is nothing to state as to when
the applicant was advised to file the Appeal. The application being
cryptic and there being no ground, much less a sufficient one, for the
Condonation of Delay, the application is liable to be dismissed.
03/ Heard and considered.
04/ It cannot be disputed that the Law of Limitation has to be
applied with all its vigor and rigor as prescribed by the Statute. One
cannot escape the consequences of section 5 of the J&K Limitation
Act Samvat 1995, which provides that for the extension of the period
of limitation in a given case, the condition precedent is that the
applicant or the appellant has to satisfy the Court that he/she has
carved out a sufficient cause in seeking the indulgence of the Court
for not preferring the Appeal or Application within the stipulated
time. The applicant - appellant cannot escape the liability of
satisfying the Court that the Appeal was filed with due diligence. The
Courts cannot come to the aid and rescue of the applicant/s where the
application for condonation of delay does not spell out sufficient
cause and the approach of the applicant, in making such application, is
casual and cryptic.
05/ Testing the application of the Applicant on the touch stone of
the law, governing the subject, it will be profitable to quote
paragraphs 7&8 of the law laid down in 2010(4) JKJ 638 (HC),
herein below, in verbatim :
"7. In the case P.K. Ramachandran v. State of Kerala, reported in AIR
1998 SC 2276, the Apex Court, at paragraph 6 ruled as under:
"Law of limitation may harshly affect a particular party
but it has to be applied with all its rigor when the statute
so prescribe and the Courts have no power to extend the
period of limitation on equitable grounds. The discretion
exercised by the High Court was, thus, neither proper nor
judicious. The order condoning the delay cannot be
sustained. This appeal, therefore, succeeds and the
impugned order is set aside. Consequently, the
application for condonation of delay filed in the High
Court would stand rejected and the Miscellaneous First
Appeal shall stand dismissed as barred by time. No
costs."
8. In another case, the Hon'ble Supreme Court, while deliberating
upon the question of condonation of an inordinate delay of 264 days on
an application preferred by the Government, has observed as under:
"2. This special leave petition filed on November 16,
1993 is delayed by 264 days. For quite some time in the
past this Court has been making observations as to the
grave prejudice caused to public interest by appeals
brought on behalf of the Government being lost on the
point of limitation. Such observations have been made for
over a few years in the past. But there seems to be no
conspicuous improvement as is apparent in the present
petition which is filed in November 1993. The explanation
for the delay, had better bet set out in petitioner's own
words:
....................................................................................3. This explanation is incapable of furnishing a judicially
acceptable ground for condonation of delay. After the
earlier observations of this Court made in several cases
in the past, we hoped that the matters might improve.
There seems to be no visible support of this optimism.
There is a point beyond which even the courts cannot help
a litigant even if the litigant is Government which is itself
under the shackles of bureaucratic indifference. Having
regard to the law of limitation which binds everybody, we
cannot find any way of granting relief. It is true that
Government should not be treated as any other private
litigant, as indeed, in the case of the former the decisions
to present and prosecute appeals are not individual but
are institutional decisions necessarily bogged down by
the proverbial red-tape. But there are limits to this also.
Even with all this latitude, the explanation offered for the
delay in this case merely serves to aggravate the attitude
of indifference of the Revenue in protecting its common
Interests. The affidavit is again one of the stereotyped
affidavits making it susceptible to the criticism that the
Revenue does not seem to attach any importance to the
need for promptitude even where it affects its own
interest."06/ Applying the ratio of the law laid down above to the instant
case, there has been a reckless delay of 01 year and 146 days in filing
the LPA and no satisfactory explanation has come forward on that
count. No doubt, a liberal approach has to be adopted in the matter of
condonation of delay when there is no gross negligence or deliberate
inaction or lack of bona fides on the part of the applicant but in the
instant case the applicant - appellant took his own time to formulate
an opinion that the Appeal has to be filed. The law laid down in AIR
2011 SC 1237 enunciates this principle and it lays down as follows :"........3/ This appeal emanates from the judgement of the
Division Bench of the Guwahati High Court (High Court of
Assam, Nagaland, Meghalaya, Manipur, Tripura, Mizoram and
Arunachal Pradesh) in Misc. Case No. 1569 of 2007 in W.A.No.
72020 of 2006. The appeal filed by the Union of India was
dismissed by the High Court because of inordinate delay of 239
days. The Division Bench of the High Court, while dismissing the
appeal, has observed as under :"We have gone through the contents of the
petition. The delay occurred because of the respondents
took their own sweet time to reach the conclusion whether
the judgement should be appealed or not. It is not that
they were prevented by any reason which is beyond their
control to take such a decision in time. Even otherwise, on
merits of the case also it does not appear to have any
tenable ground of appeal. In the circumstances, we do
not see any merits in this petition."4/ We have also gone through the condonation of delay
application which was filed in the High Court. In our considered
view, the High Court was fully justified in dismissing the appeal
on the ground of delay because no sufficient cause was shown for
condoning the delay.....................6/ The Union of India ought to have been careful particularly in
filing this Civil Appeal because the Division Bench, by the
impugned order, has dismissed the appeal before it on the ground
of delay. It is a matter of deep anguish and distress that majority
of the matters filed by the Union of India are hopelessly barred
by limitation and no satisfactory explanations exist for condoning
inordinate delay in filing those cases."07/ Resort can also be had to an elaborate and a lucid judgement
of Hon'ble the Supreme Court, reported in (2013) 12 SCC 649, the
relevant excerpts of which are as under :"...........21.2. (ii) The terms "sufficient cause" should be understood in
their proper spirit, philosophy and purpose regard being had to the fact
that these terms are basically elastic and are to be applied in proper
perspective to the obtaining fact-situation.21.9. (ix) The conduct, behavior and attitude of a party relating
to its inaction or negligence are relevant factors to be taken into
consideration. It is so as the fundamental principle is that the
courts are required to weigh the scale of balance of justice in
respect of both parties and the said principle cannot be given a
total go by in the name of liberal approach.21.10. (x) If the explanation offered is concocted or the grounds
urged in the application are fanciful, the courts should be
vigilant not to expose the other side unnecessarily to face such a
litigation...................21.12. (xii) The entire gamut of facts are to be carefully
scrutinized and the approach should be based on the paradigm of
judicial discretion which is founded on objective reasoning and
not on individual perception.21.13. (xiii) The State or a public body or an entity representing
a collective cause should be given some acceptable latitude.
22.1 (a) An application for condonation of delay should be
drafted with careful concern and not in a haphazard manner
harboring the notion that the courts are required to condone
delay on the bedrock of the principle that adjudication of a lis on
merits is seminal to justice dispensation system.
....................31. Neither leisure nor pleasure has any room while one
moves an application seeking condonation of delay of almost
seven years on the ground of lack of knowledge or failure of
justice."08/ The applicant -appellant appears to have drafted the
application for condonation of delay recklessly without giving a
proper account of the dates and details of the grounds agitated in it.
Recourse has been had to the leisure and pleasure in moving the
application and to cap it all, the applicant has not knocked the doors of
the Court with clean hands. It is so because it has been pleaded in the
application for the condonation of delay that the applicant came to
know about the judgement of this Court only after filing the other
writ petition. This assertion is belied from a bare perusal of the
judgement dated 02nd of May, 2013 of this Court in which,
Mr. M.M.Dar, learned Advocate, is found to have appeared before the
Court to represent the applicant - petitioner therein. Therefore, fair
play has become a casualty at the hands of the applicant for the
simple reason that what has been pleaded, to form the bedrock and
baseline of the case, does not hold true.09/ To substantiate this contention further, a cue can be had from
the law laid down by the Division Bench of this Court in COD No.
237/2016 (LPA 06/2016), wherein it has been held as follows :"1. There is a delay of 310 days in filing the accompanying
appeal. The COD application which is under consideration is
vague and without any specific details explaining the day to day
delay in filing the appeal. The only explanation that has been
given is that after receipt of the judgement, the appellant
examined the judgement which took, "sometime" and thereafter,
the judgement was sent to the State Law & Parliamentary Affairs,
Ministry for further action. It is further stated that the Law &
Parliamentary Affairs, Ministry examined the judgement and
after examining the same, it was decided that an LPA should be
filed and this also took "considerable time" and ultimately
sanction for filing of the appeal was granted by the Law
Department.2. No reasons have been indicated as to why in the first instance
examination of the judgement took time and why in the second
instance, the Law Department took considerable time in deciding
to file an appeal.3. Sufficient cause for the delay clearly has not been shown by
the applicants/appellants. Consequently, the COD application is
dismissed. The accompanying appeal also stands dismissed."10/ Viewed in the context of what has been said and done above,
we are of the considered opinion that the applicant has failed to
explain the delay of 01 year & 146 days in filing the Appeal.
Consequently, the application for Condonation of Delay, in filing the
Appeal, is rejected, as a consequence of which, the Letters Patent
Appeal (LPA) shall stand dismissed as barred by time.(M.K. HANJURA) (RAMALINGAM SUDHAKAR)
JUDGE JUDGE
Tariq MOTA
SRINAGAR.
08 -08-2017 |
699b8487-bedf-586c-b3bc-3ae85f395537 | court_cases | State Consumer Disputes Redressal CommissionNarinder Singla vs Municipal Corporation Chandigarh on 1 September, 2011BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U
STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T.,
CHANDIGARH
First Appeal
No
:
69 of 2011
Date of Institution
:
08.04.2011
Date of Decision
:
01.09.2011
Narinder Singla, son of Shri Manoj
Kumar Plot No.402, Industrial Area,
Phase II, Chandigarh.
.Appellant/Complainant
V E R S U
S
1.
Municipal Corporation Chandigarh, through its Superintendent/Sub Divisional
Engineer, M.C. Public Health, Water Works, Sub Division No.5, Sector 32, Chandigarh.
2.
Ravi Palta, son of Shri Ramesh
Chand Palta, presently resident of Ashok Park Extension, New Delhi 110026.
..Respondents/Opposite Parties
Appeal underSection 15of the
Consumer Protection Act, 1986.
BEFORE: MR. JUSTICE SHAM SUNDER, PRESIDENT.
MRS. NEENA SANDHU, MEMBER.Argued
by: Sh.Vikas Sagar, Advocate for the appellant.Sh.Vinay Gupta,
Advocate for respondent No.1.Respondent No.2 (Service dispensed with, vide order
dated 26.05.2010).PER JUSTICE SHAM SUNDER, PRESIDENT1.
This appeal is directed against the order dated 10.03.2011,
rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh
(hereinafter to be called as the District Forum only) vide which it accepted
the complaint, and directed the OPs as under:-i.The complainant shall pay the said amount of Rs.1,51,800/- to OP-1
within 15 days. After receiving the payment from the complainant, the OP-1
shall resume the water connection in the said premises.ii.OP-2 shall pay to the complainant Rs.1,51,800/- alongwith interest @8%
p.a. since 13.02.2009 (the date when the first complainant regarding the theft
of water was reported to SDO, Chandigarh vide Annexure C-2) and Rs.5,000/- each
as litigation costs to the complainant as well as OP-1 within 15 days from the
date when the said payment is made by the complainant to OP-1.iii.The order shall be fully complied with by the complainant and OP-2 in
the aforesaid period failing which:-a.Complainant would be liable to pay the aforesaid amount of Rs.1,51,800/-
to OP-1 alongwith penal interest @18% p.a. since the filing of the present
complainant i.e. 06.05.2010 till the payment is actually made.b.OP-2 would be liable to pay the aforesaid amount of Rs.1,51,800/- to the
complainant alongwith penal interest @18% p.a. since 13.02.2009 (the date when
the first complainant regarding the theft of water was reported to SDO,
Chandigarh vide Annexure C-2) till the payment is actually made besides payment
of litigation costs of Rs.5,000/- each to complainant as well as OP-12.
The facts, in brief, are that, the complainant, claimed
himself, as landlord and owner of Plot No.402, Industrial Area, Phase II, Chandigarh. OP-2, was the
tenant of the complainant, in the front portion of the premises, in question.
OP-2, was illegally having water connection direct from the Public Health Line.
On coming to know of this factum, the complainant immediately informed OP-1 on
2.2.2009, regarding the theft of water by OP-2, from the Public Health Line. On
the complaint, made by the complainant, OP-1 immediately made an enquiry and
found that OP-2, was having illegal water connection, from the Public Health
Line and using the water for his business of filling of water
dispensers/campers. Accordingly, the illegal water connection, wherefrom the
OP-2, was taking water for his business, was disconnected. On 13.2.2009, the
complainant, received a water bill dated 11.2.2009, for Rs.1,38,000/-, on
account of penal rent for the illegal water connection, without going into the
question, that the said illegal water connection was taken by OP-2, and not by
the complainant, for his business. It was stated that despite filing complaint dated
18.2.2009, with the SSP, and also with OP-1, no action was taken against OP-2. It
was further stated that, on the other hand, the legal water supply connection of
the premises of the complainant, was disconnected. It was further stated that
the aforesaid acts of the OPs, amounted to deficiency, in service, and
indulgence into unfair trade practice. A legal notice was sent to OP-1 on
10.11.2009, but to no avail. When the grievance of the complainant, was not
redressed, left with no alternative, a complaint underSection 12of the
Consumer Protection Act, 1986 (hereinafter to be called as the Act only) was
filed.3.
OP-1 in its written reply, admitted that OP-2 had
taken illegal water connection from the main Public Health Line. It was stated
that OP-1 was not concerned, whether the complainant or owner, or occupier made
payment towards the water charges. It
was further stated that OP-1, had the legal right to recover the outstanding
charges, as per the provisions of law. It
was further stated that the water connection, which the complainant, had taken
in the aforesaid premises, legally, was disconnected, as he did not make
payment, despite repeated requests by OP-1, and an amount of Rs.1,51,800/- was
still due and outstanding towards the previous arrears of water charges. It was
further stated that, under these circumstances, OP-1, was neither deficient, in
rendering service, nor indulged into unfair trade practice. The remaining allegations,
were denied, being wrong.4.
None appeared, on behalf of OP-2, despite due
service. Accordingly, OP-2, was proceeded against ex-parte.5.
The parties led evidence, in support of their case.6.
After hearing the Counsel for the parties, as well
as, on going through the evidence, and record, the District Forum, accepted the
complaint, in the manner, referred to above, in the opening para., of this
order.7.
Feeling aggrieved, the instant appeal was filed, by
the appellant/complainant.8.
Service of the OP-2, was dispensed with, vide order
dated 26.05.2010, as he was ex-parte in the District Forum.9.
We have heard the Counsel for the parties, and have
gone through the evidence and record of the case, very carefully.10.
The Counsel for the appellant/complainant,
submitted that he was not taking the water illegally, from the Public Health
Line. He further submitted that the complainant, was having a legal water
connection, in his premises, and was taking water therefrom. He further
submitted that, it was OP-2/respondent no.2, his tenant, who was having illegal
water connection, from the Public Health Line, and was taking the water for the
purpose of running his business. He further submitted that the complainant,
made a complaint, against OP-2, when he came to know of his illegal acts. He
further submitted that it was, on the basis of the complaint, made by the
complainant, that the illegal connection, which OP-2 had taken from the Public
Health Line, for using the water for his business, was disconnected. He further
submitted that, under these circumstances, the demand raised by OP-1, against
the legal water connection of the complainant, in his premises and
disconnection of the said connection, on non-payment of that amount, was
illegal. He further submitted that for the fault of OP-2, the complainant could
not be blamed, nor the liability of OP-2, could be fastened by OP-1, on the
complainant, when he was not concerned with the illegal connection, taken by
the latter. He further submitted that the order, of the District Forum, directing
the complainant to pay Rs.1,51,800/- to OP-1,within 15 days, from the date of
receipt of the impugned order, and on payment of the same, resumption of water
connection, at his premises, was illegal. He further submitted the order of the
District Forum, against the complainant/appellant, being illegal, is liable to
be set aside.11.
On the other hand, the Counsel for the respondent
No.1/ OP No.1 submitted that, it was within its right to recover the amount of
water charges, alongwith penalty from the complainant, who was the landlord/owner
of the premises, though he had legal water connection, as per the provisions of
bye-laws. He further submitted that the District Forum, was right in directing
the complainant, to deposit Rs.1,51,800/-. He further submitted that the
District Forum, was also right in holding that after receiving that amount,
from the complainant, OP-1, shall resume the water connection, in the said premises.
He further submitted that the order of the District Forum being, legal and
valid, deserves to be upheld.12.
After giving our thoughtful consideration, to the
rival contentions, advanced by the Counsel for the parties, in our considered
opinion, the appeal is liable to be accepted and the order of the District
Forum, deserves to be modified, for the reasons to be recorded hereinafter. At
the time of arguments, the Counsel for OP-1/respondent no.1, produced a copy of
the amended Bye-Laws, governing the subject matter, issued by the Chandigarh
Administration, Local Government Department. Clause vii of Bye-Laws defines consumer.
According to this Clause, consumer means any corporate body, person or persons,
supplied or applying to be supplied with or using water from the water supply Works
or any person or persons otherwise, liable for the payment of water charges.
From this Clause, it is evident that any person using water from the water supply
works of the Municipal Corporation, falls within the definition of consumer.
OP-2/respondent no.2, was a tenant, at the relevant time, in the premises,
being owned by the complainant. The complainant was admittedly having legal
water connection, in his premises. It was not the complainant, who was found
committing theft of water or tampering with the legal water connection,
installed in his premises. It was not the complainant, who was having illegal
water connection for taking water, from the main Public Health Line. On the
other hand, it was OP-2/respondent no.2, who was having illegal connection,
from the main line of Public Health for extracting water for using the same,
for his business, referred to above. It was the complainant, who made the
complaint against OP-2, when he came to know of his illegal acts. Since OP-2,
had taken illegal water connection from the main pipe line of the Public Health
and was getting water therefrom, for his
business, he fell within the definition of consumer and could be fastened with
the liability. The liability to pay the amount of Rs.1,51,800/-, calculated, as
per the Bye-Laws aforesaid, could only be fastened upon OP-2 and not upon the
complainant. The findings of the District Forum, that, since the complainant,
was the owner of the premises and OP-2 was a tenant, therein, he(complainant)
was equally responsible for the act and conduct of the OP-2, being illegal, are
reversed.13.
The legally installed water connection of the
complainant, in the premises, in question, which was not being tampered with
nor being illegally used by him or by OP-2, could not be illegally
disconnected, for the fault of OP-2, who was having illegal connection, from
the main pipe line of Public Health. OP-1 was, however, entitled to recover the
amount of penalty, referred to above, from OP-2, and not from the complainant.
The disconnection of water connection, in the premises of the complainant, when he
was not at fault, was completely illegal. The findings of the District Forum, to
the effect, that the water connection of the complainant, in his premises, was
rightly disconnected, being perverse are reversed.14.
OP-2, as stated above was, however, liable to pay
the amount of penalty, as it was he, who was at fault by taking illegal
connection, from the main pipeline of Public Health. The District Forum,
instead of fastening the liability solely on OP-2, unnecessarily and without
any legal basis, made the complainant, also responsible for no fault of his.15.
For the reasons recorded above, the appeal, filed
by the complainant/appellant is accepted, with no order as to costs and the
impugned order is modified in the following manner:-(a) The order of the District Forum, directing the
complainant, to pay the amount of Rs.1,51,800/- to OP-1, within 15 days, and after
the receipt of the same, from
him(complainant), directing OP-1, to resume the water connection in the said
premises being illegal is set aside.(b) OP-1, is directed to reconnect the water connection, which
was legally installed in the premises of the complainant, within 10 days, on receipt
of a copy of the order, without charging Rs.1,51,800/-, or any other amount,
not legally due, against the said connection.(c) OP-2/respondent no.2,
shall pay to OP-1, Rs.1,51,800/-, alongwith interest @8% per annum, from
13.02.2009 (the date when the first complainant regarding the theft of water
was made to the SDO, Chandigarh
vide Annexure C-2, by the complainant), alongwith litigation costs of
Rs.5,000/-, within 30 days from the date of receipt of a copy of this order.(d) Incase, OP-2, fails
to pay the amount aforesaid, within the stipulated period, alongwith interest,
he shall be liable to pay the same, alongwith penal interest @12% per annum,
from 13.02.2009 (the date when the first complainant regarding the theft of
water was made to the SDO, Chandigarh, vide Annexure C-2, by the complainant),
till realization, besides payment of litigation costs of Rs.5,000/-, awarded by
the District Forum, to OP-1/respondent no.1.(e) Any other direction
to and against the complainant, given by the District Forum, in the impugned
order, shall also stand set aside.16. Copies
of this order be sent to the parties free of charge.Pronounced.September 1st, 2011
Sd/-[JUSTICE
SHAM SUNDER]
PRESIDENT
Sd/-[NEENA
SANDHU]
MEMBER
Rg |
921628d1-b7af-5877-9a58-07af6ff33e6e | court_cases | Supreme Court - Daily OrdersSurender Mehta vs H.P.State Electricity Board Ltd. . on 21 February, 2014¨
ITEM NO.27 COURT NO.10 SECTION XIV
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Civil) No(s).3777/2014
(From the judgement and order dated 03/01/2014 in CWP No.38/2014 of The
HIGH COURT OF H.P AT SHIMLA)
SURENDER MEHTA & ANR. Petitioner(s)
VERSUS
H.P.STATE ELECTRICITY BOARD LTD. & ORS. Respondent(s)
(With appln(s) for exemption from filing c/c of the impugned Judgment and
prayer for interim relief and office report ))
Date: 21/02/2014 This Petition was called on for hearing today.
CORAM :
HON’BLE MRS. JUSTICE GYAN SUDHA MISRA
HON’BLE MR. JUSTICE V. GOPALA GOWDA
For Petitioner(s) Mr. A. Tewari, Adv.
For Mr. Shree Pal Singh,Adv.
For Respondent(s)
UPON hearing counsel the Court made the following
O R D E RThe special leave petition is dismissed.
However, we leave it open to the petitioners to request the
respondent-Authority to consider his representation and it is for
the Authority to consider whether the petitioners can be
accommodated on equitable ground in case they have surplus
accommodation.The special leave petition is disposed of with the
aforesaid observation.|(Neetu Khajuria) |(S.S.R. Krishna)
|
|Sr.P.A. |Court Master | |
92922b88-5aae-55d9-83cf-47e270e447ec | court_cases | Income Tax Appellate Tribunal - MumbaiPranlal P Damani , Mumbai vs Department Of Income Tax on 26 April, 2011IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, MUMBAI
BEFORE SHRI, J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND
SMT. ASHA VIJAYRAGHAVAN, JUDICIAL MEMBER
ITA no.3747/Mum./2010
(Assessment Year : 2004-05)
Date of Hearing: 26.4.2011
Income Tax Officer, Ward-16(1)(2)
Matru Mandir, Mumbai - 400 007 ....................... Appellant
v/s
Mr. Pranlal P. Damani
44, Vijay Chambers
Tribhuvandas Road
Mumbai 400 004
PAN - AABPD7637F ................... Respondent
Revenue by : Mr. Surendra Kumar
Assessee by : Mr. M. Subramanian
ORDER
PER J. SUDHAKAR REDDY, A.M.This appeal filed by the Revenue, is directed against the impugned
order dated 19th February 2010, passed by the Commissioner (Appeals)-
XXVII, Mumbai, for assessment year 2004-05.2. The assessee filed an application under Rule-27 of Income Tax
(Appellate Tribunal) Rules, 1963, and consequently, the validity of re-
assessment proceedings.3. Learned Departmental Representative objected the same.4. On careful consideration of rival contentions, we find that the
Commissioner (Appeals) has decided this issue against the assessee and the
2 Mr. Pranlal P. Damani
ITA no.3747/Mum./2010
assessee seeks to support the order of the first appellate authority on the
ground which has been decided against him. This is permissible and,
consequently, we allow the assessee to raise this issue by invoking Rule 27
of Income Tax (Appellate Tribunal) Rules, 1963. Now, we proceed to decide
this appeal on merit.5. Brief facts of the case are like this. The assessee is an individual and
has filed his return of income declaring incomes under the heads "long term
capital gains", "short term capital gains" and under the head "income from
other sources". He also claimed exemption undersection 54Fof the Income
Tax Act, 1961 (for short "the Act") for long term capital gains arose due to
purchase of 16,000 equity shares of Betala Global Securities Ltd., a Madras
based company, details which are given in the assessment order. The
Assessing Officer, for the various reasons given in his order, has doubted the
date of purchase of these shares. It should be noted that the factum that the
assessee has sold the shares and the date of sale and the amount received
towards sale proceeds is not disputed. The Assessing Officer recorded
various reasons for disbelieving the claim of the assessee that it has
purchased the shares on 8th 9th and 10th July 2002. Main reason are that, the
assessee has failed to produce the requisite evidence and that the assessee's
investments were multiplied by 22 times within a span of 1½ years and the
test of human probability has to be applied. He disbelieve the claim for long
term capital gains and assessed this income under the head "income from
other sources" and refused the claim for deduction undersection 54F.6. On appeal, the first appellate authority relied upon the decision of
Mumbai Bench of this Tribunal in Mukesh R. Marolia v/s ACIT, decided in ITA
no.1201/ Mum/2005, vide order dated 15th December 2005, and granted
relief. Aggrieved, the Revenue is in appeal raising following grounds of
appeal:-"1. The Commissioner (Appeals) erred in treating the income arising
from long term capital gain on purchase / sale of shares amounting to
` 16,63,200 as genuine and directing the Assessing Officer to give the
deduction undersection 54of the Act.3 Mr. Pranlal P. Damani
ITA no.3747/Mum./20102. The Commissioner (Appeals) erred in following the decision of
Mumbai Tribunal in the case of Mukesh R. Marolia v/s ACIT, wherein it
is held that all documentary evidences are available of purchase / sale
of shares transaction is treated as genuine whereas in this case the
assessee has manipulated the transactions of shares to purchase a
flat."7. Learned Departmental Representative, Mr. Surendra Kumar, took this
Bench to the order of the Assessing Officer and contends that the assessee
has claimed that physically share certificates have been delivered by M/s.
Betala Global Securities Ltd., in the name of assessee, vide their letter dated
4th October 2002, and that these certificates were not printed certificates but
were only hand written. The original certificates were in the name of one Ms.
Minakshi Jain, and were issued on 17th February 1996. He pointed out that
Betala Global Securities Ltd., is not listed on the Exchange and, hence, no
details are available with both the Exchanges. He relied on the test of human
probabilities and submitted that the entire transactions pointed out to
manipulation made by the assessee to the share brokers. He relied on the
order of the Assessing Officer and submitted that the Commissioner
(Appeals) committed a mistake by relying on the decision of Mumbai Bench
of this Tribunal in Mukesh R. Marolia (supra).8. Learned Counsel for the assessee, Mr. M. Subramanian, on the other
hand, on merits, relied on the order of passed by the Commissioner
(Appeals). On the issue of re-opening, the learned Counsel preferred to the
reasons recorded for re-opening and submitted that there is no observations
that the Assessing Officer has reason to belief that income escaped
assessment. He pointed out that a perusal of the reasons for re-opening
show that it was done to scrutinize the long term capital gain transactions in
the hands of the assessee. For the proposition that only the reasons as
recorded by the Assessing Officer has to be looked into and that there should
be a positive recording that the Assessing Officer has reason to believe that
any income chargeable to tax has escaped assessment. In support of his
arguments, he relied on the following judicial pronouncements:-4 Mr. Pranlal P. Damani
ITA no.3747/Mum./2010
♦Prashant S. Doshi v/s ITO & Anr., (2010) 324 ITR 154 (Bom.); and
♦ German Remedies Ltd. v/s DCIT & Ors., (2006) 285 ITR 026 (Bom.)9. Learned Departmental Representative opposed the contentions of the
learned Counsel and submitted the entire exercise of re-opening was done
because the Assessing Officer was of the opinion that income chargeable to
tax has escaped assessment because of manipulation.10. Rival contentions were heard. On careful consideration of the facts and
circumstances of the case and on perusal of the papers on record, orders of
the authorities below as well as the case laws cited before us, we hold as
follows.On the issue of reopening, reasons recorded are extracted below:-"During the course of survey action, it was revealed that the assessee
has declared long term capital gain on sale of shares and claimed
exemption undersection 34Fof the Act, for acquisition of flat in lieu of
5long term capital gain. It is also seen that the assessee's investments
were multiplied by 22 times within a span of 1½ years. Hence, the
transactions of long term capital gain required to be scrutinized in the
hands of the assessee."Though the intention of the Assessing Officer might have been that he
had a reason to belief that income chargeable to tax has escaped
assessment, the same has not manifested itself in the reasons of re-
opening. The first part of the reasons are only factual recording that there
was a survey and it was found that the assessee had declared long term
capital gain and claimed exemption undersection 54F. The second factual
recording is that the assessee's investments have multiplied by 22 times
within a span of 1½ years. Thereafter, only recording is that the long term
capital gains are required to be scrutinised in the hands of the assessee. For
scrutiny, notice undersection 143(2)of the Act would suffice. The
assessment cannot be re-opened for scrutining the same. There should be
positive indication in the reasons recorded that the Assessing Officer had
reason to believe that income chargeable to tax has escaped assessment. In
5 Mr. Pranlal P. Damani
ITA no.3747/Mum./2010
this case, no such recording is there. This ground is, thus, decided in favour
of the assessee and the order of the Commissioner (Appeals) is hereby
upheld on this ground.11. Since we have decided the issue of re-opening in favour of the
assessee, the other issues raised by the Revenue become academic in
nature, which need no separate adjudication by us.12. In the result, Revenue's appeal is dismissed.Order pronounced in the open Court on 28.4.2011
Sd/- Sd/-
ASHA VIJAYRAGHAVAN J. SUDHAKAR REDDY
JUDICIAL MEMBER ACCOUNTANT MEMBER
MUMBAI, DATED: 28.4.2011
Copy to:
(1) The Assessee
(2) The Respondent
(3) The CIT(A), Mumbai, concerned
(4) The CIT, Mumbai City concerned
(5) The DR, "C" Bench, ITAT, Mumbai
TRUE COPY
BY ORDER
Pradeep J . Chowdhu ry ASSISTANT REGISTRAR
Sr. Private Secretary ITAT, MUMBAI BENCHES, MUMBAI |
30cf1d0f-a258-5a7b-8d37-e93f457ab6b7 | court_cases | Gujarat High CourtSabarkantha Dist.Co.Operative Castor ... vs Uttar Gujarat Vij Co.Ltd. Thro. Chief ... on 9 February, 2007Author:D.N.PatelBench:Dn PatelSCA/3697/2007 1/1 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 3697 of 2007
=========================================================
SABARKANTHA DIST.CO.OPERATIVE CASTOR OIL SEED GROWERS & 1
- Petitioner(s)
Versus
UTTAR GUJARAT VIJ CO.LTD. THRO. CHIEF ENGINEER & 2 -
Respondent(s)
=========================================================
Appearance :
MR BS PATEL : MRS RANJAN B PATEL for the Petitioners.
None for Respondent(s) : 1 - 3.
=========================================================
CORAM : HONOURABLE MR.JUSTICE DN PATEL
Date : 09/02/2007
ORAL ORDERNotice returnable on 2nd March,2007. Direct
service permitted.(D.N.PATEL,J)
*dipti |
c745c7bd-8a1b-5f64-94a5-b945c8007f95 | court_cases | Rajasthan High CourtShri Om Prakash Chauhan vs State Of Raj & Ors on 5 March, 2010Author:Ajay RastogiBench:Ajay RastogiIn the High Court of Judicature for Rajasthan
Jaipur Bench
**
Civil Writ Petition No.3277/2010
Om Prakash Chauhan Versus State & Ors.
Date of Order ::: 05/03/10
Hon'ble Mr. Justice Ajay Rastogi
Mr. Subhash Bisawa Dadhich, for petitionerCounsel submits that controversy raised herein has been decided by DB decision of this Court at principal seat Jodhpur in Special Appeal (Writ) 208/06 & bunch of others (State of Rajasthan Vs. Ramniwas Porwal) on 13/12/07 (Per Hon. Mr. Rajesh Balia, J.) (2008(2) WLC 406) clarifying the position ad infra:However, it may be clarified that because of the provisions made in Note 8 read with Note appended to Rule 6 a Senior Teacher drawing pay in second selection grade of 6500-10500 prior to 1.7.1998 and promoted as Senior Teacher but after 1.7.1989 who has not completed 10 years as Senior Teacher at the time of commencement of the Act his pay in pay-scale of 6500-10500 was protected as personal to him, though he would become eligible to such scale under the new rules of 1998 only on completion of 10 years. In this view of the matter, the rights of the respondents even under the aforesaid provision remain intact and unaffected and it could not have any adverse effect on them.But those who have been promoted as Senior Teachers drawing their pay in Second Selection Grade of 6500-10500 will not be eligible for this pay protection because even under the Rules of 1998 as initially exist, they were to be promoted to Senior Scale, which was Rs.5500-9000 only. But because of lacuna in the Rules originally enacted, not 26 providing any specific provision, their fixation has been wrongly made by considering all Senior Teachers to be of the same category. The initial fixation in higher pay-scale being without any mistake on their part, until Notification of amendment, the resultant recoveries of excess amount paid to them has been waived.But after correction of this lacuna on amendment of Note 8, no such protection has been granted under the Rules. If any such recovery has become due on account of continued drawing of pay by such Senior Teachers promoted after 1.7.1998, due to no mistake or misrepresentation on the part of such incumbents, they may make appropriate representation to the Government to consider their cases against recovery.Accordingly, with the aforesaid clarification the appeals are allowed. The judgment under appeal declaring Notification dated 8.6.2001 to be ultra vires is set-aside. However, the view which we have taken on interpretation of the Rules, the existing teachers who have been promoted as Senior Teacher in the Second Selection Grade prior to commencement of the Rules at any time but because of non-completion of 10 years of service as Senior Teacher under the revised rules were required to be fixed in lower pay-scale, their continuance in the higher pay-scale was protected as pay-scale personal to them under Note to Rule 6. The rights of all the appellants stand protected to this extent. In that light, the writ petitions filed by the appellants stand allowed to that extent.A bunch of 62 Special Appeals (Writ) (No. 936/05 State of Rajasthan Vs. Shyam Swaroop Upadhayaya) came up for consideration before Division Bench at Jaipur Bench that too vide judgment dt.04/04/08 (per Hon.Mr.R.M.Lodha, J.)were disposed of in the light of judgment inState of Rajasthan Vs. Ramniwas Porwal(2008(2) WLC 406) ad infra:The existing teachers who have been promoted as Senior Teacher in the second selection grade prior to commencement of the Rules at any time but because of non-completion of 10 years of service as Senior Teacher under the revised Pay rules are required to be fixed in lower pay scale. Their continuance in higher pay scale protected as pay scale personal to them under Note to Rule 6 would remain to that extent.Consequently, writ petition is hereby disposed of with the direction to the petitioner to make fresh representation within one month and if made, respondent-authority is directed to pass appropriate orders in terms of DB decision inState of Rajasthan Vs. Ramniwas Porwal(supra) and communicate the decision within three months to petitioner who if feels aggrieved, will be free to avail of remedy under law.(Ajay Rastogi), J.K.Khatri/p.3/
3277CW2010Mar5SlsclRp.do |
c01fa6ed-66fe-53d1-becf-7e9c3a93b678 | court_cases | Customs, Excise and Gold Tribunal - DelhiMarkfed Vanaspati And Allied ... vs Commissioner Of C. Ex. on 25 February, 2000Equivalent citations: 2002(146)ELT474(TRI-DEL)ORDER
G.A. Brahma Deva, Member (J)1. These are four appeals. Appeal Nos. E/32/90-C and E/299/90-C are filed by the parties and remaining two appeals are filed by the department involving common issue and, accordingly, they are taken together and are being disposed of by this common order.2. These matters have come on board on several times awaiting decision of the Larger Bench on the issue involved herein.3. The point to be considered in these appeals is as to whether spent earth is liable to excise duty or not. It was brought to our notice that decision of the Larger Bench is out as per Order Nos. 102-105/99-C, dated 12-11-1999 in the case of M/s. Markfed Vanaspati & Allied Industries and Ors., reported in 2000 (36) RLT 170. In that case, it was clearly held that spent earth is not liable to excise duty. Further it was observed that appeals involving question of excisability of spent earth shall now be posted by the Registry before the concerned Bench for final disposal.4. Shri K. Srivastava appearing for the Revenue submitted that he has raised some basic points during the course of hearing the matter before the Larger Bench but the same has not been considered as can be seen from the order passed by the Larger Bench and requires to be reconsidered. The plea taken by the D.R. cannot be looked into by the Bench at this stage since Division Bench is not empowered to review the order of the Larger Bench and on the other hand, we are bound by the decision of the Larger Bench, as per judicial discipline.5. Since the issue involved herein has already been considered and concluded by the Larger Bench, following the same, we hold that 'spent earth' is not excisable being not manufactured product. Accordingly, these appeals are disposed of in the above terms. |
611164e3-50ac-5f5c-a8bf-241e4d42e709 | court_cases | Chattisgarh High CourtJhadu Das vs State Of Chhattisgarh on 22 March, 2017Page No.1
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
M.CR.C. No. 1543 of 2017
Jhadu Das, S/o. Baldev Das Manikpuri, Aged About 40 Years, R/o Village
Umargaon, Police Station -Sihava, District- Dhamtari, Chhattisgarh.
----Applicant
Versus
State Of Chhattisgarh, Through : Station House Officer, Police Of Police
Station -Sihava, District -Dhamtari, Chhattisgarh.
---- RespondentFor Applicant : Mr. Anil Gulati, Advocate
For Respondent/State : Mr. Neeraj Mehta, Panel Lawyer
Hon'ble Shri Justice Goutam Bhaduri
Order On Board
22/03/20171. This is the first bail application filed underSection 439of the Code of
Criminal Procedure, 1973 for grant of regular bail to the applicant who
has been arrested in connection with Crime No.109/2016, registered at
Police Station - Sihava, District - Dhamtari (C.G.) for the offence
punishable underSection 379of the Indian Penal Code and 4 (21) of
Mining Act.2. As per the prosecution case, on 18.11.2016 on information received
that the applicant is in possession of stolen diamonds on a raid being
made, 19 pieces of diamonds worth Rs.1.00 Lakh was recovered for
which he was not able to produce any documents. Thereby the offence
has been committed.3. Learned counsel for the applicant would submit that only on the
apprehension, the applicant has been arrested, no evidence is on
record that he has stolen the goods and no one has made report. It is
further submitted that charge-sheet in this case has been filed and the
seizure has already been made and the applicant is in jail sincePage No.218.11.2016, therefore, the applicant may be enlarged on bail.4. On the other hand, learned counsel for the State opposes the bail
application.5. I have heard learned counsel appearing for the parties.6. Perused the case diary and the documents. Considering the facts and
circumstances of the case, the nature of allegation, charge-sheet in
this case has been filed and the applicant is in jail since 18.11.2016
and no further investigation is necessary, this Court is of the opinion
that present is a fit case, in which, the applicant should be enlarged on
regular bail.7. Accordingly, the bail application filed under Section 439 of the Cr.P.C.is allowed.8. It is directed that applicant shall be released on bail on his furnishing a
personal bond in the sum of Rs.25,000/- with one surety in the like
sum to the satisfaction of the concerned trial Court, for his appearance
as and when directed.Certified copy as per rules.Sd/-(Goutam Bhaduri)
Judge
Balram |
16792535-aa06-5bb5-99dc-77fcccc75368 | court_cases | Punjab-Haryana High CourtSatish Kumar And Others vs State Of Punjab And Others on 19 July, 2013Author:Mehinder Singh SullarBench:Mehinder Singh SullarCRM No.M-18316 of 2013 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CRM No.M-18316 of 2013
Date of Decision:19.07.2013
Satish Kumar and others .....Petitioners
Versus
State of Punjab and others .....Respondents
CORAM: HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR.
Present: Mr.J.S.Toor, Advocate, for the petitioners.
Mr.Jaspreet Singh, Assistant Advocate General,
Punjab, for respondent No.1-State.
Mr.Neeraj Sharma, Advocate,
for respondent Nos.2 and 3.
****MEHINDER SINGH SULLAR , J.(oral)
The matrix of the facts and material, culminating in the
commencement, relevant for disposal of the instant petition and
emanating from the record is that, initially in the wake of complaint of
complainant-Tara Sidhu son of Jagat Ram, respondent No.3 (for brevity
"the complainant"), a criminal case was registered against the petitioners-
accused Satish Kumar son of Bishan Dass and others, vide FIR No.162
dated 25.07.2012(Annexure P-1), on accusation of having committed the
offences punishable underSections 406,498-A,294and506IPC, by the
police of Police Station Salem Tabri, District Ludhiana.2. During the course of investigation of the criminal case, good
sense prevailed and the parties have amicably settled their disputes, by
way of compromise-deed dated 11.04.2013(Annexure P-2).3. Having compromised the matter, now the petitioners-Rani Seema S2013.07.25 14:14I attest to the accuracy andintegrity of this documentHigh Court ChandigarhCRM No.M-18316 of 2013 2accused have directed the present petition, to quash the impugned FIR
(Annexure P-1) and all other subsequent proceedings arising therefrom,
invoking the provisions ofSection 482Cr.P.C., inter alia, pleading that
now with the intervention of respectables and elders, they have amicably
settled all their disputes. They have mutually resolved to live as a
husband and wife and to take care of the matrimonial home. The
settlement is stated to be valid and genuine and in the larger interest of
the parties. The complainant and his daughter-Manudeep(respondent
No.2) have no objection, if the present criminal case registered against
the petitioners-accused, by means of impugned FIR(Annexure P-1) is
quashed. On the strength of aforesaid grounds, the petitioners-accused
sought to quash the impugned FIR(Annexure P-1) and all other
subsequent proceedings arising therefrom, in the manner described
hereinabove.4. During the course of preliminary hearing, the Magistrate
was directed to record the statements of all the concerned parties, with
regard to the genuineness and validity or otherwise of the compromise-
Deed(Annexure P-2) between them by this Court, vide order dated May
31, 2013.5. In compliance thereof, having recorded the statements of all
the concerned parties, the Magistrate has concluded vide his report dated
16.07.2013 that the compromise arrived at between the parties is genuine
& valid and statements of both the parties are not the result of any kind of
pressure or coercion in any manner. They(petitioner No.1 and respondent
No.2) have decided to reside as a husband and wife in the matrimonialRani Seema S2013.07.25 14:14I attest to the accuracy andintegrity of this documentHigh Court ChandigarhCRM No.M-18316 of 2013 3home. The complainant and respondent No.2 have no objection, if the
present criminal case registered against the petitioners-accused is
quashed.6. Meaning thereby, it stands proved on record that the parties
have amicably settled their disputes, by virtue of compromise-deed dated
11.04.2013(Annexure P-2). The factum of compromise is also reiterated
in the report of the Magistrate.7. What cannot possibly be disputed here is that, the law with
regard to the settlement of criminal disputes by virtue of amicable
settlement between the parties is no more res integra and is now well-
settled.8. An identical question (recently) came to be decided by the
Hon'ble Apex Court in case Gian Singh Versus State of Punjab and
another, 2012(4) RCR(Criminal) 543. Having interpreted the relevant
provisions and considered a line of the judgments on the indicated points,
it was ruled (para 57) as under:-"57. The position that emerges from the above discussion can be
summarised thus: the power of the High Court in quashing a criminal
proceeding or FIR or complaint in exercise of its inherent jurisdiction is
distinct and different from the power given to a criminal court for
compounding the offences underSection 320of the Code. Inherent power
is of wide plenitude with no statutory limitation but it has to be exercised in
accord with the guideline engrafted in such power viz; (i) to secure the ends
of justice or (ii) to prevent abuse of the process of any Court. In what cases
power to quash the criminal proceeding or complaint or F.I.R. may be
exercised where the offender and victim have settled their dispute would
depend on the facts and circumstances of each case and no category can be
prescribed. However, before exercise of such power, the High Court must
have due regard to the nature and gravity of the crime. Heinous and
serious offences of mental depravity or offences like murder, rape, dacoity,
etc. cannot be fittingly quashed even though the victim or victim's family
and the offender have settled the dispute. Such offences are not private in
nature and have serious impact on society. Similarly, any compromise
between the victim and offender in relation to the offences under special
statutes likePrevention of Corruption Actor the offences committed by
public servants while working in that capacity etc., cannot provide for any
basis for quashing criminal proceedings involving such offences. But theRani Seema S2013.07.25 14:14I attest to the accuracy andintegrity of this documentHigh Court ChandigarhCRM No.M-18316 of 2013 4criminal cases having overwhelmingly and pre-dominatingly civil flavour
stand on different footing for the purposes of quashing, particularly the
offences arising from commercial, financial, mercantile, civil, partnership
or such like transactions or the offences arising out of matrimony relating
to dowry etc. or the family disputes where the wrong is basically private or
personnel in nature and the parties have resolved their entire dispute. In
this category of cases, High Court may quash criminal proceedings if in its
view, because of the compromise between the offender and victim, the
possibility of conviction is remote and bleak and continuation of criminal
case would put accused to great oppression and prejudice and extreme
injustice would be caused to him by not quashing the criminal case despite
full and complete settlement and compromise with the victim. In other
words, the High Court must consider whether it would be unfair or
contrary to the interest of justice to continue with the criminal proceeding
or continuation of the criminal proceeding would tantamount to abuse of
process of law despite settlement and compromise between the victim and
wrongdoer and whether to secure the ends of justice, it is appropriate that
criminal case is put to an end and if the answer to the above question(s) is
in affirmative, the High Court shall be well within its jurisdiction to quash
the criminal proceeding."9. Such, thus, being the legal position and the material on
record, now the short and significant question, though important, that
arises for determination in this petition is, as to whether the present
criminal prosecution against the petitioners deserves to be quashed in
view of the compromise or not?10. Having regard to the contentions of the learned counsel, to
my mind, it would be in the interest and justice would be sub-served, if
the parties are allowed to compromise the matter. Moreover, the learned
counsel are ad idem that, in view of the settlement of matrimonial
disputes between the parties, the present petition deserves to be accepted
in this context.11. As is evident from the record that, in the instant case, the
parties have amicably settled their disputes with the intervention of
respectables and elders, by way of compromise-deed dated 11.04.2013
(Annexure P-2), without any kind of pressure or coercion. They have
decided to mutually resolve their disputes for the betterment ofRani Seema S2013.07.25 14:14I attest to the accuracy andintegrity of this documentHigh Court ChandigarhCRM No.M-18316 of 2013 5matrimonial home and children. Now they have no grudge against each
other. Both the parties do not want to further pursue the matter. The
complainant and respondent No.2 have no objection, if the present
criminal case registered against the petitioners-accused, vide impugned
FIR(Annexure P-1) is quashed. The factum and genuineness of the
compromise between the parties is also reiterated by the Magistrate in his
indicated report.12. Thus, it would be seen that since, the compromise is in the
welfare and interest of the parties, so, there is no impediment in
translating their wishes into reality and to quash the criminal prosecution
to set the matter at rest, to enable them to live in peace and to enjoy the
life and liberty in a dignified manner. Therefore, to me, the ratio of the
law laid down and the bench-mark set out by the Hon'ble Supreme Court
in Gian Singh's case(supra), "mutatis mutandis" is applicable to the
facts of the present case and is the complete answer to the problem in
hand. Sequelly, the impugned FIR(Annexure P-1) and all other
subsequent proceedings arising therefrom, deserve to be quashed in the
obtaining circumstances of the case.13. In the light of aforesaid reasons, the instant petition is
accepted. Consequently, the impugned FIR No.162 dated 25.07.2012
(Annexure P-1) and all other subsequent proceedings arising therefrom,
are hereby quashed. The petitioners-accused are accordingly discharged,
from the indicated criminal case, on the basis of compromise.July 19, 2013 (MEHINDER SINGH SULLAR)
seema JUDGERani Seema S2013.07.25 14:14I attest to the accuracy andintegrity of this documentHigh Court Chandigarh |
398fe0fd-6881-56cc-860b-0d7fd0fe32bd | court_cases | Patna High CourtMantu Kumar Yadav vs The State Of Bihar on 24 September, 2018Author:Birendra KumarBench:Birendra KumarIN THE HIGH COURT OF JUDICATURE AT PATNA
Criminal Appeal (SJ) No.3587 of 2018
Arising Out of PS.Case No. -25 Year- 2018 Thana -JANKINAGAR District- PURNIA
===========================================================
Mantu Kumar Yadav son of Bijendra Yadav, R/o. village- Binova Gram, Mathura
Tola, P.S. Jankinagar, District- Purnea
.... .... Appellant/s
Versus
The State of Bihar
.... .... Respondent/s
===========================================================
Appearance :
For the Appellant/s : Mr. Amit Kumar Anand, Advocate
For the Respondent/s : Mrs. Usha Kumari No.1, SPP
===========================================================
CORAM: HONOURABLE MR. JUSTICE BIRENDRA KUMAR
ORAL JUDGMENTDate: 24-09-2018
Heard learned counsel for the parties.This is an appeal underSection 14(A)(2)of the Scheduled
Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989
against the refusal of prayer for bail vide order dated 13.08.2018
passed by the learned 1st Additional Sessions Judge-cum-Special
Judge (S.C./S.T. Act), Purnea, in Special SC/ST Case No.38 of 2018,
arising out of Jankinagar Police Station Case No.25 of 2018,
registered underSections 302/120Bof the Indian Penal Code,Section
27of the Arms Act andSection 3(i)(x)of the Scheduled Castes and
Scheduled Tribes (Prevention of Atrocities) Act, 1989.The allegation of commission of fire-arm injury which
resulted in death is against co-accused Md. Mojib and Amrendra
Yadav as well as Md. Ajmer. Allegation against the appellant and
Patna High Court CR. APP (SJ) No.3587 o f 2018 dt.24-09-2018
P2/
others is of surrounding the deceased at the time of firing.Considering the nature of allegation as well as period
already undergone by the appellant, let the appellant, above named, be
released on bail on furnishing bail bond of Rs.20,000/- (Twenty
Thousand) with two sureties of the like amount each to the
satisfaction of the learned Court-below where the case is pending in
connection with the aforesaid case, with condition that the appellant
shall fully cooperate with the investigation/trial of the case, failing
which the court below shall be at liberty to cancel the bail bond of the
appellant.Accordingly, the impugned order is set aside and appeal is
allowed.(Birendra Kumar, J)
Mkr./-AFR/NAFR NAFR
CAV DATE NA
Uploading Date 27.09.2018
Transmission 27.09.2018
Date |
084dac5c-353d-5da0-98d7-e5c0c3b32501 | court_cases | Delhi High CourtInder Raj @ Inder Ram & Ors vs State & Ors on 1 February, 2012Author:Suresh KaitBench:Suresh Kait$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.M.C. 382/2012
% Judgment delivered on: 1st February, 2012
INDER RAJ @ INDER RAM & ORS ..... Petitioner
Through : Mr. Sunil Kumar, Adv.
versus
STATE & ORS ..... Respondent
Through : Mr. Satish Mishra, learned Proxy
counsel for Ms. Rajdipa Behura, learned
APP.
Mr. Neeraj Bhardwaj, Adv. for R2 along with
R2 in person.
CORAM:
HON'BLE MR. JUSTICE SURESH KAIT
SURESH KAIT, J. (Oral)CRL. M.A. 1324/2012 (Exemption)
Allowed subject to all just exceptions.CRL. M.C. 382/20121 Notice issued.2 Mr. Satish Mishra, learned Proxy counsel for Ms. Rajdipa
Behura, learned counsel for State accepts notice on behalf ofCrl.M.C. 382/2012 Page 1 of 4State/respondent No.1.3 Mr. Neeraj Bhardwaj, learned counsel accepts notice on behalfof respondent No. 24 With the consent of both the parties, the instant petition is taken
up for final disposal.5 Learned counsel for both the parties have jointly stated that vide
FIR No. 596 dated 15.08.2007, a case underSections 308/34Indian
Penal Code, 1860 was registered at P.S. Yamuna Vihar/Gokul Puri,
Delhi against the petitioners on the complaint of respondent No.2.
6 Further submit that the respondent No.2 and the petitioners have
amicably settled all the issues qua the aforesaid FIR and the parties are
no more interested to pursue the matter further.
7 Respondent No.2 Pandit Rukam Singh/complainant is personally
present in the court today. He has been duly identified by his counsel.
8 Learned counsel for respondent No.2 on instructions submits
that respondent No. 2 is not interested to pursue the aforesaid FIR and
he has no objection if the present FIR is quashed. It is further
submitted he received simple injuries and no stitches were applied on
the injury and he was discharged on the same day from the hospital.
9 Learned APP for State submits that the Charge-sheet has been
filed, charges have been framed and the matter is pending for recording
Prosecution Evidence before the learned trial court.
10 Further submits that offences committed underSection 308Indian Penal Code, 1860 are non-compoundable in nature.11 Learned APP referred the decision of Hon'ble Supreme Court inCrl.M.C. 382/2012 Page 2 of 4Gian Singh v. State of Punjab & Anr.in SLP (Crl.)No.8989/2010
wherein the Division Bench of the Supreme Court has referred three
earlier decisions viz,B.S. Joshi v. State of Haryana(2003) 4 SCC
675, Nikhil Merchant v. Central Bureau of Investigation & Anr.(2008) 9 SCC 677 & Manoj Sharma v. State & Ors. (2008) 16 SCC 1
to the larger Bench for re-consideration whether the abovesaid three
decisions were decided correctly or not. Therefore, she has prayed that
till the matter is decided by the larger Bench of the Apex Court, instant
petition may be adjourned sine-die. Alternatively, she prayed that in
the event, the FIR is quashed, heavy costs should be imposed upon the
petitioners, as the government machinery has been used and precious
time of the Court has been consumed.12 The Division Bench of Mumbai High Court in Nari Motiram
Hira v. Avinash Balkrishnan & Anr. in Crl.W.P.No.995/2010 decided
on 03.02.2011 has permitted for compounding of the offences of 'non-
compoundable' category as perSection 320Cr. P.C. even after
discussingGian Singh(supra).13 Therefore, I feel that unless and until, the decisions which have
beenreferred above, are set aside or altered, by the larger Bench of the
Supreme Court, all the above three decision hold the field and are the
binding precedents.14 In addition, the Supreme Court inShiji @ Pappu & Ors. v.
Radhika & Anrin Crl.Appeal No.2064/2011 decided on 14.11.2011
that the cases of non-compoundable nature can be compounded,Crl.M.C. 382/2012 Page 3 of 4certainly not after the conviction observing as under:-„...... That being so, continuance of the prosecution
where the complainant is not ready to support the
allegations which are now described by her as
arising out of some "misunderstanding and
misconception"; will be a futile exercise that will
serve no purpose. It is noteworthy that the two
alleged eye witnesses, who are closely related to
the complainant, are also no longer supportive of
the prosecution version. The continuance of the
proceedings is thus nothing but an empty
formality.Section 482Cr.P.C. could, in such
circumstances, be justifiably invoked by the High
Court to prevent abuse of the process of law and
thereby preventing a wasteful exercise by the
Courts below.‟15 Though I find force in the submissions made by the learned APP
for State but keeping in view the fact that the petitioners are working as
labourers and belong to poor strata of society, I refrain imposing costs
upon them.16 In the circumstances and in the interest of justice, I quash the
FIR No. 596/2007 registered at P.S. Yamuna Vihar/Gokal Puri, Delhi
and all the emanating proceedings emanating therefrom.
17 Criminal M.C. 382/2012 is allowed.18 Dasti.SURESH KAIT, J
FEBRUARY 01, 2012
jCrl.M.C. 382/2012 Page 4 of 4 |
c32081f9-d6f7-50e8-b911-dfa810564aec | court_cases | Supreme Court - Daily OrdersRita Subhash Shah vs Election Officer . on 10 January, 2017Bench:Kurian Joseph,A.M. KhanwilkarNON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 301 OF 2017
(ARISING FROM SLP(C) NO. 23549/2012)
RITA SUBHASH SHAH APPELLANT(S)
VERSUS
ELECTION OFFICER & ORS. RESPONDENT(S)
J U D G M E N TKURIAN, J.Leave granted.2. In this appeal arising out of SLP(C) No.23549 of
2012 all that the High Court has done is to relegate
the appellant to pursue the remedy by way of an
election petition.3. In the peculiar facts and circumstances of this
case, we do not deem it appropriate to interfere with
the order since the alternate remedy by way of
election petition is the most efficacious remedy for
the appellant in the facts of this case, particularly
since the nomination of the appellant is alleged to
have been improperly rejected by the Returning
Officer.4. Therefore, this appeal is disposed of as follows:i) The result of the election already
conducted during the pendency of this
appeal shall be declared forthwith.ii) In case an election petition is
filed by the appellant within 10 days from
the declaration of the result, we direct
the Election Tribunal to try and dispose ofSignature Not VerifiedDigitally signed byNARENDRA PRASADthe same on merits expeditiously and at anyDate: 2017.01.1617:52:08 ISTReason: rate before the declaration of the election
for the next term.15. There shall be no order as to costs.6. Pending application(s), if any, shall stand
disposed of........................J.
[KURIAN JOSEPH]
.......................J.
[A.M. KHANWILKAR]
NEW DELHI;JANUARY 10, 2017.2NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 302 OF 2017
(ARISING FROM SLP(C) NOS. 18902/2014)
RITA MAGANLAL ACHARYA @ RITA SUBHASH SHAH APPELLANT(S)
VERSUS
DIVISIONAL CASTE CERTIFICATE SCRUTINY
COMMITTEE & ORS. RESPONDENT(S)
J U D G M E N T
KURIAN, J.Leave granted.2. The appellant is aggrieved since the order of the
Caste Scrutiny Committee which upheld the claim of
the appellant as belonging to Hindu Jogi has been
stayed by the High Court.3. Being an interim order, we do not propose to go
into the merits of the matter. Since the fresh
elections are due to be held around six months, we
request the High Court to dispose of the writ
petition expeditiously and preferably within three
months from the production of a copy of this order.4. Needless also to say that the writ petition will
be disposed of on merits uninfluenced by any of the
observations contained in the impugned interim order.5. The appeal is disposed of.36. There shall be no order as to costs.7. Pending application(s), if any, shall stand
disposed of........................J.
[KURIAN JOSEPH]
.......................J.
[A.M. KHANWILKAR]
NEW DELHI;JANUARY 10, 2017.4ITEM NO.4 COURT NO.7 SECTION IX
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 23549/2012
(Arising out of impugned final judgment and order dated 30/07/2012in WP No. 7186/2012 passed by the High Court of Bombay)
RITA SUBHASH SHAH PETITIONER(S)
VERSUS
ELECTION OFFICER & ORS. RESPONDENT(S)
(with appln. (s) for permission to file additional documents and
interim relief and office report) (For Final Disposal)
WITH SLP(C) No. 18902/2014 (With Interim Relief and Office Report)
Date : 10/01/2017 These petitions were called on for hearing today.
CORAM : HON'BLE MR. JUSTICE KURIAN JOSEPH
HON'BLE MR. JUSTICE A.M. KHANWILKAR
For Petitioner(s) Mr. Sachin Patil,Adv.
For Respondent(s) Mr. Vinay Navare,Adv.Ms. Abha R. Sharma,Adv.Mr. Arun R. Pedneker,Adv.Mr. V.N. Raghupathy,Adv.Mr. K.N. Rai,Adv.Dr. R. R. Deshpande,Adv.Mr. Nishant Ramakantrao Katneshwrkar,Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.The appeals are disposed of in terms of the respective signed
judgments.(NARENDRA PRASAD) (RENU DIWAN)
COURT MASTER ASSISTANT REGISTRAR
(Two separate Signed 'Non-Reportable' Judgments are placed on
the file)5 |
06db16bf-49df-5c12-8543-b354f4eeb3cb | court_cases | Madhya Pradesh High CourtPraveen Pandey vs The State Of Madhya Pradesh Judgement ... on 2 May, 2014M.Cr.C. No.6234 /2014
02/05/2014
Shri Ghanshyam Sharma, Advocate for the applicant.
Shri Vivek Agrawal, Dy. Advocate General for the
respondent-State.Heard counsel for the parties.This is first application for grant of bail underSection
439of Cr.P.C. on behalf of applicant - Praveen Pandey.The applicant has been named as an accused in Crime
No.16/2013 registered with Police Station, S.T.F.,
Jehangirabad, Bhopal for the offences punishable underSections 420,467,468,471and120-Bof IPC andSections 65,66of I.T. Act andSection 3(d)1,2/4M.P. Manyata Prapt
Pariksha Adhiniyam, 1937.The allegation against the applicant is that he indulged
in unfair means by keeping the answer-sheet blank to be filled
in later on by some one else and for which he had parted with
Rs.5.00 lacs. On the basis of that examination result, he was
declared pass, but, however, did not secure employment in the
final selection process.The fact remains that the counsel for the State, on
instructions of the Investigating Officer, in all fairness,
submits that the charge-sheet has already been filed against the
present applicant and as of now further investigation may not
be necessary qua him. All relevant material has been collated
and filed along with the challan before the concerned Court
qua the applicant. In other words, the continuance of the
applicant in jail may not be necessary and the applicant can be
released on bail, on strict conditions.Accordingly, taking overall view of the matter, in the
interest of justice, we direct release of the applicant, if he is not
required in any other case, on following conditions :(1) The applicant shall furnish personal bond in the sum of
Rs.1,00,000/- (Rupees one lac) with two sureties of the like
amount to the satisfaction of the Trial Court for his regular
appearance during the trial in connection with Crime
No.16/2013;(2) The applicant will report to the Police Station, Maihar,
District Satna once a week on every Friday between 10.00 a.m.
to 12.00 a.m; and
(3) The applicant shall also comply with the conditions
enumerated underSection 437(3)of Cr.P.C. meticulously.The bail application stands disposed of accordingly.
C.c. As per rules.(A.M.Khanwilkar) (K.K.Trivedi)
Chief Justice Judge
(DV) |
9f6d7101-7de8-56f1-9381-fe48f706691c | court_cases | Bangalore District CourtIn Mvc No.1628/2015 1. Shashikala vs Sreenath on 27 January, 2017IN THE COURT OF MOTOR VEHICLES ACCIDENT CLAIMS
TRIBUNAL, BANGALORE.
SCCH-14
PRESENT: BASAVARAJ CHENGTI., B.Com.,LL.B.,(spl)
Member, MACT,
XVI ADDL. JUDGE,
Court of Small Causes,
BANGALORE.
MVC No.1628/2015 and 1629/2015
Dated this the 27th DAY OF JANUARY 2017.
Petitioners in MVC No.1628/2015 1. SHASHIKALA
W/o Raju
Aged about 41 years
2. RAJU
S/o Srinivasagowda
Aged about 48 years,
R/at Garalapura village,
Kodihalli Hobli,
Kanakapura Taluk,
Ramanagara District.
(By pleader Sri NKG)
Vs.
Respondents 1. SREENATH
S/o Adi Shivashankar Reddy
Aged about 38 years,
The Managing Director of
M/s SVG Exports Pvt., Ltd.,
No.19/1, 24th cross,
6th block, N.S Garden,
Jayanagara,
Bangalore -560 011.
SCCH-14 2 MVC No.1628/15 & 1629/15
2. TATA AIG GENERAL
INS.,CO.LTD.,
5th floor, West entrance,
Khanija Bhavana,
Race Course road,
Bangalore -560 001.
(R1-Exparte
R2-By pleader Sri JNR)
Petitioner in MVC No.1629/2015 KIRAN
S/o late Manikya
Aged about 21 years
R/at Arallmaradadoddi village,
Kodihalli Hobli,
Kanakapura Taluk,
Ramanagara District.
(By pleader Sri NKG)
Vs.
Respondents 1. SREENATH
S/o Adi Shivashankar Reddy
Aged about 38 years,
The Managing Director of
M/s SVG Exports Pvt., Ltd.,
No.19/1, 24th cross,
6th block, N.S Garden,
Jayanagara,
Bangalore -560 011.
2. TATA AIG GENERAL
INS.,CO.LTD.,
5th floor, West entrance,
Khanija Bhavana,
Race Course road,
Bangalore -560 001.
3. SRI SOMASHEKAR
S/o Chikke Gowda
Major
SCCH-14 3 MVC No.1628/15 & 1629/15
R/at Garalapura Village,
Kodihalli H.O,
Kanakapura Taluk,
Ramanagara District.
4. THE UNITED INDIA
INSURANCE CO.LTD.,
Regional Office,
No.18, 5th & 6th floors
Krishibhavan
Hudson circle,
Bangalore-560 001.
(R1, 3 & 4 -Exparte
R2-By pleader Sri JNR)
XVI ADDL. JUDGE,
Court of Small Causes & MACT.,
BANGALORE.
SCCH-14 4 MVC No.1628/15 & 1629/15
COMMON JUDGMENT
The petitioners in MVC No.1628/2015 have filed the petition
U/Sec.166of Motor Vehicles Act claiming compensation of
Rs.30,00,000/- for the death of Abhishek S/o Raju in a road traffic
accident and the petitioner in MVC No.1629/2015 has filed the
petition U/Sec.166of Motor Vehicles Act claiming compensation of
Rs.10,00,000/- for the injuries sustained by him in a road traffic
accident. Since, these two petitions are arising out of the same
accident, they are clubbed together for common trial and for
disposal by a common Judgment.
2. Brief facts of the cases are as under:
On 03.11.2014 at about 06.45 p.m., the deceased Abhishek
was riding motorcycle bearing No.KA-42-S-0876 along with his
friend i.e., the petitioner Kiran as pillion rider from Kanakapura side
towards Garalapura. When they reached near petrol bunk,
Kodihalli, Kanakapura-Kodihalli road, Kanakapura Taluk,
Ramanagar District, at that time, driver of Lorry bearing No.KA-10-
3411 without following any traffic rules and regulations, negligently
and endangering to human life, without switching on the hazard
parking lights, without giving any signals, very carelessly parked his
lorry in the middle of the road. Due to this, the deceased Abhishek
went and dashed the motorcycle against the lorry from behind and
caused the accident. Due to impact, both occupants of the
motorcycle fell down and sustained severe head injuries. The said
Abhishek succumbed to fatal injuries on the spot. After postmortem,
SCCH-14 5 MVC No.1628/15 & 1629/15
the dead body of the deceased Abhishek was handed over to the
petitioners who performed the last rites for which they have spent
more than Rs.2,00,000/-. The deceased was the only earning
member of the family of the petitioners in MVC No.1628/2015. Due
to the sudden death of the deceased, the petitioners are under going
deep mental shock, pain and sufferings and hardship. They have
lost love and affection and their future life has become dark. Prior to
the accident, the deceased was hale and healthy, was aged 21 years,
was final year B.Com., student at Kodihalli Govt., College. He was a
brilliant student and used to participate in extra curricular
activates. He was earning Rs.10,000/- per month as a milk vendor.
The deceased was contributing his entire income for the
maintenance of the family. The petitioners have put great financial
hardship, untold misery and depressed. The petitioners have lost
caretaker son.
The petitioner Kiran was taken to Kanakapura Govt.,
Hospital, wherein first aid treatment was given and then, he was
referred to NIMHANS Hospital, Bangalore. Later, he was shifted to
Victoria Hospital for treatment. Again, the petitioner was admitted
as an inpatient at Kanakapura Govt., Hospital, from 04.11.2014 to
08.11.2014. During the course of treatment, x-rays, CT scans were
taken. He has lost four teeth and was discharged with an advice to
take follow up treatment and bed rest. The petitioner is still
continuing follow up treatment and bed rest. He spent
Rs.1,50,000/- towards medical and nourishment charges, etc., Prior
to the accident, the petitioner was hale and healthy, was aged
21 years, was B.Com., student at Kanakapura Municipal College.
SCCH-14 6 MVC No.1628/15 & 1629/15
He was a brilliant student and used to participate in extra
curricular activities. Due to accidental injuries, he cannot attend his
exam and was failed as a result loss of education and put to great
financial hardship, untold misery and depressed. The petitioner
cannot walk, sit squat, cannot expose to sun light. He is getting
partial head ache, he cannot chew food and can't speak properly.
Kodihalli police have registered Cr.No.131/2014 against the driver
of lorry bearing No.KA-10-3411 for the offences punishable
U/Sce.279, 338 and 304(A) ofIPC. After completing investigation,
the said police have filed a charge sheet against the driver of said
lorry. The respondent no.1 and 2 are the owner and insurer of the
said lorry and are jointly and severally liable to pay compensation.
Hence, the petitioners have sought awarding compensation of
Rs.30,00,000/- and Rs.10,00,000/- respectively with cost and
interest. Originally, the petition was filed against the respondent
No.1 and 2. During the proceedings, the owner and insurer of
motorcycle bearing No.KA-42-S-0876 are impleaded as the
respondent No.3 and 4 as per the order on IA filed by the
respondent no.2 in MVC No.1629/2015.
3. In pursuance of the notice, the respondent no.2 has
appeared before the Court through his counsel and filed objection
statement in both the cases denying the averments of the petitions
as false and contended that the petitions are not maintainable
either in law or on facts, that the petitions are bad for non joinder of
necessary parties. He has admitted the issuance of the policy in
favour of the respondent no.1 in respect of lorry bearing No.KA-10-
SCCH-14 7 MVC No.1628/15 & 1629/15
3411, but he has contended that the insured vehicle was not
involved in the accident, that the insured and concerned police have
not complied with their mandatory duties, that the driver of insured
vehicle was not holding a valid and effective driving licence and the
said vehicle was not having valid RC, FC, permit and route permit at
the time of alleged accident, that the insured has violated the terms
and conditions of the policy, that he is not liable to indemnify the
respondent no.1, that the insured vehicle in question is falsely
implicated to have wrongful gain, that the compensation claimed by
the petitioners is highly excessive, exaggerated, arbitrary and
speculative when compared to comparable cases which have been
disposed off. Hence, he has sought for dismissal of the petitions.
The notice was not served upon the respondent no.1 in the ordinary
course. Hence, notice was issued to him by substitute service i.e.,
by paper publication. Inspite of publication of notice in newspaper,
the respondent no.1 remained absent. The respondent no.3 and 4
remained absent inspite of service of notice. Hence, the respondent
no.1, 3 and 4 are placed exparte.
4. On the basis of the above pleadings, the following issues
have been framed:
ISSUES in MVC No. 1628/2015
1. Whether the petitioners prove that
Abhishek S/o Raju died due to injuries
sustained by him in an accident
occurred on 03.11.2014 at about 06.45
p.m., near Petrol bunk, Kanakapura-
Kodihalli main road, Kodihalli,
Kanakapura taluk, Ramanagar
District, arising due to rash and
SCCH-14 8 MVC No.1628/15 & 1629/15
negligent driving of driver of Lorry
bearing No.KA-10-3411?
2. Whether the petitioners are entitled
for compensation? If so, how much
and from whom?
3. What Order or Award?
ISSUES in MVC No. 1629/2015
1. Whether the petitioner proves that he
sustained grievous injuries in the
nature of permanent disablement on
03.11.2014 at about 06.45 p.m., near
Petrol bunk, Kanakapura-Kodihalli
main road, Kodihalli, Kanakapura
taluk, Ramanagar District, arising due
to rash and negligent driving of driver
of Lorry bearing No.KA-10-3411?
2. Whether the petitioner is
entitled for compensation? If so,
how much and from whom?
3. What Order or Award?
5. At the instance of the petitioners, the petitions have
been clubbed together for common evidence and for common
disposal. During the trial, the petitioners in MVC No.1628/2015
have examined petitioner no.2 as PW.1 and the petitioner in MVC
No.1629/2015 has examined himself as PW.2. The petitioners have
examined one witness as PW.3 and have got marked documents as
Ex.P1 to 20. The respondent no.2 has examined three witnesses as
RW.1 to 3 and got marked documents as Ex.R1 to 4.
SCCH-14 9 MVC No.1628/15 & 1629/15
6. Heard the arguments. The counsel for the petitioners
has relied upon following rulings:
1.2007(a) T.A C 795(SC):New India Assurance
Co.Ltd., V. Smt. Kalpana & Ors.,
2. ILR 2014 KAR 2558: Mr.Devaraju Vs. The
United India Ins.,Co.Ltd., rep., by its
Manager, Bangalore & Anr.,
3. ILR 2002 KAR 893: A.S Chandraprakash Vs.
The Labour Officer and Minimum Wages
Enquiring Authority, Chikamangaluru &
Anr.,
4. 2007(4) KCCR 2810: M/s Mahesh centre &
Anr., Vs., People Charity Fund by Trustees
5. (2009) 15 SCC 165: North West Karnataka
Road Transport Corporation Vs. Gourabai
& Ors.,
The counsel for the respondent no.2 has relied upon
following rulings:
1. Civil Appeal No.3171/2009: North West
Karnataka Road Transport Corporation V.
Gourabai & Ors.,
2. ILR 2009 KAR 2921: Bajaj Allianz General
Ins.,Co.Ltd., Vs. B.C Kumar & Anr.,
3. ILR 2009 KAR 3562: Veerappa & Anr., Vs.
Siddappa & Anr.,
4. ILR 2015 KAR 401: Mr.Vijay V. Shetty Vs.
Mr. V.Sharada & Ors.,
5. MFA No.5314/2009: H.B
Hemakeshwarappa Vs. Abdul Roop Khan
& Anr.,
6. 2011 (4) AIR KAR 91: Divisional Controller
K.S.R.T.C Urban Division, Bannimatnap,
Mysore, V. Mahadevamma & Ors.,
7. MFA No.11445/2012(MV): Kanthamma A.C
Vs. The Branch Manager & Anr.,
I have gone through said rulings and perused the records.
SCCH-14 10 MVC No.1628/15 & 1629/15
7. My findings to the above issues are as under:-
MVC NO.1628/2015
Issue No.1: In Affirmative.
Issue No.2: In Affirmative.
For Rs.9,94,000/-
from the respondent no.2
Issue No.3 : As per final order:
For the following:
MVC NO.1629/2015
Issue No.1: In Affirmative.
Issue No.2 : In Affirmative. For Rs.90,000/-
from the respondent no.2.
Issue No.3 : As per final order:
for the following:
REASONS
8. ISSUE NO.1 IN BOTH THE CASES: These issues are
interlinked and pertaining to same point and hence, I have taken
them together for common discussion. One among the cases is a
case of death and the other one is a case of injury. The petitioners in
first case are parents of the deceased, whereas the petitioner in the
other case is the victim. Their common assertion is that the accident
was due to sole negligence of the driver of lorry bearing no.KA-10-
3411 as he had negligently parked the lorry in the middle of the
road without switching on parking lights or indicators, that due to
said negligence, the rider of motorcycle bearing no.KA-42-S-0876
i.e., the deceased Abhishek could not locate the lorry, went and
dashed against its rear portion resulting in his death and severe
injuries to the pillion rider i.e., the petitioner in 2nd case.
SCCH-14 11 MVC No.1628/15 & 1629/15
9. There is no dispute that the said Abhishek died on the
spot and the petitioner Kiran sustained injuries due to accident,
that both of them were traveling on motorcycle bearing no.KA-42-S-
0876 at the time of accident, that the petitioner Kiran was taken to
Govt. hospital, Kanakapura and then, was shifted to NIMHANS
hospital and later, was admitted in Victoria hospital, Bangalore,
that Kodihalli police have registered Cr.No.131/14 on 3.11.2014 at
7.30 p.m., on the basis of information given by one Suresh,
investigated the matter and filed charge sheet against the driver of
lorry bearing no.KA-10-3411 for the offences punishable U/s 279,
337, 338 and 304A ofIPC. The respondent no.1, 3 and 4 are
exparte, whereas the respondent no.2 has contested the matter. He
has admitted the issuance of policy in favour of the respondent
no.1, but he has denied the case of the petitioners as false. He has
disputed the involvement of lorry bearing no.KA-10-3411 in the
alleged accident. He has contended that the accident has not
occurred in the manner as stated by the petitioners, but the actual
facts have been twisted for their convenience in order to have
wrongful gain from him.
10. The petitioners have relied upon oral evidence of PW-1
to 3 and documentary evidence at Ex.P-1 to 20 to prove their case.
Among the witnesses, PW-1 is the mother of deceased Abhishek.
She is not an eye witness to the accident. Hence, her evidence as to
manner of accident, involvement of lorry bearing no.KA-10-3411
and occurrence of accident due to negligence of its driver is
inadmissible and unbelievable. But, her evidence as to death of
SCCH-14 12 MVC No.1628/15 & 1629/15
Abhishek in road accident and involvement of motorcycle bearing
no.KA-42-S-0876 in the accident is believable and acceptable. Copy
of inquest panchanama and PM report are at Ex.P-5 and 6 which
disclose that Abhishek died due to head injury and other fatal
injuries. Such injuries could have occurred due to road traffic
accident.
11. PW-2:Kiran is the victim and he has deposed as per the
averments of his petition. His evidence corroborates the evidence of
PW-1 as to cause for the death of Abhishek. PW-3:Suresh is the first
informant and eye witness to the accident and he has supported the
version of PW-1 and 2 as to occurrence of accident, as to death of
Abhishek, as to causing of injuries to PW-2 and as to negligence of
driver of lorry bearing no.KA-10-3411 for the occurrence of accident.
Specific suggestions given to PW-1 to 3 and answers given by them
during cross examination are as under:
PW.1:
"It is true to suggest that the said
Suresh is the first informant in police
case".
"It is true to suggest that Kiran has
sustained simple injuries. Witness
volunteers that his teeth were broken".
"It is false to suggest that due to skid of
motorcycle, my son fell down and sustained
injuries. It is false to suggest that though it
was a self fall, we colluding with the police
got implicated the lorry in the accident".
PW.2:
"It is false to suggest that I was
riding the motorcycle at the time of
accident and I deposing falsely that
SCCH-14 13 MVC No.1628/15 & 1629/15
Abhishek was riding the motorcycle
thinking that if I say the truth, I will not
get compensation and created documents
by colluding the police. The width of the
road in the place of accident was about 18
feet. Lorry was parked on the road. It is
true to suggest that our motorcycle has
dashed against parked lorry. Witness
volunteers that there were no parking
lights to see the lorry".
"It is false to suggest that lorry bearing
No.KA-10-3411 was not involved in the
accident and we fell down from the
motorcycle due to skid and sustained
injuries".
PW.3:
"The accident has occurred at about
06.45 p.m., It was a cloudy day and there
was no sun light at that time".
"There are no street lights in the said
place".
"It is true to suggest that one cannot
see in dark without switching on head
light".
"It is false to suggest that I cannot
tell on whose negligence the accident has
occurred. Witness volunteers that Abhishek
and Kiran went and dashed against the
lorry which was parked on the middle of
the road".
"It is false to suggest that Abhishek and
Kiran fell down due to skid of motorcycle".
The above cross examination makes the defence of the
respondent no.2 clear. He has denied the involvement of lorry
bearing no.KA-10-3411 in the accident and contended that the rider
of motorcycle bearing no. KA-42-S-0876 i.e., the deceased Abhishek
rode the motorcycle in high speed, in rash and negligent manner
SCCH-14 14 MVC No.1628/15 & 1629/15
which resulted in the accident, that Abhishek died and PW-2
sustained injuries due to skid and fall from bike. He has examined
RW-1 to 3 and got marked Ex.R-1 to 4 to prove his defence. The
other respondents are exparte. RW-1:Rajanna has produced
authorization letter and case sheet of NIMHANS which are marked
as Ex.R-1 and 2. RW-2:Dr.Muralidhar has produced MLC extract of
Govt hospital, Kanakapura pertaining to the petitioner Kiran which
is marked as Ex.R-3. Authorization letter of RW-3 is at Ex.R-4.
Evidence of RW-3 is as per the defence of the respondent no.2. But,
his evidence that 3 persons were traveling on the motorcycle bearing
no.KA-42-S-0876 at the time of accident and suggestion of the
counsel for the respondent no.2 during cross examination of PW.2
that he was riding the motorcycle and the deceased was the pillion
rider are inconsistent with pleading of the respondent no.2 and
police records. RW.3 has admitted that there was no delay in
lodging complaint, that rider of motorcycle died on the spot. He has
shown ignorance as to detention of lorry bearing no.KA-10-3411 by
police on the same day, but he has denied the suggestion that the
respondent no.1 has got it released from police by executing
indemnity bond. He tried to narrate the manner of accident, but he
is not an eye witness to the accident and hence, his evidence in that
regard is inadmissible.
12. Copy of spot panchanama, of IMV report and of charge
sheet are at Ex.P-2, 3 and 7 which reveal that lorry bearing no.KA-
10-3411 was involved in the accident, that it was parked in the
place of accident, that motorcycle bearing no.KA-42-S-0876 went
SCCH-14 15 MVC No.1628/15 & 1629/15
and dashed against rear portion of said lorry. The police have
detained the said lorry bearing no.KA-10-3411 from the place of
accident and it was subjected to inspection. IMV report reveals that
no damages were found on the said lorry, but its brake system was
in order and the accident was not due to mechanical defects. This
makes it clear that the accident was due to human error i.e.,
negligence of the deceased or of the driver of lorry bearing no.KA-10-
3411 or of the both. Only on the basis of the fact that the lorry had
no damages, it can not be said that lorry bearing no.KA-10-3411
was not involved in the accident and it is falsely implicated in the
case. The detention of vehicles is not challenged. The driver and
owner of lorry bearing no.KA-10-3411 have not questioned the
detention of vehicle and registration of crime. These aspects make it
clear that lorry bearing no.KA-10-3411 was involved in the accident
and it was parked in the place of accident.
13. Case sheet of NIMHANS hospital at Ex.R-2 supports the
evidence of RW-3 that Abhishek died and the petitioner Kiran
sustained injuries due to skid and fall from bike. Ex.P-15 is
emergency case record issued by NIMHANS hospital and it
corroborates the evidence of RW-3. History of injuries of the
deceased Abhishek and of the petitioner Kiran is shown as RTA in
medical records at Ex.P-14, 16, 18 and 19. Details of accident are
not mentioned in any of the said records. Ex.P-18 and Ex.R-3 are
one and the same. RW-2 has admitted that the petitioner Kiran
sustained injury to his mouth and he was not able to speak properly
when he was taken to Govt. hospital, Kanakapura. PW-2 has stated
SCCH-14 16 MVC No.1628/15 & 1629/15
that he did not give history of injuries to doctors at NIMHANS, that
one Somashekar took him to hospital. RW-2 confirms about
presence of Somashekhar. Since, Somashekhar has not seen the
accident, history of injuries as mentioned in medical records and
emergency case records of NIMHANS hospital is unacceptable.
14. There is implied admission by the respondent no.2 as to
manner of accident. Portion of cross examination of PW-2 is as
under:
"It is true to suggest that our motorcycle
has dashed against parked lorry".
He is denying the collision on the fact that the insured lorry
was not damaged. His suggestions to PW-2 and 3 are as under:
PW.2:
"It is true to suggest that if two
vehicles involved in the accident, there
will be chance of causing the damages to
both the vehicles. It is true to suggest that
as per IMV report lorry was not damaged".
PW.3:
"It is true to suggest that if a lorry is hit
by motorcycle from behind, there is
chance of getting both the vehicles
damaged".
Copy of police records at Ex.P-1 to 7 disclose that Kodihalli
police have registered Cr.No.131/14 on 3.11.2014 at 7.30 p.m., on
the basis of information given by PW-3 Suresh, investigated the
matter and filed charge sheet against the driver of lorry for the
offences punishable U/s 279, 337, 338 and 304A ofIPC. There was
no delay in lodging complaint. The charge sheet filed by the police is
SCCH-14 17 MVC No.1628/15 & 1629/15
prima facie evidence as to negligence of the driver of lorry bearing
no.KA-10-3411 for the occurrence of accident. But, it is not a
conclusive proof of said fact.
15. IMV Report at Ex.P-3 reveals that the motorcycle
bearing no. KA-42-S-0876 was having following damages:
1. Head light vyser damaged,
2. Front left side indicator damaged,
3. Crash guard damaged.
The said damages could occur when motorcycle goes and
dashes against another object. Spot panchanama and sketch at
Ex.P-2 and 4 reveal that lorry bearing no.KA-10-3411 was parked in
the middle of the road, that the motorcycle went and dashed against
the lorry, but impact was between the rear metalic portion of lorry
and head of the deceased Abhishek. PW-3 has explained about non
causing of damages to the lorry by stating that rear portion of lorry
was a matalic body. His explanation is acceptable and believable.
Same is consistent with the sketch and panchanama. When the
impact was between metalic body of the lorry and head of the
deceased, it was possible that the lorry would not sustain any
damages. I am of the opinion that evidence of PW-2 and 3 and
contents of Ex.P-1 to 7 disclose that motorcycle bearing no.KA-42-S-
0876 went and dashed against lorry bearing no.KA-10-3411 from
behind. This evidence supports evidence of PW-1. Hence, evidence of
RW-3 as to false implication of lorry bearing no.KA-10-3411 is
unacceptable and is liable to be rejected.
SCCH-14 18 MVC No.1628/15 & 1629/15
16. Evidence of PW-1 to 3 and contents of Ex.P-1 to 7, 14,
18 and 19 substantiate the averments of the petition as to
negligence of driver of lorry bearing no.KA-10-3411 for the
occurrence of accident. Evidence of RW-3 and contents of Ex.P-15
and Ex.R-2 disclose that it was a skid and fall. There is no dispute
that rider of motorcycle Abhishek died on the spot, that the
petitioner Kiran was taken to Govt. hospital, Kanakapura, was
shifted to NIMHANS and then was admitted to Victoria hospital.
History of his injuries is mentioned as under in those medical
records:
Govt. Hospital, Kanakapura : wound
certificate at Ex.P14:
RTA near Kodihalli, Petrol bunk at
Kodihalli, Kananapura main road at about
06.30 p.m.,
Govt. Hospital, Kananakapura: MLC
extract at Ex.P18 and Ex.R3:
RTA details not known. Kodihalli
main road. Petrol bunk at about 06.30 p.m.,
Victoria Hospital: MLC extract at Ex.P19:
RTA at around 06.30 p.m., on
03.11.2014 when he hit a parked truck
near petrol bunk, Kodihalli.
History of skid and fall has come only in records of NIMHANS
Hospital. Medical records prior to and subsequent to it disclose that
the petitioner sustained injuries due to hit to a lorry. The person
who gave history of injuries at NIMHANS Hospital was not an eye
witness. History of injuries of Kiran was recorded in NIMHANS
SCCH-14 19 MVC No.1628/15 & 1629/15
hospital at about 10.30 p.m., on 03.11.2014, but FIR and complaint
at Ex.P-1 disclose that eye witness Suresh i.e., PW-3 has lodged
complaint against the driver of lorry bearing no.KA-10-3411 at 7.30
p.m., on 3.11.2014. It means, complaint was registered much
earlier to the time the petitioner Kiran was taken to NIMHANS
hospital. Ex.P-15 and Ex.R-2 are records subsequent to filing of
complaint. Hence, contents of complaint at Ex.P-1 prevail over the
records of NIMHANS hospital. It is not possible to implicate lorry
bearing no.KA-10-3411 within such a short span of time. Hence,
I disbelieve the contents of Ex.P-15 and Ex.R-2 regarding history of
injuries of Kiran. On the contrary, evidence of PW-2 and 3 is direct
and is believable. Police records corroborate their evidence and
reveal that motorcycle bearing no.KA-42-S-0876 went and dashed
against lorry bearing no.KA-10-3411 from behind, that rider of
motorcycle Abhishek died on the spot due to accidental injuries,
whereas the petitioner Kiran sustained injuries due to accident.
17. The counsel for the respondent no.2 has tried to elicit
from PW-2 and 3 that the accident has occurred due to negligence
of the rider of motorcycle. He has succeeded to get an admission
from PW-3 that head light of motorcycle of the deceased was not
switched on and the petitioner Kiran was not wearing helmet. But, it
is to be noted that the road in the spot is 18' wide. Sketch discloses
that the lorry was parked in the middle of the road. No person can
expect parking of a bigger vehicle in such manner. It was about to
sun set and there was darkness as per PW.3. Not switching of light
can not be the cause for the accident. Not wearing helmet was not
SCCH-14 20 MVC No.1628/15 & 1629/15
even an offence at the time of accident. If the lorry bearing no.KA-
10-3411 was not parked in the said place or if parking lights or
indicator of lorry were switched on, then the accident would not
have occurred. It was main road from Kanakapura to Kodihalli. In
such main road, normal speed of vehicles would be about 50-60
kmph. In such speed, one can not control the vehicle and avoid
dashing the vehicle which was parked negligently in the middle of
the road without parking lights or indicator even if head lights were
on. The respondent no.2 has not examined the driver of lorry to
prove that proper precautionary measures were taken on that day.
In the absence of such direct evidence, oral evidence of PW-2 and 3
can be believed. I am of the opinion that the accident has occurred
due to sole negligence of the driver of lorry bearing no.KA-10-3411
who parked his vehicle without parking lights or indicators. The
evidence of RW-1 to 3 and contents of Ex.P-15, Ex.R-1 to 4 are not
sufficient to hold that the deceased Abhishek was also negligent and
contributed for the occurrence of accident. Thus, the respondent
no.2 has failed to prove his defence. On the other hand, the
petitioners have succeeded to prove the issues and I answer the
issues in affirmative.
18. ISSUE NO.2 IN MVC No.1628/2015: The petitioners
are claiming to be the parents of the deceased Abhishek. The
respondent no.2 has generally denied the relationship between the
petitioners and the deceased. The petitioners have relied upon oral
evidence of PW.1 and documents at Ex.P8 to 12 to prove their
status as LRs of the deceased.
SCCH-14 21 MVC No.1628/15 & 1629/15
19. PW.1:Raju is the father of the deceased and he has
stated that he is the father and the petitioner no.1 is the mother of
the deceased. Nothing is elicited from him to disbelieve his evidence.
Copy of student ID, study certificate, copy of driving license, copy of
ration card and copy of adhaar card are at Ex.P8 to 12. These
documents corroborate the evidence of PW.1 and reveal that the
petitioners are the parents of the deceased Abhishek. Inquest
panchanama at Ex.P5 supports the version of PW.1. Hence, I have
no hesitation to hold that the petitioners are the mother and father
of the deceased. They are LRs of the deceased and are entitled for a
compensation under all heads.
20. Evidence of PW.1 and contents of student ID, driving
licence and Adhaar card disclose that the deceased was born on
24.07.1994. There is nothing on record to disbelieve the date of
birth shown in said documents. Age of the deceased is mentioned as
20 years inquest panchanama and PM report at Ex.P5 and 6.
Hence, I hold that the deceased was aged 20 years as on the date of
accident. Looking to the contents of student IDs and study
certificate, it can be easily said that the deceased was in 3rd year
B.Com., It corroborates the evidence of PW.1 that the deceased was
a student. The petitioners have produced milk pass book to
establish that the deceased was also doing milk vending business.
The said pass books are in the name of the deceased, but the
petitioners have not examined the author of the said pass book.
PW.1 has admitted that these pass books are pertaining to
SCCH-14 22 MVC No.1628/15 & 1629/15
2012-13 and several dates and months in the said books are
overwritten. These admissions and non examination of author of
pass books induce the court disbelieve the contents of pass book.
Hence, I am of the opinion that the deceased was a student of
B.Com., at the time of accident. He was not having any income of
his own. However, he was having capacity to get job on the basis of
qualification of degree holder after completing B.Com., Therefore,
income of the deceased shall have to be assessed notionally. I am of
the opinion that if the income of the deceased is considered as
Rs.8,000/- per month, it will meet the ends of justice. Since, the
deceased was not having actual income as on the date of accident,
there shall be no addition towards future prospects. His annual
income comes to Rs.96,000/-. He was aged 20 years on the date of
accident. Appropriate multiplier is 18. The deceased was a bachelor.
50% amount shall be deducted towards personal expenses of the
deceased. On such deduction, net income of the deceased comes to
Rs.48,000/- p.a., The petitioners have lost dependency, have lost
love and affection and estate of the deceased. They have spent
amount for transportation of dead body and funeral expenses. There
is no corroboration to the evidence of PW.1 that the petitioners
spent Rs.2,00,000/- for transportation of dead body and funeral
expenses. However, the petitioners are entitled for reasonable
amount towards said expenses. Loss of dependency of the
petitioners would be Rs.46,000X18=Rs.8,64,000/-. The petitioners
are further entitled for a compensation of Rs.50,000/- towards loss
of love and affection, Rs.50,000/- towards loss of estate and
Rs.30,000/- towards transportation of dead body and funeral
SCCH-14 23 MVC No.1628/15 & 1629/15
expenses. Thus, the petitioners are entitled for just and reasonable
compensation as under:
1 Loss of dependency Rs.8,64,000/-
2 Loss of love and affection Rs. 50,000/-
3 Loss of estate Rs. 50,000/-
4 Transportation of dead Rs. 30,000/-
body and funeral
expenses
Total Rs.9,94,000/-
Hon'ble Supreme Court in Civil Appeal No.3238/2015
(arising out of SLP (C) 1865/2014 (Chanderi Devi and Anr., Vs.
Jaspalsingh & Ors.,) and Hon'ble High Court in MFA No.2326/2016
(Annapurna & Ors., G.Ashawathraya & Anr.,) have held that rate of
interest shall be @9% p.a., Hence, I hold that the petitioners are
entitled for interest @9% p.a., from the date of petition till the date
of payment. They are entitled to share the amount as under:
Petitioner no.1 : Rs.6,00,000/-
Petitioner no.2 : Rs.3,94,000/-.
Liability aspect is discussed separately. Hence, I answer the
issue as above.
21. ISSUE NO.2 IN MVC No.1629/2015: The petitioner
Kiran is claiming compensation of Rs.10,00,000/- for the injuries
sustained by him in the accident. The respondent no.2 has denied
the claim of the petitioner as excessive and exorbitant. The
petitioner has examined himself as PW.2 and got marked copy of
wound certificate, emergency case record, OPD book, student ID,
MLC extracts as Ex.P14 to 19. The respondent no.2 has examined
SCCH-14 24 MVC No.1628/15 & 1629/15
RW.1 to 3 and got marked Ex.R1 to 4. But, the oral and
documentary evidence produced by the respondent no.2 are not
sufficient to disprove the case of the petitioner Kiran.
22. PW.2: Kiran has deposed as per the averments of the
petition and stated that he sustained severe head injury and
fracture injuries in the accident, that his lips were contused, that he
has sustained lacerated wound over left forehead, abrasion of right
forearm, abrasion over left wrist, abrasion on left leg in the accident.
He has stated that he took treatment in Kanakapura Govt. Hospital,
in NIMHANS Hospital, in Victoria Hospital, during period from
03.11.2014 to 08.11.2014 and spent Rs.1,50,000/- towards
treatment, nourishment, conveyance and attendant charges, etc.,
He has further stated that he lost teeth in the accident and requires
Rs.50,000/- for the replacement of same. He has stated about his
difficulties due to accidental injuries and stated that he is
permanently disabled. In cross examination, he has admitted that
he was given free treatment in Victoria Hospital. He has denied the
suggestion that he has not lost academic year, but he has admitted
that there is semester system in B.Com., and he has no difficulty to
produce marks cards. Since, the petitioner has not produced marks
cards, his evidence that he lost academic year and has failed in all
subjects cannot be believed.
23. On perusal of wound certificate, emergency case record,
OPD book and MLC extract at Ex.P14 to 16, 18 and 19, it reveals
that the petitioner has sustained following injuries in the accident:
SCCH-14 25 MVC No.1628/15 & 1629/15
1. Lips contused with a lacerated wound
2. A lacerated wound over forehead
3. Abrasion over right forearm over lower
third over the bony aspects,
4. Abrasion over left wrist back of hand
5. Abrasion over front of left leg
There is no evidence to believe that the petitioner has
sustained fracture injuries, lost teeth and severe head injury. There
is no neurological deficit. The petitioner has not suffered motor or
cognitive disability. His injuries at Sl.No.2 to 5 are described as
simple and injury no.1 which caused to lips is described as grievous
in nature. The petitioner has not examined any doctors to prove that
the accidental injuries have resulted in permanent disability. The
said injuries of in such nature which requires follow up treatment
and rest for a period about 4 to 6 weeks. Total laid up period comes
to 2 months. The petitioner might have spent amount for
nourishment, conveyance and attendant charges during the said
period apart from incurring medical expenses. Medical bills are not
produced. PW.2 has admitted that he was given free treatment in
Victoria Hospital. However, he might have spent some amount for
treatment. Student ID at Ex.P17 goes to show that the petitioner
was a student of 3rd year B.Com., in Government First Grade
College. He might have missed classes for about 2 months resulting
in set back in studies. He might have suffered some difficulties
which persisted for a short period resulting in temporary loss of
amenities. There is no evidence to believe that the petitioner has
suffered disfiguration. However, the petitioner has sustained severe
facial injury, injury to teeth and lips in the accident. There is
nothing on record to believe that the petitioner has lost his teeth.
SCCH-14 26 MVC No.1628/15 & 1629/15
Hence, I am of the opinion that the petitioner is entitled for a
compensation of Rs.40,000/- towards pain and sufferings,
Rs.5,000/- towards medical expenses, Rs.10,000/- towards set
back in studies, Rs.10,000/- towards nourishment, conveyance and
attendant charges and Rs.25,000/- towards temporary loss of
amenities. Thus, the petitioner is entitled for just and reasonable
compensation as under:
1 Pain and suffering Rs. 40,000/-
2 Medical expenses Rs. 5,000/-
3 Set back in studies Rs. 10,000/-
4 Nourishment, Rs. 10,000/-
conveyance and
attendant charges
5 Temporary loss of Rs. 25,000/-
amenities
Total Rs.90,000/-
Hon'ble Supreme Court in Civil Appeal No.3238/2015
(arising out of SLP (C) 1865/2014 (Chanderi Devi and Anr., Vs.
Jaspalsingh & Ors.,) and Hon'ble High Court in MFA No.2326/2016
(Annapurna & Ors., G.Ashawathraya & Anr.,) have held that rate of
interest shall be @9% p.a., Hence, I hold that the petitioner is
entitled for interest @9% p.a., from the date of petition till the date
of payment. Liability aspect is discussed separately. Hence, I answer
the issue as above.
LIABILITY
24. The respondent no.1 and 2 are the owner and insurer of
Lorry bearing No.KA-10-3411. The respondent no.3 and 4 are the
SCCH-14 27 MVC No.1628/15 & 1629/15
owner and insurer of motorcycle bearing No.KA-42-S-0876. It is
held above that the accident has occurred due to sole negligence of
the driver of lorry bearing no.KA-10-3411. Hence, the respondent
no.1 and 2 are jointly and severally liable to pay compensation and
interest to the petitioners. The respondent no.3 and 4 are not liable
to pay any compensation. There is no evidence to establish the
defence of the respondent no.2 that the driver of lorry was not
holding a valid and effective driving licence and the said vehicle was
not having RC, FC and permit as on the date of accident. However,
it is admitted that the policy of lorry was in force on the date of
accident. Hence, the respondent no.2 is liable to indemnify the
respondent no.1 and to compensate the petitioners as stated above.
Consequently, I answer the issue regarding liability as above.
25. ISSUE NO.3 IN BOTH CASES: In view of above
discussion and findings, I proceed to pass the following:
ORDERThe petitions in MVC No.1628/2015 and
MVC No.1629/2015 filed U/Sec. 166 ofM.V
Actby the petitioners are hereby partly allowed
with cost.The petitioners in MVC No.1628/2015
are entitled for a compensation of
Rs.9,94,000/- with interest @ 9% from the
date of petition till the date of payment.SCCH-14 28 MVC No.1628/15 & 1629/15They are entitled to share the amount
with proportionate interest as under:Petitioner no.1 : Rs.6,00,000/-
Petitioner no.2 : Rs.3,94,000/-The petitioner in MVC No.1629/2015 is
entitled for a compensation of Rs.90,000/-
with interest @ 9% from the date of petition till
the date of payment
The respondents are jointly and severally
liable to pay compensation of Rs.9,94,000/- to
the petitioners in MVC No.1628/2015 and to
pay compensation of Rs.90,000/- to the
petitioner in MVC No.1629/2015 with interest
@ 9% from the date of petition till the date of
payment. In view of policy, the respondent no.2
is liable to deposit the amount before the Court
within one month from the date of award.After deposit of the amount Rs.3,00,000/-
out of the share of the petitioner no.1 in MVC
No.1628/2015 shall be deposited in her name
in any nationalized, scheduled or co-operative
bank for a period of 3 years. Balance amount
of the said petitioner and entire amount of the
petitioner no.2 in said case and of the
petitioner in MVC No.1629/2015 with interest
shall be released in their favour throughSCCH-14 29 MVC No.1628/15 & 1629/15account payee cheques with proper
identification.Claim petition in MVC No.1629/2015 as
against the respondent no.3 and 4 is dismissed
without cost.The original Judgment shall be kept in
MVC No.1628/2015 and copy of the same in
MVC.No.1629/2015.Advocate's fee is fixed at Rs.2,500/-
each.Draw award accordingly.(Dictated to the Stenographer directly on computer, corrected by me and
pronounced in the open court, on this the 27th day of January 2017.)
(Basavaraj Chengti)
XVI ADDL.JUDGE.Court of Small Causes & MACT.,
Bangalore.SCCH-14 30 MVC No.1628/15 & 1629/15ANNEXURE
WITNESSES EXAMINED AND DOCUMENTS MARKED FOR
PETITIONERS AND RESPONDENTS:PW.1 Raju
PW.2 Kiran
PW.3 Suresh
Respondents :
RW.1 Rajanna S.K
RW.2 Dr.Muralidhar. M
RW.3 Karthik M
Ex.P1 Copy of FIR with complaint
Ex.P2 Copy of Mahazar
Ex.P3 Copy of IMV report
Ex.P4 Copy of sketch
Ex.P5 Copy of Inquest report with statement
Ex.P6 Copy of PM report
Ex.P7 Copy of charge sheet
Ex.P8 Copy of College ID's ( 2 in nos)
Ex.P9 Study certificate
Ex.P10 Copy of Driving license of deceased
Ex.P11 Copy of ration card
Ex.P12 Copy of Adhaar cards (3 in nos)
Ex.P13 Milk supply pass books (2 in nos)
Ex.P14 Copy of wound certificate
Ex.P15 Emergency case record of NIMHANS record
Ex.P16 OP book
Ex.P17 Copy of student ID
Ex.P18 MLC extract to Govt., Kanakapura
Ex.P19 MLC extract to Victoria Hospital
Ex.P20 Copy of Adhaar of PW.3
Respondent's
Ex.R1 Authorization letter
Ex.R2 Case file
Ex.R3 MLC extract of Kiran
Ex.R3(a) Relevant page
Ex.R4 Authorization letter
XVI ADDL.JUDGE.Court of Small Causes & MACT.,
Bangalore.SCCH-14 31 MVC No.1628/15 & 1629/15Dt.27.01.2017
P-NKG
R1,3 & 4- Exparte
R2-JNR
For Judgment
Order pronounced in open court
vide separate judgment.ORDER
The petitions in MVC No.1628/2015 and MVC
No.1629/2015 filed U/Sec. 166 ofM.V Actby the
petitioners are hereby partly allowed with cost.The petitioners in MVC No.1628/2015 are
entitled for a compensation of Rs.9,94,000/- with
interest @ 9% from the date of petition till the date of
payment.They are entitled to share the amount with
proportionate interest as under:Petitioner no.1 : Rs.6,00,000/-
Petitioner no.2 : Rs.3,94,000/-The petitioner in MVC No.1629/2015 is
entitled for a compensation of Rs.90,000/- with
interest @ 9% from the date of petition till the date of
payment
The respondents are jointly and severally liable
to pay compensation of Rs.9,94,000/- to the
petitioners in MVC No.1628/2015 and to paySCCH-14 32 MVC No.1628/15 & 1629/15compensation of Rs.90,000/- to the petitioner in
MVC No.1629/2015 with interest @ 9% from the date
of petition till the date of payment. In view of policy,
the respondent no.2 is liable to deposit the amount
before the Court within one month from the date of
award.After deposit of the amount Rs.3,00,000/- out of
the share of the petitioner no.1 in MVC
No.1628/2015 shall be deposited in her name in any
nationalized, scheduled or co-operative bank for a
period of 3 years. Balance amount of the said
petitioner and entire amount of the petitioner no.2 in
said case and of the petitioner in MVC No.1629/2015
with interest shall be released in their favour through
account payee cheques with proper identification.Claim petition in MVC No.1629/2015 as against
the respondent no.3 and 4 is dismissed without cost.The original Judgment shall be kept in MVC
No.1628/2015 and copy of the same in
MVC.No.1629/2015.Advocate's fee is fixed at Rs.2,500/- each.
Draw award accordingly.XVI ADDL.JUDGE
Court of Small Causes & MACT.,
Bangalore.SCCH-14 33 MVC No.1628/15 & 1629/15AWARD
SCCH NO.14
BEFORE THE MOTOR ACCIDENT CLAIMS TRIBUNAL
METROPOLITAN AREA : BANGALORE CITY
MVC No.1628/2015
Petitioners in MVC No.1628/2015 1. SHASHIKALA
W/o Raju
Aged about 41 years2. RAJU
S/o Srinivasagowda
Aged about 48 years,
R/at Garalapura village,
Kodihalli Hobli,
Kanakapura Taluk,
Ramanagara District.(By pleader Sri NKG)
Vs.
Respondents 1. SREENATH
S/o Adi Shivashankar Reddy
Aged about 38 years,
The Managing Director of
M/s SVG Exports Pvt., Ltd.,
No.19/1, 24th cross,
6th block, N.S Garden,
Jayanagara,
Bangalore -560 011.2. TATA AIG GENERAL
INS.,CO.LTD.,
5th floor, West entrance,
Khanija Bhavana,
Race Course road,
Bangalore -560 001.(R1-Exparte
R2-By pleader Sri JNR)SCCH-14 34 MVC No.1628/15 & 1629/15WHEREAS, this petition filed on by the
petitioner/s above named U/sec.166 of the M.V.C. Act, praying for
the compensation of Rs.(Rupees ) for the
injuries sustained by the petitioner/Death of in a motor
Accident by vehicle No.
WHEREAS, this claim petition coming up beforeSri/Smt.Basavaraj Chengti, XVI Addl.Judge, Member, Court of
Small Cause, Bangalore, in the presence of Sri/Smt.
Advocate for petitioner/s and of Sri/Smt.
Advocate for respondent.ORDER
The petition in MVC No.1628/2015 filed U/Sec.
166 ofM.V Actby the petitioners are hereby partly
allowed with cost.The petitioners in MVC No.1628/2015 are
entitled for a compensation of Rs.9,94,000/- with
interest @ 9% from the date of petition till the date of
payment.They are entitled to share the amount with
proportionate interest as under:Petitioner no.1 : Rs.6,00,000/-
Petitioner no.2 : Rs.3,94,000/-SCCH-14 35 MVC No.1628/15 & 1629/15The respondents are jointly and severally liable
to pay compensation of Rs.9,94,000/- to the
petitioners in MVC No.1628/2015 with interest @ 9%
from the date of petition till the date of payment. In
view of policy, the respondent no.2 is liable to deposit
the amount before the Court within one month from
the date of award.After deposit of the amount Rs.3,00,000/- out of
the share of the petitioner no.1 in MVC No.1628/2015
shall be deposited in her name in any nationalized,
scheduled or co-operative bank for a period of 3 years.
Balance amount of the said petitioner and entire
amount of the petitioner no.2 in said case with interest
shall be released in their favour through account
payee cheques with proper identification.The original Judgment shall be kept in MVC
No.1628/2015 and copy of the same in
MVC.No.1629/2015.Advocate's fee is fixed at Rs.2,500/- each.Given under my hand and seal of the Court this day
of 2017.
MEMBERMOTOR ACCIDENT CLAIMS TRIBUNAL,
METROPOLITAN AREA: Bangalore.SCCH-14 36 MVC No.1628/15 & 1629/15By the
__________________________________
Petitioner/s Respondent
No.1 No.2
__________________________________
Court fee paid on petition 10-00
Court fee paid on Powers 01-00
Court fee paid on I.A.
Process
Pleaders Fee
_____________________________
Total Rs. ____________________________
Decree Drafted Scrutinised by MEMBER, M.A.C.T.
METROPOLITAN: BANGALORE
Decree Clerk SHERISTEDARSCCH-14 37 MVC No.1628/15 & 1629/15AWARD
SCCH NO.14
BEFORE THE MOTOR ACCIDENT CLAIMS TRIBUNAL
METROPOLITAN AREA : BANGALORE CITY
MVC No. 1629/2015
Petitioner in MVC No.1629/2015 KIRAN
S/o late Manikya
Aged about 21 years
R/at Arallmaradadoddi village,
Kodihalli Hobli,
Kanakapura Taluk,
Ramanagara District.(By pleader Sri NKG)
Vs.
Respondents 1. SREENATH
S/o Adi Shivashankar Reddy
Aged about 38 years,
The Managing Director of
M/s SVG Exports Pvt., Ltd.,
No.19/1, 24th cross,
6th block, N.S Garden,
Jayanagara,
Bangalore -560 011.2. TATA AIG GENERAL
INS.,CO.LTD.,
5th floor, West entrance,
Khanija Bhavana,
Race Course road,
Bangalore -560 001.3. SRI SOMASHEKAR
S/o Chikke Gowda
Major
R/at Garalapura Village,
Kodihalli H.O,
Kanakapura Taluk,
Ramanagara District.SCCH-14 38 MVC No.1628/15 & 1629/154. THE UNITED INDIA
INSURANCE CO.LTD.,
Regional Office,
No.18, 5th & 6th floors
Krishibhavan
Hudson circle,
Bangalore-560 001.(R1, 3 & 4 -Exparte
R2-By pleader Sri JNR)
WHEREAS, this petition filed on by the
petitioner/s above named U/sec.166 of the M.V.C. Act, praying for
the compensation of Rs.(Rupees ) for the
injuries sustained by the petitioner/Death of in a motor
Accident by vehicle No.
WHEREAS, this claim petition coming up beforeSri/Smt.Basavaraj Chengti, XVI Addl.Judge, Member, Court of
Small Cause, Bangalore, in the presence of Sri/Smt.
Advocate for petitioner/s and of Sri/Smt.
Advocate for respondent.ORDER
The petitions in MVC No.1629/2015 filed U/Sec.
166 ofM.V Actby the petitioners are hereby partly
allowed with cost.SCCH-14 39 MVC No.1628/15 & 1629/15The petitioner in MVC No.1629/2015 is entitled
for a compensation of Rs.90,000/- with interest @ 9%
from the date of petition till the date of payment
The respondents are jointly and severally liable to
pay compensation of Rs.90,000/- to the petitioner in
MVC No.1629/2015 with interest @ 9% from the date of
petition till the date of payment. In view of policy, the
respondent no.2 is liable to deposit the amount before
the Court within one month from the date of award.After deposit, entire amount of the petitioner in
MVC No.1629/2015 with interest shall be released in
his favour through account payee cheques with proper
identification.Claim petition in MVC No.1629/2015 as against
the respondent no.3 and 4 is dismissed without cost.The original Judgment shall be kept in MVC
No.1628/2015 and copy of the same in
MVC.No.1629/2015.Advocate's fee is fixed at Rs.2,500/- each.Given under my hand and seal of the Court this day
of 2017.
MEMBERMOTOR ACCIDENT CLAIMS TRIBUNAL,
METROPOLITAN AREA: Bangalore.SCCH-14 40 MVC No.1628/15 & 1629/15By the
__________________________________
Petitioner/s Respondent
No.1 No.2
__________________________________
Court fee paid on petition 10-00
Court fee paid on Powers 01-00
Court fee paid on I.A.
Process
Pleaders Fee
_____________________________
Total Rs. ____________________________
Decree Drafted Scrutinised by MEMBER, M.A.C.T.
METROPOLITAN: BANGALORE
Decree Clerk SHERISTEDARSCCH-14 41 MVC No.1628/15 & 1629/15 |
732fda1d-9f0d-5076-8552-a31d7b9151fe | court_cases | Punjab-Haryana High CourtJoginder Singh Son Of Shri Santa Singh ... vs Dalip Singh Son Of Late Sh. Ralla Singh ... on 4 July, 2013Author:K. KannanBench:K. KannanRSA No.916 of 1986 -1-
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT
CHANDIGARH
RSA No.916 of 1986
Date of Decision.04.07.2013
Joginder Singh son of Shri Santa Singh and others .....Appellants
Versus
Dalip Singh son of late Sh. Ralla Singh and others .......Respondents
Present: None for the appellants.
Mr. G.S. Virk, Advocate for
Mr. G.S. Nagra, Advocate
for respondent Nos.25, 27 to 29 and 31.
None for other respondents.
CORAM:HON'BLE MR. JUSTICE K. KANNAN
1. Whether Reporters of local papers may be allowed to see the
judgment ? No
2. To be referred to the Reporters or not ? No
3. Whether the judgment should be reported in the Digest? No
-.-
K. KANNAN J.(ORAL)1. Notice has been ordered in the appeal but no substantial
questions of law had been framed. Learned counsel has served a
memorandum containing the substantial questions, which he proposes to
raise. I have examined the same and after going through the records, I
am of the view that the following substantial question of law alone
arises for consideration:-"Whether the lower Appellate Court was justified in
reversing the judgment of the trial Court by placing reliance
on a photocopy of the alleged original of power of attorney
(D-1) in preference to a true copy of the power of attorney
issued by the Registrar's office and spoken to by an official
from the Registrar's office (P-2) ?"2. There is no representation for the appellant. The case is of
the year 1986 and the case has been published in the board for notice ofRSA No.916 of 1986 -2-advocates and there appears no justification for lack of appearance on
behalf of the appellant. The counsel for the respondent is present and I
proceed to examine the case on the basis of records available and pass
the following judgment.3. The issue for consideration in the case was that the 17th
defendant had held the power from the original owner of the property
to grant sale to other contesting defendants. The validity of the sale
was dependent on whether 17th defendant had a power to act on behalf
of the original owner to effect the sale or not. The plaintiffs were
relying on Ex.P1 and P2 purporting to be the power of attorney executed
by the owners in favour of the 17th defendant to contend that he had no
power to sell. Ex.P1 was a type written copy of the alleged power of
attorney said to have been issued by the Registrar's office and Ex.P2 was
a photocopy of the registration copy of the power of attorney. The
plaintiffs were relying on these two documents to contend that there
existed no power to the 17th defendant to enter into a transaction of
sale and therefore, the purchases on the basis of which the respondents
entered the defence could not be acted upon. The defendants'
contention on the other hand was that Ex.P1 did not contain any seal or
certification that it was a true copy issued under theRegistration Actand its relevant Rules and Ex.P2 was a photocopy of a copy which is not
secondary evidence in the eye of law.4. The Appellate Court examined Ex.P1 with reference to the
evidence of the official from the Registrar's office. The witness
admitted that the document did not contain any certification or seal of
the Registrar's office and that it was merely type written from theRSA No.916 of 1986 -3-original.The Registration Actcontains provisions detailing the manner
in which the official records are kept and the procedure for issuing
copies of the originals. Article III of Punjab Table of Registration Fees
prescribes a fee for supply of certified copy of a document registered
and the Registration Manual published in the respective States provide
for preparation and certification of copies.5. When there was an admission that the document had not
been prepared in the manner required under the law, the plaintiff could
not have relied on Ex.P2 as a secondary evidence. Ex.P2 also was a copy
of the photocopy and in terms ofSection 62of the Indian Evidence Act,
photocopy of the copy is not secondary evidence at all. The contesting
defendants, however, gave a justification for non-production of the
original by saying that the original had been held by the power of
attorney himself and he had died at the time of trial and the original
was, therefore, not available. Ex.D1 was produced by the defendant as
a copy taken from the original and asserted that it was a photocopy that
ensured a mechanical reproduction of the original. The trial court
judgment itself records the fact that PW2 has given evidence to the
effect that Ex.D1 produced by the defendant was an exact reproduction
of the original or what he has actually scribed. Oral evidence of
document claimed in the original is also secondary evidence. Therefore,
there was appropriate justification to rely on Ex.P1 as a true copy.Section 65of the Indian Evidence Act details several instances wherein
secondary evidence could be produced and one of the circumstances is
the loss of original. All that was required to be seen was whether the
document produced as a photocopy conformed to the requirement ofRSA No.916 of 1986 -4-law. Secondary evidence is defined underSection 63of the Indian
Evidence Act and it includes a copy made from the original by a
mechanical process which in themselves ensured the accuracy of the
copy and the copy is compared with such copies. Copies made from or
compared with the original are also secondary evidence as per Section63. A copy which was said to have been compared with original and
which was vouched by the scribe of the document as an exact replica of
the original were sufficient proof of the secondary evidence and if the
justification for production of the secondary evidence was available by
proof of loss of the original as required underSection 65, the reliance
made by the Appellate Court to find that there existed a power to sell
the property and that consequently, the assertions by the contending
defendants that they have purchased the property was well-founded.6. The specific question of law raised regarding the validity of
the D1 as whether it was a valid secondary evidence and whether Ex.P1
and P2 could be relied on as secondary evidence are answered in the
light of the above and I hold that Ex.P1 and P2 are not documents which
are admissible but Ex.D1 was. Resultantly a transaction of sale by the
17th defendant on the basis of a power that he had through the power of
attorney was valid and the plaintiff was required to be non-suited that
was so done correctly by the Appellate Court.7. The judgment of the Appellate Court is confirmed and the
second appeal is dismissed.(K. KANNAN)
JUDGE
July 04, 2013
Pankaj* |
48665e85-2edc-5e95-8981-dd3bdceea7dc | court_cases | Gujarat High CourtManojkumar Daashrathlal Patel vs State Of Gujarat on 29 September, 2016Author:Paresh UpadhyayBench:Paresh UpadhyayR/CR.MA/23329/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL MISC.APPLICATION
(FOR ANTICIPATORY BAIL ) NO. 23329 of 2016
With
CRIMINAL MISC.APPLICATION NO. 23203 of 2016
With
CRIMINAL MISC.APPLICATION NO. 23402 of 2016
With
CRIMINAL MISC.APPLICATION NO. 22719 of 2016
With
CRIMINAL MISC.APPLICATION NO. 22739 of 2016
With
CRIMINAL MISC.APPLICATION NO. 24320 of 2016
==========================================================
MANOJKUMAR DAASHRATHLAL PATEL
AND OTHERS ....Applicants
Versus
STATE OF GUJARAT ....Respondent
==========================================================
Appearance:
Criminal Misc. Application No. 23329 of 2016
MR DAIFRAZ HAVEWALLA, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
MR RASHESH RINDANI, APP for the Respondent-State
Criminal Misc. Application No. 23203 of 2016
MR N K MAJMU DAR, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
MR RASHESH RINDANI, APP for the Respondent-State
Criminal Misc. Application No. 23402 of 2016
MR R.J. GOSWANI, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
Page 1 of 4
HC-NIC Page 1 of 4 Created On Thu Nov 17 00:19:39 IST 2016
R/CR.MA/23329/2016 ORDER
MR RASHESH RINDANI, APP for the Respondent-State
Criminal Misc. Application No. 22719 of 2016
MR TUSHAR CHAUDHARY, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
MR RASHESH RINDANI, APP for the Respondent-State
Criminal Misc. Application No. 22739 of 2016
MR P.S. CHAUDHARY, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
MR RASHESH RINDANI, APP for the Respondent-State
Criminal Misc. Application No. 24320 of 2016
MR ADITYA R. PARIKH, ADVOCATE for
MR MRUGEN K. PUROHIT, ADVOCATE for the Applicant
MR MITESH AMIN, PUBLIC PROSECUTOR with
MR RASHESH RINDANI, APP for the Respondent-State
==========================================================
CORAM: HONOURABLE MR.JUSTICE PARESH UPADHYAY
Date : 29/09/2016
ORAL ORDER1. These are the applications for anticipatory bail.2. The applicants apprehend their arrest in connection with
FIR being CR-I No. 64 of 2016 registered with the Kheralu
Police Station, District: Mehsana for the offences punishable
underSections 191,192,196,198,199,200,463,464,469,471,406,408,409,420and114of the Indian Penal Code.3. Rule returnable on 05.10.2016. Learned Additional PublicPage 2 of 4HC-NIC Page 2 of 4 Created On Thu Nov 17 00:19:39 IST 2016
R/CR.MA/23329/2016 ORDER
Prosecutor waives service of notice of Rule on behalf of
respondent-State.4. Learned Public Prosecutor is heard at length. He has
made available to this Court the material so far gathered
during the course of Investigation and the material which is
otherwise relevant for the purpose. Learned Public Prosecutor
has also explained in detail the modus of the accused.5. This Court has taken into consideration the allegations
made in the complaint. The alleged criminality / illegality is
with regard to the implementation of the Swachchh Bharat
Abhiyan - the much admired policy of the Government. The
said policy is an attempt to reach to the last man of our
society, as was dreamed by the father of the nation. Keeping in
view this background and the object, it appears to this Court
that the questioning of the accused needs to be done and / or
guided by some higher Officer. In the peculiar facts of the
case, it is directed that the Superintendent of Police, Mehsana,
may look into the matter. It needs to be observed that delicate
balance would be required to be maintained since, any harsh
action may ultimately prove to be counter productive for the
poorest man of the society and at the same time, any leniency
may result in siphoning of the budget meant for lower strata of
our society. Keeping these broad aspects in view, the
investigation needs to go ahead.6. In view of above, the concerned Sarpanch and the Taluka
Development Officer, along with other accused who are the
applicants before this Court are directed to present themselves
before the Superintendent of Police, Mehsana for questioning
on 02.10.2016. (Except applicant of Criminal Misc. ApplicationPage 3 of 4HC-NIC Page 3 of 4 Created On Thu Nov 17 00:19:39 IST 2016
R/CR.MA/23329/2016 ORDER
No. 23329 of 2016 who is stated to have been arrested). This
Court is conscious that 02.10.2016 is Sunday and even
otherwise a public holiday. However keeping in view the fact
that the alleged offence in question is an off shoot of the
scheme noted above, 2nd October is the most appropriate date
when the concerned Officer should start applying his mind in
the direction noted above. Therefore, the Superintendent of
Police, Mehsana is requested to do / start this exercise on
02.10.2016.7. The Investigating Officer / the S.P. shall also verify as to
whether, as a matter of fact, the toilets in question are
constructed or not, and to what extent the policy is breached.8. It is ordered that till the next date of hearing, the
applicants shall not be arrested in connection with the offence
in question.Direct service is permitted.(PARESH UPADHYAY, J.)
Salim/60Page 4 of 4HC-NIC Page 4 of 4 Created On Thu Nov 17 00:19:39 IST 2016 |
b525a92f-b028-589f-bc0d-c19c37b3367b | court_cases | Patna High Court - OrdersVikash Kumar & Ors vs The State Of Bihar on 13 April, 2018Author:Arun KumarBench:Arun KumarIN THE HIGH COURT OF JUDICATURE AT PATNA
Criminal Miscellaneous No.21414 of 2018
Arising Out of PS. Case No.-250 Year-2017 Thana- MANIGACHI District- Darbhanga
======================================================
1. Vikash Kumar son of Binod Rai resident of Village - Dharm
Saini, P.S. + District - Saharsa, presently residing at Patel
Nagar, Ward No. 31, P.S. + District - Saharsa.
2. Amar Kumar son of Kanhaiya Mahto resident of village -
Muradpur, P.S. Nauhatta, District - Saharsa.
3. Prem Kumar son of Upendra Mahto resident of village + P.S. -
Nauhatta, District - Saharsa.
... ... Petitioner/s
Versus
The State of Bihar.
... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr. Pramod Mishra
For the Opposite Party/s : Mr. Sri Chandrasen Prasad Singh
======================================================
CORAM: HONOURABLE MR. JUSTICE ARUN KUMAR
ORAL ORDER
2 13-04-2018Heard learned counsel for the petitioners and the
learned APP for the State.Petitioners, already in custody, seek bail in connection
with Manigachhi P.S. Case No.250 of 2017, registered underSections 420,414,467,468and120(B)of the Indian Penal
Code.The police stopped a vehicle on suspicion and the
driver produced the papers but registration book of the vehicle
was found fake and suspected to be a stolen vehicle and the
three petitioners were also boarding the vehicle.Learned counsel for the petitioners submits that the
vehicle was of Vishundeo Mahto and he was driving the vehicle,
Patna High Court Cr.Misc. No.21414 of 2018(2) dt.13-04-20182/2the petitioners had taken lift and petitioner no.2 has no criminal
antecedent whereas petitioner nos.1 and 3 have one criminal
antecedent underSections 366/365of the Indian Penal Code.Having considered the aforesaid facts and
circumstances and in particular that the vehicle was being
driven by another co-accused Vishundeo Mahto and papers were
also produced by him, petitioners, namely, Vikash Kumar, Amar
Kumar and Prem Kumar are directed to be released on bail on
furnishing bail bonds of Rs.10,000/- (ten thousand) each with
two sureties of the like amount each to the satisfaction of
learned ACJM-VI, Darbhanga in connection with Manigachhi
P.S. Case No.250 of 2017.(Arun Kumar, J)
S.KUMAR/-U T |
7034953c-7f4b-5004-88f3-c7899ca56cab | court_cases | Bombay High CourtManu Bharati Cooperative Housing ... vs Commissioner Of Income Tax. on 22 January, 1986Equivalent citations: (1987)59CTR(BOM)226JUDGMENTMasodkar, J. - This appeal questions the eventual acquisition of property by the revenue-respondent on the ground that conveyance-deed evidenced by registered document of 12-2-1974 of Plot No. 127, Swami Vivekanand Road, Vile Parle, bearing revisional survey No. 212, was for inadequate consideration and, therefore, it was liable to be acquired. Order for such acquisition unders. 269F(6)of the IT Act 1961, has been made and that order made by the Competent Authority has been upheld by the Income-tax Appellate Tribunal, C Bench, Bombay. Against that the present appeal has been filed.2. We may, at the outset make the position clear, in that apart from the merit the ld. Counsel appearing for the appellant relied on a Division Bench judgment of this Court in Special Civil Applications Nos. 1628 of 1973, 1629 of 1973, 1630 and 1631 of 1973, decided on 6-2-1981, so as to contend that the proceedings initiated are liable to be quashed as not being in accordance with law, including the inititial notice being bad and not warranted by the provision of law. In that judgment this Court has, indeed, struck down such notices and consequent proceedings for the purpose of acquisition of the properties. Similarly, on the basis of that judgment, it was pointed out that the proceedings were not initiated within nine months from the date of sale, and reliance was placed on the communication of 8-10-1985 which showed that the concerned Gazette was available for public sale on 9-12-1974. The submission of the ld. Counsel is that both these grounds go to the root of the matter and as has been held by this Court in the group of those cases, the proceedings in acquisition are entirely vitiated.3. The defects that go to the root of the jurisdiction, as have been pointed out in that judgment, appear to be available in the present case also. And applying the ratio of that judgment, the proceedings for acquisition unders. 260F(6)of the IT Act, 1961, would be rendered invalid. That would be enough so as to allow the appeal.4. However, we are also satisfied in the present case that on the admitted positions as to valuation and consideration, the orders are unsustainable.5. The judgment under appeal shows that eventually the Tribunal was minded to come to the conclusion that the value of the property, including the scrap value of the building, could be worked in the sum of Rs. 4,59,365. This value which includes the land value at Rs. 200 per square yard is noted in paragraph 19 of the order of the Tribunal. In paragraph 4 of the order, while referring to the competent Authoritys valuation, we find that the land value was worked out at Rs. 225 per square yard and the value of the building as scrap value at Rs. 39,165, the total being Rs. 5,11,890. Under the conveyance-deed it is not in dispute that the vendor has to pay and he did pay a consideration of Rs. 2,00,000. It is further not in dispute that the property was tenanted property and by reason of the claims of the tenants with regard to the property, the liability undertaken by the purchaser was to provide alternative accommodation to the tenants that works out to Rs. 2,66,000. These positions and quantums are not in dispute on behalf of the revenue. If these figures are kept in view for the purpose of the transaction as against the property, it is not disputed that the purchaser would be out of pocket by Rs. 4.66.000, which includes the consideration paid for the actual purchase of the property. The valuation worked out against such a liability undertaken, in our view, would not be unfair or inadequate.6. Mr. Page for the revenue, however, argued that the capitalised value of the standard rent which is worked out at Rs. 79,800 will have to be taken as a credit so as to find out the market value. In his submission, therefore, if that amount is deducted, Rs. 1,86,200 will be the amount which would be the additional liability apart from the amount of Rs. 2,00,000 payable under the document. In other words, Mr. Page for the revenue contended that the total liability under the transaction would be Rs. 3,86,200 and that keeping the figure of Rs. 4,59,365, which gives the land value at Rs. 200 per square yard, the transaction will be within the mischief ofs. 269C(2)(a)of the IT Act, 1961.7. We are unable to agree. If, for all purposes and as is not in disputs, a purchaser is required to be out of pocket in a given transaction by the amounts apart from the consideration. Such amounts will have to be give due credit while considering the fairness of the transaction. In this case giving deduction for the compensation to the tenants from the notional value, the Competent Authority as well as the Tribunal have worked out the figures which are available in paragraphs Nos. 4 and 19 of the order of the Tribunal. It is not in dispute that the consideration paid for the purchase of the property is Rs. 2,00,000, while the liability to provide alternative accommodation to the tenants is undertaken by the purchaser and its value is worked out notionally to the tune of Rs. 2,66,000. Keeping in view that the property was tenanted and further that the proceedings leading to the compromise with the tenants were required to be initiated where under alternative accommodation was required to be constructed and provided to the tenants, it is obvious that the figures worked out are just the estimates, though admittedly put at Rs. 2,66,000 and on that basis notionally the market value is arrived at. When such approximates are worked out for the purpose of market value, the fluctuations therein cannot be ignored. For testing unfairness of the transaction under the Circumstances, and on the admitted facts it would not be enough then to rely only on the figure of consideration stated in the document. Even the estimates have variables. It cannot be forgotten that the land value has been worked out by the valuer of he assessee at Rs. 160 per square yard, while by the Competent Authority it has been worked out at Rs. 225 per square yard and the Tribunal was willing to reduce it to Rs. 200 per square yard. Looking to the occupation of the property by tenants and also the predicament which is noted 9n paragraph 19 of the order of the Tribunal, estimates can further be reduced than the value at Rs. 200 per square yard. Depending upon several considerations which exist in the present case, the value of he land at Rs. 180 per square yard would not be unrealistic. And upon that basis, we do not think that this was a fit case where all the requirements ofs. 269C(a)of the IT Act, 1961, could be said to have been established. Even if we were to reduce notionally the land value by 10 per cent, the transaction would not be within its mischief by reason of the admitted liability of providing the alternative accommodation to the tenants as a part of the transaction. It is not suggested by the revenue that was not the liability so undertaken by the purchaser or that liability should not be considered. For all purposes, that liability is treated as the part of the transaction undertaken the purchaser. Even such a case of such accommodation is notionally worked out. Under the circumstances, wherefore, no clear case existed for finding out that the market value of the property exceeded the apparent consideration in the conveyance deed by more than 25 per cent.8. For all these reasons, and particularly on the strength of the earlier judgment of this Court referred to above, the present appeal is allowed and the orders impugned are set aside. There would be no order as to costs. The Civil Application is, thus, allowed. |
12ca375c-2861-5979-a049-de67b8a30ba5 | court_cases | Bombay High CourtNagu Dagdu Dhangare And Another vs The State Of Maharashtra And Others on 3 September, 2018Author:Ravindra V. GhugeBench:Ravindra V. Ghuge1 38-wp-11114-16 .odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 11114 OF 2016
NAGU DAGDU DHANGARE AND ANOTHER
VERSUS
THE STATE OF MAHARASHTRA AND OTHERS
...
Advocate for the Petitioners : Shri K. F. Shingare
AGP for Respondent- State : Shri S. R. Yadav-Lonikar
Advocate for Respondent Nos. 5 and 6 : Shri S. S. Kazi
...
CORAM : RAVINDRA V. GHUGE, J.DATED : 03rd SEPTEMBER, 2018....PER COURT :1. Liberty to file the re-joinder.2. Stand over to 03/10/2018.3. Interim relief, granted earlier, to continue till the next
date.(RAVINDRA V. GHUGE, J.)
shp/-::: Uploaded on - 04/09/2018 ::: Downloaded on - 06/09/2018 01:20:38 ::: |
922bc4c0-a9e6-5791-978a-3ac043dde165 | court_cases | Allahabad High CourtThe Commissioner,Commercial ... vs S/S Star Tax,98/07,Bekanganj,Kanpur on 31 July, 2014Author:Surya Prakash KesarwaniBench:Surya Prakash KesarwaniHIGH COURT OF JUDICATURE AT ALLAHABAD
Court No. - 4
Case :- SALES/TRADE TAX REVISION No. - 423 of 2014
Applicant :- The Commissioner,Commercial Tax,U.P.Lucknow
Opposite Party :- S/S Star Tax,98/07,Bekanganj,Kanpur
Counsel for Applicant :- S.C.
Counsel for Opposite Party :- Shubham Agarwal
Hon'ble Surya Prakash Kesarwani,J.1. Heard Sri B.K.Pandey, learned Standing Counsel for the applicant and Sri Bharat Ji Agarwal, learned Senior counsel, assisted by Sri Shubham Agarwal, learned counsel for the respondent.2. This revision arises from the order of the Tribunal dated 27th June, 2014 passed in a proceeding arising from an order of seizure underSection 48(7)of the U.P. VAT Act, 2008. Seizure was made on the ground that the commodity in question is a taxable commodity falling under Entry-196 of Part-C of Schedule-II to the Act. The stand of the dealer is that it is an exempt commodity falling under Entry-21 of Schedule-I. The Seizing Authority prima facie found the goods to be taxable, and therefore, demanded security of Rs.4,72,309/- on the estimated value of goods Rs.11,80,772/- the security was demanded @ 40%. The respondent moved an application under the proviso toSection 48(7)which was rejected by the Joint Commissioner.3. Aggrieved with that order, the respondent preferred an Appeal No.210/2014 (Year-2014-15) before the member Commercial Tax Tribunal, Kanpur Bench-I, Kanpur which has been allowed by the impugned order dated 27th June, 2014. The Tribunal came to the conclusion that the commodity in question is covered by Entry-21 of Schedule -I.4. Thus the only question which requires consideration is as to whether prima facie the commodity in question is covered underEntry-21 of Schedule-I of the Act?5. Entry-21 of Schedule-I is reproduced below : -21Silk Fabrics ; Handloom cloth of all kinds ; handloom shawls & lois whether plain, printed, dyed or embroidered; Dhoties and Saries; textiles of following varieties manufactured on powerloom excluding the items described in Schedule-II : -(a) cotton fabrics of all varieties ;(b) rayon or artificial silk fabrics, including staple fibre fabrics of all varieties ;(c) woolen fabrics of all varieties ;fabrics made of a mixture of any two or more of the above fibres, viz., cotton, rayon, artificial silk, staple fibre or wool, or of a mixture of any one or more of the said fibres with pure silk fibre ;(e) canvas cloth.6. Sri B.K. Pandey submit that the Tribunal has relied upon a Division Bench judgment of this Court dated 4th August, 2010 in Writ Tax No. 410/2007 (Northern India Fisihing Material Company Vs. State Of U.P. & Others), wrongly assuming that the judgment of this Court in the case of M/sGaurav Traders, Gorakhpur Vs. Commissioner of Trade Tax, 2007 UPTC 914has been overruled.He further submits that the decision in the case of M/sGaurav Traders(supra) dealing with the similar commodity was followed in Sales/Trade Tax Revision No.1756 of 2006 (Commissioner of Trade Tax, U.P., Lucknow Vs. S/S Mahabir Textiles), decided on 28th May, 2014. He, therefore, submits that the view taken by this Court with respect to the commodity in question clearly establish that the commodity in question is not an exempt commodity.7. Learned Standing counsel has also referred to the meaning of the words "rayon" and 'cellulose' as given in "Oxford Dictionary & Thesaurus" which gives the meaning of these two words as under : -"rayon/renon/noun textile fibre or fabric made from cellulose.cellulose/......./ noun 1 carbohydrate forming plant-cell walls. 2 paint or lacquer consisting of cellulose acetate or nitrate in solution."8. Thus only those textiles as described in sub Items a, b, c, d and e of Entry-21 shall qualified for exemption which are manufactured on power goods.9. Sri Bharat Ji Agarwal, learned Senior counsel submits that the Tribunal has recorded a prima faice finding of fact looking into the nature of proceeding before it that the goods in question is a textile fabric exempt under Entry-21 of Schedule-I which contains the list of exempt items.10. Learned counsel for the parties wants to make further submission. As prayed, put up on Saturday, i.e., on 2nd August, 2014 for further hearing on which date learned Standing Counsel shall also produced the original record relating to seizure .Order Date :- 31.7.2014
Mukesh |
8307a06f-d50c-58a9-8505-7b9f0c5417b6 | court_cases | Rajasthan High Court - JodhpurM/S Yaduvanshy Cons.Company vs State & Ors on 7 July, 2009Author:Prakash TatiaBench:Prakash Tatia1
S.B. Arbitration Application No.27/2008
M/s. Yaduvanshy Const. Company
vs
State of Rajasthan & Ors.
DATE OF ORDER : 7.7.2009
HON'BLE MR. PRAKASH TATIA.
Mr.RS Choudhary, for the applicant.
Ms.Aruna Negi, for the respondent.
<><><>
Heard learned counsel for the parties.
The petitioner-contractor in response to the notice
inviting tender issued by the respondent submitted his
tender and ultimately his offer was accepted and petitioner
executed the agreement with the respondent and started
working from 29.10.2005 and as per the petitioner he
started the work and it is also alleged that during carrying
out the work as per Annex.1, the petitioner firm faced
objections of the residents of ward no.15 and therefore, he
could not complete the work. It is alleged that Asstt.
Engineer and Executive Engineer of the Municipal Board,
Bhadra directed the petitioner-firm to stop work and,
therefore, the work remained closed for 2 months. After
some time, instructions were issued by the Executive
officer, Municipal Board, Bhadra to the petitioner-firm for
starting the work and petitioner-firm started the work. On
2
23.1.2006 against there were some objections raised by
some tenants and work was not completed. The petitioner
submitted some representations and ultimately, the
respondent cancelled the contract of the petitioner on 17th
Marcy, 2006 and issued fresh NIT for completion of the rest
of the work at the risk and cost of the petitioner-firm. The
petitioner-firm filed the suit for injunction for restraining the
other party to do the work, however, the petitioner has
submitted this petition underSection 11of the Arbitration
and Conciliation Act, 1996 for appointing the arbitrator to
settle the dispute as the petitioner has paid a sum of
Rs.56762/- and he also deposited the settlement fees as
required by clause 23 of the agreement. Inspite of the
petitioner's request, the arbitrator was not appointed,
therefore, he has submitted this petition underSection 11of the Act of 1996 before this Court.
The respondent submitted reply and raised objection
that clause 23 provides for referring the dispute to the
standing committee and according to learned counsel for
the respondent there is no provision for referring the matter
to the arbitrator and, therefore, the arbitrator cannot be
appointed.
The objection raised by the respondent has already
been answered by the Division Bench of this Court
3
delivered in the case of Chetan Construction Co. Vs. State &
Ors reported in 2005(1) WLC (Raj.) 484 wherein the
authority failed to refer the matter to the standing
committee under the same clause 23 then this Court held
that if the party fails to act in accordance with procedure
provided in clause 23 of agreement then the Chief Justice or
the Judge designated by it is required to appoint arbitrator
after taken into consideration the provisions ofSection 11of the Act of 1996.
Since there is live dispute and that has not been
adjudicated yet and the petitioner before approaching this
Court requested the respondents for appointing arbitrator
and the respondent failed to appoint the arbitrator,
therefore, this petition is allowed and Sh. Sohan Lal
Beniwal, Retd. Executive Engineer, Irrigation Department
resident of Near Tiddi Area, Patel Nagar, Bikaner is
appointed as arbitrator, who may fix his fees and also fix
the expenditure which is necessary for conducting arbitral
proceedings.
(PRAKASH TATIA),J.cpgoyal/- |
3597d7de-5068-5519-80b9-0079a6594bef | court_cases | Income Tax Appellate Tribunal - DelhiGomti Exim Pvt. Ltd., New Delhi vs Assessee on 12 June, 2015THE INCOME TAX APPELLATE TRIBUNAL IN
(DELHI BENCH "C" NEW DELHI)
BEFORE SHRI G.C.GUPTA, HON'BLE VICE PRESIDENT
AND
SHRI N.K.SAINI, ACCOUNTANT MEMBER
ITA NO. 5383 /DEL/2010
(Assessment Year: 2006-07)
Gomti Exim Pvt. Ltd. Vs. ITO
A-1/60, FF Sector-11 Ward-12(2)
Rohini
New Delhi New Delhi
PAN : AACCG6995M
(Appellant) (Respondent)
Appellant by : Sh. Ved Jain, Adv., Smt. Rano Jain, CA
Respondent by : Smt. Parminder Kaur, Sr. Dr.
Date of hearing : 15/04/2015
Date of pronouncement : 12 /06/2015
ORDERPer N.K.Saini, A. M. :1. This is an appeal by the Assessee against the order dated
30/09/2010 of CIT(A)- XV, New Delhi.2. Following grounds have been raised in this appeal :-"1. On the facts and circumstances of the case, the
order passed by the learned Commissioner of Income Tax
(Appeals) [CIT(A)] is bad both in the eye of law and on facts.2 ITA No. 5383/ Del/20102(i) On the facts and circumstances of the case, the
learned CIT(A) has erred both on facts and in law in
confirming the addition of Rs. 10,00,000/- made by AO on
account of share application money.(ii) That the above said addition has been confirmed
despite the assessee bringing all material and evidences on
record to prove the identity of the share holder.
(3) That the addition on account of share capital has
been confirmed ignoring the fact that appellant company
was incorporated during the year and there was no source
of income which could be alleged to have been introduced
by way of share capital.4(i) On the facts and circumstances of the case, the
learned CIT(A) has erred both on facts and in law in
confirming the addition of Rs. 5,79,203/- on account of
advance received against the land invoking the provision of
section 2(22)(e) of the Act.(ii) That the above said addition has been confirmed
ignoring arbitrarily the evidence brought on record that the
transaction was entered into in due course of the business
of the assessee and as such does not come under the
purview of section 2(22)(e) of the Act.(iii) That the appellant company not being a shareholder,
no addition can be made in the hands of the appellant on
account of dividend.5. That the appellant craves leave to add, amend or alter
any of the grounds of appeal."3. Ground no. 1 and 5 are general in nature so do not require any
comments on our part.4. Vide ground no. 2 (i), (ii) and (iii) the grievance of the assessee
relates to the confirmation of addition of Rs. 10,00,000/- made by the
AO on account of share application money.3 ITA No. 5383/ Del/20105. The facts of the case in brief are that the assessee filed e-return of
Income on 28.11.2006 declaring nil income which was processedu/s
143(1)of the Income Tax Act, 1961(hereinafter referred to as the Act)
and thereafter the case was selected for scrutiny. During the course of
assessment proceedings, the AO noticed that the assessee had raised
share capital including share premium amounting to Rs. 10,00,000/-
from Shri Vinod Kumar and Rs. 6,50,000/- from Shri Jasbir Singh. The
AO asked the assessee to furnish the confirmation and the sources of
investment made by the above mentioned two share holders. He also
asked to produce the aforesaid persons to verify the veracity of the
transactions. In response the assessee produced both the persons on
5.12.2008. The AO observed that Shri Jasbir Singh was able to
substantiate his sources of investment from sale proceeds of
agricultural land but Shri Vinod Kumar could not do so. The AO further
observed that the statement of Shri Vinod Kumar was also recorded in
which he explained that he made the investment out of his past
savings from agricultural activities and out of refund of cash loan given
to Shri Jasbir Singh alias Pappu. Shri Vinod Kumar in his statement
also stated that he owned approximately 40 bighas of land, however,
papers were not available with him since those were mortgaged in4 ITA No. 5383/ Del/2010connection with a tractor loan. The AO observed that Shri Vinod
Kumar could not explain the exigency under which he had to apply for
bank loan specially when a sum of Rs. 10,00,000/- in cash was
available with him. He further observed that copy of the Khasra
Khatoni of agricultural land at Village Nathupur the names mentioned
were Shri Sardare, Shri Tare and Shri Umed Singh as owner of
agricultural land and the name of Shri Vinod Kumar was not amongst
the co-owners of the land. The AO pointed out that the assessee
produced an agreement on the blank paper which revealed that Shri
Jasbir Singh of Village Nathupur had refunded and an old cash loan to
Shri Vinod Kumar, however, he did not find merit in the submission of
the assessee and added Rs. 10,00,000/- to its income by considering
the same as unexplained creditsu/s 68of the Act. Reliance was
placed on the following case laws :-" --Union of India vs. Raghubir Singh 178 ITR 548 (S.C)--Gujarat State Co-operative Bank Ltd. vs. CIT(2001) 250 ITR
229(Guj.)--CIT vs Steller Investment Ltd., [2001] 251 ITR 263 (SC)."6. Being aggrieved the assessee carried the matter to the Ld.
C.I.T.(A) and submitted that the assessee produced following5 ITA No. 5383/ Del/2010evidences before the AO to prove the identity and creditworthiness of
Shri Vinod Kumar :-"(i) Copy of Share Application received from Mr. Vinod Kumar(ii) Copy of Shares Certificate of shares Allotted to him(iii) Copy of confirmation received from him(iv) Copy of Annual Return and Form 2 filed before the Registrar of
Companies(v) Various documents related to assets owned by him, Identity Card."It was further submitted that the assessee produced the person who
confirmed the amount of contribution to the assessee. It was also
stated that the assessee produced various papers related to land and
other assets owned by Shri Vinod Kumar which could establish his
creditworthiness and to prove the genuineness of the transaction it
was necessary to prove the identity and creditworthiness of the
creditor. It was submitted that the AO specifically mentioned in his
order that Shri Vinod Kumar appeared before him and produced
details of assets owned by him. Therefore, assessee discharged the
onus cast upon him. It was prayed that the addition of Rs.
10,00,000/- made by the AO may be deleted. Reliance was placed on
the following case laws :-"1. CIT vs. M/s Lovely Exports Pvt. Ltd. 216 CTR 1952. CIT vs. Steller Investment Ltd. 251 ITR 263 (SC)3.CIT vs. Sophia Finance Ltd.205 ITR 98 (Del)4.CIT vs. Achal Investment Ltd.268 ITR 211 (Del)5. CIT vs. M/s Divine Leasing & Finance Ltd. (299 ITR 268)6. CIT vs. Sumati Dayal 214 ITR 801 (SC)6 ITA No. 5383/ Del/20107.CIT vs. Value Capital Services Pvt. Ltd.307 ITR 334 (Del)"7. The Ld. CIT(A) after considering the submissions of the
assessee observed that Shri Vinod Kumar was not assessed to tax
and did not have a PAN. He further observed that Shri Vinod Kumar
could not produce any evidence with regard to the source of income
for his creditworthiness and that the mode of payment regarding his
claim of agricultural income was not furnished before the AO. The ld.
C.I.T.(A) also observed that the assessee could not submit either the
copy of Khasra, Khatauni or any receipt of agricultural produce and
that the genuineness of the transaction was in doubt since the
payment was not made through banking channel but was made in
cash. The Ld. CIT(A) also mentioned that the case laws relied by the
assessee were not applicable to the present case. Accordingly the
addition made by the AO on account of share capital of Rs. 10 lac
received from Sh. Vinod Kumar was sustained.Now, the assessee is in appeal.8. The Ld. Counsel for the assessee reiterated the submissions
made before the authorities below and further submitted that the
assessee furnished various documents including PAN Card, Share
Certificate, Receipt, Khasra Khatauni etc. before the AO, for the7 ITA No. 5383/ Del/2010aforesaid contention our attention was drawn towards page no. 51
onward of the assessee's paper book. It was further submitted that
the assessee produced Shri Vinod Kumar before the AO who
recorded his statement wherein the source of investment was
explained out of saving from agricultural activities. It was also
submitted that Shri Vinod Kumar is son of Shri Umed Singh whose
name was appearing in Khasra Khatauni copy which is placed at
page no. 43 to 49 of the assessee's paper book and the name of the
father Shri Umed Singh was there in the khatauni as a co-owner.
Reference was made to page no. 43 of the assessee's paper book. It
was submitted that the addition sustained by the AO was not justified.9. In his rival submissions, the ld. DR strongly supported the roder of
the authorities below and further submitted that the assessee could
not produce the creditworthiness of Shri Vinod Kumar and the
genuineness of transaction was in doubt. Therefore, the ld. CIT(A)
was fully justified in confirming the addition made by the AOu/s 68of
the Act. Reliance was placed in the following case laws :---C.I.T. vs. NOVA PROMOTERS AND FINLEASE (P) LTD.342 ITR169 (Del.)--C.I.T. vs. FAIR FINVEST LTD.357 ITR 146 (Del.)--C.I.T. vs. GANGESHWARI METAL P. LTD.361 ITR 10 (Del.)--C.I.T. vs. LOVELY EXPORTS P. LTD. [2009] 319 ITR (St.) 5 (SC)8 ITA No. 5383/ Del/201010. We have considered the submissions of both the parties and
carefully gone through the material available on the record. In the
present case, it is an admitted fact that the asessee received a sum of
Rs. 10,00,000/- as share application money from Shri Vinod Kumar.
The assessee furnished copy of PAN Card, Annual return, Share
application form, copy of share certificate, copy of Khasra Khatauni
before the AO vide letter dated 11.12.2008 copies of the above
documents are placed at page nos. 17 to 49 of the assessee's paper
book. In the present case, the main objection of the AO was that in
khasra khatauni, the name of the assessee was not appearing as the
owner of land. In this regard the explanation of assessee was that the
name of his father Shri Umed Singh was appearing in khasra khatauni
which is placed page no. 43 of the assessee's paper book which
clearly established the ownership of land. It is also noticed that the
assessee furnished copies of "J" froms in the name of Shri Vinod
Kumar which clearly established that he sold the agricultural produce
to M/s. Rameshwer Dayal Prem Chand Aadhti, Sonepat Mandi, copies
of the same are placed at page no. 37 to 43 of the assessee's paper
book. In the present case, it is noticed that the assessee received a
sum of Rs. 5,00,000/- from Shri Jasbir Singh to whom the said amount9 ITA No. 5383/ Del/2010was given as an advance to purchase the land which is evident from
page no. 44 of the assessee's paper book which clearly shows that the
advance money given to Shri Jasbir Singh was taken back by Shri
Vinod Kumar on 25.12.2005. Both the parties affixed their signature
on the above said document which is witnessed by Shri Ajay Kumar
son of Shri Jagdish and Shri Jagdish Son of Shri Raj Kumar.11. From the above facts, it is clear that Shri Vinod Kumar was a
man of means, his creditworthiness was proved and the identity was
not in doubt since the assessee produced Shri Vinod Kumar before the
AO who recorded his statement wherein the investment in the shares
was admitted, copy of the share certificate, is placed at page no. 36
of the assessee's paper book which revealed that 10,000 shares
having destructive nos. 16,501 to 26,500 were allotted to Shri Vinod
Kumar vide certificate no. 22, therefore, the genuineness of
transaction can also not be doubted. From the above facts, it is clear
that the asseseee proved the identity and creditworthiness of Shri
Vinod Kumar as well as the genuineness of transactions amounting to
Rs. 10,00,000/-, therefore, the addition made by the AO and sustained
by the ld. CIT(A) was not justified, accordingly the same is deleted.10 ITA No. 5383/ Del/201012. The next issue vide ground no. 4 (i),(ii), & (iii) relates to the
confirmation of addition of Rs. 5,79,203/- made by the AO by invoking
the provisions ofSection 2(22)(e)of the Act. The facts related to this
issue in brief are that the AO, during the course of assessment
proceedings noticed that the assessee had taken an advance of Rs.
10,00,000/- from M/s. Precision Stock and Credit Pvt. Ltd. in which
Shri Jasbir Singh held 22,000 out of 1,03,500 shares i.e. a beneficial
holding of 21% shares with voting right. He further, observed that Shri
Jasbir Singh had holding of 24.52% in assessee's company and that
the balance sheet of M/s Precision Stock and Credit Pvt. Ltd. revealed
that it had an accumulated profit of Rs. 579203/- in the beginning of
year, thus, satisfying the conditions of applicability ofSection 2(22)(e)of the Act. The AO asked the assessee to explain as to why the
amount of advance received to the extent of accumulated profits of
M/s Precision Stock and Credit Pvt. Ltd. may not be taxed as deemed
dividend as per the provisions ofSection 2(22)(e)of the Act. The
Assessee submitted that the advance was received against the land
which was in the nature of normal business transaction, M/s Precision
Stock and Credit Pvt. Ltd. had no accumulated profits and the
advance was given only out of share premium available with that11 ITA No. 5383/ Del/2010company which could not be termed as part of accumulated profit as
such the provisions ofsection 2(22)(e)of the Act were not applicable.
The AO, however, was not satisfied from the submission of the
assessee by observing that the balance sheet of M/s Precision Stock
and Credit Pvt. Ltd. revealed that accumulated profits of Rs. 5,79,203/-
was included in reserve and surplus as per Schedule II. He also
mentioned that a share premium of Rs. 66,15,000/- was added during
the year beside the profit for the year of Rs. 99,213/- which gave the
total reserve and surplus of Rs. 72,93,433/-. The AO accordingly made
the addition of Rs. 5,79,203/- by invoking the provisions ofSection
2(22)(e)of the Act. Reliance was placed in the judgment of the
Hon'ble Bombay High Court in the case ofWall Chand & Co. Ltd. vs.
CIT(1975), 100 ITR 598.13. Being aggrieved the assessee carried the matter to the Ld.
CIT(A) and submitted that the assessee company was incorporated
during the year under consideration with the objective of dealing in real
estate business and a sum of Rs. 10,00,000/- was received from one
of its client M/s Precision Stock & Credit Pvt. Ltd. It was further
submitted that the provisions ofSection 2(22) (e)of the Act make it
clear that in case some money has been advanced by any company12 ITA No. 5383/ Del/2010for some business transaction, the same cannot be considered for the
purpose ofSection 2(22)(e)of the Act. It was further, submitted that
the money advanced by M/s Precision Stock & Credit was on account
of business transaction and also the said party did not has
accumulated profits to the extent of amount advanced by it to the
assessee. It was emphasized that the balance sheet of M/s Precision
Stock & Credit Pvt. Ltd. revealed that the said company had given the
amount of Rs. 10,00,000/- to the assessee on account of advance
towards purchase of some property. In support of the above
contention, copy of the agreement was produced before the AO. It was
submitted that the said amount was refunded back to the assessee in
the next year and the balance sheet in the books of the said party had
been reduced to nil, therefore, the transaction was clearly out of the
purview of provisions ofSection 2(22)(e)of the Act.14. The Ld. CIT(A) after considering the submissions of the assessee
observed that Shri Jasbir Singh who had holding of 24 to 25% in the
assessee company was also having a beneficial holding with voting
right of 21% in M/s Precision Stock & Credit Pvt. Ltd. which had an
accumulated profit of Rs. 5,79,203/-. The Ld. CIT was of the view that
the provisions ofSection 2(22)(e)of the Act would be applicable in the13 ITA No. 5383/ Del/2010present case, since Sh. Jasbir Singh was holding more than 20% to
the shares in both the assessee and M/s Precision Stock and Credit
Pvt. Ltd. He also mentioned that the assessee could not prove on the
basis of evidence that the transaction was in the nature of the
business transaction. He, therefore, confirmed the addition made by
the AO. Now, the assessee is in appeal.15. Ld. Counsel for the assessee submitted that since the assessee
company was not a share holder of M/s Precision Stock and Credit
Pvt. Ltd. and just because of a common share holder the additionu/s
2(22)(e)of the Act cannot be made. Reliance was placed on the
following case laws :-1.Commissioner of Income Tax vs. Ambassador Travels P. Ltd.[2009] 318 ITR 376(Delhi)2.Commissioner of Income Tax vs. Shri Raj Kumar[2009]318 ITR 462(Delhi)3.Commissioner of Income Tax vs. Creative Dyeing & Printing Pvt. Ltd.[2009]318 ITR 476 (Delhi)
It was further submitted that the assessee had received advance
against land from M/s Precision Stock and Credit Pvt. Ltd. which is in
the nature of business transaction.A reference was made to page no.51 of the assessee's paper book which is a copy of the agreement. It
was submitted that the transaction during the normal course of
business does not come within the ambit ofsection 2(22)(e)of the Act.The reliance was placed on the following case laws :-14 ITA No. 5383/ Del/20101.Commissioner of Income Tax vs. Universal Medicare Private Ltd.[2010] 324 ITR 263 (Bom)2.Commissioner of Income Tax vs. Ankitech Pvt. Ltd. & Others[2012] 340 ITR 14 (Del.)3.Commissioner of Income Tax vs. MCC Marketing(p.) Ltd. [2012] 343 ITR 350 (Del.)4. Assistant Commissioner of Income Tax vs. Bhaumik Colour (P) Ltd. [2009] 313 ITR 1465. CIT vs. AR Magnetics Pvt. Ltd. (2014), 220 Taxman 209 (Delhi)(HC)6.C.I.T. vs. Navyug Promoters (P) Ltd.(2011) 203 Taxman 618(Del.)16. In his rival submissions, the Ld. DR strongly supported the
orders of the authorities below and further submitted that since Shri
Jasbir Singh was a common share holders having more than 20%
share holding in the assessee company and M/s Precision Stock and
Credit Pvt. Ltd. which was having an accumulated profits. Therefore,
the provisions of Section 2(22)(e) were rightly invoked by the AO and
the Ld. CIT(A) was justified in confirming the addition made by the AO.17. We have considered the submissions of both the parties and
carefully gone through the material available on the record. In the
present case, it is noticed that the assessee entered into an
agreement with M/s Precision Stocks and Credit Pvt. Ltd. on 28.3.2006
for the sale of agricultural land and received Rs. 10,00,000/- vide
cheque no. 406306 of Cooperative Bank Ltd, the same is evident
from page no. 51 to 53 of the assessee's paper book which is the copy
of aforesaid agreement. The assessee also issued receipt for the
above said amount copy of which is placed at page no. 54 of the15 ITA No. 5383/ Del/2010assessee's paper book. From the above facts, it is clear that the
assessee who was engaged in the real estate business received an
advance against the sale of land, therefore it was in the nature of
business transaction. On a similar issue the Hon'ble Jurisdictional
High Court in the case ofCIT vs. Ankitech Pvt. Ltd. and Others[2012]
340ITR14(Supra) has held as under :-"25. Further, it is an admitted case that under normal
circumstances, such a loan or advance given to the
shareholders or to a concern, would not qualify as dividend. It
has been made so by legal fiction created undersection
2(22)(e)of the Act. We have to keep in mind that this legal
provision relates to "dividend". Thus, by a deeming provision,
it is the definition of dividend which is enlarged. Legal fiction
does not extend to "shareholder". When we keep in mind this
aspect, the conclusion would be obvious, viz., loan or
advance given under the conditions specified undersection
2(22)(e)of the Act would also be treated as dividend. The
fiction has to stop here and is not to be extended further for
broadening the concept of shareholders by way of legal
fiction. It is a common case that any company is supposed to
distribute the profits in the form of dividend to its
shareholders/members and such dividend cannot be given to
non-members. The second category specified undersection
2(22)(e)of the Act, viz., a concern (like the assessee herein),
which is given the loan or advance is admittedly not a
shareholder/member of the payer company. Therefore, under
no circumstance, it could be treated as shareholder/member
receiving dividend. If the intention of the Legislature was to
tax such loan or advance as deemed dividend at the hands of
"deeming shareholder", then the Legislature would have
inserted deeming provision in respect of shareholder as well,
that has not happened. Most of the arguments of the learned
counsels for the Revenue would stand answered, once we
look into the matter from this perspective.16 ITA No. 5383/ Del/201026. In a case like this, the recipient would be a shareholder
by way of deeming provision. It is not correct on the part of
the Revenue to argue that if this position is taken, then the
income "is not taxed at the hands of the recipient". Such an
argument based on the scheme of the act as projected by the
learned counsel for the Revenue on the basis ofsections
4,5,8,14and56of the Act would be of no avail. Simple
answer to this argument is that such loan or advance, in the
first place, is not an income. Such a loan or advance has to
be returned by the recipient to the company, which has given
the loan or advance.27. Precisely, for this very reason, the courts have held that
if the amounts advanced are for business transactions
between the parties, such payment would not fall within the
deeming dividend undersection 2(22)(e)of the Act."18. In the present case also, the assessee company is not the
shareholder in M/s Precision Stock & Credit Pvt. Ltd. and received the
amount from the said company in the course of ordinary business
activities. Therefore, in view of ratiolaid down bythe Hon'ble
Jurisdictional High Court in the aforesaid referred to case, the
provisions ofsection 2(22)(e)of the Act were not applicable. We,
therefore, by considering the totality of the facts deem it appropriate to
delete the impugned addition made by the AO and sustained by the
Ld. CIT.19. In the result, appeal of the assessee is allowed.17 ITA No. 5383/ Del/2010(Order pronounced in open court on 12 June, 2015.)
Sd/- Sd/-(G.C.Gupta) (N.K.Saini)
Vice President Accountant Member
Dated 12 June, 2015
Binita
Copy forwarded to
1. APPELLANT
2. RESPONDENT
3. CIT
4. CIT (A)
5. CIT (ITAT), New Delhi.
AR, ITAT
N. Delhi |
da56eaac-6001-5740-b5db-ef86f5e62105 | court_cases | Rajasthan High Court - JodhpurPawan Kumar vs . Hemraj on 3 July, 2015Author:Sangeet LodhaBench:Sangeet LodhaS. B. CIVIL WRIT PETITION NO. 3193/2015
Pawan Kumar Vs. Hemraj
Date of Order : 03/07/2015
HON'BLE MR. JUSTICE SANGEET LODHAMr. Shree Kant Verma, for the petitioner.
Mr. Rajeev Purohit, for the respondent.1. This writ petition is directed against the judgment and order
dated 7.2.15 passed by the Appellate Rent Tribunal, Bikaner in
Appeal Decree No.102/11, whereby the appeal preferred by the
petitioner aggrieved by the judgment and order dated 12.9.11
passed by the Rent Tribunal, Bikaner in Original Case No.28/04,
directing eviction of the petitioner from the premises in question,
stands dismissed.2. After arguing for quite sometime, learned counsel appearing
on behalf of the petitioner submits that the petitioner does not
want to press this writ petition on merits. It is submitted that the
petitioner is ready to vacate the premises, however, he may be
granted time upto 30.9.16 for the purpose of vacating the suit
premises, on reasonable terms and conditions.3. Mr. Rajeev Purohit, learned counsel appearing on behalf of
the respondent, in all fairness has not opposed the limited prayer
made on behalf of the petitioner.4. Accordingly, with the consent of the learned counsel for the
parties, on the facts and in the circumstances of the case, this writ
petition is disposed of with the following directions:-(1)The petitioner shall vacate and hand over the vacant
possession of the premises in question to the respondent on
or before 30th September, 2016;(2)The petitioner shall pay the mesne profits for the use and
occupation of the premises in terms of provisions of sub-section(3) ofSection 20of the Rent Control Act, 2001 to-2-the respondent i.e. at the rate of three times the rent last
paid. The arrear of mesne profits, if not already paid, shall
be paid within a period of one month from the date of this
order.(3)The petitioner shall continue to pay the mesne profits as
aforesaid month by month, by 7th day of the following
month towards the use and occupation of the premises
during the said period;(4)The petitioner shall not make any material alteration in the
premises in question and shall not part with the possession
of the premises during the said period;(5) The petitioner shall submit an undertaking before the Rent
Tribunal, Bikaner latest by 3rd August, 2015 , for compliance
of the order passed by this Court as aforesaid;
(6)On the failure of the petitioner to comply with any of the
aforesaid directions, the certificate for recovery of
possession shall become executable forthwith.
No order as to costs.(SANGEET LODHA), J.Rp4 |
ed0116d6-31a2-5143-91cb-ae04754e87e4 | court_cases | Orissa High CourtMd Siraj vs Ircon International Ltd And Others on 15 September, 2015Author:B.R.SarangiBench:B.R.SarangiORISSA HIGH COURT: CUTTACK
OJC No. 15274 OF 1997
In the matter of an application underArticles 226& 227of the
Constitution of India.
-----------------------------
Md. Siraj ......... Petitioner
- versus -
Ircon International Ltd. & others ......... Opp. Parties
For Petitioner : Mr. R.K. Rath, Sr. Advocate
For Opp.Parties : M/s. Sabitri Ratho,
(Opposite Party nos. 1 and 2)
PRESENT:
THE HONOURABLE DR. JUSTICE B.R.SARANGI
Date of hearing: 31.08.2015 | Date of Judgment: 15.09.2015
Dr. B.R.Sarangi, J.The petitioner, who was working as a Laboratory
Assistant in the Office of the Ircon International Ltd., a Government
of India undertaking, Ministry of Railways, has filed this application
seeking to quash the order dated 10.07.1997 vide Annexure-7,
accepting the voluntary resignation submitted by the petitioner and
order dated 30.09.1997 vide Annexure-9 releasing the petitioner
from service and further seeking for a direction to regularize his
service with effect from the date the services of his juniors have been2regularized pursuant to Annexure-11-B and Annexure-11-C, the
Office Order Nos. 456/2003 and 483/2003 respectively.2. The epitome of facts of the case, in hand, is that the
petitioner entered into service on 26.03.1985 on daily rated basis as
a Laboratory Assistant. He having continued as such till 21.10.1986,
was granted ad hoc scale w.e.f. 21.10.1986. While he was posted at
Bhubaneswar under opposite party no.2, he was communicated with
orders dated 10.07.1997 and 30.09.1997 by which he was compelled
to take voluntary retirement from service. The petitioner while
posted at Mathura in the State of Uttar Pradesh, having faced a lot of
harassment and humiliation submitted an application for voluntary
retirement on 22.03.1996 in Annexure-1, which was not accepted by
the opposite party no.1. In other words, the same was rejected vide
order dated 09.04.1996 specifically indicating that the petitioner is
not entitled to seek voluntary retirement as he has not completed 10
years of service to opt for voluntary resignation floated by opposite
party no.1. On 24.11.1995, the opposite party no.1 floated another
Voluntary Resignation Scheme in which it was specifically mentioned
that ad hoc employees having 10 years or more service as on
31.10.1995 can seek for voluntary resignation by making a written
request vide Annexure-3. Accordingly, the petitioner sought for
voluntary resignation pursuant to the above scheme and requested
for acceptance of the resignation latest by 31.10.1997 pursuant to3his application dated 23.12.1996 in Annexure-4. As per the letter of
the Advisor dated 19.06.1997, GM/HRM was intimated that the
petitioner has complained that he has applied for voluntary
resignation under Ircon's Voluntary Retirement Scheme on
23.12.1996 and his application was forwarded by Delhi-Mathura
Project on 26.03.1997 to the Corporate Office. The petitioner
expressed his keenness for taking advantage of the scheme and
wanted to know whether his resignation is being considered and
therefore he show law into the complained and advise him adjust . In
response to the same, note has been given "the category of
Laboratory Assistant is not covered under VRS Scheme. Hence the
request of Mohd. Siraj for VRS could not been accepted".
Accordingly, it was directed that the same should be intimated on
Fax to CPM/Cal for information to the petitioner. Accordingly, by
memo dated 25.03.1997, the behavior was intimated that Corporate
office has recently decided that the staff who have completed five
years or more service on 31.12.1996 shall submit application for
voluntary resignation from IRCON service. Accordingly, the petitioner
vide letter dated 10.07.1997(Annexure-7) was intimated that his
VRS application submitted on 23.12.1996 has been accepted vide
Corporate Office Order No. 601/97 dated 07.07.1997. The petitioner
filed an application on 01.09.1997 for withdrawal of voluntary
resignation and stated that Office Order No. 601/97 dated407.07.1997 be treated as cancelled and he be allowed to continue in
service of Ircon International Ltd.. Instead of considering the said
letter in Annexure-8, he has been intimated vide Annexure-9 dated
30.09.1997 that since his application for voluntary retirement has
been accepted by the competent authority vide Corporate Office
Order No. 601/97, he is relieved from service w.e.f. 30.09.1997 and
it was intimated that all dues other than CPF, GIS shall be paid by
the Office duly drawn from Calcutta Office. Assailing the said order,
the petitioner approached this Court by filing the present application
stating that since his VRS has not been accepted vide Annexure-5,
which has been communicated to him, he is continuing in service.
Subsequently acceptance of his application for voluntary retirement
by reducing the period from 10 years to 5 years in Annexure-7 is
absolutely misconceived one and communication made thereof
cannot sustain in the eye of law and consequential direction for
release of benefit also cannot sustain. While entertaining the writ
application, this Court passed an interim order on 10.11.1997
directing stay of Annexures-7 and 9 for a period of four weeks and
the said interim order has been extended from time to time. Opposite
party nos.1 and 2 appeared and filed Misc. Case No. 4366 of 1997 for
vacation of interim order. This Court while vacating the interim order
directed for listing the matter for final disposal. But in the meantime,
there was subsequent development in view of the fact that on523.04.2003 a committee was constituted to consider the
regularization of the services of the employees where the petitioner's
name finds place in serial no. 15 pursuant to Annexure-11-A dated
23.04.2003. But subsequently, though the services of his juniors
have been regularized vide Annexure-11-B and Annexure-11-C,
Office Order Nos. 456/2003 and 483/2003 respectively, the
petitioner's service has not been regularized on the plea that his VRS
has been accepted by the authority in Annexure-7.3. Mr. R.K. Rath, learned Senior Counsel for the petitioner
strenuously urged that the petitioner having communicated with the
fact that he has not completed 10 years of service, his application for
voluntary resignation has not been accepted vide Annexure-5,
subsequent steps taken for acceptance of VRS reducing the eligibility
period from 10 years to 5 years without any application therefor, the
action of the authorities is arbitrary and unreasonable and therefore,
he seeks for quashing of Annexures- 7 and 9. He further seeks for
regularization of service as his name has been recommended vide
Annexure-11-A by the committee constituted for regularization of
service from the date the services of his juniors have been
regularized pursuant to Annexure-11-B and Annexure-11-C,
respectively. To substantiate his case, he has relied onThe
Manager, Govt. Branch Press and another V. D. B. Belliappa,AIR 1979 SC 429 and Om Prakash Goel V. The Himachal6Pradesh Tourism Development Corporation Ltd., Shimla and
another, AIR 1991 SC 1490.4. Ms. S. Ratho, learned counsel for opposite party nos. 1
and 2 submitted that pursuant to memo dated 25.03.1997 in
Annexure-6 opposite party no.1 revised the criteria for filing
application under the VRS Scheme to the effect that those workmen
who have completed five years or more service on 31.12.1996
would be eligible to avail the benefits. Consequently, the application
submitted by the petitioner in Annexure-4 dated 23.12.1996 has
been accepted. With regard to maintainability of the writ application,
she urged that since disputed questions of fact fall underSchedule-
III of the Industrial Dispute Act, 1947and there is availability of
alternative remedy under the statute, instead of availing the said
forum under theIndustrial Disputes Act, the present writ application
is not maintainable. She further urged that due to shrinkage/closure
of the activities of the project, the Company resorted to terminate
the service of surplus employees on payment of retrenchment
compensation, gratuity, bonus payment in lieu of notice in
accordance with provisions of law. Since the petitioner has been
engaged in a project work, with the closure of the Project, his
application for VRS has been accepted and therefore, no illegalities or
irregularities have been committed by the authority in accepting the
VRS submitted by the petitioner by reducing the eligibility criteria7from 10 years to 5 years. It is stated that since the project has been
closed, employees who have been engaged under the project, have
no legal right to seek continuance in employment or even to seek
employment in other projects of the said Company.To substantiate
her contention, she has relied upon the judgments of the apex Court
in Hindustan Steel Works Construction Ltd., etc. etc. v.
Hindustan Steel Works Construction Ltd. Employees' Union,
Hyderabad and another etc. etc., AIR 1995 SC 1163, Lal
Mohammad and Ors. v. Indian Railway Construction Co. Ltd.
and Ors.,AIR 2007 SC 2230 and Secretary, State of Karnataka
and Ors. v. Umadevi and Ors., AIR 2006 SC 1806.5. From the facts pleaded above, the following questions
emerge for consideration.(i) Whether the petitioner's resignation vide Annexure-4
dated 23.12.1996 still survived for consideration by the
authority by accepting the same in Annexure-7 dated
10.07.1997 and giving effect to vide Annexure-9 dated
30.09.1997, respectively?(ii) Whether the petitioner is entitled to get regularization of
service as claimed from the date his juniors have been
regularized pursuant to Annexure-11-B and Annexure-11-
C respectively?8(iii) To what relief the petitioner is entitled to?6. As regards question no.(i), it appears that admittedly,
the petitioner was initially appointed on daily rated basis as a
Laboratory Assistant under the opposite parties on 26.03.1985 and
he worked as such till 20.10.1986. Thereafter, he was allowed to
continue on ad hoc scale w.e.f. 21.10.1986. While he was continuing,
opposite party no.3 issued Circular No. IRCON/Estt/VRS dated
24.11.1995 floating voluntary resignation scheme, pursuant to which
the petitioner submitted his application for voluntary retirement on
22.03.1996 giving effect from 10.04.1996. Accordingly, the SPM/DIN
recommended the case of the petitioner for acceptance of VRS and to
release him by 10.04.1996 pursuant to Annexure-1. But the same
has not been accepted vide letter dated 07.04.1996 stating that on
scrutiny of service records, it appears that the petitioner had served
the IRCON w.e.f. 26.03.1985 to 20.10.1986 on daily rated basis (as
casual) and was awarded ad hoc scale w.e.f. 21.10.1986. As the
service rendered by the petitioner on daily rated basis is not to be
counted as qualifying service for computing 10 years of service for
the eligibility for opting the Scheme for voluntary resignation, he was
not eligible for the same. Again another Voluntary Resignation
Scheme was introduced vide Circular dated 24.11.1995 wherein it
was stated that the same Scheme will be applicable to ad hoc
employees having 10 years or more service as on 31.10.1995 and it9is further stated that any employee may seek voluntary resignation
by making written request. Pursuant to such Circular the petitioner
submitted his application vide Annexure-4 dated 23.12.1996 stating
that his resignation be accepted latest by 31.10.1997 as he may opt
for VRS before the said date with an undertaking that he will not
withdraw his request for voluntary retirement at a later date. Since
no action was taken on such application, he met the Advisor/OM,
who on consideration of the grievance made by the petitioner,
recommended the case of the petitioner vide Annexure-5 stating that
his application was forwarded by Delhi-Mathura project on
26.13.1993 to the Corporate Office. It is further stated that the
petitioner expressed his keenness for taking advantage of the
Scheme and wanted to know whether his resignation is being
considered. Accordingly, the Advisor/OM requested the GM/HR to
look into the grievance of the petitioner and advise him accordingly.
In Annexure-5, there is an office notice where it has been
categorically stated as follows :"The category of Lab.Asst. is not covered under VRS Scheme.
Hence, the request of Mohd.Siraj for VRS could not be accepted.Sd/- 30.6.1997"In the said note, direction has been given to communicate the same
through FAX to CPM/Cal for information of the petitioner on
5.7.1997. Accordingly, the petitioner has been intimated that as VRS
submitted in Annexure-4 dated 23.12.1996 has not been accepted by10the authority as category of Lab.Asst. is not covered under the VRS
scheme. Therefore, for all times to come, the petitioner's resignation
has not been accepted. When the matter thus stood, on 25.3.1997
the scheme was modified to the extent that the staffs who have
completed five years or more service as on 31.12.1996, may submit
their voluntary resignation from IRCON service. Though the petitioner
has not submitted any application and his application dated
23.12.1996 in Anexure-4 has been rejected vide Annexure-5, the
order impugned in Annexure-7 dated 10.7.1996 has been passed
stating that the authorities have accepted the application for
voluntary resignation pursuant to office order No.601/97 and directed
the petitioner to receive the consequential benefits pursuant to
Annexure-9 dated 20.9.1997. Once the application submitted in
Annexure-4 dated 23.12.1996 has not been accepted as the VRS is
not applicable to the Lab. Asst. vide Annexure-5 and the same has
been communicated to the petitioner, the authorities cannot and
could not act upon the same by accepting the resignation vide
Annexure-7 and consequentially direct for receipt of the benefits in
Annexure-9. The petitioner having been communicated that his
application dated 23.12.1996 in Annexure-4 has not been accepted,
the said application is no more available to be considered for
acceptance vide Annexure-7 and as such Annexure-7 and the
consequential order for release of benefits in Annexure-9 cannot11sustain in the eye of law. The petitioner might have been appointed
for a project work by the opposite parties and on completion of the
same, the petitioner's service may not be required, but that ipso
facto cannot automatically be taken into consideration for acceptance
of the VRS application submitted in Annexure-4 which has already
been disposed of vide Annexure-5 by not accepting the same as the
scheme is not applicable to the post held by the petitioner, namely,
Lab. Asst.7. Learned counsel for opposite party nos.1 and 2 has
placed reliance on Hindustan Steel Works Construction Ltd.
(supra) where the apex Court has held that once the project is
closed, the employees, who are engaged under the project has no
legal right to seek continuance in employment or even seek
employment under any other project of the same company. Much
reliance is placed on paragraph 16 of the said judgment. The same
view has also been expressed by the Apex Court in Lal Mohammad
(supra). The ratio decided in those cases has been considered
taking into account the facts of the respective cases.The Constitution
Bench of the apex Court inState of Orissa v. Sudhansu Sekhar
Misra, AIR 1968 SC 647, has held as follows:-"A decision is only an authority for what it actually decides.
What is of the essence in a decision is its ratio and not every
observation found therein nor what logically follows from the
various observations made in it. It is not a profitable tax to12extract a sentence here and there from a judgment and to
build upon it. "Therefore, the ratio decided in Hindustan Steel Works
Construction Ltd. (supra) and Lal Mohammad (supra) has no
basis to the present context.8. In view of such position, since the application
submitted by the petitioner on 23.12.1996 having been considered
and not accepted by the authority vide Annexure-5, the same is no
more available to be reconsidered to enable the authority to pass an
order in Annexures-7 and 9. Question No.(i) is answered accordingly.9. So far as question No.(ii) is concerned, it is seen that
due to non-acceptance of VRS, the petitioner was continuing in
service when the opposite parties 1 and 2 constituted a committee to
regularize the services of ad hoc / contract staff looking into their
service history as available in the personal file and also the service
book. A list of 87 candidates was prepared by the authorities vide
Annexure-11-A for consideration of their regularization by the
Committee, in which the name of the petitioner finds place at
Sl.No.15, but the services of the petitioner have not been regularized
though juniors to him, who have completed 10 years of service in a
scale of pay as on 30.6.2003 and are free from DAR/Vigilance, have
been regularized in the service of the company w.e.f. 1.7.2003
against the post and in the pay scale indicated against each and the13regularization was also directed to be effective only on assuming
charge of the post in the new place of posting mentioned against
each of the name and as such their salary for the month of July,
2003 and onwards will be drawn at the new place of posting. In the
said order it is also stated that they will be governed by the service
conditions, conduct and discipline rules as applicable to the regular
employees of the company and it is further directed that they will
remain on probation for a period of two years from 1.7.2003 and
thereafter their services shall be regularized. Vide office orders
No.456/03 and 483/03 in Annexures-11-B and 11-C respectively,
though the services of the juniors to the petitioner have been
regularized, the services of the petitioner have not been regularized.
No reason has been assigned for non-regularization of the services of
the petitioner though he had completed 10 years of ad hoc service
and as such, his case was placed before the Committee duly
constituted by the authority for regularization.10.InThe Manager, Govt. Branch Press(supra) the
apex Court has held that if the services of a temporary Government
servant are terminated arbitrarily, and not on the ground of his
unsuitability, unsatisfactory conduct or the like which would put him
in a class apart from his juniors in the same service, a question of
unfair discrimination may arise, notwithstanding the fact that in
terminating his service, the appointing authority was purporting to14act in accordance with the terms of the employment. Where a charge
of unfair discrimination is levelled with specificity, or improper
motives are imputed to the authority making the impugned order of
termination of the service, it is the duty of the authority to dispel that
charge by disclosing to the Court the reason or motive which
impelled it to take the impugned action and therefore, fairness
founded on reason is the essence of the guarantee epitomised in
Arts. 14 and 16 (1) of the Constitution of India.11.InOm Prakash Goel(supra) in paragraph 6 the apex
Court has held as follows:"In this context, the learned counsel also questioned the
termination order from another angle. In that order it is
mentioned that the services of the petitioner are no longer
required, therefore, they are terminated. But from the
record it is clear that juniors to the petitioner are retained
and they are continuing in service. In the affidavit it is
clearly mentioned that juniors whose names are given
there are retained in service in violation of Arts. 14 and 16
of the Constitution. In the counter-affidavit only a vague
reply is given simply stating that the averments made by
the petitioner are not correct.InK. C. Joshi v. Union of
India, (1985) 3 SCR 869: (AIR 1985 SC 1046) it is
observed that if it is discharged simpliciter, it would be
violative ofArt. 16, because a number of store-keepers
junior to the appellant are shown to have been retained in
the service".Likewise in Jarnail Singh's case (AIR 1986 SC
1626) it was observed as under (at p. 1635):"In the instant case, ad hoc services of the
appellants have been arbitrarily terminated as
no longer required while the respondents have
retained other Surveyors who are juniors to
the appellants. Therefore, on this ground also,
the impugned order of termination the
services of the appellants are illegal and paid
being in contravention of the fundamental15rights guaranteed under Arts. 14 and 16 of
the Constitution of India."After a careful perusal of the record we are satisfied that
the juniors to the petitioner are retained. Therefore on
this ground also the termination order is liable to be
quashed."12. In view of the fact that pursuant to Annexures-11-B
and 11-C since juniors to the petitioner have been allowed to
continue in service, the petitioner's service has to be regularized and
he should be extended with all the service benefits at par with his
juniors against the post held by him and he should be extended with
all the consequential benefits as admissible to the post. The
contention raised by the learned counsel for the opposite parties 1
and 2 with regard to the applicability ofUma Devi(supra), this
Court is of the considered view that the ratio decidedin that caseis
not applicable to the present case. Admittedly, juniors have been
given regularization and therefore, the petitioner is entitled to get
such benefits as claimed by him. Question No.(ii) is answered
accordingly.13. Considering the above facts and circumstances and the
law governing the field, the orders passed in Annexures-7 & 9 are
hereby quashed and the opposite parties 1 and 2 are directed to
regularize the services of the petitioner from the date his juniors
have been regularized pursuant to Annexures-11-B and 11-C and the
same be extended to him with all the consequential benefits within a16period of three months from the date of communication of this
judgment.14. The writ application is allowed accordingly. No order as
to costs....................................Dr. B.R.Sarangi, J.Orissa High Court, Cuttack
The 15th September, 2015/Ajaya/PKSahoo |
8caf82fe-94a6-5ba5-91c7-84de4542487c | court_cases | Madras High CourtNabisha Begum vs Arumuga Thewar And Ors. on 5 February, 1973Equivalent citations: AIR1974MAD273, AIR 1974 MADRAS 273, 1987 MADLW 198 (1974) 1 MADLJ201, (1974) 1 MADLJ201JUDGMENT
N.S. Ramaswami, J.1. The plaintiff, who lost before the trial court, the first appellate court as well as before Ramakrishnan J. in second appeal, is the appellant before us in this Letters Patent appeal. The suit is one for declaration and possession with future mesne profits in respect of certain lands which the plaintiff purchased from one Velayutham Pillai under the sale deed Ex. A-1, dated 25-7-1957. All the courts have held that the plaintiff's remedy, if any, is only a suit for general partition with an equity for having the suit properties allotted to the share of vendor Velayutham Pillai inasmuch as, on the date of sale, he was not the owner of the suit properties but only had a 1/3 share in the family properties including the suit properties and that the suit for possession of the specific properties should fail. The matter turns upon the effect of an order under O. XXXII, R. 12, C. P. Code, in a suit for partition in which a preliminary decree has already been passed, regarding the status of the members of the joint family. Whether the division in joint family status already brought about is nullified and the members restored to their status of joint family members by the order under Order XXXII, Rule 12,C.P.C. dismissing the suit (even though a preliminary decree for partition had already been passed), is the question.2. The facts are these: Velayutham Pillai, the vendor under Ex. A-1, in favour of the plaintiff, one Ambalavana Pillai and one Nelliappa Pillai are the sons of one Muthiah Pillai. The father Muthiah Pillai died in the year 1933. The three brothers admittedly were members of a joint Hindu family and the family owned several items of immovable properties. In 1941, when Nelliappa Pillai, one of the three brothers, was a minor, O. S. No. 35 of 1941, was filed on the of the Court of the Subordinate Judge, Tirunelveli, on behalf of the said minor Nelliappa Pillai by his uncle acting as his next friend. To this suit, the other two brothers, viz., Velayutham Pillai and Ambalavana Pillai, as well as Kanthimathi Ammal, the mother of the parties, had been impleaded as defendants. A preliminary decree for partition declaring that the minor plaintiff, viz., Nelliappa Pillai, and the other two brothers, Velayutham Pillai and Ambalavana Pillai, are each entitled to a 1/3 share in the various items of suit properties was passed. The preliminary decree also made certain provisions towards the maintenance of Kanthimathi Ammal, the mother of the parties. After the passing of the abovesaid preliminary decree but before any one applied for passing a final decree, Nellayappa Pillai, the minor plaintiff in the suit, attained majority. Then he filed I. A. 110 of 1944 in O.S. 35of 1941, under Order XXXII, Rule 12,C.P.C., electing to abandon the suit. Upon that, the court appears to have passed an order dismissing the suit. The said Nelliappa Pillai died in April 1945, leaving no widow or issue.3. Very many years after, i.e., in the year 1957, Kanthimathi Ammal, the mother of the parties, filed I. A. No. 278 of 1957 in the abovesaid suit for having the suit restored to file. By that time, Ambalavana Pillai, one of the three brothers, was not heard of for several years. It is stated that his whereabouts are not known since 1948. In I. A. No. 278 of 1957, Kanthimathi Ammal pleaded that on the death of Nelliappa Pillai in 1945, and on the civil death of Ambalayana Pillai, who was not heard of for a long number of years, their two shares had devolved on her and that the suit should be restored to file and a final decree passed giving her 2/3 share in the property, while the remaining 1/3 share should go to the only remaining son, Velayutham Pillai. This application, which was resisted by Velayutham Pillai, ultimately came to be dismissed mainly on the ground that the order in I. A. No. 110 of 1944, the application under Order XXXII, Rule 12,C.P.C., dismissing the suit had been passed in the presence of Kanthimathi Ammal, that the having been a party to the said proceedings, cannot now be heard to say that the suit should be restored, especially after the lapse of 12 of 13 years. The question whether there had been division in status between the three brothers, Velayutham Pillai, Ambalavana Pillai and Nalliappa Pillai, and whether on the death of Nalliappa Pillai and on the civil death of Ambalavana Pillai, their respective shares devolved on Kanthimathi Ammal, their mother, was not decided in I. A. No. 278 of 1957. That application was dismissed as aforesaid on 5-12-1958. It was in the meanwhile Velayutham Pillai executed Ex. A-1 dated 25-7-1957 in favour of the appellant before us.4. The plaintiff brought the suit O. S. No. 40 of 1960 on the file of the Court of the District Munsif, Tirunelveli, out of which the present appeal arises, inter alia, contending that there had been no division in the joint family status between the three brothers, Velayutham Pillai, Ambalavana Pillai and Nallyappa Pillai, and on the death of Nalliappa Pillai and on the civil death of Ambalavana Pillai, Velayutham Pillai got all the joint family properties by survivorship and that therefore he was entitled to covey good title to her in respect of the suit properties by executing Ex. A-1 dated 25-7-1957. The main contesting defendant is Kanthimathi Ammal who has been impleaded as the 4th defendant in the suit. The other three defendants (defendants 1 to 3) are the tenants under Kanthimathi Ammal. Several questions had been raised before the trial court, with which we are not now concerned. The trial court as well as the first appellate court held that Velayutham Pillai, the plaintiff's vendor, did not get all the joint family properties by survivorship as there had been division in status amongst the three brothers and that the shares of Nelliappa Pillai and Ambalavana Pillai had devolved on Kanthimathi Ammal, the mother, as she is the nearest heir. Before Ramakrishnan J. who heard the second appeal, two questions were urged, one regarding the effect of the order in I. A. 110 of 1944 filed by Nelliappa Pillai underOrder XXXII, Rule 12 C.P.C. and the second was regarding the effect of the order dismissing I. A. 278 of 1957, the application filed by Kanthimathi Ammal, for having O.S. 35of 1941, restored and a final decree passed therein. Regarding the second point, the contention had been that Kanthimathi Ammal is barred by the principle of res judicata from contending in the present suit that she became entitled to the shares of Nelliappa Pillai and Ambalavana Pillai inasmuch as her application to restore O.S. 35of 1941 had been dismissed. But this question of res judicata does not really arise because, as already seen, the court which dismissed I. A. 278 of 1957 did not decide the question of the division in status or otherwise between the three brothers and whether the shares of Nelliappa and Ambalavana devolved on their mother Kanthimathi Ammal or not. That question is not agitated before us. The only point that is raised, as we said earlier, is about the effect of the order passed in I. A. 110 of 1944 in O.S. 35of 1941.5. The contention of the learned counsel for the appellant is that as O.S. 35of 1941, the suit for partition, came to be dismissed on Nelliappa filing I. A. 110 of 1944 under Order XXXII, Rule 12,C.P.C., after he attained majority, the parties got restored to their original position, viz., that before filing of O.S. 35of 1941, and that therefore, Nelliappa and Ambalavana cannot be considered to be divided members when the former died and the latter is civilly dead. But this contention is wholly unacceptable. It is settled law that division in status amongst members of joint family takes place immediately on a coparcener declaring his unequivocal intention to separate and communicates the declaration to the other members. The very filing of a suit for partition would amount to such a declaration. In this regard, there is no distinction between a coparcener who is sui juris and a coparcener who is a minor and on whose behalf of next friend acts, except that such declaration is subject to the approval by court. In Pedasubbayya v. Akkamma, , their Lordships of the Supreme Court observe-"Now, the Hindu law makes no distinction between a major coparcener and a minor coparcener, so far as their rights to joint properties are concerned. A minor is, equally with a major, entitled to be suitably maintained out of the family properties, and at partition, his rights are precisely those of a major. Consistently with this position, it has long been settled that a suit for partition on behalf of minor coparcener is maintainable in the same manner as one filed by an adult coparcener, with this difference that when the plaintiff is a minor the court has to be satisfied that the action has been instituted for his benefit."Then at page 1049, their Lordships observe-"In our judgment, when the law permits a person interested in a minor to act on his behalf, any declaration to become divided made by him on behalf of the minor must be held to result in severance in status, subject only to the court deciding whether it is beneficial to the minor; and a suit instituted on his behalf, if found to be beneficial, must be held to bring about a division in status." The above decision has been followed and the point stressed by a Division Bench of this court inRamaswami Chettiar v. Roya Kuppa Chetti, , and it is enough to quote the relevant part in the headnote-"It is now well-settled that under the Hindu law, there is no distinction between a major coparcener and a minor coparcener so far as their rights in the joint family properties are concerned. As any other coparcener a minor coparcener too has a right, by a unilateral declaration on his part, to effect a division in status in the family so far as he is concerned, without effecting an actual partition. But as a minor cannot be held to have a volition of his own, a guardian or next friend acting on behalf of the minor is allowed to exercise such a volition subject to the condition that it is approved by the court as a safeguard to the minor's interest."In the present case, undoubtedly Nelliappa Pillai, who was then a minor, acting through his next friend filed the suit for partition viz., O.S. 35of 1941, and ultimately the court passed a preliminary decree in August 1942, by which the shares of the parties in the properties came to be declared. Admittedly the preliminary decree declared that each of the three brothers, viz., Nelliappa Pillai (the minor plaintiff in the suit), Velayutham Pillai and Ambalavana Pillai (defendants in the suit) is entitled to a 1/3 share in the family properties. This is on the court's finding that it was beneficial for the minor to be divided from his brothers. That means, the court has put its seal of approval to the declaration made by the next friend on behalf of the minor plaintiff. Undoubtedly, after the passing of the preliminary decree, there was no joint family status between the three brothers and the division in status dates back to the date of plaint. As a matter of fact, the learned counsel appearing for the appellant does not dispute the above position. But his contention is that because of the subsequent events it must be deemed that the joint family status between the three brothers came to be restored.6. The contention is that when the court, in allowing I. A. 110 of 1944 filed by Nelliappa Pillai under Order XXXII, Rule 12,C.P.C., (on his attaining majority) dismissed O.S. 35of 1941, the suit for partition, the parties got restored to their original position, i.e., the position prior to the filing of the suit, as according tot the learned counsel, the dismissal of the suit wiped out all the earlier proceeding including the preliminary decree. This contention is untenable. There is no question of the preliminary decree becoming non est as a result of the suit being dismissed under Order XXXII, Rule 12,C.P.C. We will quote the said rule-"1. A minor plaintiff or a minor not a party to a suit on whose behalf an application is pending shall, on attaining majority, elect whether he will proceed with the suit or application.2. Where he elects to proceed with the suit or application, he shall apply for an order discharging the next friend and for leave to proceed in his own name.3. The title of the suit or application shall in such case be corrected so as to read henceforth thus:--"A. B., late a minor, by C. D. his next friend, but now having attained majority."4. Where he elects to abandon the suit or application, he shall, if a sole plaintiff or sole applicant, apply for an order to dismiss the suit or application on repayment of the costs incurred by the defendant or opposite party or which may have been paid by his next friend.5. Any application under this rule may be made ex parte; but no order discharging a next friend and permitting a minor plaintiff to proceed in his own name shall be made without notice to the next friend."7. The order of dismissal made by the court on the erstwhile minor plaintiff abandoning the suit under Order XXXII, Rule 12,C.P.C., would only mean that all reliefs which had not been granted so far are negatived. It would certainly not mean that a decree which has already been passed granting certain reliefs is either set aside or become non est. Supposing the suit filed on behalf of the minor plaintiff does not contemplate passing of a preliminary decree at one stage and passing of a final decree at a later stage and the suit has been decreed and there is nothing more to be done in the suit, there would be no question of such a decree being wiped out by the minor, on attaining majority, filing an application under Order XXXII, Rule 12,C.P.C. Even in the present case, it a final decree had been passed before the minor plaintiff attained majority, there would be no question of the suit being dismissed under Order XXXII, Rule 12, having the effect of nullifying the decree. A decree once passed by a competent court can be set aside only in appeal or other modes known to law. A suit, which has already been decreed, cannot be dismissed thereby nullifying the decree. There is no difference between a preliminary decree and a final decree in this regard.8.Section 2, sub-sec. (2)C.P.C. defines 'decree' as 'the formal expression of an adjudication which, so far as regards the courts expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final". Therefore a preliminary decree is as much a decree as a final decree and, as far as the rights of parties conclusively determined by a preliminary decree, there is no going back unless the decree is set aside by some mode known to law. Surely Order XXXII, Rule 12,C.P.C. is not meant for setting aside a decree already passed. As we pointed out earlier, if in a suit, say for possession, decree has already been passed allowing the plaintiff's claim, the suit cannot be dismissed by the court which passed the decree, under Order XXXII, Rule 12,C.P.C. That provision would apply only with regard to a matter which has not already fructified into a decree.9. The learned counsel contends that as long as a final decree has not been passed, the suit for partition should be deemed to be pending and as the suit has not been disposed of the same can be effectively dismissed. It is no doubt true that a suit for partition would be completely disposed of only after a final decree is passed. Therefore, on the date on which I. A. 110 of 1944 was filed by Nelliappa, the suit was no doubt pending on the file of the court of the Subordinate Judge, Tiruchirapalli. But it should not be forgotten that the suit was not pending regarding all the questions that arose in the suit. The suit for partition having been filed by a minor copartner through his next friend, one of the questions that fell for determination by the court before passing of a preliminary decree was whether it was beneficial for the minor to separate from the other coparceners. That question has undoubtedly been finally decided by the court when it passed the preliminary decree. The question as to what share the respective parties are entitled has also been finally decided by the court when it passed the preliminary decree because admittedly the preliminary decree declares that each of the three brothers is entitled to 1/3 share. The definition of the word 'decree' makes it clear that a decree can be either preliminary or final and even preliminary decree is one which conclusively determines the rights of the parties with regard to certain matters in controversy in the suit. In Venkatareddy v. Pethireddy, , their Lordships of the Supreme Court point out that a preliminary decree passed, whether it is in a mortgage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive. Therefore, if the suit was pending, it was so pending only for the determination of the remaining questions and not with regard to questions which had already been decided, which decision had merged into the preliminary decree. The order in I. A. 110 of 1944 dismissing the suit would in no way affect the preliminary decree which has already been passed.10. However, the learned counsel for the appellant, relying on certain observations of Venkataramana Rao J. in Ramarao v. Venkatasubbayya, AIR 1937 Mad 274, contends that by Nellayyappa electing to abandon the suit for partition as contemplated under Order XXXII, Rule 12,C.P.C., he must be deemed to have revoked the intention to separate and therefore continued to be an undivided member of the family. That was a case where the minor plaintiff, on whose behalf the suit for partition had been filed, elected to continue the suit and the question which fell for determination by Venkataramana Rao J. was whether the rights of the plaintiff are to be determined as on the date of the plaint or as on the date when he elected to continue the suit. In the course of the discussion, the learned Judge observed at page 276(column 2) and page 277(column 1):--"The ratio decidendi of the Full Bench on the other hand is intelligible; the exercise of the option by the guardian does effect a severance but the severance so to speak remains in stage of suspended animation till the court ratifies the act; the court takes upon itself the task of deciding that which the minor if he were an adult would have done himself, namely, whether it is beneficial or not to become separate; it is not a fresh expression of volition by the court. The volition was already expressed by the guardian on behalf of the minor; the court puts the seal of approval on it in the place of the minor and for him. It is open to the minor on attaining majority to elect to abandon or continue the suit. If he elects to continue, he adopts the act of the guardian and puts his own imprimatur on it and the court is no longer called upon to pronounce its opinion on it; the minor becomes separated from the date of plaint. And if he elects to abandon the suit the minor continues to be an undivided member of the family and he must be deemed to have revoked the intention to separate."The learned counsel for the appellant very much relies on the latter part of the above observation of Venkataramana Rao, J. Apart from the observation being in the nature of obiter, it certainly does not apply to a suit for partition, where a preliminary decree and already been passed. In a suit for partition, where the preliminary decree itself has not been passed, the position is that though the next friend, in filing the suit for partition, has made an unequivocal declaration on behalf of the minor to separate, that declaration has no become an effective declaration because the law says that such declaration is subject to approval by the court. Till a preliminary decree is passed, the stage of the court approving or disapproving of the declaration made by the next friend on behalf of the minor would not arise. In such a case, when the minor, who has by then attained majority, abandons the suit, the position would be similar to a case where the court holds (the minor plaintiff still continuing to be a minor even till the date of preliminary decree) that it is not in the interests of the minor to separate and refuses to grant a preliminary decree for partition. But that is not the position as far as the present case is concerned. Here the court has, in fact, set its seal of approval of the declaration made by the next friend of the minor to separate and that decision of the court has become final. Therefore the observations of Venkataramana Rao J. relied on by the learned counsel would not help him. In the present case, when Nelliappa filed I. A. 110 of 1944, it would certainly have been open to the other shares to press for a final decree. Needless to say that in a suit for partition there is no distinction between a plaintiff and a defendant who is also claiming a share. The preliminary decree had declared not only the share of Nelliappa but also that of Velayutham Pillai and Ambalavana Pillai. By Nelliappa, on attaining majority, saying that he was abandoning the suit, the rights of the other two sharers to have the properties divided by metes and bounds and getting a final decree in the same suit cannot be jeopardised.11. There is also the further question as to whether a coparcener who made the necessary declaration and brought about a severance in status can unilaterally withdraw the declaration and restore the parties to their original position.InRadhakrishna v. Satyanarayana, 1948-2 Mad LJ 331 = (AIR 1949 Mad 173), a Division Bench of this court points out that when once there is a division in a joint Hindu family, whether of status or property, there is no means of avoiding the result except by a reunion for which an agreement, express or implied, is always required. This decision also points out that a unilateral declaration of intention to divide by a member which is unequivocal and which is communicated to the other coparceners brings about a disruption or division of a status of a family and when once such a communication of intention is made, which has resulted in the severance of status, it is not open to the member concerned to nullify its effect so as to restore the family to its original joint status. It is further pointed out that the withdrawal of the unilateral act of declaration of intention to separate which had already resulted in a division in status cannot amount to an agreement to reunite.This decision has been referred to with approval by their Lordships of the Supreme Court in Puttorangamma v. Ranganna, . It is pointed out by their Lordships of the Supreme Court at page 1022 that when once a communication of the intention to separate is made, which has resulted in the severance of the joint family status, it is not thereafter open to the coparcener to nullify its effect so as to restore the family to its original joint status, though it is possible for the members of the family by a subsequent agreement, to reunite. It is made clear that the mere withdrawal of the unilateral declaration of the intention to separate which already had resulted in the division in status cannot amount to an agreement to reunite. Regarding this aspect, there can be no distinction between a declaration made by a coparcener who is sui juris and a declaration made by the next friend of a minor coparcener which has subsequently been approved by court in passing the preliminary decree.12. The result is, the appeal fails and the same is dismissed with costs.13. Appeal dismissed. |
648aee72-22b1-5ac4-bc8f-68036cb47a30 | court_cases | Delhi High CourtH.R.D. Enterprises vs Amtrex Ambience Ltd. on 9 November, 2001Equivalent citations: 2002 A I H C 2284JUDGMENT
V.S. Aggarwal, J.1. M/s. H.R.D. Enterprises is a partnership concerned. A civil suit has been filed for recovery of Rs. 7,10,384/- against the defendant (Amtrex Ambience Ltd.). It has been pleased that the defendant company had appointed the plaintiff as a dealer in respect of air conditioner and air conditioning units being marketed by the defendant. The defendant company had promised to pay the commission/remuneration. Accordingly, the firm commenced the work as a dealer of the defendant company and in such capacity effected sales of the products marketed by the defendant. It also provided after sales services. As per instructions of the defendant the plaintiff was required to book orders and intimate the same to the defendant who was thereupon to raise direct bills in the names of the customer. Other details are not relevant for purposes of the present order and suffice to say that plaintiff filed the suit for his remuneration alleging that the civil court at Delhi has the jurisdiction to entertain and adjudicate upon the present suit because plaintiff was appointed as a dealer by the defendant at Delhi and the defendant is to make the payment at Delhi. By and large all sale and work was executed at Delhi.2. In the written statement filed the defendant contested the suit. Besides other pleas it has been pleaded that the civil court at Delhi has no jurisdiction to entertain the suit and only the civil court at Ahmedabad has jurisdiction to try the suit has per agreement between the parties.3. Issues had been framed by this Court on 6th November, 2000. Vide order passed on 12th January, 2001 issue No. 4 was treated as preliminary issue and it reads as under:-"4) Whether this court has no territorial jurisdiction to try the suit, as alleged?4. By this order the said order is proposed to be disposed of.5. On behalf of the plaintiff it was urged that contract had been entered into with the defendant at Delhi. The goods were supplied by the plaintiff to different customers at Delhi. Payments were also made at Delhi and, therefore, the Delhi Courts has jurisdiction to entertain the suit. On the contrary reliance is being placed by the defendant on the invoices placed on the record to urge that it was clearly mentioned that all the disputes shall be subject to the jurisdiction of the Courts at Ahmedabad.6. To appreciate the said controversy reference can well be made toSection 20of the Code of Civil Procedure. The same reads as under:-"20. Other suits to be instituted where defendants reside or cause of action arises- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or(b) any of the defendants, where there are more than one, at the tim,e of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry or business, or personally work for gain, as aforesaid, acquiesce in such institution; or(c) the cause of action, wholly or in part, arises."7. It was Clause C of Sub-section 20of the Code of Civil Procedure which was being pressed into service to urge that cause of action, keeping in view the fact that contract was entered at Delhi, the plaintiff sold the goods at Delhi and even payment was made at Delhi, therefore, the Delhi Courts has jurisdiction. In addition to that it was contended that the defendant has its sub office even at Delhi.8. Reliance on behalf of the plaintiff was placed on the decision of the Supreme Court in the case of Patel Roadways Ltd. v. Tropical Agro System Pvt. Ltd. and Anr. . Almost identical question had come up for consideration before the Apex Court. It was held that so long as there is a subordinate office of the Corporation situated at such a place it would be taken also to be a place where the business is carried by the defendant and in this regard thereupon the Court held:-"This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the Corporation is not located there) so long as there is a subordinate office of the Corporation situated at such place. The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a Corporation, for the purposes of Clause (a), the location of the subordinate office, with the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business. If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be placed where the Corporation is deemed to be carrying on business, the disjunctive "or" will not be there. Instead, the second part of the Explanation would have read "and, in respect of any cause of action arising at any place where it has a subordinate office, also at such place."9. It is true that it has been mentioned that the disputes arising out of the contract shall be settled in the Court at Ahmedabad but this condition is appended to the invoices pertaining to Amtrex brand. The defendant herein is Amtrex Ambience Ltd. Learned counsel for the plaintiff urged that plaintiff is not a party of these invoices and, therefore, would not be bound by the general conditions relied upon on behalf of the defendant. It is patent that Amtrex Ambience Ltd. is different from the company Amtrex Appliances. It may be having connections with each other but so far as the plaintiff's allegations are concerned it is contended by it that it was having dealing with the defendant and it was acting as the dealer of the defendant. At the present moment one has only to see the assertions that have been made in the plaint besides the statement of PW-1 Smt. Bhanu Seth. She has stated that the plaintiff has no dealing with M/s Amtrex Appliances Ltd. It was only having dealing with the defendant. The plaintiff was authorised dealer of the defendant for Delhi region and the plaintiff was appointed as dealer in April, 1994 at New Delhi. The air conditioners were sold by the plaintiff and also were installed in Delhi region. It has further been stated that the plaintiff is not bound by the direct dealing between Amtrex Appliances Ltd of Gujarat with customers in Delhi.10. The defendant felt shy of examination of any witness to show that in fact the contract was entered into at Ahmedabad or that the plaintiff was dealing on behalf of the defendant anywhere outside Delhi region. Keeping in view the same it must be held that the plaintiff has little to do with the dealings of M/s Amtrex Appliances directly with the customers. In that view of the matter the plaintiff cannot be held to be bound by the condition in the invoices, in which plaintiff is not a party, that it is subject to the jurisdiction of the Courts at Ahmedabad.11. Accordingly, the issue is decided in favor of the plaintiff. List it before the Joint Registrar on 16th January, 2002 for fixing the date for evidence of the parties. The Joint Registrar is appointed as the Local Commissioner. |
ac0ed6f0-ca37-580f-9ccc-7524855b2b01 | court_cases | Lok Sabha DebatesNeed To Expedite Completion Of Lahchura Dam Project In Mahoba District, Uttar ... on 25 April, 2005Title: Need to expedite completion of Lahchura Dam Project in Mahoba district, Uttar Pradesh. – Laid.श्रीराजनरायन बुधौलिया(हमीरपुर, उ.प्र.) : * अध्यक्ष महोदय, मेरे संसदीय क्षेत्र का बहुत बड़ा भू-भाग असिंचित है। क्षेत्र की सम्मानित जनता धरने प्रदर्शनों द्वारा लगातार उत्तर प्रदेश सरकार का ध्यान आकर्षित करती रहती है। किसानों को सिंचाई का पानी न मिलने के कारण आत्महत्याओं तक के प्रयास गरीब किसानों द्वारा किये गये हैं।पुनरीक्षित लहचूरा बांध परियोजना की तकनीकी स्वीकृति केन्द्रीय जल आयोग, नयी दिल्ली द्वारा की जा चुकी है। व्यय वित्त समति से स्वीकृति प्राप्त हो चुकी है तथा प्रस्तावित इनवेस्टमेंट क्लीयरेंस हेतु प्रकरण उत्तर प्रदेश राज्य सरकार से योजना आयोग, नयी दिल्ली को वित्तीय वर्ष २००४-२००५ में कार्य प्रारंभ करने की अनुमति दिये जाने हेतु शासन स्तर से संदर्भित किया जाना है। वित्तीय पोषण हेतु परियोजना आर.आइ.डी.एफ. के अंतर्गत केन्द्रीय जल आयोग, भारत सरकार, नयी दिल्ली को प्रेषित की जा चुकी है। वन भूमि का प्रकरण शासन को प्रेषित किया जा चुका है।अत: मेरा केन्द्र सरकार से अनुरोध है कि मेरे संसदीय क्षेत्र के सम्मानित किसानों को सिंचाई के लिए पर्याप्त पानी उपलब्ध हो सके, इसके लिए लहचूरा बांध परियोजना, जनपद महोबा, उत्तर प्रदेश को वित्तीय वर्ष २००५-२००६ में अवश्य पूरा कराये जाने हेतु अविलम्ब कदम उठाने का कष्ट करें।* Laid on the Table . |
f5d83856-02a0-561d-a7ef-99ee2f5fdc1d | court_cases | Tripura High CourtParty Name : Dulal Debnath vs The State Of Tripura & Ors on 4 April, 2017Author:T. VaipheiBench:T. VaipheiCase No :WP(C) 0000027/2017
Party Name : DULAL DEBNATH VS THE STATE OF TRIPURA & ORS
THE HONBLE THE CHIEF JUSTICE T. VAIPHEI THE HONBLE MR. JUSTICE STALAPATRA
124.124.2917,
The State-respondents and the respondent No.5 are granted 6 (six) weeks time to file theirrespective affidavits.List it again on 30.05.2017.The interim order will continue until further order(s).
Download Date: 8-05-20] 7 15:05 1/1 |
992d5eb3-71a7-5f3c-95d6-80ab9c4ba3c5 | court_cases | Income Tax Appellate Tribunal - ChennaiBest Safety P. Ltd., Chennai vs Department Of Income Tax on 14 January, 2011IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH 'C', CHENNAI
BEFORE
Dr. O.K.NARAYANAN, VICE PRESIDENT
and
SHRI HARI OM MARATHA, JUDICIAL MEMBER
.....
ITA No.635(Mds)/2011
Assessment Year: 2005-06
The Assistant Commissioner M/s.Best Safety P. Ltd.,
of Income-tax, Vs. Plot No.25, sector 2,
Company Circle I(2), SALTA Special Economic
Chennai. Zone, 24-Paragnas South,
West Bengal-743 504.
PAN AABCB7497E.
(Appellant) (Respondent)
Appellant by : Shri K.P.Gopakumar, Jt.CIT
Respondent by: None.
ORDERPER Dr.O.K.NARAYANAN, VICE-PRESIDENT:This appeal is filed by the Revenue. The relevant
assessment year is 2005-06. The appeal is directed against the-2 - ITA No.635(Mds)/2011
order of the Commissioner of Income Tax (Appeals)-III at
Chennai dated 14-1-2011 and arises out of the assessment
completed under sectionn143(3) of theIncome-tax Act, 1961.2. When the matter was called on for hearing, Shri
K.P.Gopakumar, the learned Joint Commissioner of Income-tax,
appeared for the Revenue. There was no appearance for the
respondent-assessee in spite of notice. In these circumstances,
this matter is disposed of ex parte, qua, the assessee.3. The ground raised by the Revenue in this appeal is
that the Commissioner of Income Tax (Appeals) has erred in
directing the Assessing Officer to exclude those items from the
total turnover which have been excluded from export turnover of
the assessee.4. The Commissioner of Income Tax (Appeals) has
held that there should be corresponding exclusion from the total
turnover as well, relying on the Special Bench decision of the
Tribunal, Chennai in the case ofITO vs. SAK Soft Ltd., 313 ITR
(AT) 353.5. Therefore, we have to see that the Commissioner of
Income Tax (Appeals) was following the decision of the Special-3 - ITA No.635(Mds)/2011
Bench of the Tribunal, which is binding on him, and, therefore,
his order cannot be held to be erroneous. In view of this matter,
we find that the appeal filed by the Revenue is liable to be
dismissed.Order pronounced in the open Court at the time of
hearing on Monday, the 18th day of July, 2011 at Chennai.Sd/- Sd/-
(Hari Om Maratha) (Dr. O.K.Narayanan)
Judicial Member Vice-President
Chennai,
Dated the 18th July, 2011.
V.A.P.
Copy to: (1) Appellant
(2) Respondent
(3) CIT
(4) CIT(A)
(5) D.R.
(6) G.F. |
c94efc0c-ff62-5ed6-9f96-df3e8a07346c | court_cases | Madhya Pradesh High CourtHarchhat Kol & Ors. vs The State Of M.P on 6 November, 2012Criminal Revision No. 1491 of 2002
06/11/2012
Shri G.S.Baghel, Advocate for the petitioners.
Shri Santosh Yadav, Panel Lawyer for the respondent-State.Learned counsel for the petitioners prays for withdrawal
of the petition on behalf of appellant no.3 Smt Ujjiyari Bai.Prayer is allowed.The petitioners preferred this revision under Section 397
read withSection 401of Cr.P.C. being aggrieved by the
judgment dated 26/11/2002 passed by Additional District
Judge, Katni, in Criminal Appeal No.45/2002, arising out of the
judgment dated 22/03/2002 passed by Judicial Magistrate
First Class, Katni in Criminal Case No.505/2001, whereby the
petitioner nos. 1 & 2 have been convicted and sentenced as
under:-Petitioners Provision Sentence
Harchhat (No.1) u/s 323/34IPCR.I. for 3 months
& with fine of Rs.250,
Dant @ Daniya in lieu of default,
(No.2) R.I. for one month,
each.2. According to prosecution, on 18/12/1990 at about 8.00
am, complainant went to his field and saw that
applicants/accused Harchhat and Dani @ Daniya were
ploughing his field. Complainant Premlal questioned them that
why they were ploughing his field. The accused persons came
there, abused him and gave him a blow by lathi. As a result of
blow by lathi, the complainant sustained injuries on various
parts of his body.3. Learned counsel for the petitioners did not challenge
the finding of conviction of the petitioners but confined his
arguments to the point of sentence only.4. Learned counsel for the petitioners further submitted
that the petitioners had already suffered the jail sentence of
35 days. Therefore, their case be considered sympathetically
and their sentence should be reduced to the period already
undergone in jail.5. Learned counsel for the State does not oppose the
prayer of the petitioners' counsel.6. It is well settled that the revisional jurisdiction cannot
embark upon re-appreciation of evidence unless the finding of
fact,on the face of it, is illegal and perverse. The appellate
judgment affirming the finding of guilt does not suffer from any
error of jurisdiction. Both the Courts below have not committed
any mistake in believing the statements of prosecution
witnesses further corroborated by medical evidence.
Therefore, the petitioners are rightly convicted underSection
323/34of IPC.7. With regard to sentence, admittedly the petitioners
remained in jail for a period of 35 days. No previous criminal
conduct of the petitioners had been proved by the prosecution
therefore it appears that they are first offender. Keeping in
view the facts and circumstances of this case and
submissions made by the parties especially the fact that the
incident is of 18/12/1990, it would not be in the interest of
justice to send the petitioners back to jail to serve the
remaining part of the sentence after lapse of 22 years.8. Consequently, this criminal revision is allowed. The
conviction of the petitioner Nos.1 & 2 passed by the Courts
below is hereby maintained, but the sentence is reduced to
the period already undergone by them.9. With the aforesaid directions, revision petition stands
disposed of.10. A copy of this order be sent to the trial Court for
information and compliance.(SMT.VIMLA JAIN)
JUDGE
manju |
527f2271-b6fb-58e4-bba4-5d6ba76bfd23 | court_cases | Allahabad High CourtRaj Kamal Pandey vs State Of U.P. & Orhters on 30 July, 2012Author:Rajes KumarBench:Rajes KumarHIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 18
Case :- WRIT - A No. - 14150 of 2001
Petitioner :- Raj Kamal Pandey
Respondent :- State Of U.P. & Orhters
Petitioner Counsel :- Vimal Chandra Mishra
Respondent Counsel :- C.S.C.
Hon'ble Rajes Kumar,J.It appears that one Sri Ram Niranjan Dwivedi was working as a permanent Assistant Teacher in L.T. Grade. He has been promoted as ad hoc lecturer in History in the year 1994. On account of promotion of Sri Ram Niranjan Dwivedi as a lecturer in History, short term vacancy arose. To fill up the short term vacancy, an advertisement was made in two newspapers on 9.8.1994 and 11.8.1994. In pursuance of the advertisement the petitioner applied for the post of Assistant Teacher. The petitioner has been appointed vide letter dated 12.9.1994. It appears that ad hoc promotion of Sri Ram Niranjan Dwivedi was not approved by the District Inspector of Schools. It appears that the Committee of Management has sought financial approval of the petitioner's appointment. When the approval has not been granted and the salary was also not being paid to the petitioner, the petitioner filed representation and when the representation has not been decided, the petitioner filed Writ Petition No. 29396 of 2000 wherein a direction has been given to the District Inspector of Schools to decide the representation of the petitioner dated 17.11.1995. The District Inspector of Schools vide order dated 3.2.2001 has rejected the claim of the petitioner. The claim of the petitioner has been rejected on the ground that there was no sanctioned post for the Lecturer and, therefore, the promotion of Sri Ram Niranjan Dwivedi was not in accordance to law. It appears that ad hoc appointment of Sri Ram Niranjan Dwivedi, on the post of Lecturer History, has not been approved by the District Inspector of Schools against which he filed Writ Petition No. 41138 of 2003 which has been dismissed vide order dated 9.5.2005. In the writ petition, there was no interim order in favour of Sri Ram Niranjan Dwivedi. Against the order of the learned Single Judge, Special Appeal No. 759 of 2005 was filed in which the Division Bench of this Court has stayed the operation of the order of the District Inspector of Schools dated 16.8.2003 and the order of the learned Single Judge with the rider that in case if the aforesaid order dated 16.8.2003 passed by the District Inspector of Schools, Allahabad has not been implemented. The petitioner filed the present writ petition challenging the order dated 3.2.2001. The writ petition was entertained and as an interim measure it is directed that if the petitioner is working as Assistant Teacher in Krishna Intermediate College, Garaiya, Allahabad he shall be permitted to work. However, the question of payment of salary shall be considered after the exchange of the counter and rejoinder affidavits between the parties.Learned counsel for the petitioner submitted that in view of the order the petitioner is working as Assistant Teacher and, therefore, he is entitled for the salary.Learned Standing Counsel submitted that the petitioner's appointment was against the short term vacancy on account of promotion of Sri Ram Niranjan Dwivedi and once the promotion of Sri Ram Niranjan Dwivedi has not been approved and he has been reverted back to the post of Assistant Teacher L.T. Grade and working on the said post the petitioner cannot be allowed to work on the said post inasmuch as the petitioner is not entitled for the salary of the Assistant Teacher L.T. Grade from the State Government as Sri Ram Niranjan Dwivedi is already getting salary for the post of Assistant Teacher L.T. Grade.On these facts, let the learned Standing Counsel may verify that whether the petitioner is still working as an Assistant Teacher L.T. Grade and upto what period he worked as Assistant Teacher L.T. Grade. He prays for and is granted 10 days time to file supplementary affidavit.List in the week commencing 13.8.2012.Order Date :- 30.7.2012
OP |
032b14bd-6e42-5637-b011-e450a16387c9 | court_cases | Central Administrative Tribunal - ChandigarhMohinder Singh vs Union Territory on 14 September, 2015CENTRAL ADMINISTRATIVE TRIBUNAL,
CHANDIGARH BENCH,
CHANDIGARH.
O.A.No.060/00723/2014 Date of Decision :
Reserved on: 08.09.2015
CORAM: HONBLE MRS. RAJWANT SANDHU, ADMINISTRATIVE MEMBER
HONBLE DR. BRAHM A. AGRAWAL, JUDICIAL MEMBER
1. Mohinder Singh, s/o late Sh. Gurdev Singh, Chowkidar.
2. Satnam Singh, s/o late Sh. Amarjit Singh, Chowkidar.
3. Manjit Singh, s/o Sh. Sarja Singh, Chowkidar.
4. Jaspal Singh, s/o late Sh. Harbhajan Singh, Chowkidar.
5. Tarsem Lal, s/o late Sh. Bhangi Ram, Chowkidar.
6. Pritam Singh, s/o Sh. Bawa Singh, Chowkidar.
7. Kulwant Singh, s/o Sh. Wassan Singh, Chowkidar.
8. Gandhi Ram, s/o late Sh. Ronki Ram, Chowkidar.
9. Avtar Singh, s/o late Sh. Dayal Singh, Chowkidar.
10. Gurmail Singh, s/o Sh. Babu Singh, Chowkidar.
11. Surinder Singh, s/o Sh. Balwant Singh, Helper.
12. Jaswinder Singh, s/o Sh. Ram Singh, Helper.
13. Satpal Singh, s/o Sh. Sada Ram, Helper.
14. Jaswinder Singh, s/o Sh. Ram Lal, Helper.
All the applicants are working in the o/o Executive Engineer Project, Municipal Corporation, Public Health Division No.1, Chandigarh.
Applicants
Versus
1. Union Territory, Chandigarh Administration through its Secretary Department of Engineering, U.T. Civil Secretariat, Sector 9, Chandigarh.
2. Chief Engineer, Union Territory, Chandigarh Administration, Engineering Department, U.T. Civil Secretariat, Sector 9, Chandigarh.
3. Commissioner, Municipal Corporation, Chandigarh.
4. Chief Engineer, Municipal Corporation, Chandigarh.
5. Executive Engineer, Project, Municipal Corporation, Public Health, Division No.1, Chandigarh.
. Respondents
Present: Mr. Barjesh Mittal, counsel for the applicants
Mr. Sanjeev Dahiya, counsel for respondents no.1 & 2
Mr. Aseem Rai, counsel for respondents no.3 to 5.
O R D E RHONBLE MRS. RAJWANT SANDHU, MEMBER (A)1. This Original Application has been filed underSection 19of the Administrative Tribunals Act, 1985, seeking the following relief:-8 (ii) Respondents be directed to produce complete record of the case of the applicants regarding their working as Daily Wage / Work Charge Chowkidars / Helpers for the last more than 25 years.(iii) Direction be issued to the respondents to consider the cases of all the applicants for regularization of their services as Chowkidars / Helpers in view of judgments passed by Honble Apex Court and Honble Court (Annexures A-1, A-3, A-7 and A-15) and also strictly in terms of reguliarization policy of Government of Punjab dated 18.03.2011 (Annexure A-9) and also the regularization policies / scheme formulated by Chandigarh Administration (Annexure A-2) and further direct the respondents to create requisite number of posts in the concerned Department for regularization of services of the applicants in view of notification dated 18.03.2011 (Annexure A-9) and 05.04.2013 (Annexure A-2) and further grant all consequential benefits to which they may be found entitled to under the rules and law.2. It is stated in the OA that all the applicants joined respondent Chandigarh Administration on daily wage basis during the years 1983-85 as Chowkidars / Helpers and as per the promotion policy of Chandigarh Administration for conversion of staff from Daily Wage to Work Charge, were brought on the work charge establishment as Chowkidars / Helpers in the years 1986 and 1989 (Annexure A-4). All the applicants have been performing their duties diligently and to the entire satisfaction of their controlling officers for the last more than 25 years. However, the applicants have not been considered for regularization inspite of policy / scheme framed by the respondents for their regularization as well as the observations made by the Apex Court in Uma Devis case followed by many other judgments.3. In the grounds for relief, it has been stated as follows:-i) The applicants have been continuing working as Daily Wage Chowkidars / Helpers under respondent Chandigarh Administration since 1983-85 on daily wage basis and thereafter w.e.f. 1989 on work charge basis and thereafter on the formation of Municipal Corporation Chandigarh were transferred on deemed deputation basis to MC where they are still working and till now have worked for more than 25 years to the entire satisfaction of their superiors without any complaint against them. Therefore, pursuant to the judgment passed by Honble Supreme Court in Dharampals case (Annexure A-7), they have completed much more than 240 days of regular service with the respondent Chandigarh Administration. Further the case of the applicants is also squarely covered by the Constitution Bench decision of Honble Supreme Court in Uma Devis case as well as the Punjab Govt. notifications dated 15.01.2006 (Annexure A-8) and 18.03.2011 (Annexure A-9) which have been issued in view of the decision of Honble Apex Court in Uma Devis case which are ipso-facto applicable on the respondent Chandigarh Administration vide notification dated 13.01.1992 (Annexure A-5) and order dated 13.07.1995 (Annexure A-6) whereas the respondents have denied consideration to the cases of the applicants for regularization of their service pursuant to the above notifications issued by Punjab Govt. dated 18.03.2011 (Annexure A-9) and therefore the action of the respondents is unreasoned, illegal, arbitrary and in violation of the Apex Court judgment (Annexure A-7) and notifications (Annexure A-8) and Annexure A-9). Therefore, the whole action on the part of the respondents in non regularizing the services of the applicants is illegal, arbitrary and in violation of the judgments mentioned as well as in the body of the petition. Hence, the whole action is non-est in law and is liable to be quashed / set aside.ii) The Punjab Govt. notification dated 18.03.2011 (Annexure A-9) which is ipso-facto applicable on the respondent Chandigarh Administration as well as in view of the decision given by Honble Supreme Court of India in Uma Devis case, the respondents Chandigarh Administration after detailed discussions / deliberations and on the recommendations of the coordination committee issued regularization policy dated 05.04.2013 (Colly with Annexure A-2) and decided that employees working on daily wage / work charge who completed 10 years of service till December, 2006 and who fulfill the educational qualifications, their services be regularized by creating the requisite number of posts in the concerned Department. Subsequently, the respondent Administration issued another regularization policy dated 10.02.2014 (Annexure A-2) wherein in furtherance to the earlier policy dated 05.04.2013, it was provided that while regularizing the service of Group D work charge / daily wage employees on the same post on which he / she was engaged in the Department, Relaxation in Educational Qualification may be allowed to those who have completed 10 years of service till December, 2006 as a onetime measure. Consequently the applicants being fully eligible and fulfilling the requisite requirements in terms of the regularization policy of respondent Chandigarh Administration dated 05.04.2013 and 10.02.2014 (Annexure A-2) being in employment for more than about 16-20 years as on December, 2006, were required to be considered for regularization by the Department but even inspite of repeated representations preferred by the applicants through their union dated 06.07.2012 (Annexure A-13) as well as 15.11.2013 (Annexure A-14), the respondents have failed to consider their cases for regularization till date as per the seniority list of employees in the respective cadre of Chowkidars / Helpers whereas as is apparent from perusal of order dated 01.08.2014 (Annexure A-12), the respondents are regularizing the services of juniors to the present applicant in an illegal manner ignoring the claim of the applicants being much senior to them and serving the respondent departments for more than 25 years till date. Therefore, the whole action on the part of the respondents in not regularizing the services of the applicants in view of their own regularization policies (Annexure A-2) is illegal, arbitrary and such action of the respondents is liable to be quashed / set aside by this Court.iii) The case of the applicants is squarely covered by the latest decision of Honble Apex Court in the case of UT Chandigarh and others Vs. Sampat & Ors, decided on 03.04.2014 (Annexure A-1) wherein the Honble Apex Court has dismissed the several SLPs filed by the Chandigarh Administration against the order / judgment dated 28.07.2003 (Annexure A-10) in Badris case and has directed the respondent Chandigarh Administration to expedite the regularization of service of those employees who have not yet been regularized. The case of the present applicants being wholly identical and similar to the respondents therein deserves to be considered by the respondents by granting the benefit of the judgment. In Uttranchal Forest RangersAssn.(Direct Recruit) Vs. State of U.P., (2006) 10 SCC 346, the Honble Apex Court has referred to the decision in the case ofState of Karnataka Vs. C. Lalitha(2006) 2 SCC 747 and held that Service jurisprudence evolved by this Court from time to time postulates that all persons similarly situated should be treated similarly. Only because one person has approached the court that would not mean that persons similarly situated should be treated differently.If the administrative authorities discriminate amongst persons similarly situated, in matters of concessions and benefits the same directly infringes the constitutional provisions enshrined inArt. 14and16of the Constitution of India.
Moreover, the case of the applicants is also covered by the decision of the Honble Apex Court inNihal Singh & Ors. Vs. State of Punjab & Ors., 2013 (4) SCT 469 wherein it has been held that after utilizing the services of the employees for almost two decades, the respondents cannot take the plea of non-availability of sanctioned posts and were directed to regularize the services within a period of three months. Similar is the latest decision of Honble Madras High Court in the case of G.Ashokan and the case of the applicants is also squarely covered by the decision of this Court dated 30.09.2013 (Annexure A-3) wherein this Court has also directed the respondents to create the requisite posts for the applicants who are entitled for regularization so that their services can be regularized. Therefore, the non consideration of the case of the applicants till date for regularization of their services by the respondents amounts to violation of the mandate as enshrined by the Honble Apex Court in catena of cases and as such the action of respondent is illegal, arbitrary and is liable to be quashed / set aside by this Court.4. In the short reply filed on behalf of respondents no.1 and 2, it has been stated that the applicants were initially engaged on daily wage basis as Chowkidar / Helper in the year 1984 by the Chandigarh Administration and their services were converted into work charge under the Work Charge Establishment in the year 1989. The applicants were transferred to Municipal Corporation, Chandigarh on its formation in May, 1996, on the creation of Municipal Corporation, Chandigarh as Work Charged employees along with works and till then they were working with Municipal Corporation, Chandigarh and the salary of the applicants are being paid by the Municipal Corporation, Chandigarh. Thus, the applicants are not the employees of Chandigarh Administration. There are two regular posts of Chowkidar lying vacant with the answering respondent Department i.e. Engineering Department of Chandigarh Administration for which the agenda for regularization is under process from purely work charge Chowkidar as per seniority who are working in the Engineering Department of Chandigarh Administration. Since the applicants have been transferred to Municipal Corporation, Chandigarh on its formation in May, 1996, they are permanent employees of Municipal Corporation, Chandigarh i.e. respondents no.3 to 5 and hence the responsibility to regularize the service of the workers rest with the Municipal Corporation authorities.5. In the short reply filed on behalf of respondents no.3, 4 and 5, it has been stated that relief has been claimed against the Municipal Corporation whereas the Municipal Corporation, Chandigarh does not fall within the jurisdiction of this Tribunal. Vide decision dated 03.04.2014 in the SLP titled U.T. Chd & Ors. Vs. Sampat & Ors., the Honble Supreme Court of India has made it clear that if no post is available in the regular establishment, the employees may continue in the work charged establishment but they will be entitled to full salary which they are already drawing. In order to comply with the judgment of the Honble Supreme Court of India, the seniority list of the work charged / daily wage workers has been prepared for consideration of regularization of their services as per seniority and as per availability of posts. The process of regularization has already been set in motion.6.In the rejoinder filed on behalf of the applicants, it has been stated that notification dated 21.05.1996 transferring the services of employees of Chandigarh Administration on deemed deputation basis to Municipal Corporation, Chandigarh, came under challenge before this Tribunal in OA No.488/CH/1996 in case titledRajinder Singh & Ors. Vs. Union of India & Ors.and several other connected OAs which were decided by this Tribunal on 09.11.2001 (Annexure A-16) wherein this Court quashed the impugned notification dated 21.05.1996 and directed the respondent Chandigarh Administration to seek fresh options from the employees of Chandigarh Administration transferred to Municipal Corporation.The Chandigarh Administration aggrieved by the order dated 09.11.2001 (Annexure A-16) passed by this Court preferred judicial review before Honble Punjab and Haryana High Court by filing CWP No.5295/CAT/2002 titled UT Chandigarh Vs. CAT & Ors. which was dismissed by the Honble High Court while deciding bunch of cases and the judgment dated 09.11.2001 was upheld Liberty was given to the Chandigarh Administration to file an application before the Tribunal to continue the services of all the persons transferred by virtue of the said notification as deemed deputationists.Thereafter the Chandigarh Administration issued another notification dated 15.04.2005 and 06.06.2005 for transferring employees to Municipal Corporation, Chandigarh, which again became a subject matter of challenge before this Court in number of OAs with leading case titledLalit Kumar & Ors. Vs. UOI & Ors.in OA No.218/CH/2005. This Court decided the said OA vide order dated 24.02.2006 (Annexure A-17) allowing the same and held that the notifications dated 15.04.2005 and 06.06.2005 to be non sustainable and quashed / set aside the same.7. Further, similar issue regarding regularization and grant of pension qua colleague of the present applicants also working as Chowkidar with the same respondents came up for consideration before this Court in OA No.060/00501/2014 titledRajinder Kumar Vs. UT Chandigarh Administration & Ors.wherein also the respondents had taken similar objection of jurisdiction. This was decided on 02.12.2014 whereby this Tribunal while considering judgments Annexure A-16 and A-17 ibid in the operative para of the said order held as under:-14. Hence, for all intents and purposes, the applicant whose name was included in the notification dated 21.05.1996 as a work charged employee has to be considered to have continued to be an employee of the Chandigarh Administration and on deemed deputation with the MC, Chandigarh during the period that he worked there. Since the judgments in Badri (supra) and Sampat (supra) are applicable to the work charged employees of the Chandigarh Administration, we are of the view that the applicant is also entitled to the benefits of these judgments. This is also justified since it is possible that juniors of the applicant may have been retained in the Chandigarh Administration while he was sent to the MC and the junior may have got the benefit of regularization / pension in view of various judgment/pronouncements while the claim of the applicant in this regard is being contested by the respondents.15. Keeping the above discussion in view, respondents no.1 and 2 are directed to consider the claim of the applicant for regularization of his services and consequential benefits in terms of Badri (supra) and Sampat (supra). Action in this regard may be completed within three months of a certified copy of this order being served upon the respondents.8. It is also stated that the direction of Honble Supreme Court of India in Sampats case to expedite the regularization coupled with the policy / scheme of regularization issued by Chandigarh Administration, Department of Personnel dated 10.02.2014 (Annexure A-2) squarely covers the cases of the present applicants as the said policy has been formulated by the respondent Chandigarh Administration for the benefit and in favour of the employees who are working on daily wage / work charge basis since a long period and their claim for regularization is covered by the judgments of Honble Supreme Court of India in the case ofUOI & Ors. Vs. Dharam Pal & Ors.as well as in accordance with Constitution Bench judgment in Uma Devis case as all the conditions as laid down the regularization policy as well as in Uma Devis case are fulfilled by the present applicants. The applicants place reliance on the documents Annexure A-19 whereby the o/o Executive Engineer, Horticulture under respondent no.2 has in terms of the regularization policy of Chandigarh Administration dated 10.02.2014 (Annexure A-2) has regularized the services of similarly situated and circumstanced daily wage employees working in the office of respondent no.2 i.e. Chief Engineer, U.T. Chandigarh though belonging to different cadre of Malis.The perusal of the communications / documents (Annexure A-19) categorically shows that the respondent Chandigarh Administration is regularizing the services of daily wage / work charge employees in terms of its regularization policy / scheme dated 10.02.2014 (Annexure A-2) and similar claim of relief of regularizing the services of the present applicants has been made by the applicants in the OA.9. Arguments advanced by the learned counsel for the parties were heard, when learned counsel for the applicant dwelt at great length on the claim of the applicants for regularization stating that the Government must act in a reasonable and non arbitrary manner. He cited Uma Devis case to press that since the applicants had put in long years of service as work charged employees, they were entitled to regularization.In this regard he also referred toManinder Kaur Vs. State of Punjab, 2003 (4) RSJ 98, wherein it has been held as follows:-B. Constitution of India, Articles 14 and 16 - Daily wage workers Regularization of services Length of daily wage service Presumption of existence of regular posts Where the work on which persons are engaged on daily wage basis continues for considerably long period, say two-three years, there is presumption of existence of regular work and requirement of regular posts Such workers, fulfilling all requisite qualifications, are entitled to be regularized by adopting a rational policy Once a policy is framed it must be implemented concurrently in future to regularize such workers Engaging daily wagers on casual basis is one of the recognized source of employment Non-availability of sanctioned regular posts / vacancies is no ground to deny such right of the workers The goal of our Constitution is to provide employment certainty of regular source of livelihood, not to snatch it.C. Constitution of India,Articles 14and16 Punjab Govt. Policy dated 23.01.2001 for Regularization of Services Regularization Ban on creation of new posts The policy dated 23.01.2001 of Punjab Govt. does not impose an absolute bar on creation of posts The purpose is only that new recruitments be not made without concurrence of the finance department The very dominating purpose of the policy is regularization of services of eligible daily wagers which cannot be defeated by exception clauses of provisions.
He also referred toNihal Singh & Ors. Vs. State of Punjab & Ors., 2013 (4) SCT 469 to press that since the applicants were on deemed deputation with the Municipal Corporation, Chandigarh, it was the bounden duty of the Chandigarh Administration to create posts for their regularization. The applicants were working for paltry remuneration since long and had not got any benefit of financial upgradation. He stated that equity demanded that the requisite posts for regularization of the services of the applicants be created and their services be regularized.10. Learned counsel for the respondents reiterated the content of the short replies filed on behalf of the respondents.11. We have given our thoughtful consideration to the matter and perused the judgments cited by the learned counsel. The issue of the applicants as being on deemed deputation from Chandigarh Administration to the Municipal Corporation is already settled as per judgments cited on behalf of the applicants and also inRajinder Singh(supra).In UT Chandigarh and others Vs. Sampat & Ors, decided on 03.04.2014, the Apex Court has directed as follows:-However, we make it clear that if no post is available in the regular establishment, the employees may continue in the work charged establishment but they will be entitled to full salary which they are already drawing including dearness allowance and the pensionary benefits to which they are entitled under the CPWD Work Charge Establishment Manual and Rules. Those who have been already regularized in the regular establishment are entitled for the benefits of a regular employee of regular establishment including the gratuity and pension which they are entitled as per rules. Widows shall get the family pension. Those who have retired from service shall get pensionary benefits. The interim order dated 07.032005 passed by this Court is vacated. The appellants are directed to expedite the regularization of service of those respondents who have not yet been regularized and pay pension, if not yet made. The appeals are dismissed but with aforesaid directions to the appellants.12. Creation of posts is a matter within the domain of the executive and since the number of such posts required for the regularization of the daily wagers / work charged employees working with the Chandigarh Administration / Municipal Corporation is quite large, we do not considerate it appropriate to issue any direction regarding creation of these posts for regularization of the persons who are claiming regularization. However, as and when vacancies arise, the Chandigarh Administration is required to regularize the services of the daily wagers / work charged employees who are on deemed deputation as per their seniority on the basis of the combined seniority list that is maintained in respect of such employees by the Chandigarh Administration and Municipal Corporation. The benefits of regularization and pensionary entitlement will be governed by the directions of the Apex Court in Sampat & Ors. (supra).13. The OA is disposed of accordingly.14. No costs.(RAJWANT SANDHU)
ADMINISTRATIVE MEMBER.(DR. BRAHM A. AGRAWAL)
JUDICIAL MEMBER
Place: Chandigarh
Dated:sv:13(OA.No.060/00723/2014) |
c2e0082e-5e18-5d07-9c31-d153db96a2fa | court_cases | Calcutta High CourtEastern Coalfields Limited vs Kumari Kiran Singh & Ors on 14 December, 2018Equivalent citations: AIRONLINE 2018 CAL 1593Author:Shampa SarkarBench:Debasish Kar Gupta,Shampa Sarkar1
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
(Original Side)
Present:
The Hon'ble Chief Justice Debasish Kar Gupta
And
The Hon'ble Justice Shampa Sarkar
A.P.O. 505 of 2017
G.A. 2449 of 2017
With
W.P. 556 of 2014
Eastern Coalfields Limited
-Vs-
Kumari Kiran Singh & Ors.
For Appellants : Mr. Malay Kr. Basu
Senior Advocate
Mr. R.N. Majumdar
Mr. Nikhil Roy
For Respondent : Mr. U.S. Agarwal
A.P.O. 344 of 2017
G.A. 2093 of 2017
With
W.P. 554 of 2014
Eastern Coalfields Limited
-Vs-
Bhuban Mejhain
For Appellants : Mr. Malay Kr. Basu
Senior Advocate
Mr. Alok Kr. Banerjee
Ms. Sanchita Barman Roy
For Respondent : Mr. U.S. Agarwal
A.P.O. 182 of 2018
G.A. 1812 of 2017
W.P. 232 of 2015
Eastern Coalfields Limited
-Vs-
Oindrila Barman & Others
2
For Appellants : Mr. Anubhav Sinha
Ms. Sanchita Barman Roy
For Respondents : Mr. Partha Ghosh
Mr. Subhojit Seal
Heard on : 05/07/2018, 13/09/2018, 20/09/2018, 27/09/2018, 04/10/2018
Judgment on : 14/12/2018
Shampa Sarkar, J. :These three intra-court appeals involve similar questions. The appellant in
all these appeals is the Eastern Coalfields Limited (hereinafter referred to as ECL).
This Court has decided to hear these appeals analogously with the consent of the
parties.2. APO No.505 of 2017 arises out of W.P.No.556 of 2014 (hereinafter
referred to as the writ petition no.1).3. APO No. 3444 of 2017 arises out of W.P. No.554 of 2014 (hereinafter
referred to as the writ petition no.2).4. APO No.182 of 2018 arises out of W.P. No.232 of 2015 (hereinafter
referred to as the writ petition no.3).5. The writ petition no.1 was filed by the respondent/writ petitioner, Kumari
Kiran Singh, for setting aside the order passed by the General Manager (P & IR)
Eastern Coalfields Limited dated 28/29 November, 2013, by which her prayer for
appointment under the appellant on compassionate grounds was rejected. A
further prayer for employment in place of her father, late Dilip Kumar Singh, an
ex-employee of the appellant who had died-in-harness was also made. The father
of Kumari Kiran Singh died-in-harness on January 26, 2004. At the time of death3of her father, she was 17 years 8 months and 6 days old. Upon attaining the age
of 18 years, she applied for compassionate appointment. On May 12, 2005, the
General Manager, Sodepur area sent her documents to the Chairman-cum-
Managing Director, Eastern Coalfields Limited, Headquarters who was the
competent authority. The competent authority failed to take any action, even
pursuant to two representations dated December 16, 2005 and July 6, 2006.
Finally in 2011, she filed W.P. No.634 of 2011, being aggrieved by the inaction on
the part of the appellant. The said writ petition was disposed of by a learned
Single Judge of this court on August 12, 2013, with a direction upon the General
Manager (personnel) Eastern Coalfields Limited, to consider the case for
compassionate appointment of Kumari Kiran Singh in accordance with law upon
giving her a hearing and by passing a reasoned order. On October 28, 2013,
Kumari Kiran Singh appeared before the General Manager (P & IR), Eastern
Coalfields Limited Head quarters. By an order dated November 28/29 of 2013, the
General Manager (P & IR) Eastern Coalfields Limited rejected her prayer for
compassionate appointment by assigning the following reasons:-"I have gone through the representation and argument of Kumari Kiran Singh
and found that:a) Admittedly she was 17 years 8 months and 6 days old on the date of death of
her father.b) The relevant portion of National Coal Wage Agreement (NCWA) applicable to
the case is reproduced below:"9.5.0 (III): In case of death either in mine accident or for other reasons or
medical unfitness under Clause 9.4.0, if no employment has been offered and
the male dependant of the concerned worker is 12 years and above in age, he
will be kept on a live roster and would be provided employment
commensurate with his skill and qualifications when he attains the age of 18
years. During the period the male dependant is on live roster, the female
dependant will be paid monetary compensation as per rates at paras (i) & (ii)
above. This will be effective form 1.1.2000".From the above it is evidently clear that there is a provision of keeping the
name of male dependant in the live roster till he attains eighteen years of age,
which is the minimum age for employment underMines Act, 1952. But the
same is not applied to the female dependant.4The Petitioner Kumari Kiran Singh being the female dependant is not entitled
for the same consideration.c) The NCWA-III is a bipartite agreement between the five federations of trade
unions representing the workmen of Coal Industry and the Management of
Coal India, Singareni Collieries Co. Ltd. (SCCL).The Subsidiary Companies of CIL such as ECL, has no authority to interpret
the provision of said agreement or rewriting in any manner, the contents of the
said agreement."6. Aggrieved by the aforesaid decision Kumari Kiran Singh filed writ petition
no.1.7. The appellant filed an affidavit-in-opposition to the said writ petition and
contended that for the welfare of the employees of the Coal Industry a
memorandum of agreement dated December 11, 1974 was executed between the
management and representing workmen, whereby and whereunder the wage
structure and other conditions of service including fringe benefits under the
recommendation of Central Wage Board was made applicable. The workmen
category of all coal industries demanded review of the wage structure. The
Government of India considered and approved the proposal for setting up a joint
bipartite Wage Negotiation Committee for the Coal Industries. The committee in
which the trade unions were represented came to an agreement in respect of wage
scale, wage structure and other service conditions which subsequently came to be
known as The National Coal Wage Agreement (in short NCWA).8. It was the specific case of the appellant before the learned Single Judge
that the age of the writ petitioner, Kiran Singh, as assessed by the Internal
Medical Examination Board was 17 years 8 months and 6 days on the date of
death of her father and as such she was not entitled to an appointment unlike a
male dependant as her name could not have been kept alive in the live roster as
per the provisions of Clause 9.5.0 of NCWA (VI). Such provision has been accepted
and adopted in all subsequent NCWAs.59. According to the appellant, the NCWA was a settlement within the
meaning ofSection 2 (p)of the Industrial Dispute Act, 1947 (hereinafter referred
to as the said Act of 1947) and was binding on the employees as also on the
management and the settlement could be challenged either before the Labour
Court or the Industrial Tribunal.10. The learned Single Judge upon hearing the writ petition, by judgment
and order dated February 24, 2017, allowed the writ petition and held as follows:-"This Court, therefore, deprecates the manner in which the authority had
proceeded to decide the application in refusing to apply the ratio laid down in
Babunti Kumari's case.The order impugned is thus set aside and quashed.Because of the observations of the said authority this Court feels that it
would be a futile exercise to remit the matter back to the same authority for fresh
consideration. The respondent no.4, who is the superior authority, is hereby
directed to consider the application of the petitioner afresh and shall dispose of
the same within eight weeks from the date of communication of this order in the
light of the observations made hereinabove as well as the other conditions
required under the said scheme.The writ petition is thus disposed of.There will be no order as to costs."11. Aggrieved by the aforementioned judgment and order APO No.505 of
2017 has been filed by Eastern Coalfields Limited.12. Writ Petition No.2 was filed by the respondent/writ petitioner Bhuban
Mejhain for a direction upon the appellant (respondent therein) to set aside the
order passed by the Welfare Officer (T), Pandaveswar Colliery dated February
17/20, 2009 and for a further direction upon the appellant/respondent to provide
her with an appointment on compassionate ground in place of her father, late
Nitai Majhi who died-in-harness on January 2, 2001. Her mother made an
application for her appointment. By order dated February 17/20, 2009 the
competent authority rejected the prayer for compassionate appointment of the
petitioner on the ground that on the date of death of her father she was 17 years 5
months 18 days old and was not entitled to be appointed as a female dependant6as per the provisions of NCWA. Aggrieved by the rejection, the petitioner filed the
writ petition. The appellant who was a respondent therein, filed an Affidavit-in-
Opposition and the contentions raised by the appellant in the said opposition
were similar to those raised by them in their Affidavit-in-Opposition filed to the
writ petition no.1.13. The learned Single Judge upon hearing the contentions of the respective
parties remitted the matter back to the General Manager Pandaveswar area, by
setting aside the order of rejection dated February 17/20, 2009, with a direction
upon the said authority to consider the application for compassionate
appointment of Bhuban Mejhain afresh in the light of the observations made in
the judgment and order. The relevant portion of the judgment is set out here
under:-"In the instant case, the application for compassionate appointment is rejected as
the female dependant is only entitled to monetary compensation and cannot
seek the appointment on compassionate ground under the said NCWA scheme. If
the male dependant was minor at the time of the death of the employee his name
is required to be kept in live roster. There is no justification in rejecting the
application that the female dependant was not major at the time of death.
Furthermore, the Clause 9.5.0 of NCWA has been held by the Court
unconstitutional and discriminatory and the female dependant was found to be
equally entitled to be considered for appointment on compassionate ground, this
court, therefore, feels both the grounds assigned by the authority cannot be
sustained. The order dated 20th February, 2009 is hereby set aside.
The matter is remitted back to the respondent no.6, being the appropriate
authority, to consider the application afresh in the light of the observation made
hereinabove and the other conditions envisaged under the said scheme and
shall see that the same is disposed of within six weeks from the date of
communication of this order.There will be no order as to costs."14. Aggrieved by the aforesaid judgment and order APO No. 344 of 2017 has
been filed by ECL.15. Writ petition no.3 was filed by Oindrila Barman for a declaration that
the discriminatory clause in 9.5.0 (iii) in the NCWA was ultra vires the
Constitution of India. A prayer was made for setting aside the decision dated7January 3, 2015 taken by the CMS (I/C) Administration, CH Kalla, Eastern
Coalfields Limited and to provide her appointment as also monetary compensation
under the died-in-harness category in place of her mother.16. The petitioner's mother Dipti Barman died-in-harness on March 6, 2007
in a road accident and her father namely Indrajit Barman made an application
before the authorities on March 21, 2007 to keep the name of the petitioner in the
live roster and also for monetary compensation. That the petitioner through her
father on attaining the age of majority submitted her documents on December 4,
2009. There was a Pre-Employment Medical Examination and the petitioner was
asked to appear before the screening committee by a letter dated July 31, 2010.
The petitioner's claim for compassionate appointment was rejected by an order
dated March 10, 2011 by the competent authority with the following observation:-"The aforesaid case file was placed before the higher authority for decision as
the claimant was Minor on the date of death of the deceased employee.
Whereupon, after going through all the materials/documents on record the said
authority has shown his inability to consider the instant claim since Kumari
Oindrila Barman daughter of Lt. Dipti Barman (Roy), Ex. Dresser (F) was Minor
i.e below the age of 18 years as on date of death of her mother and therefore,
she is not eligible for employment as per relevant provision of NCWA". The
petitioner was above 15 years at the time death of her mother"17. The writ petitioner did not challenge the aforesaid order but made
another application on April 10, 2014 before the competent authority for
compassionate appointment and by an order dated July 3, 2014 her case was
once again rejected on the same ground. The petitioner was informed that her
claim had already been rejected by a letter dated March 10, 2011 which she had
duly received as per the records of the appellant. Aggrieved by the aforesaid
rejection as communicated by a letter dated July 3, 2014, the petitioner filed W.P.
No.726 of 2014. The said writ petition was disposed of by an order dated August
25, 2014 by a learned Single Judge of this court directing the authorities to8reconsider the case of the petitioner in the light of the judgments of this court and
the Hon'ble Supreme Court on the self same issue. The case of writ petitioner was
once again considered and rejected by the appellants by an order dated January
3, 2015. The relevant portion of the order is set out herein below:-"Restrictive provisions for employment of women on compassionate
ground which may be looked to be discriminatory on the face of it but in view of
restriction in deploying the women worker under the provisions of theMines Actas discussed hereinabove the management of coal companies and the
representative of the workmen through various federal unions have made
restrictive provision in NCWA with respect to the women in giving compassionate
appointment.The above factors has limited the scope of employment of women in the Coal
Mining Industries and the Company is running with surplus female employees
and to get rid of such surplus female employees it has to bring Spl V.R Scheme.The employment of Minor daughter under compassionate employment was also
not provided by the functioning Trade Unions and management in line with our
social customs in which the daughter after marriage goes to the father in law's
house. Based on all such factors the discrimination provided in the agreement
seems not to be unreasonable and irrational. More over in this particular case the
petitioner who is admittedly not entitled for employment because of her under
age on the cut of date i.e. Date of Death of her mother was living along with her
father. Her father was economically sound and was not declared as a dependent
of her mother although living in the same family. Hence there is no economic
hardship to the lone daughter.In view of the above facts and circumstances, since the Compassionate
employment is not a vested right, and since the father is economically sound, I
am inclined to hold that compassionate employment is a misplaced proposition
stemmed not out of need but out of greed. The Hon'ble Supreme Court has
already settled through its varied judgment the law that compassionate
employment is not a vested right and meant to provide the livelihood of the
family of the deceased ex-employee to cope up with sudden financial crisis due
to death of the soul bread earner of the family. It is also stated that mere death
of an employee in a government or public sector undertaking in harness does not
entitle the family to claim employment as it is not a vested right. The competent
authority has to examine the financial condition of the family of the deceased
employee and if it satisfied that without providing employment the family will not
be able to meet the financial crisis that a job is to be offered to the eligible
members of the family."18. Aggrieved by the order of rejection dated January 3, 2015 the petitioner
filed the writ petition No.3.19. The appellant was the respondent in the writ petition and filed an
affidavit-in-opposition and relied upon Clause 9.5.0 of NCWA (VI) which has been9accepted in the subsequent NCWAs, in order to justify the order of rejection of the
case of the petitioner for compassionate appointment. The appellant further
contended that as perSection 46of the Mines Act, 1952 (hereinafter referred to as
the said Act of 1952), a women shall not be employed, in any part of a mine which
was below the ground. As 85% of the mines of the appellant were underground
mines there was very little opportunity to employ and engage women in the
remaining few open caste mines. This section was elaborately explained in the
opposition, which also provided that every woman should be engaged in a mine
only between 6 a.m. to 7 p.m. with interval of not less than 11 hours between
termination of employment on any one day and the announcement of next period
of employment. It was contended that as the scope of appointment of women in
coal mines, was limited the NCWA being a settlement under theSection 2 (p)of
the said Act of 1947, was binding on the parties.20. The learned Judge upon hearing the parties was pleased to allow the
said writ petition and held as follows:-"In my opinion, there is no whisper in the existing rules to what extent a
female would be excluded in consideration for employment. In fact, there is
nothing in the National Coal Wage Agreement which limits the employment of
females in the organization. The National Coal Wage Agreement only says that a
minor female dependant would not be placed in the live roster.This issue about a minor female being excluded in the live roster has been
considered at the level of the Division Bench of this Court when a finding has
been entered that there was no justification for excluding females from the live
roster and that if a female crossed the age of 18 years, then normally she could
be appointed in the compassionate category, as noted earlier.I feel myself bound by those judgments.I am also of the opinion that the adjudicating authority ought to have
confined himself to the issue referred to him by the order of this Court dated 25th
August, 2014 instead of digressing to some other areas which were not in issue
before the Court when it passed the said order. If Mr. Majumdar has to succeed,
either the National Coal Wage Agreement has to be altered with retrospective
effect or the decision of our Division Bench overruled by the Supreme Court.In those circumstances, the impugned decision dated 3rd January, 2015 is
set aside. The petitioner is now over 18 years of age. The respondent no. 3 is
directed to appoint the petitioner in any suitable post within three months of
communication of this order without insisting on following a list of such
candidates serially."1021. Aggrieved by the above judgment and order APO 182 of 2018 has been
filed by ECL.22. Mr. Malay Kumar Basu, learned Senior Advocate appeared on behalf of
the appellant ECL in the first two appeals and submitted that once the parties
bound themselves by an agreement (NCWA), they would not be entitled to
question the validity of the clauses, save and except under section 36A of the said
Act. According to him, the settlement was binding and the appropriate forum to
decide any issue regarding the same would either be the Labour Court or the
Appropriate Government. He further contended that both the writ petitions should
have been dismissed in the absence of any challenge to the vires of clause 9.5.0 of
the NCWA.23. Justifying the clauses of the agreement, Mr. Basu contended, that it
was difficult for a lady to work in a colliery and the parties to the agreement,
consciously did not include minor female dependants of ex-employees who died-
in-harness in the live roster unlike minor male dependants but, the female
dependants were entitled to appropriate monetary compensation.24. Mr. Basu, relied upon a Full Bench decision of this court inPutul
Rabidas vs Eastern Coalfields Limited & Others(In re: F.M.A No. 4401 of
2016) and contended that Their Lordships had held that as the NCWA was a
settlement under the said Act, arrived at between the parties after protracted
deliberation, the same was binding on the parties underSection 18 (3)of the said
Act of 1947.Mr. Basu referred to the decisions of the Apex Court in the matter of
Eastern Coalfields Limited & Others vs Shanti Mudi and Others (In re: Special
Leave Petition No. C (s) 8320 of 2015) and in the matter of Eastern Coalfields11Limited & Others vs Santi Ruidas (In re: Special Leave to Appeal Civil No.(s)
16870 of 2010) and urged that the judgments relied upon by the writ
petitioners/respondents in support of their claim for compassionate appointment
and also relied upon by the respective learned Single Judges, were subject
matters of challenge in the Special Leave Petitions mentioned hereinabove and
those appeals were disposed of by the Hon'ble Supreme Court keeping the point of
law raised by the appellant open and therefore, the decisions of the learned Co-
ordinate Benches of this court in Eastern Coalfields Limited & Others vs.
Shanti Mudi & Others (In re: A.P.O No. 106 of 2014) and Santi Ruidas vs. Coal
India Limited & Another, reported in (2010) 2 CAL/LT/703 (HC) were not
binding on us.25. Per contra, Mr. U.S.Agarwal learned Advocate who appeared on behalf of
the respondents in the first two appeals relied upon the decisions of the learned
Co-ordinate Benches of this court mentioned hereinabove as also the decision of
the Hon'ble Supreme Court inEastern Coalfields Limited vs. Babunti Kumari &
Ors. (Inre: Special leave to Appeal (Civil) No. (s) 16475 of 2013) by which the
Special Leave Petition was dismissed. According to him, the writ petitioners were
entitled to have similar benefits as male dependants of an employee who had died-
in-harness as decided by other learned Division Benches of this court.26. Mr. Anubhav Sinha, learned Advocate appeared on behalf of the
appellant in the third appeal. While adopting the contentions of Mr. Basu, he
urged that the reason for excluding minor female dependants from the live roster
was in furtherance of the mandate ofSection 46of The Mines Act. He submitted
that NCWA was a bipartite agreement arrived at after prolonged discussion and
deliberation and its clauses could not be challenged by way of a writ petition. He12relied upon the observations of the larger bench inPutul Rabidas(supra) in
support of such submission.Reliance was also placed in the matter of Kisto Dasi
vs. Coal India Limited, reported in (2006) 2 CAL LJ 15, Eastern Coalfields
Limited vs. Smt. Kisto Dasi and Another (In re:A.P.O 97 of 2006), Eastern
Coalfields Limited vs Dilip Singh & Others, reported in (2013) SCC Online Cal
4285, State Bank of India & Another vs. Raj Kumar, reported in (2010)11 SCC
661, Jadavpur University & Another vs. Jolly Dey Bose & Others, reported in
(2015) SCC Online Cal 2097, Maino Mejhian vs. Eastern Coalfields Limited &
Others, reported in (2015) 1 CAL LT 160 (HC) and Smt. Papiya Banerjee vs.
The State of West Bengal & Others, reported in (2015) SCC Online Cal 1682.27. Mr. Partha Ghosh, learned Advocate appeared for the writ
petitioner/Respondent and relied on the decisions of the various Learned Co-
ordinate Benches of this court by which it had already been decided that Clause
9.5.0 (iii) of the NCWA was arbitrary and violative ofArticle 14and16of The
Constitution of India. Mr. Ghose relied upon the decision of the Apex Court inChennai Port Trust vs. The Chennai Port Trust Industrialemployees Canteen
Workers Welfare Association & Others, reported in 2018 (4) Supreme 487. He
further submitted that as similar reliefs had been granted by this court to other
female dependants of deceased employees, the petitioner being similarly placed
should be granted the same relief.His next contention was that by an earlier
order dated August 25, 2014 in W.P NO.726 a learned Single Judge of this court
had directed the competent authority of the appellants to consider the case of the
writ petitioner, Oindrila Barman, in terms of the orders of the Hon'ble Supreme
Court and the learned Division Benches of this court thereby, declaring the right
of the petitioner to get the same relief as Santi Ruidas (supra) , Shanti Mudi13(supra) andBabunti Kumari(supra) and, the appellant not having challengedthe said judgment, could not turn around and maintain the instant appeal. Mr.
Ghosh further submitted that the appellant had called Oindrila Barman for
medical examination and had recommended her case initially which displayed an
intention on the part of the authority to appoint her on compassionate ground
but, thereafter the authorities rejected her application on the basis of Clause 9.5.0(iii) of the NCWA.28. Mr. Sinha refuted such contention of Mr. Ghosh by submitting that as a
matter of course, as soon as applications were made by dependants of deceased
employees, their papers were processed and medical examinations were
conducted but, such actions on the part of the employer did not amount to any
indication that candidates were fit for appointment on compassionate grounds.
According to him, in all cases of like nature medical examinations were made as a
routine activity and the papers were sent to the competent authority. It was the
competent authority who was to ultimately decide the eligibility of the candidates
on the basis of the NCWA which contained the scheme for compassionate
appointment.29. Having heard the arguments advanced by the respective parties at
length we now proceed to deal with the issues one after the other.30. The first issue to be decided is whether this bench sitting in coordinate
jurisdiction can hear these appeals. Having gone through the judgments of the
Hon'ble Supreme Court in both Santi Ruidas (supra) and Shanti Mudi (supra),
we find that although, the special leave petitions were disposed of, the question of
law in both the cases had been kept open. In Babunti Kumari, the special leave
petition was dismissed without going into merits.Moreover, Babunti Kumari14(supra) was decided on the basis of the decision in Santi Ruidas (supra).The
Hon'ble Supreme Court in the matter of Santi Ruidas (supra), has kept the point
of law open and as such there is no bar in considering these appeals, there being
no finality to the judgments of the learned Division Benches of this court.31. Now, we proceed to deal with the nature of the NCWA. The NCWA is a
negotiated agreement between the employees of a public employer and such
employer, arrived at after collective bargaining and prolonged deliberation. It is a
product of meeting of minds. It is not a product of a unilateral decision of the
employer. It has a statutory force and is binding on the parties. It must be
appreciated that the parties therein were equally represented from both
employer's and employee's side and had contemplated all situations, before
indentifying the classes of persons who ought to be kept in the live roster,
implying thereby that the class not included in the relevant clause of the NCWA
were consciously excluded. The NCWA was revised from time to time and fresh
agreements and settlements were arrived at with modifications of previous
settlements and introduction of additional benefits to the workers keeping pace
with changed situations but the relevant provision of 9.5.0 (iii) has never been
altered. The NCWA made provisions for compassionate appointment or in the
alternative, monetary payment of monthly compensation for the dependants of
employees of Coal Companies under Clauses 9.3.0, 9.4.0 and 9.5.0.32. The participants in the bipartite agreement, leading to the NCWA-VI
were as follows:-Name of the Organisation No. of Members
Representing Management
a) Coal India Limited and its Subsidiary Companies 12b) Singareni Collieries Co. Ltd. 115c) Tata Iron & Steel Co. Ltd. 1d) Indian Iron & Steel Co. Ltd. 1Representing Workmena) Indian National Trade Union Congress 6b) All India Trade Union Congress 3c) Hindu Mazdoor Sabha 3d) Bhartiya Mazdoor Sangh 3e) Centre of Indian Trade Unions 333. It is seen that not only Coal Companies which are State underArticle 12of the Constitution of India, but private Coal Companies were also
parties to the agreement. It further appears that a charter of demand of the
aforementioned unions were integrated and after protracted negotiations a
memorandum of understanding was arrived at on December 13, 2000
covering all the demands of the unions. In terms of the said memorandum of
understanding the agreement called the National Coal Wage Agreement
was born.34. The NCWA is a settlement underSection 2(p)of the said Act of
1947.Section 2 (p)states as follows:-" 'settlement' means a settlement arrived at in the course of conciliation
proceeding and includes a written agreement between the employer and
workmen arrived at otherwise than in the course of conciliation proceeding
where such agreement has been signed by the parties thereto in such
manner as may be prescribed and a copy thereof has been sent to [an
officer authorized in this behalf by] the appropriate Government and the
conciliation officer;]"The NCWA is binding underSection 18(3)of the said Act.Section 18(3)states as follows:-"18. Persons on whom settlements and awards are binding.-1. *********2. *********
(3) 4 ] A settlement arrived at in the course of conciliation proceedings
under this Act 5 or an arbitration award in a case where a notification has16been issued under sub- section (3A) of section 10A] or 6 an award 7 of a
Labour Court, Tribunal or National Tribunal] which has become
enforceable] shall be binding on--(a) all parties to the industrial dispute;(b) all other parties summoned to appear in the proceedings as parties to
the dispute, unless the Board, 5 arbitrator,] 8 Labour Court, Tribunal or
National Tribunal], as the case may be, records the opinion that they were
so summoned without proper cause;(c) where a party referred to in clause (a) or clause (b) is an employer, his
heirs, successors or assigns in respect of the establishment to which the
dispute relates;(d) where a party referred to in clause (a) or clause (b) is composed of
workmen, all persons who were employed in the establishment or part of
the establishment, as the case may be, to which the dispute relates on the
date of the dispute and all persons who subsequently become employed in
that establishment or part."35. Reliance is placed on the decision of the Learned Full Bench of this
court as to the binding nature of the NCWA. The relevant portions of the
decision inPutul Rabidas(supra) are quoted below:-"25. We agree with the learned Judge to the extent that in a given
case a distinction may be made between cases where rules framed by the
employer are found to be discriminatory and those cases which considered
a clause in a settlement arrived at between the employees and the public
employer. That is precisely the reason why no departure from whatever is
provided in para 9.3.0 would be warranted. Without any addition or
subtraction, the various terms of the NCWA-VI have to be read and the
meaning of words used therein gathered from the context. Additionally,
since a settlement in view ofSection 18of the 1947 Act (which obviously
had duly been arrived at between the parties after protracted
deliberations) is binding on such parties, we any have to pin down all the
parties including ECL to the terms thereof."36. The Supreme Court while considering the provisions of the
aforesaid wage agreements in the case of Mohan Mahto v. M/s. Central
Coal Field Ltd & Ors., reported in 2007 (6) Supreme 525 observed in the
first paragraph that workmen working in coal mines were, inter alia,
governed by a 'Settlement' known as National Coal Wage Agreement17(N.C.W.A.) V, which is indisputable a settlement in terms of sub-section (3) ofSection 18of the Industrial Disputes Act.37.In another decisionM/S. Eastern Coalfields Ltd. Vs. Dewanti
Kumari & Ors., reported in (2016) 3 WBLR (Cal) 464, it was held that it
was indisputable that the National Coal Wage Agreement was a bipartite
settlement between Coal India and its subsidiary companies and other
employers in the Coal Industry on the one hand and the workmen
represented by several trade unions on the other. That settlement had been
signed in conciliation and therefore was binding not only on those employees
who were in service on the date it was signed but on all future workmen as
well. In the same decision it was also held that the guidelines issued on
12th/19th December, 1994 did not have any force of law and was not binding
on the appellant.38. Reference may also be made to the decision inWorkmen of the
Motor Industries vs. Management of Motor Industries, reported in (1969)
2 SCC 13 in which the Hon'ble Supreme Court held that a settlement underSection 2 (p)of the said Act of 1947, was binding on the workmen.In the
decision ofBibha Mondal vs. Union of India, reported in (2016) 1 WBLR
(CAL) 632, the issue was whether an unmarried sister of a coal miner who
died-in-harness could be given appointment on compassionate grounds
under NCWA (VI). It was held, that a distinction had to be made between the
manner of interpretation of a clause of an agreement that was born out of
negotiations between the representatives of employees and the employer and
a clause contained in a set of unilateral rules imposed and introduced by the
employer. Accordingly, the sister of an employee who died-in-harness was18denied any relief, as a sister did not come within the purview of Clause 9.3.3
as an indirect dependant although a brother was included therein.39. The scheme governing the field of compassionate appointment for
female dependants of employees who died-in-harness under the appellant
have been incorporated in Clause 9.5.0 of the NCWA. The clause is quoted
below:-"In so far as female dependants are concerned, their employment
would be governed by the provisions of Clause 9.5.0.(iv) The dependants to be considered for employment should be
physically fit and suitable for employment and aged not more than 35
years provided that the age limit in case of employment of female spouse
would be 45 years as given in Clause 9.5.0. In so far as male spouse is
concerned, there would be no age limit regarding provision of employment.9.5.0 Employment/Monetary compensation to female dependant.
Provision of employment/monetary compensation to female
dependants of workmen who die while in service and who are declared
medically unfit as per clause 9.4.0 above would be regulated as under:i) In case of death due to mine accident, the female dependant
would have the option to either accept the monetary compensation of Rs.
4000/- per month or employment irrespective of her age.ii) In case of death/total permanent disablement due to causes
other than mine accident and medical unfitness under Clause 9.4.0, if the
female dependant is below the age of 45 years she will have the option
either to accept the monetary compensation of Rs.3000/- per month or
employment.In case the female dependant is above 45 years of age she will be
entitled only to monetary compensation and not to employment.iii) In case of death either in mine accident or for other reasons
or medical unfitness under Clause 9.4.0, if no employment has been
offered and the male dependant of the concerned worker is 12 years and
above in age, he will be kept on a live roster and would be provided
employment commensurate with his skill and qualifications when he
attains the age of 18 years. During the period the male dependant is on
live roster, the female dependant will be paid monetary compensation as
per rates at paras (ii) & (ii) above. This will be effective from 1.1.2000.(iv) Monetary compensation, wherever applicable, would be paid till
the female dependant attains the age of 60 years.(v) The existing rate of monetary compensation will continue. The
matter will be further discussed in the Standardisation Committee &
finalized."1940. Clause 9.5.0 (i), of the NCWA provides that in case of death due to
mine accidents, female dependants could claim either employment or
monthly monetary compensation per month irrespective of age. Clause 9.5.0(ii) provides that in case of death or total permanent disablement occurring
for reasons other than accidents in mines the female dependant below the
age of 45 years could claim either employment or monetary compensation. If
a purposive construction is given to the said clauses it would be clear that
monetary compensation in either case would be given to female dependants
irrespective of their age which meant and included minor female dependants
as well.41. The said provision had not been made applicable in case of male
dependants, and on the contrary when a male dependant of an employee
who died-in-harness was 12 years of age or above his name would be kept in
the live roster and he would be provided employment when he attained the
age of 18 years. During the period the name of the male dependant would be
in the live roster, the female dependant would be paid monetary
compensation. Clause 9.5.0 (IV) stipulates that monetary compensation,
wherever applicable would be paid to the female dependant up to the age of
60 years. While making provisions for female dependants, two situations
have been taken care of in the NCWA. A female dependant who had attained
majority could either opt for appointment or for monetary compensation. The
claim for monetary compensation could be made by a female dependant
irrespective of her age which, meant that the minor female dependants were
also entitled to monetary compensation under the NCWA and would
continue to get monetary compensation upto the age of 60 years.2042. In our opinion, the clauses were incorporated by a process of
deliberation and negotiation by and between the employer and the employee
keeping in mind the service conditions prevailing in the coal mines. Separate
provisions have been made for male dependants and for female dependants
as per the ground reality in coal mines. While there was an upper age limit
for appointment of female dependants, there was no such embargo in case of
male dependants. Although, a brother was treated as an indirect dependant
in the absence of a direct dependant, a sister was not treated as one.43. In State of Chhattisgarh & Ors. vs. Dhirjo Kumar Sengar,
reported in (2009) 13 SCC 600, it was held that appointment on
compassionate ground was an exception to the Constitutional Scheme of
equality underArticle 14and16in the Constitution of India. Compassionate
appointment was a special provision in the nature of a privilege given by an
employer to the dependant of an employee who either dies or was in-
capacitated, in order to allow the bereaved family means to tide over
immediate financial crisis. It is a deviation from the general method of
recruitment in public employment and is governed by a scheme.44. The above provisions in the NCWA have been consciously arrived
at through a process of collective bargaining between the employer and
employees and cannot be tested on those parameters applicable to state
action in which, the employer imposes unilateral conditions by way of
Statutes, Rules, Regulations or Schemes. In those cases the employees do
not have any opportunity of putting forward their opinion and/or demands.
Hence, the ratio of the decisions inAir India vs Nergesh Meerza, reported
in 1982 SCR (1) 438 and Central Inland Water Transport Corp. Ltd. and21Anr. vs. Brojonath Ganguly and Anr., reported in (1986) 3 SCC 156 shall
not be applicable here.45.In a decision of a learned Co-ordinate Bench of this Court inEastern Coalfields Limited vs. Dilip Singh & Others, reported in (2013)
SCC Online CAL 4285, it has been held that it was not open for the court to
re-write the terms of the scheme for compassionate appointment (NCWA)
but, compassionate appointment being a privilege extended and an exception
to the general rule of recruitment and given in terms of a scheme should be
strictly construed, and such appointment was not a heritable right. The
relevant portion ofthe said judgmentis quoted below:-"In the decision reported in 2005 LAB I.C. 386 (Geetha Ramani v. The
District Educational Officer, Kancheepuram) the Madra High Court applied
the provisions ofSection 16of the Hindu Marriage Act, 1955 to a scheme
for compassionate appointment to hold that a son born out of second
marriage would entitled to employment. We are unable to agree with such
proposition. The scheme of compassionate appointment is neither property
of the deceased nor a heritable right. It cannot be equated with a right to
pension of the employee or his dependants upon his death. Hence, the
ratio of the Madras High Court does not appear to be based on sound logic.
Reliance on the Apex Court decision is also faulty as a judgement is an
authority for what it decides and not what logically follows therefrom.On the other hand, the decision of the Allahabad High Court reported in
2004 (100) FLR 111 (Ramesh Chand v. Executive Engineer, Electricity
Distribution Division - II, U.P. Power Corporation Ltd., Allahabad) has
rightly interpreted the restricted import of the legal presumption inSection
16of the Act and rejected its applicability to matters relating to
compassionate appointment.Right to compassionate appointment is an exception to the general rule
of recruitment by public competition. Such privilege therefore is to be
strictly construed according to the terms and conditions of the scheme and
the same cannot be rewritten by the Courts.InBhawani Prasad Sonkar v.
Union of Indiareported in (2011) 4 SCC 209 THE Apex Court, inter alia,
held as follows:"Thus, while considering a claim for employment on compassionate
ground, the following factors have to be borne in mind:(i) Compassionate employment cannot be made in the absence of rules or
regulations issued by the Government or a public authority. The request is
to be considered strictly in accordance with the governing scheme, and no
discretion as such is left with any authority to make compassionate
appointment dehors the scheme."2246.InState Bank of India vs. Jaspal Kaur, reported in (2007) 9 SCC
571 it has been held that a public post was not heritable property. If that be
so, then the daughter's claim as a class I heir like a son cannot be applied in
cases of compassionate appointment.47. Reference is made to the decision ofState Bank of India &
Another vs. Raj Kumar, reported in (2010) 11 SCC 661 wherein it has
been held that the claim for compassionate appointment was traceable only
to the specific scheme framed by the employer and there was no right
outside such a scheme.In another judgmentState of Haryana vs. Ankur
Gupta, reported in (2003) 7 SC 704 it has been held that the court could
not grant compassionate appointment de hors statutory policy.48. It should be kept in mind that compassionate appointment is given
in order to mitigate the immediate financial hardship caused to the
distressed family after the sudden death of the sole bread earner. Reference
is made to the decision of the Hon'ble Supreme Court inUmesh Kumar
Nagpal vs. State of Haryana, reported in 1994 SCC (4) 138, JT 1994 (3)
525 wherein it was impressed that as a rule, appointments in public
services should be made strictly on the basis of open invitation of application
and on merit but appointment on compassionate ground was an exception to
the aforesaid rule, which has given after taking into consideration the fact of
the death of the employee while in service and leaving his family without any
means of livelihood. In such cases, the object was to enable the family to tide
over sudden crisis. However, such appointments on compassionate grounds
have to be made in accordance with the rules, regulations or administrative23instructions taking into consideration the financial condition of the family of
the deceased.49.InJagdish Prasad vs. The State of Bihar & Anr., reported in JT
1995 (9) SC 131, also it was held that the very object of appointment of a
dependant of deceased employee who died-in-harness was to relieve
unexpected immediate hardship and distress caused to the family by sudden
demise of the earning member of the family and such appointment could not
be given where the death occurred way back even if the claimant of such
benefit was a minor at the time of death of deceased Government servant.
The relevant portion is quoted below:-"1. **********2. ***********3. It is contended for the appellant that when his father died in harness,
the appellant was minor; the compassionate circumstances continue to
subsist even till date and that, therefore, the court is required to examine
whether the appointment should be made on compassionate grounds. We
are afraid, we cannot accede to the contention. The very object of
appointment of a dependant of the deceased employees who die in
harness is to relieve unexpected immediate hardship and distress caused
to the family by sudden demise of the earning member of the family. Since
the death occurred way back in 1971, in which year the appellant was
four years old, it cannot be said that he is entitled to be appointed after he
attained majority long thereafter. In other words, if that contention is
accepted, it amounts to another mode of recruitment of the dependant of a
deceased government servant which cannot be encouraged, de hors the
recruitment rules."50.In the case ofLocal Administration Department and Anr. Vs.
Selvanayagam @ Kumaravelu, reported in 2011 (2) CLJ (SC) 209 it has
been held that when a minor had applied after seven years and six months of
his father's death, appointment could not be said to be sub-servient to the
basic object and purpose. The Apex Court had thus laid down:-"9. In this case the Respondent was only 11 years old at the time of the
death of his father. The first application for his appointment was made on24July 2, 1993, even while he was a minor. Another application was made
on his behalf on attaining majority after 7 years and six months of his
father's death. In such a case, the appointment cannot be said to sub-serve
the basis object and purpose of the scheme. It would rather appear that on
attaining majority he staked his claim on the basis that his father was an
employee of the Municipality and he had died while in service. In the facts
of the case, the municipal authorities were clearly right in holding that with
whatever difficulty, the family of Meenakshi Sundaram had been able to
tide over the first impact of his death. That being the position, the case of
the Respondent did not come under the scheme of compassionate
appointments."51. Reference is made to the decision ofMumtaz Yunus Mulani (Smt.)
vs State of Maharashtra & Ors., reported in (2008) 11 SCC 384. In this
case the husband of the appellant died in 1996 and she made an application
for compassionate appointment in 1997. Another person was appointed in
that vacancy. No other post was available to accommodate the appellant.
Twelve years had passed since the death of appellant's husband and in the
meantime her children had grown up and family pension was received. The
High Court had refused to grant relief to the appellant. The Hon'ble Supreme
Court upheld the decision of the High Court.52. In all these appeals before us almost 14 years have lapsed since
the death of the deceased and the family had managed to tide over the
immediate financial crisis. The female dependants were entitled to monetary
compensation. Moreover, Oindrila Barman had her father to look after her.
In case of Bhuban Mejhain, her mother could have opted for compassionate
appointment at the time of death of her husband but instead, prayed for her
daughter's appointment. These crucial aspects and settled legal propositions
as regards compassionate appointment have not been considered by the
learned Single Judges while disposing of the respective writ petitions.2553. We now propose to deal with the judgments of the Learned Co-
ordinate Benches of this Court which have decided this issue. In the matter
of Santi Ruidas (supra), Coal India Limited was directed to consider the case
of the female dependant for compassionate appointment without treating her
to be disqualified on the ground that she was a female dependant and
therefore, had not completed 18 years of age on the date of the death of her
father. Their Lordships relied on the decision of Smt. Kisto Dasi (supra) and
examined the National Coal Wage Agreement (NCWA-V) on the touchstone of
the provision ofArticle 14of The Constitution of India read withSection 2 (d)and12of the Protection of Human Rights Act, 1993 and the Convention for
the Elimination of All Forms of Discrimination Against Women, 1979 (in
short CEDAW). The decision of Kisto Dasi (supra) was on the point as to
whether the marital status of the female child would ipso facto be a
disqualification from getting appointment on compassionate ground. A
learned Judge struck down the prefix "unmarried" in the expression
"unmarried daughter" appearing in Clause 9.4.0 (III) to be arbitrary and
unconstitutional. The said judgment in Santi Ruidas (supra) was passed
without considering that in an appeal namely Eastern Coalfields Limited
vs. Kisto Dasi (In re: APO No. 97 of 2006) a Division Bench of this Court
had set aside the judgment of the learned Single Judge. The relevant portion
of the order of the Division Bench is quoted herein below:-"3. We do not agree with the learned Judge who holds that the word
'unmarried' was invalid on account of its being ultra vires. It is a trite
law that the question of constitutionality of a term or of a provision
has to be considered only when it is imperative. In this case, it is not
necessary to decide that aspect at all since clearly the status of the
daughter of the writ petitioner was that of an "unmarried daughter"on the day when the writ petitioner claimed employment for her.26'4. Sri Dey, learned senior counsel appearing on behalf of ECL very
clearly says that in pursuance of the order passed, the employment
shall now be offered to the daughter of the writ petitioner. In fact, that
should be the end of the controversy. We have only clarified the legal
position that the term 'unmarried' preceding the word 'daughter' need
not be considered as constitutionally invalid. It remains to be valid as
such."5. With this we allow this appeal in part and dispose of the same in
the light of the observations made above."54.InBabunti Kumari(supra), Santi Ruidas (supra) and Shanti
Mudi (supra) the provisions of Clause 9.5.0 of the NCWA and the binding
effect of the NCWA underSection 18of the said Act of 1947 were not
considered.Moreover, all these judgments were pronounced before the
decision of the Learned Full Bench inPutul Rabidas(supra).Most
importantly after the decision of the learned Full Bench of this Court inPutul Rabidas(supra) the binding nature of Clause 9.5.0 (iii) is well settled.55. We respectfully disagree with those decisions of this court.In view
of the decision of the learned Full Bench inPutul Rabidas(supra) those
decisions are impliedly overruled.For the above reasons, the decision inChennai Port Trust(supra) does not have any manner of application.56. The learned Single Judge in writ petition no. 1 and 2 erred in
directing the appellants to re-consider the case of the writ petitioners in the
light of the decisions in Santi Ruidas(supra), Shanti Mudi (supra) andBabunti Kumari(supra), de hors the NCWA without considering the question
of inordinate delay and the ability of the family to tide over immediate
financial hardship. In writ petition no.3, the learned Single Judge erred in
directing appointment relying on those decisions after a lapse of several
years. The orders impugned to these appeals are hereby quashed and set27aside. The respondents/writ petitioners are entitled to payment of monetary
compensation as per the provisions of the NCWA.57. The three appeals are allowed without however any order as to
costs.58. Urgent Photostat certified copy of this judgment, if applied for be
given to the parties on priority basis.I agree,
(Debasish Kar Gupta, CJ.) (Shampa Sarkar, J.) |
0596f359-c4e1-55be-be80-db504c2b0ceb | court_cases | Delhi High CourtUnited India Insurance Co. Ltd. vs Ashok Kumar & Ors. on 22 January, 2015Author:G.P. MittalBench:G.P.Mittal$-3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 22nd January, 2015
+ MAC.APP. 587/2011
UNITED INDIA INSURANCE CO. LTD.
..... Appellant
Through: Mr. Manish Kaushik, Adv.
versus
ASHOK KUMAR & ORS. ..... Respondents
Through : Ms.Shanta Devi Raman, Adv. for R-1.
Mr.A.P.Aggarwal, Adv. for R-2.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENTG. P. MITTAL, J. (ORAL)1. The appellant United Insurance Company Limited impugns the
judgment dated 21.03.2011 passed by the Claims Tribunal awarding
compensation of ` 6,95,951/- to Respondent no.1 for having suffered
injuries in a motor vehicular accident which occurred on 16.01.2005.2. Relying onRaj Kumar v. Ajay Kumar & Anr., 2011 (1) SCC
343, the sole ground of challenge raised by the learned counsel for the
appellant is that Respondent no.1 was employed as a driver in Delhi
Transport Corporation (DTC). He suffered 62% disability in respect
of his right lower limb leading to permanent locomotor impairment.
Though, on account of the injuries suffered by him, Respondent no.1
was not able to drive a bus, yet he was posted on an alternative job andMAC APP 587/2011 Page 1 of 11thus, he did not suffer any pecuniary loss because of the permanent
disability.3. It is therefore, urged that the Claims Tribunal's award of `
4,28,968/- towards loss of earning capacity is illegal and without
application of mind.4. On the other hand, Ms.Shanta Devi Raman, learned counsel for
Respondent no.1 has referred to the testimony of Respondent no.1,
PW-3 Dr. Shobha Arora and PW-4 Bihari Lal. She argues that the
injuries of Respondent no.1 were very severe. He suffered fracture of
right leg bones. He had to undergo five surgeries. He remained in and
out of the Hospital for over one year for treatment and hence, could
not go to work.5. The following contentions are thus, raised by the learned
counsel for Respondent no.1:-(i) Respondent no.1 being a driver suffered 100% disability
because of locomotor impairment in his right lower limb;(ii) He remained on leave for fifteen months but he was
granted compensation for loss of income only for three
months;(iii) The compensation awarded towards loss of amenities,
loss of enjoyment and disfigurement on the lower side;(iv) The compensation awarded towards attendant chargesMAC APP 587/2011 Page 2 of 11was also on the lower side;(v) Because of leave without pay, Respondent no.1 lost one
increment for the rest of the period of his service
including pensionary benefits.The learned counsel for Respondent no.1 therefore, urges that the
compensation awarded was not adequate and the compensation is
liable to be enhanced.PERMANENT DISABILITY:6.InRaj Kumar versus Ajay Kumar(supra), the Supreme Court
laid down that : to compensate the injured towards permanent
disability, functional disability has to be measured.7. It is pointed out that in certain cases, permanent disability may
not impact the earning capacity of the victim and in such cases, the
victim may not be entitled to any compensation towards loss of
earning capacity on account of permanent disability, yet in other cases,
even on account of less permanent disability, an injured may be
completely incapacitated to carry out his vocation and hence, the
functional disability may be much more than the permanent disability
suffered by the injured.8. The Hon'ble Supreme Court gave an instance that if
the left hand of the claimant who is the driver by profession, is
amputated, the actual loss of earning capacity may virtually be 100%.MAC APP 587/2011 Page 3 of 119. In the instant case, Respondent no.1 was incapacitated to work
as a driver but at the same time, he was working in the DTC on some
other post and, therefore, the permanent disability did not impact his
earning capacity except that he lost an increment because of him
having taken leave without pay for about an year. At the same time, it
has to be noted that the age of retirement in DTC is 60 years and the
permanent disability will incapacitate Respondent no.1 to work as a
driver.10. It may also be difficult for him to perform an alternative
employment with full efficiency. Respondent no.1 was taking a salary
of `9661/- at the time of accident.11. Hence, I will take the increment of Respondent no.1 on the day
of accident as `300/- and thereby award a compensation of `46,800/-
(`300X12) X 13(multiplier) towards loss of increment.12. Because of permanent locomotor impairment and 62%
disability, I am inclined to hold that his loss of earning capacity after
the age of 60 years would be about 50% and thereby, I award a
compensation of ` 5,21,694/- (9661X12X9X50%) towards loss of
earning capacity.13. I have the record of trial court before me. PW-4 Bihari Lal
deposed that Respondent no.1 remained on medical leave from
16.01.2005 to 15.04.2005, 16.04.20115 to 15.05.2005, 16.05.2005 to
13.10.2005 and then for three months up to 5.12.2005 and was on
complete leave for the year 2006. He further stated that RespondentMAC APP 587/2011 Page 4 of 11no.1 was absent without leave from 18.04.2006 to 09.04.2006,
10.07.2006 to 26.01.2007 and he joined his duties on 27.01.2007.14. Respondent no.1 was hence, away from work either on leave
with pay, or on leave without pay for a period of about 15 months. He
is hence, entitled to compensation of `1,44,915/- (`15X9661) for the
loss of leave or for loss of salary for the period he had to take leave
without pay.15. The Claims Tribunal awarded a compensation of `18,000/-
towards attendant charges. PW-3 Dr. Shobha Arora stated that
Respondent no.1 needed an attendant from the date of accident till
18.10.2005. Thus, Respondent no.1 would be entitled to attendant
charges for a period of nine months instead of six months. The
compensation is hence, raised from `18,000/- to `27,000/- under this
head.16. The Claims Tribunal awarded a compensation of `1 lakh
towards loss of amenities. The amount of compensation towards
amenities should be able to bring the amenities and restoration of
health to Respondent no.1. In the circumstances, the sum awarded
seems to be just and reasonable. The compensation awarded is hence,
re-computed as under:-Sl. Compensation under Awarded by Awarded by
various heads the Claims this Court
No. Tribunal (in
Rs.) (in Rs.)MAC APP 587/2011 Page 5 of 111. Pain & sufferings `1,00,000/- `1,00,000/-2. Loss of amenities, loss of `1,00,000/- `1,00,000/-enjoyment and
compensation for
disfiguration
3. Loss of leave for three `28,983/- `1,44,915/-
months.
4. Expenses towards attendant `18,000/- `27,000/-
(for six months @ ` 3,000/-
per month)
5. Special diet and conveyance `20,000/- `20,000/-
6. Loss in earning capacity due `4,28,968.8/- `5,21,694/-
to disability (30%X
9166X12X13)
7. Loss of increment -- `46,800/-
TOTAL `6,95,951.8/- `9,60,409/-
(Rounded off) `6,96,000/-17. The compensation is hence, enhanced by ` 2,64,409/-.18. It is averred by the learned counsel for the appellant that there is
no cross- appeal or cross-objections by Respondent no.1. However,
the question whether enhancement of the amount without filing
cross-appeal or cross-objections has been dealt with by this Court in
MAC APP. 629/2010 titledOriental Insurance Company Limited
versus Mamta Kumari & Ors., decided on 06.09.2012 wherein thisMAC APP 587/2011 Page 6 of 11Court in paras 13 to 19 has held as under:-"13. The theory of not awarding compensation more than
the amount claimed got a sea change with the judgment
of the Supreme Court inNagappa v. Gurudayal Singh &
Ors., (2003) 2 SCC 274, wherein the Supreme Court held
that there is no restriction that compensation could be
awarded only up to the amount claimed by the Claimant.
In an appropriate case where from the evidence brought
on record if the Tribunal/Court considers that claimant is
entitled to get more compensation than claimed, the
Tribunal may pass such an award. The Supreme Court
said that the only embargo was; that it should be „just‟
compensation, that is to say, it should be neither
arbitrary, fanciful nor unjustifiable. Para 21 of the
report is extracted hereunder:"21. In our view, under theM.V. Act, there is no
restriction that Tribunal/Court cannot award
compensation amount exceeding the claimed amount.
The function of the Tribunal/Court is to award „just‟
compensation which is reasonable on the basis of
evidence produced on record. Further, in such cases
there is no question of claim becoming time barred or
it cannot be contended that by enhancing the claim
there would be change of cause of action. It is also to
be stated that as provided under Sub-section(4) toSection 166, even report submitted to the Claims
Tribunal under Sub-section (6) ofSection 158can be
treated as an application for compensation under theM.V. Act, If required, in appropriate cases, Court
may permit amendment to the claim Petition."14.InNational Insurance Company Ltd. v. Rani, 2006
ACJ 1224, a Division Bench of Madras High Court held
that without filing any Appeal or Cross-Objections, High
Court is competent to enhance the compensation inMAC APP 587/2011 Page 7 of 11favour of a victim of a motor vehicle accident by invoking
provisions ofOrder XLI Rule 33 Code of Civil
Procedure(Code). Para 16 of the report is extracted
hereunder:"16. At the risk of repetition it may be stated
that the contention put forward is that the Court is
duty bound to fix the just compensation. The fact that
the Claimants have not filed any cross objection
would not stand in the way and further the Court can
by invoking the powers conferred underOrder XLI
Rule 33 of CPC, is satisfied, can enhance the
compensation and call upon the Claimants to pay
necessary court fee. In that context, the learned
counsel also submitted, when the Supreme Court has
ruled that even at the appellate stage original
petition can be amended claiming enhanced
compensation, the Court enhancing compensation in
the instant case, if satisfied, invoking powers under
Order XLI, Rule 33 will certainly be in order."15.InOriental Fire and General Insurance Co. Ltd. v.
Amarsingh Pratapsingh Sikliker, 1(1993) ACC 627, a
Division Bench of Gujarat High Court held that the
Appellate Court was empowered to grant adequate
compensation so as to do substantial justice between the
parties even in absence of Cross-Objections or Appeal.
Para 17 of the report is extracted hereunder:"17. It becomes very clear from the aforesaid
provisions that the appellate Court is empowered to
grant adequate relief so as to do substantial justice
between the parties even in absence of cross-
objections or appeal...."16. In Sone Ram v. Jayaprakash, AIR 1986 MP 21, the
High Court of Madhya Pradesh exercising power under
Order XLI Rule 33 of the Code enhanced the
compensation granted by the Claims Tribunal evenMAC APP 587/2011 Page 8 of 11though no Appeal was preferred by the Claimant. In the
case of Sewaram alias Sewan v. Nanhe Khan alias Asgar
Beg, 1987 ACJ 354(MP), the High Court of Madhya
Pradesh awarded 10% interest on the compensation
amount in the absence of any Appeal or Cross-Objections
by the Claimants.17. A learned Single Judge of this Court in National
Insurance Co. Ltd. v. Komal & Ors.,
MANU/DE/2870/2012, (MAC. APP.No.595/2007
decided on: 27.04.2012) referred to the judgments of the
Supreme Court inPannalal v. State of Bombay, AIR 1963
SC 1516; Rameshwar Prasad v. M/s Shyam Beharilal
Jagannath, (1964) 3 SCR 549;Nirmal Bala Ghose v.
Balai Chand Ghose, AIR 1965 SC 1874;Giasi Ram v.
Ramjilal, AIR 1969 SC 1144;Harihar Prasad Singh v.
Balmiki Prasad Singh, (1975) 2 SCR 932;Mahant
Dhangir v. Madan Mohan, (1988) 1 SCR 679;State of
Punjab v. Bakshish Singh, (1999) 8 SCC 222 and
judgments of various High Courts to opine that the High
Court is empowered to enhance the compensation
without filing any Appeal or Cross-Objections by a
Claimant.18.InIbrahim v. Raju, AIR 2012 SC 534, a
compensation of `3,00,000/- was claimed by the
Appellant which resulted in an award of `60,000/- by the
Claims Tribunal. The compensation was enhanced to
`1,89,440/- by the High Court, which was enhanced to
`6,00,000/- by the Supreme Court. Para 21 of the
report is extracted hereunder:"21. We are conscious of the fact that in the petition
filed by him, the Appellant had claimed compensation
of Rs. 3 lacs only with interest and cost. It will be
reasonable to presume that due to financial
incapacity the Appellant and his family could not
avail the services of a competent lawyer and make a
claim for adequate compensation. However, as theMAC APP 587/2011 Page 9 of 11Tribunal and the High Court and for that reason
this Court are duty bound to award just
compensation, (emphasis supplied) we deem it proper
to enhance the compensation from Rs. 1,89,440/- to
Rs. 6 lacs. This approach is in tune with the judgment
inNagappa v. Gurudayal Singh, (2003) 2 SCC 274.In
that case, the Court considered a similar issue,
referred to the judgments of the Bombay High Court
in Municipal Corporation of Greater Bombay v.
Kisan Gangaram Hire, 1987 ACJ 311(Bombay),
Orissa High Court in Mulla Mod.Abdul Wahid v.
Abdul Rahim,1994 ACJ348 (Orissa) and Punjab and
Haryana High Court inDevki Nandan Bangur v.
State of Haryana, 1995 ACJ 1288 (P & H)."19.InNew India Assurance Co. Ltd. v. Gopali & Ors.,
Civil Appeal No.5179of 2012 (arising out of SLP (C)
No.11345 of 2007) decided by the Supreme Court on
05.07.2012, the New India Assurance Co. Ltd. challenged
an award of compensation of `6,45,300/-. The
compensation was, however, enhanced to `10,63,040/- by
the Supreme Court."19. Thus, there is no impediment in enhancing the compensation
awarded to Respondent no.1.20. The enhanced compensation of ` 2,64,409/- shall carry interest
at the rate of 7.5% per annum from the date of filing of the petition till
the date of deposit with the Claims Tribunal and the same shall be
deposited within a period of six weeks.21. If the compensation is not deposited within six weeks, it shall
carry interest at the rate of 12% per annum from the date of this
judgment.MAC APP 587/2011 Page 10 of 1122. 50% of the enhanced compensation shall be held in Fixed
Deposit for a period of six years on which Respondent no.1 shall be
entitled to quarterly interest; rest of the compensation shall be released
on deposit. The compensation already awarded by the Claims
Tribunal shall be released/held in a Fixed Deposit in terms of the order
passed by the Claims Tribunal.23. The appeal stands disposed of.24. Statutory amount of ` 25,000/-, if any, shall be refunded to the
appellant Insurance Company on deposit of the enhanced
compensation.(G.P. MITTAL)
JUDGE
JANUARY 22, 2015
'sn'MAC APP 587/2011 Page 11 of 11 |
cd76989f-8b7e-5c75-8ef4-ab5b4a225d3e | court_cases | Delhi District CourtState vs . Shiv Kumar & Ors. on 3 November, 2014IN THE COURT OF MS. MONA TARDI KERKETTA: MM (MAHILA COURTS) :
TIS HAZARI COURTS: DELHI
FIR NO. 494/04
P.S. TIMAR PUR
U/s. 498A/406 /34IPC02401R: 1221762005
STATE VS. SHIV KUMAR & ORS.
1.DATE OF COMMISSION OF OFFENCE : DURING SUBSISTENCE
OF MARRIAGE SINCE 15.04.1990
2. NAME OF COMPLAINANT : SMT. SUNITA GARG
D/O SH KANWAR BHAN
3. NAME OF ACCUSED PERSONS,
THEIR PARENTAGE & ADDRESS : 1. SH. SHIV KUMAR
S/O SH. JAI BHAGWAN GARG
R/O VIKAS NAGAR, GALI NO.2.
JAURASI ROAD NEAR GEETA SCHOOL,
SAMBHALAKHA PANIPAT, HARYANA.
2. SH. JAIBHAGWAN GARG
S/O SH. NANU RAM
3. SMT. KALAWATI
W/O SH. JAI BHAGWAN GARG
BOTH R/O VILLAGE KHANDARA,
PS MATLOTHA, DISTT. PANIPAT ,
HARYANA.
4. SH. PAWAN KUMAR
S/O SH. DHARAM SINGH
5. SMT. SAROJ DEVI
W/O SH. PAWAN KUMAR
BOTH R/O VILLAGE CHHAJPUR
KHURD, PANIPAT, HARYANA
6. SMT. SULOCHNA DEVI
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 1/15
W/O SH. RAM KUMAR,
7. SH. RAM KUMAR
S/O SH. LACHNI RAM
BOTH R/O BHARAT NAGAR,
LINE PAAR, SAMBHALAKHA,
PANIPAT, HARYANA
8. SH. RAMESH CHAND
S/O SH. JAI BHAGWAN
9. SMT. KAMALA DEVI
W/O SH. RAMESH CHAND
BOTH R/O D67, MANSHA RAM
PARK, UTTAM NAGAR, NEAR
NAJAFGARH ROAD, DELHI.
10. SH. PREM
S/O SH. JAI BHAGWAN
11. SMT. SANTOSH RANI
W/O SH. PREM ( SINCE EXPIRED)
BOTH R/O E37, NANHE PARK,
UTTAM NAGAR, DELHI.
4. OFFENCE COMPLAINED OF : 498A/406 /34IPC5. PLEA OF ACCUSED PERSONS : PLEADED NOT GUILTY
6. FINAL ORDER : ACQUITTED
7. DATE OF SUCH ORDER : 03.11.2014
COUNSELS FOR THE PARTIES
FOR THE STATE : SH. ANUJ PRAKASH
FOR THE ACCUSED PERSONS : SH. RAVINDER PAL SINGH
THE BRIEF REASONS FOR THE DECISION : 1. The present case has been registered against husband and in laws of the
complainant. Accused Shiv Kumar is the husband, accused Jai Bhagwan Garg and
Kalawati are parents in law, accused Ramesh Chand and Prem are Jeth, accused
Kamla and Santosh are Jethani, accused Saroj and Sulochana are Nand and
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 2/15
accused Pawan Kumar and Ram Kumar are Nandoi of the complainant. The brief
facts of the case as have been disclosed in the statement made by the
complainant Smt. Sunita Garg D/o Sh. Kanwar Bhan R/o H. No. 1000, Gali No. 7,
BlockD, Nathupura, Delhi, wherein it is stated that marriage between
complainant and accused Shiv Kumar was solemnized on 15.04.1990 at Panipat
Haryana, according to Hindu Rites and Ceremonies and out of said wedlock three
children were born. It is further stated that after marriage, complainant went to
live at her matrimonial home at village Khandra, Distt. Panipat along with accused
persons. It is further stated that soon after marriage, in laws of complainant
started committing cruelties upon the complainant in furtherance of dowry
demand.2. It is further stated that accused persons used to quarrel and beat the
complainant in furtherance of dowry demands. They also used to taunt by saying
" tu toh bhikhariyo ke ghar set aayi hai". It is further stated that after some time,
complainant and her husband started residing at Samalkha but accused persons
did not stop committing cruelties upon her for dowry. Whenever complainant's in
laws used to visit Samalkha, they would instigate complainant's husband, taunt
and give beatings to complainant and her children. It is further stated that on
12.8.2004, her in laws came to their place. While watching Television, accused
Kamla told her to bring new TV but when complainant did not give nod to bring
the same then she dragged the complainant by catching hold her hair and told ''
Ek tv apne ghar se nahi la sakti to tu humare liye aur kya karegi''. At that time, her
Jeth and Nandoi also joined and started beating the complainant. The parents in
law of complainant told '' ise aur marro humare ghar main kangalo ki koi jaroorat
nahi hain'' .3. It is further stated that on 23.8.2004, all accused persons turned her and
children out of matrimonial house with demand of Rs. 50,000/ and made clear
that she shall not be allowed at matrimonial house till their demand is fulfilled.FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 3/15
Thereafter, complainant and her children were forced to live without any
provision for maintenance. It is also stated that accused persons used to assault
complainant by baton blows and pouring of hot water and tea. Thereafter,
finding no other alternative, complainant got a complaint lodged before CAW Cell,
where reconciliation proceedings were conducted but matter could not be sorted
out . Thereafter, on the basis of statement of complainant, a case undersection
498A/406/34IPC was registered against the accused persons.4. Subsequent to registration of FIR, investigation was conducted and after
completion of investigation, chargesheet was filed in the court against the
accused persons. Cognizance of the offence was taken and accused persons were
summoned by Ld. Predecessor to face the trial for the offence allegedly committed
by them. They were supplied with copy of charge sheet in compliance of
provision given undersection 208Cr. PC. Arguments on the point of charge heard
and vide order dated 4.12.2007, charge undersection 498A/34 was directed to
framed against accused Shiv Kumar and Kamla Devi and undersection 406IPC
against accused Shiv Kumar and remaining accused persons were discharged.
Thereafter, a revision petition was preferred on behalf of the complainant, which
was allowed vide order dated 24.10.2008. In pursuant to said order, charge undersection 498A/34IPCwas framed against all discharged accused persons. The
accused persons individually pleaded not guilty and claimed trial. During the
course of trial, accused Santosh unfortunately expired, on receiving her death
verification report, proceedings against her were abated vide order dated
25.8.2011.5. Subsequent thereto matter was fixed for prosecution evidence. In order to
prove its case, the Prosecution produced following ten witnesses :(i) W/ASI Sushma appeared as PW1 and proved FIR Ex. PW1/A, (OSR)(ii) ASI Rani, appeared as PW2,(iii) Rtd. SI Chander Singh appeared as PW 3,
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 4/15(iv) Smt. Sunita Garg/Complainant appeared as PW4 and proved list of dowry
articles Ex. PW4/A, Complaint of CAW Cell vide Ex. PW4/B,(v) W/Ct. Rakesh appeared as PW5 and proved arrest memos of accused Shiv
Kuamar, Jai Bhagwan and Kalawati vide Ex. PW5/A, Ex. PW5/B and Ex. PW5/C and
personal search memos Ex. PW5/D, Ex. PW5/E and PW5/F,(vi) Sh, Sumit Kumar, nephew of complainant appeared as PW 6,(vii) HC Vinod Kumar appeared as PW7,(viii) Rtd. SI Ramphal appeared as PW8,(ix) Ct. Mukesh appeared as PW9,(x) IO / SI Babu Ram appeared as PW10 and proved arrest memo of accused Saroj
Devi, Sulochana Devi, Ram Kumar, Pawan Kumar , Ramesh Chand , Kamla Devi
and Santosh Rani Ex. PW 10/A,B,C, D, E, F, G and H,6. After completion of prosecution evidence, matter was fixed for recording of
statement of accused persons undersection 313Cr PC. The statements of accused
personsu/s 313Cr. PC. were recorded, wherein entire incriminating circumstances
appearing on record were put to them, to which they denied as false and incorrect
and claimed to have been falsely implicated. In order to disprove charge against
them, accused persons examined Sh. Jagminder as DW 1 and Sh. Shiv Kumar as DW2
( on an application undersection 315Cr. Pc.) Thereafter matter was fixed for final
arguments.7. During the course of final arguments, following arguments were made on
behalf of accused persons:(i) Admittedly, complainant and accused Shiv Kumar were residing separately in
exclusion of other accused persons,(ii) No medical evidence with respect to incident dated 22.8.2004 has been placed
on record ,(iii) No complaint was made with local police station despite allegations of
continuous torture and harassment. The present complaint was filed after coming
to Delhi and after due deliberation and in consultation with the family members,
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 5/15(iv) Allegations are general in nature without specific details(v) Matter was earlier settled between the parties and in pursuant to said
settlement, complainant was duly compensated but she did not comply with
terms and conditions to be done on her part. She did not come forward for
quashing of present FIR after receiving compensation. The factum of settlement
is established through the testimonies of defence witnesses as well as documents
Ex. DW 2/AB and Mark A and B,(vi) No recovery of dowry articles was effected and in lieu of dowry articles, a sum
of Rs. one lac was given during bail proceedings.8. The arguments of the prosecution are given below:(i) PW 4/ complainant has mentioned facts with specific details but no cross
examination has been conducted on said facts,(ii) Settlement / compromise of the matter has no bearing on the merits of the case
and accused persons cannot be acquitted on the basis of said settlement,(iii) Payment of Rs. one lac and non recovery of dowry articles have no effect upon
the merits of the case,(iv) Accused had the opportunity to return the dowry articles during CAW Cell
proceedings but same were deliberately not returned,9. The court has heard the submissions of both the sides and also gone through
entire record including testimonies of witnesses. Before appreciating evidence on
record, let us first discuss the relevant legal provisions given U/s 498 A /406/34IPC.Section 498AIPCprovides punishment to husband or relatives of the husband of a
woman subjecting her to cruelty. The prosecution must prove that :(i) the woman was subjected to cruelty or harassment,(ii) such cruelty or harassment was shown either by the husband of the
woman or by the relatives of the husband,(iii) such cruelty was (1) with a view to derive her (a) to commit
suicide or (b) to cause grave injury or danger to her life,limb or
health,whether mental or physical or(iv) such harassment was (1) with a view to coerce her or any person
related to her to meet any unlawful demand of any property or
valuable security or(2) on account of failure by such woman or any
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 6/15
person or any person related to her to meet such unlawful demandSection 406IPC prescribes punishment for criminal breach of trust.For offence under this section the prosecution must prove :(i) that the accused was entrusted with property or with
dominion over it,(ii) that he (a) misappropriated it or(b) converted it to his
own use or (c) used it or (d) disposed of it10. In the light of aforesaid legal provisions, the court would now appreciate the
evidence brought on record to ascertain if alleged acts of accused persons amount
to cruelty in terms of provision given U/s 498 AIPCand if accused Shiv Kumar is
guilty of criminal breach of trust. Undersection 498AIPC, demand is a
precondition to attract the provision of explanation(b) ofsection 498AIPC.
Admittedly, the complainant has built her case on explanation (b) ofsection 498AIPC. In the judgment of Smt. Sarla Prabhakar Vs State of Maharashtra,1990
Cri.L.J. Page 47(Bombay) and Rajnimal & Ors. Vs State by DSP,CB CID,1993 Cr.L.J
page 3019 , the court observed that cruelty by itself without demand would not be
sufficient to bring home the guilt under explanation (b) ofsection 498AIPC.
Harassment by itself is not a cruelty unless there is a demand of dowry and the
cruelty is a consequence of that demand.The Hon'ble Supreme court inState of HP
Vs Nikku Ram & Ors.(1995)6 SCC 219 while interpreting the provisions ofsection
498AIPCobserved that harassment to constitute cruelty undersection 498A
explanation(b) must have the nexus with the demand of dowry and if this is missing
the case will fall beyond the scope ofsection 498A. The precondition for attracting
the provision of this section is the demand and if the demand is missing and the
cruelty is for the sake of giving torture to the woman without any nexus with the
demand then such a cruelty will not be covered under explanation(b).It may be
cruelty underHindu Marriage Actas held by the Supreme Court in the case ofShobha Rani Vs Madhukar ReddyAIR 1988 SC 121. The Apex court observed that
cruelty under section 498A,IPCis distinct from the cruelty under theHindu
Marriage Actwhich entitles the wife to get a decree for dissolution of marriage.FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 7/1511. Let us now appreciate the evidence available on record in the light of aforesaid
legal provisions and judicial pronouncements.The testimony of complainant Smt. Sunita/PW4 is reproduced and
appreciated as below:
(11.1) She has deposed that sufficient dowry articles were given at the time of
marriage. It be observed that no evidence has been brought on record to prove
the source of said dowry articles. ( Reference may be had to the judgment of
Narender Kumar & Anr.Vs State (Govt. of NCT of Delhi) I (2008) DMC 337, )
(11.2) She has further deposed that her parents and brother used to give money
whenever they used to visit her matrimonial home and her husband used to enjoy
said money. She has further deposed that accused was not working himself but a
grocery shop was being run by her in laws. It be observed that these facts are not
mentioned in her complaint Ex. PW 4/B as well as statement recorded u/s 161 Cr.
PC. It also be observed that allegations are against accused Shiv Kumar and no
allegation has been leveled against other accused persons and allegations leveled
against accused Shiv Kumar are general in nature without any specific details,
(11.3) She has further deposed that accused Shiv Kumar used to assault her in
furtherance of demand of money to be brought from her parents. It be observed
that this fact is not mentioned in her complaint Ex. PW 4/B as well as statement
recorded u/s 161 Cr. PC. It also be observed that allegation pertains to accused
Shiv Kumar only and nothing has been stated against other accused persons
however allegation leveled against accused Shiv Kumar is again general in nature
without any specific detail,
(11.4) She has further deposed that accused persons were not satisfied with the
quality of articles given in the marriage and they used to demand high quality
articles. It be observed that these facts are not mentioned in her complaint Ex.
PW 4/B as well as statement recorded u/s 161 Cr. PC. It also be observed that
allegations are general in nature without any specific details,
(11.5) She has further deposed that on 22.8.2004, all accused persons made
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 8/15
demand of new colour TV and when complainant expressed her inability then she
was assaulted by the accused persons. In this regard, it be observed that though
no cross examination on this point has been conducted but the allegation are
general in nature as complainant has not mentioned the role of each accused in
commission of cruelties. It also be observed that this allegation is not supported
by corroborative evidence,
(11.6) She has further deposed that on 23.08.2004 she along with children were
turned out of matrimonial house in furtherance of demanded Rs. 50,000/ and it
was told that complainant shall be allowed at matrimonial house only if their
demand of Rs. 50,000/ is fulfilled and therefore, she went to her parental house.
She has further deposed that she was assaulted by the baton and sometimes hot
tea was thrown on her face by accused Shiv Kumar. It be observed that
allegations are not supported corroborative evidence. It be also observed that
during crossexamination of PW4 and in the testimonies of DW1 & 2, it has come
on record that complainant and accused Shiv Kumar were residing separately at
Samalkha and therefore claim of complainant regarding having been turned out
of matrimonial house by the accused persons is falsified.12. It is also pertinent to note that in the present case, the complainant was
made to CAW Cell on 01092004 more than one week after the alleged incident
of being turned out from the matrimonial home and about fourteen years of
cruelties, which are claimed to have been committed since the very beginning of
the marriage for the reason of nonfulfillment demand of dowry Time and again,
the object and importance of prompt lodging of the First Information Report has
been highlighted. Delay in lodging the First Information Report, more often than
not, results in embellishment and exaggeration, which is a creature of an after
thought. A delayed report not only gets bereft of the advantage of spontaneity, the
danger of the introduction of the coloured version, exaggerated account of the
incident or a concocted story as a result or deliberations and consultations,
casting a serious doubt on its veracity. Therefore, it is essential that the delay in
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 9/15
lodging the report should be satisfactorily explained. (2008 V AD (Cr.)(SC) 577)
State of Andhra Pradesh Vs. M. Madhusudhan Rao). In the present case also, no
explanation worth the name for delay in filing the Complaint with the police has
come on record. Though in the testimony of DW1, it is mentioned that earlier
complainant had filed a complaint against him before CAW Cell, Sonipath but
matter was compromised with the intervention of CAW Cell officials and they
lived together peacefully. However, no such facts have been mentioned in the
testimonies of complainant and other prosecution witnesses. Even for argument
sake, it is presumed that a complaint was filed against the accused but the matter
was settled and therefore, acts of cruelties if any, committed by the accused are
deemed to have been condoned. In her entire testimony, PW4/complainant has
not mentioned that earlier she did not prefer to file complaint against accused
persons as she wanted to save her matrimonial life.13. It be further observed that the complainant has alleged that she was
physically, mentally tortured in furtherance of dowry demand by the accused
persons but she has not placed on record any MLC or any medical record
whatsoever for the alleged beatings and injuries caused to her. Though she has
claimed to have been beaten on 22.08.2004 in furtherance of demand of new TV
but this appears to be a bald allegation for not being corroborated by supporting
evidence. She has not mentioned the role of each accused in commission of said
offence and have leveled general and bald allegation. It also be observed that no
complaint to police, any other higher authority or even to relatives was made. No
other witnesses be it interested or independent witnesses have been examined to
prove the allegations of beatings. It seems impracticable that the complainant
would continue to live with accused persons despite getting repeated beatings.14. It is also noticeable that though complainant has leveled various allegations
against her in laws but it is established on record that she lived at matrimonial
house only for sometime after the marriage, thereafter, she along with her
husband shifted to Chhajiya village . During crossexamination, she has stated
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 10/15
that she stayed at matrimonial house at village Khandara for about one and half
years thereafter, she along with her husband shifted to Samalkha but on further
crossexamination, she has admitted that before shifting to Samalkha, they used
to reside at Chhajiya village in rented premises and all her children were born
there. The version of complainant to this effect is falsified through testimony of
DW1 Sh. Jagminder, who has specifically stated that accused Shiv Kumar and
complainant used to live as tenant at his house at village Chhajiya and their
children were also born there. It be observed that during crossexamination, no
question or suggestion has been put to this witness in order to rebut this fact and
therefore deemed to have been accepted to be true.(14.A ) DW2 has also deposed on similar line, he has stated that after marriage,
he and complainant resided at Khandara for about one year only and thereafter,
they shifted to village Chhajiya, where they resided for about 08 to 09 years
peacefully and in the year, 2000, they shifted to Samalkha. During cross
examination, no counter question or suggestion has been put to rebut this fact.
Though the complainant has claimed that her in laws used to visit them at
Samalkha also and used to commit cruelties upon there complainant but these
allegations are not supported by any other evidence. Whereas DW1 has stated
that no one including parents, brother and sister of accused Shiv Kumar used to
visit them or complainant used to visit them as she would not like them. During
crossexamination, no question has been put to the witness to disprove this fact
and only suggestion has been given that complainant used to like accused persons
and he did not remember the date, time, month or year because complainant
never told him that she did not like the accused persons. DW1 has specifically
stated that during the period complainant and accused Shiv Kumar lived at his
house, there was no major quarrel between them. This fact has not been rebutted
by cross question and only suggestion has been given that accused Shiv Kumar
used to quarrel and harass the complainant in furtherance of dowry demand,
which has been denied by the witness. It also be observed that in the testimony,
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 11/15
most of the allegations are against husband of complainant and only sweeping
allegations have been leveled against other accused persons, which are general in
nature and are without specific details.15. It be observed that accused persons have taken the plea that matter was
earlier settled with the complainant but despite fulfillment of terms and
conditions of said settlement by the accused, complainant did not cooperate in
getting the FIR quashed. From the testimony of DW1 and admissions made
during crossexamination of complainant, the plea of accused persons with
regard to settlement is proved. During crossexamination, complainant has
admitted that compromise talks were initiated by the accused. She has further
admitted that she had received Rs. one lac against dowry articles during bail
proceedings. She has also admitted that 50 Sq. Yds. out of 150 Sq. Yds. of accused
Shiv Kumar shall be handed over to her.(15.A) In his testimony, DW1 has stated that on 16.09.2004, he and
complainant entered into a compromise vide Mark A i.e. certified copies of
compromise dated 16.09.2004 and 08.10.2004 and as per agreement , he permitted
the complainant and children to reside at Property situated at Vikas Nagar,
Samalkha but complainant did not come to reside there. Thereafter, at the time of
bail matter he paid a sum of Rs. 1,00,000/ as per court order and in proceedings
under section 125 Cr. PC., he transferred 50 yds. property in favour of the
complainant vide Ex DW2/A. He has further stated that on transfer of said
property, complainant started residing with him but continued with her
quarreling, when the accused objected ton it, she shunted him out of said
property with the help of his brother and lodged a false complaint against him at
Panipat.16. DW2 has further testified that on 12.02.02, complainant entered into
another agreement vide Mark B , wherein it was decided that said property shall
be sold and there shall not be any relation between them and complainant shall
cooperate in getting the present FIR quashed but even after sale of property vide
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 12/15
Ex DW2/B, complainant did not cooperate accused persons in getting the FIR
quashed. It be observed that during crossexamination of DW1, nothing
substantial could be elicited to disprove the claims of accused persons. During
crossexamination, DW1 has admitted that Ex DW2/A contains his statement
bearing his signatures at point A. The claims of accused persons are established
through document Ex DW2/A i.e. Sale deed, which proves transfer of 50 Sq.Yard
property in favour of the complainant, document Mark A proves undertaking of
parties regarding transfer of property situated at Samalkha and severance of ties
with each other and document Mark B further proves the factum of selling of
property with mutual agreement, declaration by complainant with regard to
having no grievance left against the accused, undertaking to withdraw the
pending cases against accused and to cooperate in quashing of present FIR. The
court is of the view that after settlement, the alleged acts of cruelties on the part of
accused persons, are deemed to have condoned by the complainant. The court
also can not turn blind eye to the fact that despite undertaking complainant did
not honour the settlement, which should go against her. In view of the aforesaid
discussion, the court is of the considered opinion that chargeu/s 498A/34IPC is
not established against the accused persons.17. It be observed that accused Shiv Kumar has also been charged undersection 406IPC for having misappropriated the stridhan articles of the
complainant to his own wish. In order to to establish the charge ofSection 406IPC, the prosecution was under the obligation to establish the ingredients ofsection 405IPC thus, it was required to be established that an entrustment was
made in favour of the accused and he was having dominion over the articles of
the complainant and with dishonest intentions the articles entrusted to him, have
been misappropriated. PW4 has not mentioned about entrustment of dowry
articles in favour of accused in her entire testimony, wherein she has merely
stated that all her dowry articles have been retained by the accused persons since
she was turned out of matrimonial house but it be observed that during
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 13/15
investigation none of the dowry articles could be recovered from the house of
accused, which is admitted even by PW10/ IO SI Babu Ram and admittedly, in
lieu of dowry articles, complainant was given Rs. 1,00,000/. The claim of
complainant regarding retention of dowry articles by accused persons is falsified
with the fact that she and accused Shiv Kumar were living separately from co
accused persons since long.18. The list of dowry articles Ex.PW4/ A is not witnessed by family members
of the parties, which casts a serious doubt over the genuineness of above
mentioned list. No bill, invoice etc. of the articles and or of the conveyance
through which the articles reached the matrimonial home of complainant has
been proved on record.In such circumstances being guided by the judgment ofNeera Singh vs. State Government of NCT of Delhi & Ors.138 (2007) DLI 152, the
court is of the opinion that entrustment in favour of the accused is not
established.19. It be also observed that in the present case, there is no investigation
regarding source of dowry articles. In the judgment of Narender Kumar & Anr.Vs
State (Govt. of NCT of Delhi) I (2008) DMC 337, it has been held by the Hon'ble
court that the court must be very cautious during trial of offences under section
498A/406IPCas in all such cases in the name of investigation, except recording
statement of complainant and her few relatives nothing is done by the police.
Police does not verify any circumstantial evidence nor collect any other evidence
about claims made by the complainant. This all results into gross misuse of
provision of law and investigating agency in all such cases must collect all
circumstantial and other evidence in respect of claims made by complainant. The
courts should always be careful in considering credibility and truthfulness of
statement of complainant and relatives. In the present case also, no investigation
regarding source of dowry articles has been conducted.In view of the fact that none of the ingredients ofsection 405IPC is established
and therefore no caseu/s 406IPC is made out against the accused.FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 14/1520. In view of aforesaid discussions, the court is of the opinion that no
material evidence has been produced on record in order to secure conviction of
accused persons. Accordingly, accused persons are acquitted from the respective
charges framed against them under section 498A/34/ 406IPC.21. File be consigned to Record Room.ANNOUNCED IN OPEN COURT ON 03.11.2014
CORRECTED & SIGNED ON 20.11.2014
(MONA TARDI KERKETTA)
MM02 , MAHILA COURTS
TIS HAZARI COURTS, DELHI
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 15/15FIR No.494/04P.S. Timarpur
U/SEC. 498A/34/406IPCSt. VS. Shiv Kumar & Ors.03.11.2014
Present : Ld. APP for the State.
Accused Santosh has expired
Other accused on bail with Ld. CounselVide separate judgment announced in the open court, accused persons
are acquitted from the respective charges framed u/s 498A/34/406IPC.Previous bail bonds are cancelled, sureties are discharged. Documents if
any, be returned against receiving and endorsement if any be cancelled.In compliance of provision given under section 437ACrPC, fresh
personal bonds in the sum of Rs 10,000/ with one surety each have been filed,
attested and accepted, which shall remain in force for a period of 6 months.File be consigned to Record Room.ANNOUNCED IN OPEN COURT.(Mona Tardi Kerketta)
MM02/Mahila Court
Tis Hazari Courts, Delhi
FIR NO. 494/04 PS TIMAR PUR STATE VS. SHIV KUMAR & ORS. 16/15 |
7e5e3c53-6f8d-5d34-afcd-40b9054b37c2 | court_cases | National Consumer Disputes RedressalWelfare And Service Organisation ... vs Haryana Urban Development Authority ... on 24 December, 2002Equivalent citations: I(2003)CPJ234(NC)ORDERB.K. Taimni, Member1. This complaint has been filed by the Welfare and Service Organization (Regd.) and another against the opposite party, HUDA alleging deficiency in service.2. Facts of the case are that the complainants are running institution/school for the under-privileged with focus on self-reliance for the children of Jhuggi Dwellers, women from these households. They are already running a school for the purpose in a rented accommodation. With a view to get land of their own, the complainant had been registered for getting land in April, 1980. The complainant renewed its request for allotment of land on concessional terms in 1994. They were allotted 1000 sq. yards on 7.3.1995 @ Rs. 67/- per sq. yard in Sector 10 of Housing Board Colony, Faridabad, Haryana. 25% of the demanded amount as per terms of allotment was deposited on 13.3.1995. Possession was offered on 18.12.1995 but when the parties reached this spot to take the possession, the said plot was found already occupied by the Municipal Corporation, Faridabad for the purposes of
developing Public Park. In spite of this fact being within the knowledge of opposite party, yet the complainant was asked to take possession on 19.11.1996. After protracted correspondence and paying visits the complainants were allotted another plot of 1000 sq. yards @ 1,499/- in Sector 17 in lieu of allotment in Sector 10 made earlier. The complainant protested about the enhanced rate but to no avail. Payments as per terms were made under protest. Possession of the said plot was given on 23.6.1999. At that time it was noticed that the actual, measurement of the plot was 1584 sq. yards. Revised rate was communicated for the enhanced area, which was also paid under protest. Representations were made to opposite party to charge old rate and not any new rate, but made no headway. It is in these circumstances that this complaint has been filed before us seeking following a reliefs :(i) To set aside and quash the demand of the cost of the land measuring 1584 sq. yards allotted in Sector 17, Faridabad at the rate of Rs. 1,499/-per sq. yard.(ii) To charge at the rate of Rs 67/- per sq. yard for land measuring!584 sq. yards in Sector 17, Faridabad from the complainants at the rate of original allotment.(iii) To direct the respondents to refund the excess amount to the complainants with interest @ 18% p.a. on the respective deposits from the date of payment thereof, paid under protest.(iv) Costs of the present proceedings.(v) Damages to the tune of Rs. 1,00,000/- for causing unnecessary harassment if any depression, inconvenience and unwanted litigation.(vi) Any other relief which this Hon'ble Forum deems fit and proper may kindly be granted in favour of the complainant and against the respondents.3. On a notice being issued opposite party has filed its written version it is stated by them that the complainants are not consumer as not being covered by the definition of the complainant underConsumer Protection Act, this Commission has no competent jurisdiction to deal with a question relating to cost of land in an alternative sector as also not competent to give direction to charge given rate from the complainant. It is their case that the action taken on this case was as per rules and HUDA policy. No consumer dispute arises. Payments have been made and possession handed over to the complainant. Nothing Survives. This complaint is false and frivolous, hence needs to be set aside.We have seen the material on record and heard the arguments.4. It is the case of the opposite party that complainant is not a consumer on two counts--one that it has been filed by two complainants namely Welfare and Service Organisation (WASO) and WASO Public School. The complaint can be filed by one complainant and not two and secondly complainants are not consumer within its definition given in CPA, 1986. It needs to be seen that WASO is the mother/parent organisation and WASO Public School is one of its organisations engaged in imparting education.Section 2(1)(b)defines 'complainant' means a 'consumer'. Word consumer is defined inSection 2(1)(d).'Consumer' means any person.Word 'person' is defined inSection 2(1)(m)'person' includes,(i) a firm whether registered or not;(ii) a Hindu Undivided Family;(iii) a co-operative society;(iv) every other association of persons whether registered under theSocieties Registration Act, 1860(21 of 1860) or not.5. Here is an association of persons, registered in pursuit of a common cause and it is they who had applied for a piece of land for
the welfare of the under-privileged. They fall very much within the definition of consumer. We see no merit in the preliminary objection raised by the opposite party.6. It is not in dispute, as borne by material on record, that this complainant was allotted 1000 sq. yards in Sector 10 of Faridabad @ 67/-per sq. yard, in March, 1995. Consequent to the allotment for events on which this complainant had no control, he was allotted an alternative plot in October, 1998. It is not the opposite party's case that had the original allotment continued, rate would have been revised. When alternative site has been allotted for no fault of the complainant, he cannot be burdened with the liability of enhanced price of the plot for lapses on the part of opposite party who did not know that the allotted plot is not available for handing over the possession to the complainant. We refrain from commenting on this aspect.7. On the point of jurisdiction raised by the opposite party, we have already laid down the principle to be followed by the Public Housing Bodies in such a situation inHUDA v. R.P. Chawla, R.P. Nos. 547 and 548 of 1997.8. We have also held that when on measurement the area is found to be in excess of the area mentioned in the letter of allotment, rate for the additional area shall also be same as charged for the original plot.9. Keeping in view the orders of the Commission passed on the above subject, opposite parties are directed to charge original price of Rs. 67/- per sq. yard for the area allotted to the complainants. Opposite parties shall refund the excess amount charged along with interest @ 12% p.a. from the respective date of deposit till the date of the payment which shall be made within six weeks of passing of this order failing which rate of interest shall go upto 18% p.a. This complaint is allowed with cost of Rs. 5,000/- payable by the opposite party to the complainant within the period stipulated above. |
3c9072aa-fb4e-5cc1-84e1-c5d7a74ed57d | court_cases | Delhi District CourtSh. Tara Chand vs Sh. Shalender Kumar on 6 October, 2008- :: 1 :: -
IN THE COURT OF SH. PITAMBER DUTT :
ADDITIONAL DISTRICT JUDGE : DELHI
In the matter of: -
Suit No. 246/2007.
Sh. Tara Chand. ... Plaintiff.
Vs.
Sh. Shalender Kumar. ... Defendant.
- : ORDER : -
1.By way of this order ,I shall decide an application
under order xii rule viCPCfiled by the plaintiff. The
fact necessary for the disposal of the present
application are reproduced in brief-:1.It is stated in the plaint that the plaintiff is the- :: 2 :: -absolute owner /landlord of the suit property
bearing -997-E, Lohia Gali No: -4, Babarpur,
Delhi 110032.2.It is further stated that hat the suit property was
let out to the defendant through a registered
lease deed dt 4-5-2006 at the rent of Rs 14,300/-
pm for a total period of 22 month commencing
from 3-5-2006 and ending with 1-3-2008, for
industrial purposes.3.It is further averred that the defendant stopped
paying the rent w.e.f. Jan 2007,therefore the
plaintiff was not interested to keep the defendant
as his tenant any more consequently the plaintiff
got issue a legal notice through his counsel dt 9-
5-2007terminating the tenancy of the defendant
through registered AD and UPC however the
same is received back with the endorsement that- :: 3 :: -"Intimation delivered".4.It is further the case of the plaintiff that after the
legal notice the defendant approached the
plaintiff and assured that he would make the
entire payment of arrear of rent and also hand
over the possession of the demised premises on
31-10-2007.5.It is further stated that despite the assurance
defendant did not hand over the possession nor
made the payment of arrears with effect from Jan
2007 thus the plaintiff was constrained to file
present suit.2.In pursuance of the summons the defendant appeared
and file his written statement wherein the defendant
has taken various preliminary objection that the
plaintiff has not come with clean hands and this court- :: 4 :: -has no jurisdiction to entertain the suit as the plaintiff
has claimed recovery of possession which is less than
Rupees 3 lacs thus this court lacs pecuniary
jurisdiction .3.That on merit It is admitted that the plaintiff is the
owner /landlord of the tenanted premises. It is further
admitted that the defendant approached to the plaintiff
for taking the demised premises on rent . It is further
admitted that the demised premises was let out to the
defendant by the plaintiff by virtue of a registered lease
deed dt 4-5-2006 at the rate of rent Rs 14,300/- pm for
a total period of 22 months for industrial purpose.4.Regarding the non payment of rent since Jan 2007 it is
stated by the defendant that plaintiff had obtained a
loan of rupees 70,000/- from the defendant on various
occasions to meet contingencies i.e. Rs 20,000/- was
received on 10-7-2006,35,000/- on 24-8-2006and- :: 5 :: -35,000/- on 5-9-2006 and when the said amount was
demanded back the plaintiff agreed to adjust the said
loan amount against rent payable by the defendant but
subsequently the plaintiff turned dishonest and started
taking undue advantage of the post dated cheques of
the defendant in favour of the plaintiff in good faith .5.In reply of para 5 of the plaint it is also admitted that 5
cheques issued by the defendant as part payment
toward arrears were also dishonoured with the remark
' Insufficient fund'.and a criminal complaint is pending
against those dishonoring of cheques.6.In reply of para 7 of the plaint though the fact qua legal
notice and service thereof is specifically denied
,however did not deny the fact that the defendant has
stopped paying his monthly rent w.e.f. Jan 2007.7.On the basis of the aforesaid material facts and- :: 6 :: -circumstances of the case the plaintiff has filed the
present application whereby praying that a decree for
possession of the suit premises be passed in favour of
the plaintiff on the admission made by the defendant
in his written statement .8.In para 3 of the application it is stated that the whole
case of the plaintiff based upon a duly registered lease
deed dt 4-5-2006 and the defendant has not disputed
the same thus in accordance of the said lease deed the
tenancy has come to an end on 1-3-2008 and
thereafter the defendant has no right to stay in the
said property. It is further stated that the defendant
has admitted the execution of the lease deed and also
the rate of rent Of rs 14,300/-pm . It is also stated in
para 6 that the defendant has also admitted that he
had not paid the rent and ready to pay the same to the
plaintiff in para 15 of the written statement. On the
strength of the aforesaid admission made by the- :: 7 :: -defendant in his written statement the plaintiff prayed
that a decree for possession qua suit property be
passed in his favour .9.A reply of this application is file by the defendant
stating that the application has been file to harass the
defendant and further the admission of the defendant
qua the execution of lease deed would not make the
plaintiff entitled for the decree.10.In reply of para of the application it is stated by the
defendant though the defendant has not denied the
execution of the lease deed however has raised various
tribal issues which require adjudication before deciding
the matter.11.In the entire reply of this application the basic
averment qua the duration of tenancy, rate of rent
Existence of registered lease deed and the most- :: 8 :: -important averment made in para 3 of the application
that ' the said agreement has expired on 1-3-2008 and
the defendant has no right to stay in the said property"has not been denied by the defendant rather
specifically admitted the same .The only defence put
forth by way of this reply is that the defendant has
raised various issues which requires adjudication.12.Before dealing with the application and the respective
contention of ld counsels of the parties let us analyze
the contents of the lease deed. A perusal of the lease
deed reveals that it was executed between plaintiff and
defendant and following are the material terms and
condition -:1.That the rent of the said premises is Rs 14,300/-per month.2.That this tenancy is commencing from 3rd day of- :: 9 :: -May 2006 and ending on 1st Day of March ,2008
for the fixed period of 22 months.3.That the tenant will use the said rented premises
for industrial purpose only.4.If the tenant fails to pay the rent of the said
rented premises regularly then the landlord shall
have full right to terminate this tenancy.5.After expiry of the fixed period the tenant will
deliver the vacant possession of the said rented
premises to the landlord.6.That after the expiry of the fixed period of
tenancy the tenant shall not claim any right of
the tenancy nor shall seek any right through the
court of law.- :: 10 :: -13.A perusal of the material terms and condition of the
lease deed makes it absolutely clear that the tenancy
was for a total period of 22 months and on the expiry
of the said 22 month the defendant was to hand over
the possession of the demised premises to the plaintiff.It is further amply clear that there is no renewal clause
in the said registered lease deed.14.I have heard the Ld Counsels of the parties and
peruse the plaint ,lease deed attached thereto, written
statement ,application and its reply.15.Ld counsel for the plaintiff contended hat in view of
the admission made by the defendant Qua the
registered leases-deed, rate of rent and landlord and
tenant relation the application be allowed and
judgment on admission be passed against the
defendant.- :: 11 :: -16.On the other hand ld counsel for the defendant
contended that the present application is devoid of
merits and deserve dismissal . it is further contended
that defendant has raised various triable issues which
require adjudication thus prayed that application be
dismissed.17.The dispute raised by the defendant in his written
statement is qua the service of the legal notice whereby
the tenancy of the defendant was terminated by the
plaintiff .18.The another aspect of the matter which is required to
be address at this juncture is whether the relief
claimed by way of the present application can be
granted in spite of the fact that the present suit has
been filed before the expiry of the lease period ?
,though the said period has come to an end and more
than 7 months have already been expire from the day- :: 12 :: -of expiry of the term of the lease.19.Let me deal with both these question one by one -Service of Notice
Admittedly the period of tenancy was
22 months ,which has come to an end
on 1-3-2008 i.e during the pendency of
the present suit . According to the term
of the registered lease deed on the
expiry of the lease deed the defendant
was bound to hand over the possession
to the plaintiff.20.Section 111of transfer of property act describe
various modes for termination of the tenancy Clause {a}
ofsection 111reads as under: -111.Determination of lease
A lease of immovable property
determines--(a)by efflux of the time limited
thereby:Thus a lease for fixed period determine
by efflux of time.- :: 13 :: -21.The Hon'ble Supreme Court In AIR 1978
SUPREME COURT 1518 "Firm Sardari Lal Vishwa
Nath v. Pritam Singh" has held that Having examined
the matter on authority and precedent it must be
frankly confessed that no other conclusion is possible
on the first principle. Lease of urban immovable
property represents a contract between the lessor and
the lessee. If the contract is to be put to an end it has
to be terminated by a notice to quit as envisaged underS. 106of the T. P. Act. But it is equally clear as
provided byS. 111of the T. P. Act that the lease of
immovable property determines by various modes
therein prescribed. Now, if the lease of immovable
property determines in any one of the modes
prescribed underS. 111, the contract of lease comes to
an end, and the landlord can exercise his right of re-
entry. This right of re-entry is further restricted and- :: 14 :: -fettered by the provisions of the Rent Restriction Act.
Nonetheless the contract of lease has expired and the
tenant lessee continues in possession under the
protective wing of the Rent Restriction Act until the
lessee loses protection. But there is no question of
terminating the contract because the contract
comes to an end once the lease determines in any
one of the modes prescribed underS. 111. There is,
therefore, no question of giving a notice to quit to
such a lessee who continued in possession after the
determination of the lease, i.e. after the contract
came to an end under the protection of Rent
Restriction Act. If the contract once came to an
end there was no question of terminating the
contract over again by a fresh notice.22.In the present case the tenancy was for a fixed period
of 22 months, thus, same was expired by afflux of time- :: 15 :: -on 1.3.2008. Thus in view of the termination of the
lease deed in view of clause a ofsection 111of Transfer
Of Property Act 1882, No notice of termination at all is
required.Suit being Premature23.It is the admitted case of the parties that the tenancy
was crated through a registered lease deed for a fixed
period of 22 month commencing from 3rd day of May
2006 and ending on 1st Day of March ,2008 .24.The present suit is filed on 19-11-2007 i.e. before the
expiry of the agreed fixed period. however the
defendant has not taken any objection in his written
statement as the suit being premature. In view of the
clause 11 of the lease deed a right is conferred to both
the parties to terminate the lease even before the
expiry of the fixed period by giving 1 month notice. In- :: 16 :: -view of this clause the plaintiff issued a legal notice
upon the defendant which according to the defendant
was never served upon the defendant.25.During the pendency of the present suit the fixed
period as agreed between the plaintiff and the
defendant has also expired and thus the present
application is filed by the plaintiff.26. Where the right to sue has not matured on the date
of the institution of the suit an objection in that regard
must be promptly taken by the defendant. The Court
may reject the plaint if it does not disclose the cause of
action. It may dismiss the suit with liberty to the
plaintiff to file a fresh suit on its maturity. The plaintiff
may himself withdraw the suit at that stage and such
withdrawal would not come in the way of the plaintiff
in filing the suit on its maturity. In either case, the
plaintiff would not be prejudiced. On the other hand, if- :: 17 :: -the defendant by his inaction amounting to
acquiescence or waiver allows the suit to proceed
ahead then he cannot be permitted to belatedly urge
such a plea as that would cause hardship, may be
irreparable prejudice, to the plaintiff because of lapse
of time. If the suit proceeds ahead and at a much later
stage the Court is called upon to decide the plea as to
non-maintainability of the suit on account of its being
premature.27.The Hon'ble Supreme Court In "Vithalbhai Pvt.
Ltd. V Union of India. reported as AIR 2005
SUPREME COURT 1891 has held that " The question
of suit being premature does not go to the root of
jurisdiction of the Court; the Court entertaining such a
suit and passing decree therein is not acting without
jurisdiction but it is in the judicial discretion of the
Court to grant decree or not. The Court would examine
whether any irreparable prejudice was caused to the- :: 18 :: -defendant on account of the suit having been filed a
little before the date on which the plaintiff's entitlement
to relief became due and whether by granting the relief
in such suit a manifest injustice would be caused to
the defendant. Taking into consideration the
explanation offered by the plaintiff for filing the suit
before the date of maturity of cause of action, the
Court may deny the plaintiff his costs or may make
such other order adjusting equities and satisfying the
ends of justice as it may deem fit in its discretion. The
conduct of the parties and unmerited advantage to
plaintiff or disadvantage amounting to prejudice to the
defendant, if any, would be relevant factors."28.The Hon'ble Delhi High Court in M/s Associates Pvt
Ltd. V/S Karnataka Handloom Pvt. Ltd. Reported as
62{1996}DLT 386 has held that even assuming in
favour of the plaintiff that the lease was to be further
extended for a period of three years without the- :: 19 :: -consent of the plaintiff as per the term of the
agreement . That period of three has also now come to
an end during the pendency of the suit .No doubt a
suit must be practically in all stages on the cause of
action as it existed on its date of commencement . But
the court may however in suitable cases take notices of
the events which have happened since the institution
of the suit and afford relief to the parties on the basis
of the altered condition .This must be done by the
court by giving relief to the parties on the basis of the
altered circumstances in order to shorten the litigation
and get complete justice between the parties .The
plaintiff is thus entitled to get a relief of eviction under
the provision of rule 6 of order 12CPC.29.Applying the aforesaid legal proposition in the case in
hand there appears no impediment to grant relief to
the plaintiff under order 12 rule 6CPCon the ground
as the suit has bees filed before the expiry of the fixed- :: 20 :: -period for two reasons firstly no prejudice would be
caused to the defendant as it is agreed between the
partied that after the expiry of 22 month period on 1-3-
2008, the defendant shall handover the possession of
the demised premises.30.Secondly In the case in hand the defendant has not
taken the plea that suit is bad being premature thus
the said plea available to the defendant deemed to have
been waived by the defendant.31.ORDER XII Rule 6 of C.P.C. Reads as underJudgment on admissions. -(1) Where admissions of fact have been made
either in the pleading or otherwise, whether
orally or in writing, the Court may at any stage- :: 21 :: -of the suit, either on the application of any
party or of its own motion and without waiting
for the determination of any other question
between the parties, make such order or give
such judgment as it may think fit, having
regard to such admissions.(2) Whenever a judgment is pronounced under
sub-rule (J) a decree shall be drawn up in
accordance with the judgment and the decree
shall bear the date on which the judgment was
pronounced.]32.A bare perusal of the order xii rule vi cpc clearly
shows, that it confers very wide powers on the
Court, to pronounce judgment on admission at any
stage of the proceedings. The admission may have
been made either in pleadings, or otherwise. The- :: 22 :: -admission may have been made orally or in writing.
The Court can act on such admission, either on an
application of any party or on its motion without
determining the other questions. This provision is
discretionary, which has to be exercised on well
established principles. Admission must be clear and
unequivocal; it must be taken as a whole and it is
not permissible to rely on a part of the admission
ignoring the other part.33.The powers under Order XII Rule 6 of the Code has to
be exercised judicially on the facts and circumstances
of each case. The admission on the basis of which the
Court wishes to pass a decree has to be unambiguous,
clear and unconditional.34.It is also a settled principle of civil jurisprudence that
judgment on admission is not a matter of right and- :: 23 :: -rather is a matter of discretion of a Court. Where the
defendant has raised objection which will go to the very
root of the case it would not be appropriate to exercise
this discretion. notwithstanding the admission made
by the defendant in his pleading, the Court may still
require the plaintiff to prove the facts pleaded by him
in the plaint.35.The Hon'ble Supreme Court in AIR 2000 SUPREME
COURT 2740 "Uttam Singh Dugal and Co. Ltd. v.
Union Bank of India" has held "As to the object of the
Order XII , Rule 6, we need not say anything more than
what the legislature itself has said when the said
provision came to be amended . In the objects and
reasons set out while amending the said rule, it is
stated that "where a claim is admitted, the Court has
jurisdiction to enter a judgment for the plaintiff and to
pass a decree on admitted claim.The object of the Rule
is to enable the party to obtain a speedy judgment at- :: 24 :: -least to the extent of the relief to which according to
the admission of the defendant, the plaintiff is
entitled." We should not unduly narrow down the
meaning of this Rule as the object is to enable a party
to obtain speedy judgment. Where other party has
made a plain admission entitling the former to
succeed, it should apply and also wherever there is a
clear admission of facts in the face of which, it is
impossible for the party making such admission to
succeed.36.If one examine the pleading of the present case
following admitted facts emerges -:1.The the plaintiff is the owner/landlord of the
demised premises bearing no:-997-E, Lohia Gali
No: -4, Babarpur, Delhi 110032.- :: 25 :: -2.That the suit property has been let out to the
defendant vide a registered lease deed.3.That the rate of rent of the tenanted premises is
Rs 14,300/- P M .4.That the duration of the lease is 22 months
commencing from 4-5-2006 ending with first
March 2008.5.That the purpose of letting is industrial.37.The material averments relating to the execution of a
registered lease deed for 22 months commencing from
3.5.2006 and ending on 1.3.2008.38.the relation of landlord and tenant being not denied.39.The fact regarding the rate of rent as Rs. 14,300/-- :: 26 :: -having not denied and the admission of the defendant
that after expiry of 22 months commencing from
3.5.2006 and ending on 1.3.2008, the defendant has
no right to stay in the demised premises.40.Each of these averments have not been denied by the
defendant. On an overall consideration of the written
statement and the reply to the application what
appears that these basic facts have not been disputed
by the defendant rather these averments have been
unequivocal and unambiguous admitted by the
defendant in the written statement and reply to the
application.41.In view of the above discussion, this Court is of the
opinion that the defendant has made clear,
unambiguous and unequivocal admission qua material
particulars in its written statement, reply of the legal
notice and in the reply of present application,- :: 27 :: -therefore, the plaintiff is entitled to a decree for
possession on admission. The application is
accordingly allowed. Suit for possession as per prayer
clause 'B' of the plaint is decreed. Decree sheet be
prepared accordingly.Announced in the open
Court on 6.10.2008.(PITAMBER DUTT)
ADDITIONAL DISTRICT JUDGE,
DELHI |
7ca818e1-d2f5-5b64-aa43-c4ac00358af0 | court_cases | Punjab-Haryana High CourtMunicipal Committee vs Shamsher Singh on 28 April, 2004Equivalent citations: (2004)138PLR421Author:Ashutosh MohuntaBench:Ashutosh MohuntaJUDGMENT
Ashutosh Mohunta, J.1. This appeal has been filed against the judgment dated 24.2.1984 passed by the Additional District Judge, Sangrur, whereby the suit filed by Shankar Singh was decreed and it was held that the Municipal Committee cannot recover arrears of House Tax from the plaintiff on the ground that the assessment was not in accordance with law and further that he was not the owner of the house in dispute.2. Briefly, the facts of the case are that Shankar Singh respondent-plaintiff filed a
suit for permanent injunction restraining the Municipal Committee, Dhuri, from realising
the House Tax imposed upon House No. 234 and 245 situated in Mandi Dhuri. It was
averred that the notices issued by the Municipal Committee, Dhuri, were wholly illegal,
inasmuch as Shankar Singh was not the owner of the house in dispute. Thus, the pro-
ceedings are also wholly illegal and against the law.3. The averments made by the plaintiff were controverted by the Municipal Commit-
tee. It was contended that the plaintiff Shankar Singh was the Karta of the H.U.F. and as
such the Municipal Committee was within its jurisdiction to realise the House Tax from
the plaintiff. It was further contended that the Municipal Committee could not be sued
without giving notice underSection 49of the Punjab Municipal Act, the plaintiff could
have filed an appeal against the orders passed by the Municipal Committee.4. The Sub-Judge, 1st Class, Dhuri, vide judgment dated 29.7.1982 held that the or
der imposing tax upon the plaintiff was placed without application of mind and without
looking to the correct position of the documents. However, the trial Court dismissed the
suit filed by the plaintiff on the ground that the Civil Court had no jurisdiction to decide
the case as the plaintiff should have availed of the remedies available to him under thePunjab Municipal Act.5. The plaintiff-respondent filed an appeal against the judgment of the trial Court
and the learned Additional District Judge, Sangrur, vide his judgment dated 24.2.1984
set aside the judgment of the trial court and held that the imposition of the tax on the
plaintiff was wholly illegal and he was not the owner of the house in dispute. The lower
Appellate Court further held that the Civil Court did have the jurisdiction to entertain
the suit because in such like cases the jurisdiction of the Civil Court could not be
barred. In support of his contention the learned counsel appearing on behalf of the plain-
tiff placed reliance on M.C. Amritsar v. Bala Mal Ishar Dass,1 1982 Simla Law Journal
134, wherein it was held that the jurisdiction of the Civil Court was not barred. It is,
thus, the Municipal Committee, Dhuri, has filed the present appeal.6. One thing that stands out from a perusal of the judgments passed by both the
Courts below is that the plaintiff-respondent was not the owner of House Nos. 234 and
245 situated in Mandi Dhuri and, therefore, no demand for realisation of House Tax
could have been made against him with regard to these houses. There is no documents
on the record to show that the plaintiff-respondent was the owner of the suit property.
Moreover, a perusal of M.C. Amritsar v. Bala Mai Ishar Dass,1 1982 Simla Law Journal
134, as well as M.C. Montgomery v. Master Sant Singh,2 A.I.R. 1940 Lahore 377,
shows that it was held therein that "since the tax was payable by the owners and not by
the hirer, the imposition of the tax on the hirer is illegal and ultra vires of the powers of
the Municipal Committee." In the present case also the tax has been imposed not on the
owner of the house, therefore, on the same analogy the action of the Municipal Commit-
tee would be wholly illegal and beyond its jurisdiction and can be challenged before the
Civil Court. Therefore, I find no infirmity in the judgment dated 24.2.1984 passed by
the Additional District Judge, Sangrur.7. Resultantly, there is not merit in this appeal. It is, accordingly, dismissed. There
shall, however, be no order as to costs. |
f5447c9d-5960-5186-9bb2-17fd6086f594 | court_cases | Karnataka High CourtS.V. Apparao vs Vijaya Bank And Another on 12 September, 1996Equivalent citations: [1997]88COMPCAS433(KAR), 1997(2)KARLJ610JUDGMENT
M.F. Saldanha, J.1. These two C.R.Ps. involve a common point and, therefore, have been disposed of through a common order. I have heard the learned advocated on both sides. The only grievance projected by the petitioner's learned advocate is that he was a surety for the loan that was given by the bank to judgment-debtor No. 1. His contention is that the bank has straightway applied for attachment of his property and that, according to him, this is unfair because the decree becomes enforceable against him provided the bank is unable to recover its dues or unable to execute the decree against judgment-debtor No. 1. The learned advocate submits that it is not permissible in law for the bank, for whatever reason, to bypass the principal debtor and straightaway apply for the attachment of the property of the surety because this could give rise to unfair practices where, for extraneous reasons, the decree-holder-bank may choose to exonerate the principle debtor and go after the surety. The learned advocate submits that his liability may be absolute but that the starting point of this liability arises only when the bank has found the amount due to it irrecoverable from the principle debtor. In the present case, the bank had applied for execution of the decree against judgment debtors Nos. 1 and 2 and straightaway applied for an order of attachment of the movables belonging to judgment-debtor No. 2 who was the surety. The petitioner's learned advocate submits that the trail court was in error in having straightaway issued an order of attachment as far as his property is concerned and that the correct procedure would have been to issue notice to the judgment-debtors and only if the decretal amount was not forthcoming from them, to thereafter adopt coercive steps.2. The learned advocate who represent the bank disputes this position. According to him, the loan was advanced to judgment-debtor No. 1 who in turn was working for judgment-debtor No. 2 and who has given his address C/o. judgment-debtor No. 2. The learned advocate submits on instructions that both these persons remained absent before the court in the first instance and that an ex-parte decree was passed against them. Thereafter, the bank issued notice to both of them to comply with the terms of the decree which was not done and he submits that the reason why the bank proceeded against judgment-debtor No. 2 by way of an attachment was because, according to the learned advocate, judgment-debtor No. 1 was not traceable. He, therefore, depends the action and he submits that where the decree is executed within time, i.e., within two years, under Order 21, rule 22 of the Civil Procedure Code, 1908, a show-cause notice is not obligatory. The learned advocate submits that in this background, the action is fully justified and he further submits that no interference is called for by this court.3. As regards the first aspect of the matter, I do concede that the petitioner's learned advocate has made out a case for interference because in situations such as the present one, the decree is executable primarily against the judgment-debtor and, by its very implication, the term "surety" presupposes the fact that his liability co-extensive would commence only at the point of time when the bank's recovery becomes impossible vis-a-vis the principle debtor. The learned advocate is right when he submits that unlike in partnership cases, the liability is not joint and several but that the liability arises virtually consecutively or in other words a surety would become liable only when it is demonstrated that the amount is irrecoverable from the judgment-debtor. There may be situations to justify the bypassing of the principle debtor such as if his whereabouts are unknown or if the record indicates that he is insolvent or in such a condition that nothing would be recoverable from him. There must, however, be some material placed before the court to justify the action directed against the surety in the first instance. As indicated by me, there is no bar as far as recovery from the surety is concerned but the precaution that the executing court must take is to first ensure the reasonable efforts for execution have been made as against the principle debtor. In the present instance, the petitioner's learned advocate submits that had his client been given an opportunity, he would have disclosed the whereabouts of judgment-debtor No. 1 and, furthermore, he would have also indicated as to what property judgment-debtor No. 1 has so that the bank could have recovered its dues by attachment and sale of that property. To this extent, therefore, it is always a rule of caution that an executing court must observe to ensure that even in executing a decree, the right parties are proceeded against in the right order.4. On the second aspect of the matter, namely, the question as to whether notice should have been given to the judgment-debtor who is the petitioner before me, it is true that the law does not make such notice compulsory. The fact that no such prior notice was issued would, therefore, not render the action either illegal or irregular. Regardless of this fact, as a matter of procedure/courts invariably issue notice to the parties against whom the action is directed but the dispensation of notice would certainly be valid in certain instances particularly if the decree-holder points out to the executing court that the judgment-debtor is likely to abscond or is likely to do away with the property or take such other similar steps to defeat the execution. In such situation where adequate grounds exist, an ex-parte attachment order would still be valid because the law does permit it.5. Coming back to the facts of the present case, the application for execution did not make out any special ground for purposes of bypassing judgment-debtor No. 1 and to this extent, therefore, the action taken straightaway against judgment-debtor No. 2 will have to be interfered with. I clarify, however, that if the bank makes out a case, the court could still proceed against judgment-debtor No. 2 if it is satisfied that judgment debtor No. 1 is either not available or that judgment-debtor No. 1 does not possess any assets through which the decree can be satisfied. The impugned order is accordingly set aside. The court shall, however, hear the parties as far as the execution is concerned and it judgment-debtor No. 2 is in a position to satisfy the court that there is sufficient ground to execute the decree against judgment-debtor No. 1, efforts along those lines shall first be taken. It is, however, unnecessary for the court to delay the execution proceeding for any abnormally long period of time and the executing court shall also not be debarred if it appears that the execution vis-a-vis judgment-debtor No. 1 is doubtful, from taking such steps including by way of an attachment or asking for security from judgment-debtor No. 2 also.6. There is another significant aspect of the matter where this court is required to intervene. In case after case, particularly where banks are concerned, it is found that there is abnormal delay between the passing of the decree and it execution. This court had taken judicial notice of the fact that in may case this happens because of collusion with the judgment-debtor and in the remaining, because of negligence. In both instances it is unpardonable and as a corrective, or deterrent, it is essential to prescribe certain remedial action, It is, therefore, directed that the executing court shall exclude, while computing the interest due from the judgment-debtors, the entire period between the date of passing of the decree and the date when the execution was applied for, excluding a period of one month, which is a reasonable time for the drawing up of the decree. If the execution is not prosecuted diligently the interest for the delayed period shall also be forfeited. Also, having regard to the long experience of this court in many suits where the plaintiff takes years and decades to establish a simple straightforward claim, it has become essential to provide for certain disincentives. The trial courts shall hereafter dismiss such suits in which the service and other formalities are not completed within a reasonable time which should normally by one month from the date of filing. If the plaintiff is guilty of delay in completing the formalities or delays the hearing/disposal of the proceeding, the trail court shall disqualify the party concerned from claiming interest for the period after the filing of the suit. Also while awarding interest for the earlier period the court shall disallow interest if there has been unexplained delay in approaching the court. Conversely, if the defendant adopt delaying tactics the court shall step up the rate of interest and cost against that party.7. It is in the aforesaid circumstances, the impugned order is set aside. The proceedings to the executing court where the parties are directed to appear on October 23, 1996.8. C.R.Ps. accordingly succeed. No order as to costs. |
88549d55-81de-5515-a828-3e1ffedba1f6 | court_cases | Calcutta High CourtGirish Prakash Gupta & Ors vs Registrar Of Assurances on 1 August, 2008Author:PatheryaBench:Nadira PatheryaWP No. 1243 of 2008
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
GIRISH PRAKASH GUPTA & ORS. Petitioner/Applicant
Versus
REGISTRAR OF ASSURANCES,KOLKATA & ORS. RespondentFor Petitioner : Mr. Prasanta Chakroborty with Mr.S.Bhattacharjee,
Advs.For Respondent : Mr. Indrajit Sarkar, Adv.BEFORE:The Hon'ble JUSTICE NADIRA PATHERYA
Date : 1st August, 2008.The Court : By notice dated 29th May, 2008
the petitioners were directed to make payment of the deficit stamp
duty by the Registering Officer. Such payment was to be made by
28th June, 2008. According to the petitioners for non-payment of
the said sum the Registering Officer was under an obligation to
refer the matter to the Collector. The said has not been done.
Accordingly there has been infraction of law.Counsel for the respondents submits that some
time has lapsed and therefore the same be condoned. However, the
respondents are ready and willing to refer the matter regarding
payment of stamp duty to the concerned authority under Section 47
A(3) of theIndian Stamp Act, 1899and the West Bengal Amendment.2Having considered the submissions of the
parties the Registering Officer is directed to refer the matter to
the Collector underSection 47A(3) of the 1899 Act within ten
days from the date of receipt of this order.With the aforesaid direction this writ
petition is disposed of.As no affidavit-in-opposition has been filed,
the allegation contained in the petition is not admitted.All parties concerned are to act on a xerox
signed copy of this order on the usual undertakings.( PATHERYA, J.)
pa |
fc6631dd-e16d-5ff3-aafc-e17b02f2dea7 | court_cases | Rajasthan High Court - JodhpurMohammad Akram vs State on 13 March, 2018Author:Manoj Kumar GargBench:Manoj Kumar GargHIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc. Bail No. 2540 / 2018
Mohammad Akram S/o Raj Mohammad, By Caste Musalman, R/o
Dhinga, Tehsil Pilibanga, District Hanumangarh (Rajasthan) (At
Present Lodged in District Jail, Hanumangarh)
----Petitioner
Versus
The State of Rajasthan
----Respondent
_____________________________________________________
For Petitioner(s) : Mr. Kuldeep Sharma
For Respondent(s) : Mr. Pankaj Awasthi, PP
_____________________________________________________
HON'BLE MR. JUSTICE MANOJ KUMAR GARGOrder
13/03/2018
The petitioner has been arrested in connection with FIR
No.378/2017 of Police Station Pilibanga, District Hanumangarh for
the offence punishable underSections 341,323,324,382,143IPC. He has preferred this bail application under Section 439
Cr.P.C.Counsel for the petitioner submits that the offences are
triable by the Magistrate. The accused-petitioner is in judicial
custody and the trial of the case will take sufficient long time to be
concluded. Therefore, the benefit of bail should be granted to the
accused-petitioner.Learned Public Prosecutor has opposed the bail application.
Having regard to the totality of the facts and circumstances
of the case, without expressing any opinion on the merits of the
(2 of 2)
[CRLMB-2540/2018]
case, I deem it just and proper to grant bail to the accused
petitioner under Section 439 Cr.P.C.Accordingly, the bail application filed underSec.439Cr.P.C. is
allowed and it is directed that petitioner Mohammad Akram S/o
Raj Mohammad shall be released on bail in connection with FIR
No.378/2017 of Police Station Pilibanga, District Hanumangarh
provided he executes a personal bond in a sum of Rs.80,000/-
with two sound and solvent sureties of Rs.40,000/- each to the
satisfaction of learned trial court for his appearance before that
court on each and every date of hearing and whenever called upon
to do so till the completion of the trial.(MANOJ KUMAR GARG)J.
Ms/-72 |
cbe86266-a589-592b-9cd7-c219800fcb9c | court_cases | Bombay High CourtMotilal Madanchand Lodha vs Ragho Tanaji Patil And Ors. on 26 April, 1973Equivalent citations: AIR1974BOM261, (1974)76BOMLR207, AIR 1974 BOMBAY 261, 1974 MAH LJ 404, ILR (1975) BOM 1169, 76 BOM LR 207JUDGMENT
Mallvankar, J.1. This is an appeal against the judgment and decree passed by the Assistant Judge, Dhulia, on 7th May 1965 in Civil Appeal No. 294 of 1963, allowing the appeal and decreeing the suit being Regular Civil Suit No. 275 of 1962 which was dismissed by the trial Court with costs. The appeal arise this way.2. The present appellant is original defendant No. 1 and respondent Bos. 2 and 3 are original defendants Nos. 2. and 3, Respondent No. 1 is the original plaintiff, Defendant No.1 had obtained a money decree against defendant Nos. 2 and 3 in Regular Civil Suit No. 312 of 1950. The property in dispute which is a plot of land originally belonged to one Balabai wife of Ishram. In the year 1947 defendant No. 2 had purchased this plot from Balabai . On 20th February 1955, defendant No. 2 sold the plot to the plaintiff for Rs. 500 under a registered, Ex. 45. After the purchase, the plaintiff also constructed a cattlelshed on it. Since then the plaintiff was in possession and enjoyment of the plot along with an adjacent plot with which we are not concerned in this appeal. Defendant No. 1, after he obtained the money decree, had filed Regular Darkhast No. 630 of 1959 against defendants No. 2 and 3 and had also prayed for the recovery of the amount under the decree by attachment and sale of the plot of land in dispute. On 18th July 1960 the order of attachment came to be passed and later on the attachment. In April 1961, when the suit plot was put up for sale, he came to know about this attachment and filed Miscellaneous Application No. 53 of 1961 for raising the attachment. The Court, however, did not adjourn the sale, with the result that the plot came to be sold by auction on 29th April 1961 and was purchased by defendant No. 1 decreeholder. In due course, he also obtained a sale certificate on 25th July 1962. The plaintiff also alleged that in attaching the suit plot and bringing it to sale, defendant No. 1 had perpetrated fraud on the Court. The miscellaneous application filed by the plaintiff ultimately came to be dismissed on 5th October 1961. The plaintiff, therefore, filed this suit for a declaration that the suit plot bearing Gram Panchayat No. 499 with the structure standing thereon situate in the village of Mehergaon in Dhulia Taluka of the same was not liable to be attached and sold in execution of the decree obtained by defendant No. 1 against defendants Nos. 2 and 3, and that the auction sale was void. He also prayed for permanent injunction restraining defendant No. 1 from taking possession of the plot.3. The suit was contested by defendant No. 1 on several grounds. One of the grounds was that the sale-deed obtained by the plaintiff from defendant No. 2 was bogus, sham, colourable, fictitious and without consideration, and the same was executed to defeat his claim. He also denied that the plaintiff was ever in possession of this plot of land or had constructed any building thereon. He contended that the possession of the plot continued with defendants Nos. 2 and 3. He further contended that he had filed Regular Darkhast No. 511 of 1954 in January 1955 and in that Darkhast he had got the suit plot attached on 18th January 1955. He had also obtained an injunction against defendants Nos. 2 and 3 restraining them from entering into any transaction of sale of the suit plot privately. According to him, therefore, the sale being effected by defendant No. 2 in favour of the plaintiff while the attachment in Regular Darkhast No. 511 of 1954 was subsisting, the same was void. He also claimed for compensatory costs. Defendants Nos. 2 and 3 were proceeded against ex parte.4. The learned trail Judge found that the sale deed dated 20th February 1955 executed by defendant No. 2 in favour of the plaintiff was bogus, sham, colourable and fictitious document executed with a view to defeat the claim of defendant No. 1 against defendants Nos. 2 and 3, and that the sale-deed was without consideration. He, therefore, came to the conclusion that the plaintiff did not acquire any title under the sale-deed. The learned Judge also found that the sale-deed was void on the ground that it was executed while the attachment on the suit plot was subsisting on the date of the sale-deed, in the execution proceedings being Regular Darkhast No. 511 of 1954. The plaintiff then went in appeal to the District Court, and the learned Assistant Judge who heard the appeal came to the conclusion that though the suit plot was attached in Regular Darkhast No. 511 of 1954 and on the date of the sale-deed viz. 20th February 1955 the attachment was subsisting, still the same came to an end later on when the same Darkhast came to be disposed of on 4th July 1956. He was, therefore, of the view that the attachment having come to an end, it could not render the transaction of sale void, though on the date of the sale-deed the attachment was subsisting. According to him, therefore, the sale in favour of the plaintiff being perfectly valid, defendant No. 1 could not acquire any title at the auction sale. As regards the contention of defendant No. 1 that the sale was bogus, sham, colourable, fictitious and without consideration, he found against defendant No. 1. Being aggrieved by this judgment and decree, defendant No. 1 has come to this Court in second appeal.5. The only important point that falls for determination in this appeal is whether the sale dated 20th February 1955 evidence by the sale-deed, Ex. 45, is void being hit bySection 64, C.P.C. For the purposes of confederating this question, a few facts which are not in dispute are these. Defendant No. 1 had obtained a money decree against defendants Nos. 2 and 3 in Regular Civil Suit No. 312 of 1950. In execution of this decree, he filed Regular Darkhast No. 511 of 1954. In this Darkhast, the plot of land in dispute was attached on 18th January 1955 as partly satisfied. It is material to note here that while disposing of the Darkhast ultimately came to be disposed of on the 4th July 1956 as partly satisfied. It is material to note here that while disposing of the Darkhast the Court did not direct the attachment to continue. Thereafter, defendant No.1 filed second Darkhast being Regular Darkhast No. 171 of 1958 on 28th March 1958, but the same was also disposed of on 24th July 1959. It is common ground that in this Darkhast no fresh attachment was levied on the suit plot on land in dispute. Thereafter , defendant No. 1 filed third Darkhast being Darkhast No. 630 of 1959 on 29th December 1959. In this Darkhast, fresh attachment was levied on the suit plot on 18th July 1960. In due course, the plot of land was put up for sale and was purchased by defendant No. 1 himself on 29th April 1961. While the first Darkhast was pending and attachment of the plot of land in dispute was subsisting, on 20th February 1955 the plaintiff purchased this plot from sale-deed, Ex. 45. A few days before the execution of this sale-deed, on 17th January 1955 defendant No. 1 had applied for injunction against defendant land privately. This injunction was served both on defendants Nos. 2 and 3 on 18th January 1955. On 25th June 1961 after the suit plot came to be purchased by defendant No. 1 the plaintiff applied underOrder 21 Rule 58 C.P.C. for raising the attachment, but the application was dismissed on 5th October 1961. He, therefore, filed the present suit on 4th September 1962.6. In view of these facts, the question that arises for determination is whether the sale effected by defendant No.2 in favour of the plaintiff on 20th February 1955 under Ex. 45 is void in view of the provisions ofS. 64C.P.C. The learned Counsel Mr. Bhadti appearing that when the first attachment was subsisting on 20th February 1955, the date of the sale-deed, defendant No. 1 had an enforceable claim and, therefore, as against him the sale becomes void in view of the provisions ofSection 64C.P.C. The learned Counsel Mr. Kotwal, appearing on behalf of respondent No.1, on the other hand, has argued that the first Darkhast No. 511 of 1954 in which the suit plot was attached on 18th January suit plot was attached on 18th January 1955, having been disposed of on 4th July 1956, and there being admittedly no direction of the Court to continue the attachment the attachment ceased and, therefore, there could be no claim enforceable under that attachment. According to him, therefore.Section 64C.P.W. would not assist defendant No. 1 in such a case. Secondly, he had argued that defendant No. 1 having levied attachment afresh in Regular Darkhast No. 630 of 1959 which came to be filed on 29th December 1959 long after the sale-deed was executed on 20th February 1955, and in pursuance of this attachment the suit plot being brought to sale and purchased by defendant No. 1 obviously his claim could be said to be enforceable only under the second attachment. Nows. 64C.P.C. reads thus:"Where an attachment has been made any private transfer or delivery of the property attachment or of any interest therein and any payment to the judgment-debtor of any debt, dividend or other monies contrary to such attachment, shall be void as against all claims enforceable under the attachment.Explanation - For the purposes of this section, claims enforceable under an attachment include claims for the ratable distribution of assets."It is material to note thatSection 64C.P.C. therefore contemplates only one attachment and no other. Once an attachment is made, if there is any transfer or delivery of attachment property contrary to such attachment, such a transfer would be void as against all claims enforceable under that attachment. The word "attachment" occurs thrice in this provision. Where it occurs first, it is "an attachment". where it comes for the second time it is "such attachment" and where we read it for the third time, it is "the attachment". Obviously, therefore, the attachment, during the subsistence of which the transfer is effected or delivery of property is made must be the same attachment under which all claims of the attaching creditor are enforceable. If, therefore, at the time of enforcement of the claim the attachment under which the claim is enforced is different from any earlier attachment then obviously the attaching creditor cannot take advantage of the earlier attachment, particularly when such an attachment has already ceased to exist for one reason or the other. In the instant case, therefore, as we have already pointed out the first attachment came to an end on 4th July 1956 when the first Darkhast was disposed of. It was precisely for this reason or the other. In the instant case, therefore as we have already pointed out the first attachment came to an end on 4th July 1956 when the first Darkhast was disposed of. It was precisely for this reason that defendant No. 1 had to this reason that defendant in Regular Darkhast No. 630 of 1959 when the first Darkhast was disposed of. It was precisely for this reason that defendant No. 1 had to this reason that defendant No. 1 had to levy fresh attachment in Regular Darkhasts No. 630 of 1959 which was filed on 29th December 1959, without there being any attachment levied on the suit plot. Not only this, but defendant No. 1 enforced his claim by bringing the suit plot to sale and purchased it himself in pursuance of the subsequent attachment and not the first attachment. That being so, on the reading ofSection 64C.P.C. itself, we are inclined to take the view that the first attachment which came to an end on 4th July 1956 cannot be availed of by defendant No. 1 even though during the subsistence of that attachment the plaintiff purchased the suit plot from defendant No.2 on 20th February 1955. We are fortified in this view by several decisions of different High Courts. However, we are not pointed out any decision of our High Court bearing on the point. Before we deal with several decisions of while to refer to a decision of our High Court to which our attention is drawn by the learned Counsel for the appellant.7. This decision is reported inChindha Rupla Patil v. Chhaganlal Shivlal Sheth. AIR 1928 Bom 545. In this case, the question involved was an to the validity of the sale-deed dated 8th June 1920 in favour of the plaintiffs. The property covered by the sale-deed originally belonged to one Bhabhutsingh. On 8th April 1920. One Bhila, brother of the defendant, brought suit No. 261 of 1926 and attached before judgment the property in suit on 23rd. April 1920. On 19th April 1920. the plaintiffs brought a suit No. 287 of 1920 and attached the property before judgment on 28th May 1920. On before judgment on 28th May 1920. On 22nd April 1920, the defendant brought suit No. 294 of 1920 and got the property attached before judgment on 19th June 1920. The sale-deed in favour of the plaintiffs for Rs. 8,000/- was passed for satisfaction of the claim in their, own suit and the claim of the defendant's brother in suit No. 261 of 1920. Those claims were satisfied and suit no. 287 of 1920 brought by the plaintiffs was dismissed for want of prosecution on 15th June 1920, and the suit of the defendant's brother was similarly dismissed on 22nd June 1920. The defendant, however, obtained a decree, and in execution of his decree he purchased the property on 1st July 1921. The contest was, therefore, between the defendant as an auction-purchaser in execution of his own decree and the plaintiffs as purchasers under the private sale from the original owner on 8th June 1920. It was urgedin that casethat the sale-deed in favour of the plaintiffs was void undersection 64.C.P.C. as it was effected on 8th June 1920 at a time when there were two attachments before judgment in suit No. 261 of 1920 of ht defendant's brother and suit No. 287 of 1920 of the plaintiffs and that the defendant himself attached the property on 19th June 1920. The question, therefore, afrose whether the private transfer in favour of the plaintiffs was contrary to the attachment within the meaning ofSection 64C.P.C. It was urged on behalf of the defendant-appellantin that casethat though the private transfer in favour of the plaintiffs was prior to his attachment on 19th June 1920, he could take advantage of the existing attachments before judgment in the defendant's brother's suit and in the plaintiff's suit which were subsisting at the data of the sale in favour of the plaintiffs. This Court, however, held that inasmuch as the claims of the plaintiffs and the defendant's brother were satisfied format he consideration for the sale-deed in favour of the plaintiffs, and the plaintiffs suit was dismissed on 15th June 1920 and the defendant's brother's suit was dismissed on 22nd June 1920 it could not be said that the plaintiffs sale-deed was contrary to the two attachments which might be said to be technically subsisting on the date of the sale-deed. It was then argued that the sale-deed in favour of the plaintiffs was void against all claims enforceable under an attachment, and that the claim in the defendants suit was a claim enforceable under the attachments before judgments in the two suits which were subsisting at the date of the sale. This Court, however held thatin that caseat the date of the sale in favour of the plaintiffs on 8th June 1920, there was no decree and no sale in execution of a decree. The attachment referred to inSection 64, C.P.C. was the attachment under which the execution sale was held and not an attachment of a creditor who was paid off. This court, therefore, held that there being no claims enforceable under the previous attachments undersection 64, C.P. and the claim of the defendant not being one coming under the Explanation toSection 64, the claim of the defendant was not a claim enforceable under the attachment within the meaning ofsection 64, C.P.C. it is no doubt true that the facts in this case were little different. However, this court observed that "an attachment referred to inSection 64.C.P.C. is the attachment under which the execution sale is held is paid off". It is true thatin that casethere were different attaching creditors and none attaching creditor was claiming benefit under the attachment levied by another attaching creditor in view of the provisions ofSection 64.C.P.C. But at that the attachment referred to inSection 64.C.P.C. is the attachment under which the execution sale is held and not off. However, as we have already indicated, apart from t the aforesaid observations, it is possible to distinguish the present case from the facts of the case cited above.8. We may also refer in this connection to two decision of the Madras High Court. The first is reported inNana Rao v. Arunachalam. AIR 1940 Mad 385 (FB), which is a Full Bench decision. The Madras High Court has held thatSection 64.C.P.C. priovides that where property has been attached, any subsequent alienation is void against all attachment, but it does not go beyond this. An attachment effected after a private alienation is not assisted by an attachment before the the alienation. If the execution proceedings in which the second attachment has been made, have been instituted before assets have been brought into Court, the creditor will be entitled to rateable distribution if the property is sold in the earlier execution proceedings, but if the sale takes place as the result of the attachment effected after the private alienation, a person who buys the property at the Court auction will not obtain a good title and the alienation would not be void as against his titled. It is not necessary to refer to all the facts of the case because in this much as the attachment on which reliance was placed in support of the attack on mortgage had been made under a different decree from that in execution of which the auction-purchaser had purchased the property. Nevertheless, the Madras High Court has observed in the case thatSection 64.C.P.C. provides that where property has been attached, any subsequent alienation is void against all claims enforceable under that particualr attachment, but it does not go beyond this. An attachment effected after a private alienation is not assisted by an attachment before the alienation.Similarly, inSwarupchand v. JanakiramayyaAIR 1942 Mad 330, the same High Court has observed at page 332 that all thatSection 64.C.P.C. provides is that any private transfer by the judgment-debtor of the property attached shall be void as against all claims enforceable under the attachment. it will not be accurate to readSection 64as putting an end to the power of sale, because as between the transferor and the transferee, the alienation will undoubtedly be operative . If the attaching creditor is paid off or for any reason the attachment ceases to subsist, the alien's title will be unassailable. On facts, however, this case also is distinguishable.9. Coming to another set of cases relied upon by the learned Counsel Mr. Kotwal, the first is Gobind singh v. Zalim Singh, ILR (1884) 6 All 33. the facts of this case were similar to those of the present case. On Bachu Lal held a decree for money against one Behari singh and sold the decree to one Kauleshar. Kauleshar put this decree in execution in 1865. The property, the subject of the suit, was attached in execution of this decree on 20th February 1966, and on 20th June 1867 the property was advertised for public sale. On 17th June 1867, while the attachment was subsisting the judgment-debtor Behari Singh executed three conditional sale-deeds in respect of the attached property conveying (1) one-third thereof to Shankardial Singh, (2) another third to Durga Singh and Dulli, ancestors of the plaintiffs, and (3) the remaining third to the ancestors of the defendants. Possession was given to the vendees under these there deeds. In 1867 Kauleshar's application for execution was struck off pending the execution file. In February 1868. Kauleshar made a fresh application for execution and the property attached in 1866-67 was gain attached on 14th May 1868. On 18th September 1875, another application for execution was made, the property conveyed to Durga Singh and Dulli by sale-deed No. 2 being attached and the property conveyed by sale-deed No. 1 to Shankardial singh being exempted on the allegation that he had made some payment towards satifaction of the decree. the case was struck off. In 1876 the judgment debtor's sons Nand Kishore and Deonarain Singh brought a suit against the conditional vendees under sale-deed No. 3 the ancestors of the defendants in the suit, to set aside the sale made to them on the ground that it was made ultra vires by their father and whilst he was of unsound mind. This suit was dismissed by the Court of first instance on 21st June 1876, and that decree became final as no appeal was preferred therefrom. In 1878, Kauleshar resumed proceedings in execution of his decree and moved the Court to sell one-half of the two-thirds bought by the vendees under the sale-deed Nos. 1 and 3 the other moiety being exempted form sale. This application like the others, was struck off on 15th October 1879. finally, in 1880 Kauleshar executed his decree and brought to public sale the property conditionally sold in 1867 to the ancestors of the defendants in the suit (sale-deed No. 3). The plaintiffs in the suit, the descendants of Durga Singh and Dulli (sale-deed No. 2) bought the property and brought the suit against the defendants, the vendees under the deed No. 3, to set aside that deed, and to recover possession from them, claiming on the ground, among others, that the alienation of the property was made while it was under attachment, and it was therefore void under Section 240 of Act VIII of 1859 and Section 276 of Act X of 1877. The Court of first instance held in respect of this ground of claim that the attachment of 1866-67 did not affect the validity of the alienation to the defendants as such attachment had been in operative, and it dismissed the suit. On appeal by the plaintiffs, the lower appellate Court held that the alienation was void under Section 240 of Act VIII of 1859, having been made while the property was under attachment, and gave the plaintiffs a decree. The defendants appealed to the High Court contending that the attachment of 1866-67 did not affect the validity of the alienation to them. The High Court held that a private alienation of property under attachment was void under Section 276 of the Civil Procedure Code as against all claims enforceable under the attachment only. Therefore, where property attached in execution of a decree was alienated and was after such alienation again attached, the first attachment having expired, and was brought to sale in pursuance of the second attachment and the purchaser sued for possession of the property claiming on the ground that the alienation of the property was void under the provisions of Section 276, that as no claim was enforced or was enforceable under the first attachment under which the property was alienated, but the purchaser was claiming under the second attachment, such alienation could not be assailed under the provisions of Section 276. It may be noticed here that the provisions ofSection 64of the Civil Procedure Code, 1908 are similar to the provisions of section 276 of the Civil Procedure Code, 1877. It would thus be seen that this decision clearly helps respondent No. 1 plaintiff in this case.Likewise inNageshwar Tewari v. Rup Narain Shukul(1926) 97 Ind Cas 547 (All) which is also the decision of the Allahabad High Court and which only follows the aforesaid decision of the Division Bench, it is held that a transfer by a judgment-debtor of property attached in execution of a decree against him, after such attachment had ceased by virtue of Order 21 Rule 57. Civil Procedure Code, and before a re-attachment of the same, is not void underSection 64, Civil Procedure Code, against the claims of a purchaser of the properties in execution sale, inasmuch as the property is sold in pursuance of the second attachment and not the first. In that case also, the facts were almost similar to the facts of the present case. In that case Tirjagi Narain Tewari defendant No. 2 instituted a suit for possession of property against Rup Narain shukul, the plaintiff. The suit was dismissed and Rup Narain Shukul got a decree for costs. In execution of his decree he applied for the attachment of the property now in suit and the attachment of that property was ordered on 22nd September 1916. While that attachment was still subsisting. Tirjagi Narain Tewari, the owner of the property hypothecated it on 3rd June 1917 to nageshar Tewari, his uncle. defendant No. 1. The plaintiffs application for execution was struck off on 23rd February 1918 but the plaintiff made a fresh application for attachment on 10th September 1918, and the property was re-attached and was sold on 20th February 1920, and was purchased by the decree-holder himself. The plaintiff-decree-holder sued for a declaration that the mortgage executed by the judgment-debtor on 3rd June 1917 was not binding on him and id not affect the property which he purchased at the auction sale. The trail Court dismissed the plaintiffs suit but the lower appellate Court had decreed the claim on the finding that the mortgage which was executed on 3rd June 1917, when the property was under the prior attachment, did not affect the property which was sold in pursuance of the subsequent attachment. The High Court however, held that the transfer was not affected bySection 64, Civil Procedure Code, inasmuch as the transfer was under prior attachment and the claims of the decree-holder were enforceable under the subsequent attachment in pursuance of which he himself had purchased the property at the auction sale.10. The learned Counsel Mr. Kotwal has also invited our attention to a decision of the Patna High Court in Bhagwan lal v. Rajendra, AIR 1923 pat 564. In that case, a mortgage which came to be challenged. However, later on that attachment ceased to exist and there was fresh attachment in another execution proceeding and the question arose whether the claim of the decree-holder could be said to be enforceable under the first attachment, and the Patna High court held that the attachment contemplated inSection 64. Civil Procedure Code, is that under which the claim is enforceable. It was also argued in within the meaning ofSection 64, Civil Procedure Code, against the present claim because it was a claim which might have been enforced under the earlier attachment which came into operation before the mortgage. But this argument was repelled by the Patna High Court observing that if the claim ceased to be enforceable under an attachment relied upon as avoiding the alienation it seems obvious that there is no longer any claim enforceable and not one which might have been enforced under an attachment which has since come to an end. The Patna High Court, therefore, also appears to have taken the same view as that of the Allahabad High Court.11.In this connection, we may also usefully refer to a decision of the Privy Council reported inMina Kumari v. Bijoy Singh. AIR 1916 PC 238. In that case one A had obtained two decrees against the same judgment-debtor and had purchased the properties in Court sale by attachment and sale in execution of the second decree, while the attachment effected in execution of the prior decree was kept subsisting the execution dismissed with the decree-holders consent, and the judgment-debtor privately sold the properties to another creditor by sale-deeds dated the day previous to the second decree. Their Lordships of the Privy Council held that the private alienee's title must prevail because the private sale itself was a day previous to the attachment in pursuance of the decree which actually led put to the sale and that the effect of the earlier attachment in the prior decree was to entitle the decree-holder to the benefit of the later attachment and would not otherwise place him on a better position. The mere fact that the same person is the decree-holder in both the cases would not strengthen the position of the decree-holder purchaser. In arriving at this decision, their Lordships have also observed that though the word "attachment" occurs three times in Section 276 of the Civil Procedure Code, 1882, the reference is to one, and only one attachment; that one in this case was the later attachment under which the property was sold. All that can be done is to employ that attachment for the purpose of impugning the private alienation, for it is on that alone that the decree-holder's title to the property in suit could rest.Similarly, in M. Marathachalam Pillai v. Padmavathi Ammal (1970) 2 SCWR 174. Their Lordships of the Supreme Court have observed that bySection 64the attachment is void as against all claims enforceable under the attachment and it is not void generally. The mere existence of another attachment on the date of the private transfer and its later removal did not invalidate the private transfer. In that case, one G.H. Muhammad Yousuff Sait was the owner of a house at Octacamand. M Marathachalam Pillai obtained a money decree against Sait and attached the house belonging to sait in execution of the decree on 7th August 1956. The house was then put up for sale and was purchased by Pillai with the leave of the Court on 7th February 1958. in obtaining possession of the house. Pillai was obstructed by Padmavathi who was respondent in the appeal before the Supreme Court, who claimed that she had purchased it for Rs. 15,000/- under a private sale from Sait on 9th October 1956. The executing Court ordered in a summary enquiry that the obstruction raised by Padmavathi be removed. Padmavathi then filed a suit in the Civil Court for setting aside the summary order. The trial Court dismissed the suit against Pillai holding that the house had been properly attached and the sale being contrary to be attachment levied by Pillai was void against all claims thereunder. In appeal, the High Court of Madras held that the attachment was not made according to law, since the requirements of Order 21, Rule 54, Civil Procedure Code, had not been complied with. The High Court reversed the decree, and decreed Padmavathi's suit. Pillai went in appeal to the supreme Court on a certificate grated by the High Court. Their Lordships of the supreme Court held that the attachment was bad in law and on that ground Padmavathi's suit was decreed. However, an alternative contention was advanced before their Lordships on behalf of the appellant. it was argued that at the time of sale in favour of Padmavathi there was another outstanding attachment and, therefore, the sale being contrary to such attachment was in any even void. it appeared that on 17th January 1956 Pillai had in execution of a decree obtained in suit No. 55 of 1953 attached the property but that attachment was removed on 23rd march 1957 on satisfaction of the decree. Their Lordships, therefore, observed that bySection 64, Civil Procedure Code, the attachment was only void as against all claims enforceable under the attachment and it was not void generally. since the attachment effected on 17th January 1956 was removed any private alienation contrary to such attachment could not be regarded as void for there were no claims enforceable under the attachment dated 17th January 1956.12. it would thus be seen that in the instant case, defendant No. 1 having purchased the plot of land in dispute in execution proceedings in which second attachment came to be levied, his claim could be said to be enforceable within the meaning of Section 64, Civil Procedure Code, under the attachment only and not under the first attachment, during the subsistence of which the plaintiff purchased the plot of land in dispute from defendant No. 2 and the attachment came to an end on account of the execution proceedings being disposed of.13. The learned Counsel Mr. Bhadti, however, strongly relied upon a decision of the Calcutta High Court reported inBhupendra Nath Kumar v. Joonus Haji Abduallah. (1935) 39 Cal WN 733. That was an application for the revision of an order dated 24th September 1934 made by the lower Court, dismissing a claim in execution proceedings under these circumstances. The predecessors of the petitioners had obtained a money decree against the opposite party No. 2 for about Rs. 600/-. The opposite part No. 1 obtained another money decree against the same judgment-debtor for about Rs. 3,000/-.The petitioners put their decree into execution in Execution Case No. 264 of 1930 and attached certain properties including those now in suit on 4th June 1930. The opposite party No. 1 put his decree into execution in Execution Case No. 228 of 1930 and attached the properties now in dispute on 18th September 1930. On 17th October 1930, the judgment-debtor opposite party No. 1 made a private transfer of the properties in favour of the petitioners for about Rs. 4,500/- and out of this money Rs. 3,400/- was paid to a mortgagee who had taken the mortgage long before the attachment. Rs. 600/- was credited to the petitioners decree and the balance was paid in cash. Then the petitioners brought Title Suit No. 40 of 1931 for a declaration that the decree obtained by the opposite party No. 1 was collusive and the attachment was a bogus one. The opposite party No. 2 was made a party to that suit. The suit was subsequently referred to arbitration and on 19th March 1934, a decree was made in terms of the award. The material terms of this award, so far we are concerned, are these:-"The attachment effected at the instance of the opposite party No. 1 on 18th September 1930 in Execution Case No. 228 of 1930 was declared to be valid and effective and the petitioner's purchased on 17th October 1930 was subject to that attachment".Subsequently it appeared that the opposite part No. 1 proceeded with the Execution Case No. 228 of 1930, but on 25th May 1934, he having taken no steps, it was dismissed for default. On the following day, however, he started a fresh execution case being Case No. 93 of 1934, and again attached the said property. Thereupon the petitioners filed a claim under Order 21, Rule 58, Civil Procedure Code, for a declaration that their position remained unaffected by the subsequent attachment. The learned Judge of the lower Court held that the Execution Case No. 228 of 1930 having been dismissed on 25th May 1934, the attachment ceased thereby. But he also held that, both according to the decree in terms of the award and according to decree in terms of the award and according to the provisions ofsection 64, Civil Procedure Code, the transfer made in favour of the petitioners on 17th October 1930 was void as against the decree-holder opposite party No. 1 and in that view he dismissed the petition. Against that judgment, the revision application was filed. it would thus be seen that in that case under the award attachment was declared to be valid and sale was made subject to the attachment. That being the position, the Calcutta High Court held that the claim referred to inSection 64was the claim of the decree-holder enforceable under the attachment. In view of the peculiar facts of the case, therefore, it could not be said that the claim of the decree-holder, who was opposite Party No. 1 was not enforceable under the attachment, pending which the petitioners made their purchase. Moreover, the Report shows that the two Allahabad cases cited above were also cited before the Calcutta High Court in that case, and the High Court distinguished these two cases the decree-holder had made an auction purchase at a subsequent attachment and he then brought a suit to declare a transfer made during a previous attachment void. Similarly, the aforesaid Patna case was also distinguished by the Calcutta High Court observing that in that Patna case a mortgagee pending an attachment brought the suit for a declaration that an acution-purcahse made by the decree-holder at a subsequent attachment was made subject to his mortgage. It is no doubt true that the Calcutta High Court has observed at page 736 thus:-"As regard the other case, we must disagree in so far as they support the proposition that where an attachment has been made, a private transfer contrary to such attachment may not be void as against a claim enforceable under the attachment on the ground that the attachment has ceased".But nevertheless, this decision cannot help the present appellant in support of the proposition that when there are two attachments levied on one and the same property one after the other, and the first attachment has come to an end and the decree-holder has enforced his claim under the second attachment and has purchased the property at an auction sale in execution proceedings in which the second attachment was levied, the private transfer made during the subsistence of the first attachment become void. On the contrary, as we have already pointed out, in such a case, the claim of the decree-holder cannot be said to be enforceable under the first attachment and, therefore, the private transfer made during the subsistence of the first attachment cannot be said to be void under Section 64, Civil P.C.14. We are, therefore, the opinion that the sale by defendant No. 2 in favour of the plaintiff in the instance case cannot be said to be void underSection 64, Civil P.C. and must be held as perfectly valid in law. Defendant No. 1 therefore, cannot acquire any title to the plot of land in dispute at the auction sale held in execution proceeding being Darkhast No. 630 of 1959.15. The learned Counsel Mr. Bhadti then argued that at any rate in the instant case, the learned appellate Judge wrongly threw the onus of proof on defendant No. 1 to prove that the sale was not fraudulent. In the first place, we do not find from the record that defendant No. 1 had challenged the sale on the ground that it was fraudulent. all that he had contended was that the sale was bogus, sham, fictitious, colourable, and without consideration. The learned trial Judge framed the issue No. 2A on this point casting onus on defendant no. 1 to prove that the sale-deed was bogus, sham, etc. The learned Counsel had no quarrel regarding the onus of proof placed on defendant No. 1 for proving this issue No. 2A. The learned appellate judge, while drawing the points for determination, raised the point in these terms: "Whether the disputed sale-deed is bogus, sham, colourable, fictitious and without consideration and the respondent No. 2 had continued to be the owner and in possession of the suit plot?" He, therefore, did not place onus in respect of this point either on the plaintiff or on defendant no. 1. The learned Counsel, however, has drawn our attention to the discussion on this issue in paragraphs 15 to 19 of the judgment and has argued that this discussion shows that the onus was wrongly thrown on defendant No. 1. We cannot agree. It appears from the discussion that the learned Judge has considered the evidence adduced by the parties on both the sides, and the plaintiff having proved his sale-deed and the consideration for the same, he was of the view that defendant No. 1 who alleged that the transfer was without consideration, bogus and fictitious, had failed to prove it. We, therefore, do not think that the onus was wrongly thrown on defendant No. . Moreover, the parties on both the sides having adduced evidence in this case, having question of onus becomes only academic.16. Lastly, the learned Counsel contended that the learned appellate Judge misread the oral evidence and invited our attention to paragraph 17 of his judgment. We have carefully gone through this paragraph and we are of the opinion that the learned Judge correctly appreciated the evidence and there is no question of misreading any part of it. We, therefore, do not find any substance in this contention either.17. The result, therefore, is that the decree passed by the lower appellate Court must be confirmed and the appeal is dismissed with costs.18. Appeal dismissed. |
e0deb3cd-1c11-5c64-935b-e33a14621caf | court_cases | Income Tax Appellate Tribunal - MumbaiGartner Irelant Ltd, Mumbai vs Department Of Income Tax on 30 November, 2009IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, 'G', MUMBAI
BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER
AND
SHRI VIJAY PAL RAO, JUDICIAL MEMBER
ITA No. 1148/Mum/2010
(Assessment Year: 2004-05)
DDIT(IT) 3(1),
Sciendia House
R No.136
1 s t fl. N M Road
Mumbai- .........Appellant
Vs
Gartner Irelant ltd
C/o BSR and Co.KPMG House
Kam ala Mills Compound,
448 Senapati Bapat marg
Lower Parel,
Mumbai-400013 ... Respondent
Assessee by : Shri Niraj Sheth
Revenue by : Shri Pavan Ued
O R D E RPER VIJAY P AL RAO,JM
This appeal b y the revenue is directed against the order
dated 30.11.2009 of CIT(A) arising from the penalty order
passed under section 271(1) ( c ) for the assessment year
2004-05.2 The revenue has raised only ground i n this appeal
which reads as under :"On the facts and circumstances of the case and in
law, the CIT(A) erred in deleting the penalty u/s
271(1)( c ) of the Act levied by the AO withoutIT A No. 1148/Mum/20102 (Ass es s m en t Ye ar: 2 00 4- 05)
appreciating that the assessee has furnished incorrect
facts for showing a lower total income and that the
assessee's has furnished incorrect facts for showing a
lower total income and that the assessee's
explanation remained to be proved as " "bonafide" in
as much as the assessee could not substantiate its
explanation with appropriate supporting evidence
before the AO"3. W e have heard the learned DR as well as the learned
AR and considered the relevant record. The assessee in its
return of income declared NIL incom e and claimed refund of
tax paid on the ground that its income is in the nature of
business income underArticle 7of India -Ireland DTAA and
since the assessee has no perm anent establishment in India,
therefore, its income is not subj ect to tax in India. The AO
completed the assessment by determining the income as
Royalt y at Rs.62,21,580/- vide order dated 18.12.2006. The
penalty proceedings u/s 271(1)( c ) was also initiated in
respect of the said addition and penalty of Rs.62,21,580/-
was imposed vide penalty order passed on 24.3.2009.4. The CIT(A) has deleted the penalt y by hol ding as under :"1.3.0 I have considered the facts and gone through
the penalty order passed by the AO and also the
submissions made by the appellant before me. The
assessment order was passed on 26.12.32007. A
perusal of the assessment order reveals that the AO
had considered the note below the computation of
income and investigated. However, there is no
allegation or observation of the AO in the
assessment order that any fact material to the
computation of income was either not disclosed or
was found to be wrong. The assessment has beenIT A No. 1148/Mum/20103 (Ass es s m en t Ye ar: 2 00 4- 05)
made on the basis of facts discl osed by the appellant
in the return of income and also during the course of
assessment proceedings as and when demanded by
the AO. Assessment has been made by the AO
having a different opinion from the point of view of
the appellant "5. It was brought to our notice that this Tribunal has
already deleted the quantum addition for which the penalty is
levied vide order dated 30.07.2010 in ITA No.1452/Mum/2008.
The assessee filed a copy of the order of this Tribunal in
quantum appeal. W e note that this Tribunal has decided th e
issue in favour of the aseseee at paragraph 7 which reads as
under :"7. Keeping in vi ew the principles of judici al
disci pline as explained by the Hon. Supreme Court in
the judicial pronouncements discussed above, we are
of the view that the AO as well as the l d. CIT(A)ought
to have followed the order of the Tri bunal in the case
of WIPRO ltd (supra) which was squarely applicable
to the issue i nvolved in the case of the assessee.
We, therefore, deplore their action in not following
the said decision and hold, followi ng respectfully the
same that the subscri ption income received by the
assessee from the Indian clients was not in the nature
of royalty taxable in India. The addition made by the
AO land confirmed by the ld. CIT(A) on account of
said subscription income is accordingly deleted and
appeal of the assessee is allowed"6. Since the addition itself has been deleted by this
Tribunal vide order (supra), the penalty does not survive.
Therefore, there is no reason to interfere in the order of theIT A No. 1148/Mum/20104 (Ass es s m en t Ye ar: 2 00 4- 05)
CIT(A). Accordingly, we confirm the order of the CIT(A) and
dismiss the appeal filed by the revenue.Order pronounced in the open court on 08.10.2010
Sd sd
(RAJENDRA SINGH ) (VIJAY PAL RAO)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated 8 th Oct 2010
SRL:51010
copy to:1. Appellant2. Respondent3. CIT Concerned4. CIT(A) concerned5. DR concerned Bench
True cop y BY ORDER
ASSTT. REGISTRAR, ITAT, MUMBAI |
bac4880c-4aaf-577f-8df4-3ba5da689239 | court_cases | Kerala High CourtChristopher vs N.R.Chandranath on 26 June, 2009Bench:K.M.Joseph,M.L.Joseph FrancisIN THE HIGH COURT OF KERALA AT ERNAKULAM
MACA.No. 1408 of 2005()
1. CHRISTOPHER, S/O.P.JOHN,
... Petitioner
Vs
1. N.R.CHANDRANATH,
... Respondent
2. S.SREEKUMARAN NAIR,
3. M/S.ORIENTAL INSURANCE CO LTD.,
4. MAHENDRAN, S/O.NARAYANAN,
For Petitioner :SRI.NAGARAJ NARAYANAN
For Respondent :SRI.P.JAYASANKAR
The Hon'ble MR. Justice K.M.JOSEPH
The Hon'ble MR. Justice M.L.JOSEPH FRANCIS
Dated :26/06/2009
O R D E R
K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ.
------------------------------------------------------
M.A.C.A.No.1408 of 2005-B
----------------------------------------------
Dated, this the 26th day of June, 2009
J U D G M E N TJoseph, J.The appellant has been awarded a sum of
Rs.40,500/-. The complaint of the appellant is against the
quantum. We heard the learned counsel for the appellant and
learned counsel for the Insurance Company.2. The learned counsel for the appellant would
submit that having regard to the injury he should have been
awarded compensation at the certified percentage of disability.
Though 7% disability was assessed only 6% disability has
been taken by the Tribunal, he contends. The learned counsel
further submits that the income taken by the Tribunal is
Rs.1,800/- per month. The appellant is a carpenter. He has
produced A10 copy of S.S.I.Registration certificate. He
submits that the income should have been taken as Rs.200/-
per day. He would further point out that having regard to the
injury, for pain and suffering only Rs.8,000/- granted is on
the lower side. Further, he submits that towards loss ofMACA 1408/2005 -2-amenities only Rs.5,000/- is granted.3. Learned counsel for the Insurance Company
supported the award.4. Having heard the learned counsel appearing for
the parties we feel that the appellant is entitled to
enhancement. The appellant has sustained incised wounds
measuring 4x3x0.5 cm. in the post auricular region of the ear
and lacerated wound with skin loss in the left pinna and a
fracture of the right clavicle. He was treated by clavicular
brace, cuff and color sling wound suturing and ENT
consultation was also done. As far as the income is concerned
we feel that we can safely fix Rs.2,000/- per month having
regard to the date of accident and the vocation of the
appellant. It may be true that the appellant has not examined
himself. He has produced A10 copy of permanent SSI
registration. We fix the income as Rs.2,000/- instead of
Rs.1,800/-. On the above basis the appellant would be
entitled to a sum of Rs.24,480/- which is rounded as
Rs.24,500/- towards disability (Already Rs.22,032/- stands
awarded). We do not think that the appellant has made outMACA 1408/2005 -3-any ground to increase the percentage of disability from 6% to
7%. We feel that the percentage of disability is adequate.
On the basis of the increase in the income the appellant would
be entitled to Rs.400/- more towards loss of earning. We feel
that the appellant can be awarded a further sum of
Rs. 2,000/- towards pain and suffering. In view of the injury
suffered we also feel that the appellant is to be granted a
further sum of Rs.2,500/- towards loss of amenity. On the
whole the appellant would be entitled to Rs.7,500/- more.
Accordingly, the appeal is partly allowed and the appellant is
allowed to realise Rs.7,500/- more with interest at 7.5 percent
from the date of the petition till the date of realisation from
the 3rd respondent.(K.M.JOSEPH)
JUDGE.(M.L.JOSEPH FRANCIS)
JUDGE.MS |
bfc1141b-0120-5fd1-b85d-d279826c284a | court_cases | Patna High Court - OrdersMukhtar Singh Yadav @ Mukhtar Yadav vs The State Of Bihar on 12 January, 2012Author:Dinesh Kumar SinghBench:Dinesh Kumar SinghIN THE HIGH COURT OF JUDICATURE AT PATNA
Criminal Miscellaneous No.895 of 2012
======================================================
Mukhtar Singh Yadav @ Mukhtar Yadav
.... .... Petitioner
Versus
The State Of Bihar
.... .... Opposite Party
======================================================
2 12-01-2012Heard learned counsels for the petitioner and the State.The petitioner is apprehending his arrest in a case registered
underSections 147,148,149,323,307,504and379of the
Indian Penal Code,Section 27of the Arms Act andSection 3(I)
(X)of the SC/ST. (Prevention of Atrocities) Act.It is alleged against the petitioner to have fired which hit
none. Though, it is also alleged against the petitioner to have
assaulted with the butt of the firearm as a result of which the
informant received bleeding injury.It is submitted by learned counsel for the petitioner that it
was the informant's side who committed theft in the pond of the
petitioner for which the petitioner's side lodged a case.Considering the fact that there is counter version of the
occurrence also and the informant has not received any serious
injury, let the above named petitioner be released on anticipatory
bail in the event of his arrest or surrender before the learned court
below within a period of twelve weeks from today, on furnishing
the bail bond of Rs. 10,000/- (ten thousand) with two sureties of
the like amount each to the satisfaction of learned Chief Judicial
Magistrate, Buxar in connection with Nawanagar P.S. Case No.
152/2011 subject to the conditions as laid down under Section
438(2) of the Cr.P.C.(Dinesh Kumar Singh, J)
Amrendra Kumar/- |
f095295f-2cb6-5a71-948e-9e8b0d5694dc | court_cases | Allahabad High CourtAtibal Singh vs State Of U.P. Through Principal Secy. ... on 18 May, 2012Author:Anil KumarBench:Anil KumarHIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Reserved
Case :- SERVICE SINGLE No. - 197 of 2011
Petitioner :- Atibal Singh
Respondent :- State Of U.P. Through Principal Secy. Dept.Of Secondary Edu.
Petitioner Counsel :- S.K.Singh Kalhans
Respondent Counsel :- C.S.C.
Hon'ble Anil Kumar,J.Heard Sri S.K. Singh Kalhans, learned counsel for the petitioner, Sri Ram Kumar , learned Standing Counsel and perused the record.In the city of Lucknow, there is an institution known as Jan Vikas Uchhatar Madhyamik Vidyalaya, Papna Mau, Lucknow ( hereinafter referred as 'Institution') governed by the provisions as provided under U.P. Intermediate Education Act and the Payment of Salary Act etc. The petitioner was appointed on the post of Assistant Teacher in the institution on 22.8.1978 . At the time when the petitioner was appointed, the institution was not getting any grant in aid from the State Government. Subsequently , the institution came under Grant- in- Aid List on 1.12.1998. On 30.6.2007, the petitioner retired after attaining the age of superannuation from the post of Assistant Teacher . In respect to payment of pension after retirement, petitioner submitted his grievance by way representations to the authorities concerned but no heed has been paid by them , hence for redresssal of his grievance, he approached this Court by filing Writ Petition No. 4981 (SS) of 2010 ( Atibal Singh Vs. Sate of U.P. and others) , the same was disposed of vide judgment and order dated 22.7.2010, the relevant portion is reproduced as under:-"Considering the aforesaid facts, this writ petition is finally disposed of with the direction that the representation of the petitioner, contained in Annexure no.1 to the writ petition, shall be considered and disposed of by the competent authority by a speaking and reasoned order within a period of one month from the date a certified copy of this order is produced before him."In pursuance to the said direction given by this Court , the case of the petitioner was considered and rejected by order dated 12.10.2010 ( Annexure no.1) passed by opposite party no.2/ Deputy Director of Education ( Secondary) VI Region , Lucknow on the ground that the petitioner is not entitled for getting pension as he has not rendered his service of ten years from the date i.e. 1.12.1998 when the institution in question came under grant-in-aid which is mandatory as per rules in order to get pension and the total length of service of the petitioner is only eight years and seven months from the date when the institution in question came in grant-in-aid list.In the instant matter, on the basis of arguments advanced by the learned counsel for the parties and the material on record, it is not disputed that the institution in question came in grant-in-aid list on 1.12.1998 and the petitioner retired from service on 30.6.2007. However, learned counsel for the petitioner submits that in view of clause II of the Government Order dated 24.4.2001 ( Annexure no.3) , it is mandatory on the part of the authority of institution / opposite party no. 4 to take steps for depositing the required CPF on behalf of teaching and non-teaching staff like petitioner in order to get pensionary benefit but the said exercise was not done by the opposite party no.4, so the petitioner cannot be deprived from his legal right to get pension.Further, by letter dated 16.7.2009 ( Annexure no.4) , a request has been made to the State Government for issuance of Government Order in respect to the extension of period for depositing the CPF amount upto 31.3.2010, the same is pending before the State Government for consideration, as such the action on the part of the respondent no.4 thereby passing the impugned order , rejecting the claim of the petitioner is totally illegal , arbitrary and liable to be set aside.Learned State Counsel , on the other hand, submits that from the date when the institution in question came under grant-in-aid list I.e.1.12.1998 and till the date of retirement of the petitioner on 30.6.2007, he has rendered his service only for a period of eight years and seven months and on the basis of the same , petitioner is not entitled for any pension . Further by the Government Order dated 24.4.2001 , the last date for depositing the managerial contribution of CPF was fixed up till 31.3.1996 but the petitioners managerial contribution for the period 22.8.1978 to 30.11.1998 was not deposited as such the said period cannot be counted for calculating the pension . Further, by letter dated 16.7.2009, a recommendation has been made for extension of time for depositing the managerial contribution up to 31.3.2010 but no action has been taken in this regard by the State Government so the petitioner cannot derive any benefit from the said documents.It is further submitted by the learned State Counsel that as per Article 474 of the Civil Services Regulation for grant of pension ten years qualifying services is mandatory and in the present case petitioner's qualifying services is only eight years and seven months and the managerial contribution for the period from 22.7.1978 to 30.11.1998 has not been deposited, so the said period cannot be counted for calculation of pension, hence the petitioner is not entitled for any pension .In view of the above , the position which emerge out is to effect that as per Regulation 370 (ii) Civil Service Regulation only those employees, who are regularly appointed on substantive basis and have completed ten years service, are entitled for pension and post retrial benefits.The "qualifying service" for the purposes of pension is provided in Section (i) of Chapter 16. The Regulation 361 of the Civil Service Regulations provides the condition of the qualification, which reads as follows :"361. The service of an officer does not qualify for pension unless it conforms tothe following three conditions:(A) The service must be under Government.(B) The employment must by substantive and permanent.(C) The service must be paid by Government."Regulation 368 of Civil Service Regulation provides that service does not qualify unless the officer holds a substantive office on a permanent establishment.Regulation 370 of Civil Service Regulation after the amendment w.e.f. 20.4.1977 reads as follows:"370. Continuous temporary or officiating service under the Government of Uttar Pradesh followed without interruptions by confirmation in the same or any other post shall qualify except--(i) periods of temporary or officiating service in non- pensionable establishment;(ii) periods of service in work charged establishment; and(iii) periods of service in a post paid form contingencies."Article 424 of Chapter 18 of the Civil Service Regulations provides the following kinds of pension admissible to a Government servant (a) compensation pension (b) invalid pensions (c) superannuation pension (d) retiring pensions.Fundamental Rule 56 provides for retiring of a Government servant on attaining the age of 58 years or 60 years as the case may be. It is not disputed that in the present case, the age of superannuation of the petitioner-respondent was 60 years. Clause (e) of
Fundamental Rule 56 reads as under:(e) "A retiring pension shall be payable and other retirement benefits, if any, shall be available in accordance with and subject to the provisions of the relevant rules to every Government servant who retires or is required allowed to retire under this rule:Provided that where a Government servant who voluntarily retires or is allowed voluntarily to retire under this rule the appointing authority may allow him, for the purposes of pension and gratuity, if any, the benefit of additional service of five years or of such period as he would have served if he had continued till the ordinary date of his superannuation, whichever be less."Article 465 and 465-A provides as under:"465 (1) A retiring pension is granted to a Government servant who is permitted to retire after competing qualifying service for 25 years or on attaining the age of 50 years.(2)A retiring pension is also granted to a Government servant who is required by Government to retire after attaining the age of 50 years.465-A. For officers mentioned in Article 349-A, the rule for the grant of retiring pension is as follows;(1)An officer is entitled on his resignation being accepted, to a retiring pension after completing qualifying service of not less than 25 years, or on attaining the age of 50 years.(2)A retiring pension is also granted to an office who is required by Government to retire after attaining the age of 50 years."In Law of Lexicons the expression ' regular' and 'regular services' have been assigned meanings at page 1638-1639 as under:" Regular - Webster defines "regular" to mean conformable to a rule; methodical; periodical."REGULAR" is derived from "regular", meaning "rule", and its first and legitimate signification, according to Webster, is "conformable to a rule' agreeable to an established rule, law, or principle, to a prescribed mode, or according to established, customary forms."Regular- Conformable to rule; periodical; recurring or repeated at fixed times or uniform intervals; properly constituted; normal; marked by steadiness or uniformity of action, procedure or occurrence.Regular services- The expression 'regular forces' mean officers and soldiers who by their commission, terms of enlistment, or otherwise are liable to render continuously for a term military service to His Majesty in every part of the world or in any specified part of the world. R.v. Governor of Wormwood Scrubbs Prison, (1948) 1 All ER 438, 441 (KBD). [Army Act.S. 190(8)]( See;State of Haryana Vs. Haryana Veterinary and A.H.T.C. Association's , 2000(8) SCC 4, State of Rajasthan and others Vs. Jagdish Narain Chaturvedi, (2009)12 SCC 49 and State of Punjab Vs. Ashwani Kumar, AIR 2009 SC 186)"In the present case, the institution in question where the petitioner was working as Assistant Teacher, came under the grant-in-aid only on 1.12.1998 and till the date of retirement i.e. 30.6.2007, petitioner rendered his service of eight years and seven months, thus he does not have a qualifying service of ten years for getting the pension and the period from the date of joining his service as Assistant Teacher i.e. 22.8.1978 till the institution in question came under grant- in-aid cannot be counted for the purpose of pension , so I do not find any illegality or infirmity in the impugned order which is under challenge in the present writ petition[See:Pratap Narain Chaddha Vs. State of U.P. and others, 2012(4) ADJ 714 (DB)]
For the foregoing reasons, the writ petition lacks merit and is dismissed as such.No order as to costs.Order Date :-18.5.2012
dk/ |
2e332446-cd16-5037-9660-4552104a7710 | court_cases | Gujarat High CourtGujarat State Deputy Engineers ... vs State Of Gujarat And Ors. on 23 September, 1983Equivalent citations: (1984)1GLR335JUDGMENT
S.A. Shah, J.1. This is a petition filed by Government servants of the Public Works Department claiming minimum of time-scale of the cadre of Deputy Engineer when they were promoted to the cadre of Deputy Engineer. The grievance appears to be that instead of giving them minimum of the time-scale which was at that time Rs. 220/- they were given Rs. 200/- per month which was the salary fixed for the probationers who were directly recruited to the post of Deputy Engineer, P.W.D. Petitioner No. 1 is the recognised association of Deputy Engineers in Gujarat Service of Engineers Class II in the Public Works Department and rest of the petitioners are the persons who are claiming higher initial salary of Rs. 220/- or revised initial salary of Rs. 300/- as the case may be. This petition is filed on behalf of the Deputy Engineers who are similarly situated and who are claiming initial pay of Rs. 220/- instead of Rs. 200/- granted to them by the Government when they were promoted from the lower cadre of Junior Engineer, Supervisor or Overseer as the case may be. The bone of contention is that the time-scale of the Deputy Engineers of the Public Works Department as fixed by various pay-rules was Rs. 220-15-400-EB-20-500-EB-25-650 which was thereafter revised to Rs. 300 25-450-EB-25-500-30-740. The contention of the petitioners is that Rs. 220/- or Rs. 300/-as the case may be, being the minimum of the time-scale in the cadre of Deputy Engineer, must be given to the Deputy Engineers who are promoted to the cadre of Deputy Engineer from substantive posts of Junior Engineer, Supervisor or Overseers as the case may be, unless he is entitled to a still higher initial time-scale as provided in Rule 41 of the Bombay Civil Services Rules (hereinafter referred to as BCSR). The contention of the petitioners that instead of granting minimum of time-scale at Rs. 220/- or Rs. 300/-, as the case may be, the State Government has granted Rs. 200/- which is designated for the probationers who are recruited by direct selection. According to the petitioners, the action of the State Government in granting the time-scale or the payment for probationers and denying the benefits of at least minimum of the time-scale is in breach of Rule 41 of BCSR which are admittedly statutory rules made underArticle 309of the Constitution of India.2. Mr. Jadeja, learned Advocate appearing on behalf of the State Government has raised two contentions against the prayer of the petitioners, namely, (1) that the petitioners are asking for relief from 1st May, 1960, the cause of action for the claims of the petitioners having arisen on that date, 30 years have passed, petition cannot be entertained by this Court, and the demand being stale must be rejected; and (2) that the Government has denied the minimum of time-scale of Rs. 220/- on the ground that under the provisions of Note-7 to Rule 41 of BCSR the initial salary available to the Deputy Engineers (Promotees) is that of the probationer and what has been fixed at that time by the Government was in accordance with the rules as they were in existence.3. Now, let me examine the contentions of the petitioners subject to the aforesaid two objections raised by the State Government. First of all, I will deal with the relevant facts so that the aforesaid two objections can be properly answered. The petition was admitted by this Court in the year 1977. The petition was filed in 1977 because, according to the petitioners, the State Government which was considering the grievances of the petitioners since beginning had decided the question of initial time-scale only by Government Resolution dated May 3, 1976 which is produced at Annexure-H to the petition. However, according to the petitioners, this resolution satisfies the claim of the petitioners partly. Though the Government has agreed that the offending Government Resolution dated November 27, 1964 should not be made applicable to the promoted Deputy Engineers and as a result of the said decision the pay of the promoted Deputy Engineers should be refixed notionally from November 27, 1964, or the subsequent date of promotion the Government did not agree to make payment of arrears of pay and allowance payable to the petitioners on account of the said revision. In other words the Government accepted that the resolution of November 27, 1964 produced at Annexure-B is not applicable to the Deputy Engineers, i.e. the petitioners and on that basis agreed to refix the salary notionally from 27-11-1964, but the Government refused to pay the arrears without assigning any reasons. According to the petitioners, their age-old demand for minimum of time-scale having been kept pending all these years and when the same has been ultimately decided by the Government giving only partial relief, the cause of action to approach this Court has arisen only when the Government refused to grant full reliefs to the petitioners by resolution dated 3rd May, 1976. The petitioners, therefore, submitted that no question of any delay much less inordinate delay, has arisen in this case. The petitioners further submitted that though they were making representations and their case had been properly presented by their association, they were kept under the impression that the Government will take final decision especially when a binding judgment of this Court in the case of Revenue Department was pressed into service by the petitioners before the Government. They were assured that the Government will decide their case strictly in accordance with the rules as they were in force from time to time.4. There is no doubt that the petitioners have kept this question pending for a very long time but it is not denied by the respondents in their affidavit that the said issue was not pending before the State Government and the Government Resolution dated May 3, 1976 is a clear indication and admission of the State Government that the question of fixation of initial salary was under the consideration of the Government.5. This question can also be viewed from another angle, namely, that the correct fixation of their salary was dependent on the initial time-scale admissible to the petitioners and, therefore, the petitioners were getting their salary every month, and they have always a right to refixation of their salary because the fixation of salary will also affect the salary during superannuation.6. It has now been settled that when the State is under statutory obligation to give salary to its officers and if the salary is not found to be in accordance with the provisions of law it is not just or proper for the State Government to deny the relief of salary on a technical ground of limitation or delay. If the action is wrong from the beginning the Government should come out at any time to correct the same because what they are granting is the salary payable under the statutory rules and that too to their own servants who still continue to work for them. Therefore, such technical objections regarding delay is not very proper on both the grounds, nainelv. that to deny such benefits to their own servants will also in the long run effect their performance or efficiency. Any way the State Government has not taken this objection any where in the affidavit-in-reply and the State Government has simply relied upon Note 7 of Rule 41 of the BCSR, to controvert the claim of the petitioner. In this view of the matter the first contention of the respondents regarding the delay is rejected.7. So far as the second contention of Mr. Jadeja, learned A.G.P. appearing on behalf of the State is concerned it will also be necessary to consider the scheme of Rule 41 of BCSR. Rule 41(a)(i) prescribes that when appointment to the new post involves assumption of duties or responsibilities of greater importance (as interpreted for the purposes of Rule 56) than those attaching to such permanent post, he will draw as initial pay the stage of the time-scale next above his substantive pay in respect of the permanent post.8. For example, if the minimum of the time-scale is less than the pay of the substantive post of the appointee, since he has received promotion he will get an initial salary one stage more of the time-scale next above his substantive pay and not the minimum of the time-scale. Sub-rule (ii) of Clause (a) is in respect of appointment to the new post where it does not involve assumption of higher duties or responsibilities and in such case additional stage of time-scale is not available to him.9. Clause (b) of Rule 41 is applicable to the appointment where Clause (a) is not applicable. The first two lines of Clause (b) being important are reproduced below:41. (b) If the conditions prescribed in Clause (a) are not fulfilled, he will draw as initial pay the minimum of the time-scale.The proviso is not important for the purpose of this case and it is not reproduced.10. It, therefore, transpires from Rule 41 that when an appointment is made to a post carrying fixed time-scale, the appointee is entitled atleast to the initial pay at the minimum of the time-scale subject to the exceptions which are carved out in subsequent rules. Now Note 7 which is appended to this rule which has been relied upon by the Government reads as under:Note 7 - In applying this rule as well as Rules 56 and 57 in respect of a Government servant appointed to a post to which a fixed probationary pay below the minimum of the time-scale is prescribed, such probationary pay should be deemed to be the first stage of the time scale of the post and minimum of the time-scale itself as the second stage.(Proviso being not material, is not reproduced)11. Now the question that arises is whether Note 7 is applicable to the probationer, first appointee or promotee. The general rule is that if a person is appointed to a post carrying a minimum time-scale he is then entitled to such minimum. It is a well-known fact that recruitment to a higher cadre is sometimes made by direct recruitment or by promotion or by transfer or by deputation. So far as the appointment of direct recruits are concerned they are taken by holding open competition test. Generally they are coming directly from their respective colleges and have no experience of service on a particular post. The recruitment to the cadre of Deputy Engineer itself mentions that such direct recruits will undergo training for a period of one year and thereafter for further one year he will be under supervision, and after he acquires sufficient knowledge and experience and if found so he could be confirmed on the post. Various Pay-Commissions or the Government as the case may be, have, therefore, provided probationary salary or pay-scale for such probationers which is a little less than the minimum of the time-scale. The reasons for fixing lesser than the minimum time-scale are obvious and such pay-scale in service jurisprudence is known as pay-scale for the probationer. If one looks to the provisions of pay-rules of 1961, the relevant extract being reproduced by the petitioner in Para 7A of the petition, the pay-scale of Deputy Engineer is shown as Rs. 200-220-15-400-EB-20-500-EB-25-650 which means that Rs. 200/- is meant for probationer and Rs. 220/- is the minimum time-scale. What is implicit in this time-scale has been made explicit, if one looks to item No. 3 in Schedule-C where the time-scale is designated as Rs. 220-650 and it has been specifically mentioned 'probationer Rs. 200/ - per month'. In the revised scale also there is the same phraseology. Therefore, in this view of the matter it is clear that the first figure of Rs. 200/- represents the salary payable to a probationer or to an employee who is on probation. There is no time-scale in fixation of pay-scale of a probationer. He gets Rs. 200/- till he enters into regular cadre and is entrusted with regular duty of the post. He then starts earning various stages of the time-scale.12. Mr. Mehta, learned Advocate appearing on behalf of the petitioner draws my attention to the Government decision dated 28th November, 1961 produced at Annexure-G, regarding fixation of pay of Overseers when promoted as Deputy Engineers. This letter has been sent to the Accountant General, Gujarat, and the relevant portion being important is reproduced below:I am directed to state that under paragraph 1(V) of G.C.P. & S Department No. 3868/46 dated 1st March, 1956, in some departments appointments to posts for which a fixed probationary pay is prescribed are also made by promotion and in such cases the persons so promoted are not to be treated as probationers for purposes of pay and increments. I am, therefore, to state that overseers of the Public Works Department when promoted as Deputy Engineers should not be treated as probationers for purposes of pay and increments. The initial pay on promotion in such cases should be Fixed under the normal rules in the B.C.S.R. etc., the Overseers thus promoted as Deputy Engineers and who satisfy the conditions mentioned in paragraph 2(a) will be entitled to the benefits provided under G.R.F.D. No. 2761/154S-F dated 28th February, 1961.This decision of the Government clearly shows that the Overseers who are pn noted to the cadre of Deputy Engineers are not treated as probationers for the purpose of granting initial pay of Rs. 200/-. Atleast after the said decision which is conveyed to the Accountant General Gujarat, by letter dated 28lh November, 1961 the State Government was enjoined not to treat promotee Deputy Engineers as Probationers and ought to have granted minimum of the time-scale of Rs. 220/- as fixed by the pay-rules.13. Now the argument of Mr. Mehta is that if there are two initial pay-scales it necessarily means that they are applicable to two classes of persons. Now, so far as recruitment to the cadre of Deputy Engineers is concerned, as I have stated, there are mainly two classes, namely, direct recruits who are to be treated as probationers for two years and promotees. Now, if by virtue of Note-7 the probationary scale of Rs. 200/- is applied to both the recruits then to whom we will apply the minimum payscale of Rs. 220/- atleast considering the definition of the time-scale and the practice that has been followed since number of years. Some persons who are appointed must be given the minimum of the time-scale of Rs. 220/-. Which is the class of such persons? Mr. Jadeja, learned Counsel appearing on behalf of the State is unable to answer this question. This argument of Mr. Jadeja that Note 7 applies to both, namely, probationer as well as promotee, does not stand to any logical reasons. 'Probationer' is not only defined in Clause 47 of the B.C.S.R. but it is well understood in Service Jurisprudence. A probationer is a person who is acquiring knowledge of the post on trial basis. He has no experience on a particular post. His entry is new to the cadre whereas a promotee has experience of atleast the lower cadre in the department. He being found suitable on the touch-stone of selection or seniority-cum-merit and knowledge is inducted to a higher cadre. He is entrusted directly with his duties and responsibilities of the higher cadre. He has full powers and discharges all his functions and, therefore, he is entitled to something higher than what a probationer gets. When the rule making authority prescribes the minimum of the pay-scale it means that a person who is discharging duties and liabilities of the post is entitled to atleast minimum of the time-scale; on what parity of reasons one will deny the minimum of the time-scale to a person who is promoted on his merits according to the service rules of promotion in existence and who discharges all the duties and responsibilities of the post? In my opinion neither it stands to reason nor to law to deny the minimum of the pay-scale to a person who assumes higher responsibilities and does duties of the post from the day he joins the higher cadre. If one equates a promotee with a direct recruit under training where two initial grades are prescribed he will be charged with discrimination inasmuch as he is treating unequals as equals. I have not to go to that extent in deciding the question before me.14. Rule 9(16) of the B.C.S.R defines the duty of the probationer which is reproduced below:9(16) : Duty includes-(a) Service as a probationer or apprentice (excluding an apprentice appointed on or after 15th July 1940), provided that such service shall not be regarded as duty for leave unless it be followed by confirmation.Note (1)-A Government servant appointed directly to a post to which a fixed probationary pay is prescribed during the period of probation, is not permitted to earn increments during the period of probation. For this purpose, the clause "a Government servant appointed to a post" includes -(1) a Government servant who holds substantively a permanent post in a cadre and is appointed by selection in open competition to the above post, and
(2) a Government servant who is so appointed but is granted a higher starting pay in the time-scale attached to the post.Now it is clear from this that even a Government servant, if he applies for direct selection, may be appointed to the higher post and in such circumstances he will be a probationer even though be held substantively permanent post in the lower cadre. This means that a probationer may be a person who is a direct recruit, probationer may be a Government servant holding permanent post in the lower cadre but appointed as direct recruit. Merely because he is a Government servant he cannot be given benefit of minimum time-scale. He cannot thereby avoid lesser scale of pay provided for the probationer. In my opinion this, clarifies the position that a probationer may include existing Government servant if he enters higher cadre by direct selection. That is how the State Government has fallen into an error by applying the provision of Note 7 to the petitioners and considering them as probationers and not granting the minimum of time-scale.15. It is not the case of the State Government that the appointment of the petitioners and similarly situated other Deputy Engineers were promoted as probationers to the said cadre. The petitioners were never promoted as probationers. They have not entered the higher cadre by direct selection. They were promoted in accordance with the service rules and were a class which is entitled to atleast minimum of the time-scale, provided for the said post.16. It is a clear position of rule of interpretation that the main rules always declare the rights and liabilities of the persons subjected to and generally notes are either in the nature of clarification or exception etc. Now, if the probationer is appointed to a permanent post by compliance of Rule 41(b) he is entitled for the minimum of pay-scale which is Rs. 220/- but Note 7, in my opinion, has carved out some exception that a Government servant appointed to a post to which a fixed probationary pay below the minimum of the time-scale is prescribed, such probationary pay should be deemed to be at the first stage of the time-scale of the post and minimum of time-scale itself is a second stage refers to a Government servant who is subjected to probationary pay.17. If we interpret Note 7 as applied to both direct recruits and promotees we will be re-writing the provisions of Rule 41(b) and other substantive rules. The note cannot be interpreted in such a manner. It only applies to a Government servant or direct recruit who has been appointed to the post on probation and. therefore, not entitled to the regular time-scale. Unless we read Note as an exception carved out, as applicable to the probationer, it will become a substantive provision contrary to the other provisions of Rule 41 and therefore, it is necessary to reconcile both the provisions and according to the well-recognised rule of construction this Note must give way to the substantive provision of the rule. This is the only way in which both the provisions can be reconciled, namely, that the main part of the rule applies to the Government servants promoted from the lower cadre to higher cadre who are entitled to the minimum of the time-scale as provided in Rule 41 and Government servants who are selected for that post by open competition and who are treated as probationers will be governed by the provisions of Note 7 of Rule 41.18. Mr. Mehta, learned Advocate appearing on behalf of the petitioners, has relied upon a binding decision of this Court in the case ofIswarlal Maganlal Joshi v. State of Gujaratdelivered by J. B. Mehta, J., as he then was, on July 30, 1983, which has been produced at Annexure-F to the petition. The case pertains to the cadre of Mamlatdars who challenged two orders of the State Government which were produced at Annexure-B and F to that petition. Ultimately the controversy raised there was settled by the decision of this Court. The issue raised was whether two probationary stages can be applied to the cadre of Mamlatdar who are not direct recruits and who are promotees to that cadre. It was not disputed there that the petitioner was promoted to the cadre of Mamlatdar on April 22, 1962. He was never a probationer Mamlatdar, he was a promotee throughout. Though he was promoted he was paid the scale of probationer initially and not the minimum of the regular time-scale of that cadre. The controversy was whether the probationary stage of scale should be applied to such direct recruits or the promotee also. The Court observed as under:Mr. Desai rightly pointed out the Government resolution No. 19 of 1959 laying down recruitment rules for the post of Mamlatdar which provides only direct recruit to be on probation for the period for the departmental promotee. Therefore, the State is under complete misconception that the petitioner was even a probationer or that any probationary stage could apply in his case. Therefore, the State has wrongly applied two probationary stages in the post of Mamlatdar while refixing his pay in the revised scale.19. In short the ratio of the aforesaid decision is that probationary scales can only be applied to the direct recruits who were on probation and not to the promotees who were promoted from the lower cadre. On reaching that decision the High Court has directed the State Government to refix the salary of the petitioner accordingly. It appears that this decision of the High Court has been accepted by the Government by its resolution dated October 12, 1972 in spite of the resolution dated 29-7-1964 which is also impugned in the present case. The Government has stated that the Government has since decided to acquiesce inthe said decisionof the High Court and after carefully considering the question in the light of the general orders in this behalf, has decided to continue the benefit of the orders contained in G.R.P & S.D. No. 3868/46 dated 25-8-59 upto 31-5-67 (i.e. till the pay scales of Mamlatdars and Deputy Collectors rationalised under the G.C.S. Pay Rules, 1969 with effect, from 1-6-67). In short, the Government had accepted the decision of the High Court that the Mamlatdar, being not probationer, cannot be given lesser pay-scale than the minimum time-scale of that post. It is, therefore, submitted by Mr. Mehta that the main resolution dated 27-9-1964 is applicable to all the cadres namely, cadre of the petitioners as well as the cadre of Mamlatdars and since the Government has accepted the decision of the High Court that such probationary pay-scale is not applicable to the promotee officer and the promotee officer is entitled to the minimum of the time-scale and the resolution in the case of Mamlatdar has been impliedly revoked, how can the said resolution be made applicable or can be acted upon by the State Government in the case of the cadre of the petitioners. Such a discriminatory treatment, on the face of it, is violative ofArticles 14and16of the Constitution of India. I think, the contention of Mr. Mehta cannot be disputed. If the Government resolution dated 29-7-1964 is not made applicable to the cadre of Mamlatdars, then a similar resolution dated 27th November, 1964, produced at Annexure-D cannot be made applicable to the cadre of Deputy Engineer because both the resolutions are in pursuance of the policy decision having been taken in the Government Resolution, Finance Department, dated 5-3-1964 which has been tendered today by Mr. Jadeja. Important portion of the said resolution being necessary is reproduced below:Both these levels of probationary pay should be regarded as the stages of the time-scale for the persons promoted from a lower post.Para 4 of the Government resolution directs to review the present arrangement in respect of several posts and further states that these orders will take effect from 1st January, 1964. In other words the clarification which was made in the letter dated 28th November, 1961 Annexure G, is given go-by and a different policy decision is taken to apply the probationary scales to the promotees also. Being aggrieved by this decision of the Government the Revenue cadre promotee Mamlatdar filed the petition and the decision thereof has been accepted by the State Government and benefits of minimum time-scale has been given to the cadre of Mamlatdar contrary to the policy decision taken by them in the aforesaid resolution.20. Even this decision of the State Government by resolution of 1964 has been changed by subsequent Government resolution dated 3rd May, 1976, Annexure-N to the petition. Once the Government accepts the position that the promotee Deputy Engineers are entitled to the minimum of the pay-scales and refixed and revised notionally the pay and allowances and agreed to the refixation, it is not possible for the Government to contend that full effect of the said resolution cannot be given to the promotees because Rule 41 along with Note 7 are statutory rules and if the Government adopts the interpretation of Note 7 for the purpose of refixation in granting notional salary right from 27-11-1964 the said rule and note cannot be interpreted otherwise for the purpose of granting arrears of salary. It is well settled position that when statutory rules fix the condition of service the State Government by its executive power cannot make any amendment and cannot deny the benefits flowing from the statutory rules. If the construction which has been advanced by the petitioners of Rule 41 read with Note 7 is accepted by the Government then in my opinion necessary consequence must follow.21. Mr. Jadeja, appearing for the State Government, not in a position to support the construction of Note 7 to the effect that the said Note applies also to the promotees. This issue involves the interpretation of Rule 41, Note 7 and several Government resolutions. The case was adjourned from time to time to enable Mr. Jadeja to call the proper officer of the Government for assistance. Mr. Jeswani, Joint Secretary to Government, Finance Department had remained present to assist the Court. Mr. Jeswani also is of the view that Note 7 would apply only to the probationers, reading the same in context with the other rules and Government Circulars.21.1 In view of the aforesaid discussion and the meaning which we have to assign to the word 'probationer' and in view of the decision of this Court asreferred to aboveI am in full agreement with the view taken by J.B. Mehta, J. that the probationary pay-scale is applicable only to the probationers and not to the promotees from the lower cadre. Therefore, the petition shall have to be allowed.22. It is true that the petition has been filed by the Association and some members of the Association who are actually affected it has been mentioned that petition is filed for and on behalf of the members of the association. The question involved in the petition is of the interpretation of Rule 41 read with Note 7. It is, therefore, expected that if the Government accepts this decision the Government will not deny the benefit of this judgment to the other members of the Association who are not specifically joined as petitioners in the petition.23. I, therefore, direct the State Government to refix the initial pay of the petitioners at Rs. 220/- instead of Rs. 200/- in the pay-scale of Rs. 200-650 and when the same was revised at Rs. 300/- instead of 275/- and thereafter on further revision at Rs. 370/- instead of Rs. 345/- and pay arrears of refixation. It is further directed that the refixation shall be made with effect from 1-5-1960 and effect will be given to the periodical revisions that have been made on acceptance of the recommendations of the Pay Commissions. The respondents are also directed to pay arrears if any on such refixation to the petitioners. The respondents will carry out the orders of this Court within six months from the date of receipt of writ of this Court. Rule is made absolute with no order as to costs. |
02be0610-028c-5210-a0d9-b88ec9f259c8 | court_cases | Bangalore District CourtRajashekar vs K.M.Rajashekara Murthy on 15 July, 2017IN THE COURT OF III ADDL.SENIOR CIVIL JUDGE AND MOTOR
ACCIDENT CLAIMS TRIBUNAL, BANGALORE.(SCCH-18)
Dated this 15th day of July 2017.
Present: SRI.VEERANNA SOMASEKHARA
B.Com, LL.B.,
III ADDL. SENIOR CIVIL JUDGE &
MEMBER OF MACT
COURT OF SMALL CAUSES,
BANGALORE.
E.C.A.No.85/2015
PETITIONER:
Rajashekar,
S/o Ramakrishnappa,
Aged about 25 years,
R/at Chikkadasarahalli,
Sira Taluk,
Tumkur District.
(By Pleader Sri.JD)
/Vs/
RESPONDENTS:
1. K.M.Rajashekara Murthy,
S/o late K.T. Mahalingappa,
Aged about 44 years,
Prop: Sri. Granites,
No.401/2, F.8, Swastik Manandi Arcade,
S.C.Road, Seshadripuram,
Bengaluru-560 020.
(By pleader Sri.KSM)
2. The Oriental Insurance Company Ltd.,
Regional Office,
No.44/45, Leo Shopping Complex,
Residency Road,
Bengaluru-560 025
(By pleader Sri.BHS)
JUDGMENTThe petitioner has filed this claim petition against the
respondents U/s.22 of workmenCompensation Actfor seeking
compensation of Rs.15,00,000/- for the injuries sustained by him
in an accident that was occurred during the course of
employment.2. The brief contents of the petition are as under:The contention of the petitioner is that, he was working as
a driver in a Tipper Lorry bearing Reg.No.KA-04-B-4853, which
is belonging to the respondent No.1. Further the allegation of
the petitioner is that, on 1-12-2014, at about 2.15 P.M., he was
driving the above said lorry towards Rampura in Chitradurga
district and when the said vehicle reached after 2 Kms. from
Malliravigrama village, then he has lost control over the vehicle
and dashed to another tipper lorry bearing Reg.No.KA-34-3609.
Due to the said impact, he has sustained simple as well as
grievous injuries. Thereafter, the public gathered at the spot
have shifted the injured to Govt. Hospital, Rampura, wherein he
has taken first aid and thereafter, he was shifted to Bhagwan
Mahaveer Jain hospital, Bengaluru, wherein, he has taken
treatment as an inpatient and underwent surgery and later, he
was shifted to Sridevi hospital, Tumkur, wherein he has taken
treatment as an inpatient for more than 30 days and underwent
surgery. After discharge from the hospital and as per the
advice of the doctor, he has taken follow-up treatment as an
outpatient and till today, he is taking treatment as an outpatient.
The contention of the petitioner is that, he has spent more than
Rs.4,00,000/- towards medical expenses and other incidental
charges.3. The contention of the petitioner is that, he was hale
and healthy at the time of accident, aged about 25 years,
working as a driver in Lorry bearing registration
No.KA-04-B-4853, which is belonging to the respondent No.1 and
drawing salary of Rs.12,000/-p.m. and batta of Rs.200/- per day.
Further due to the accidental injuries, he has suffered
permanent disablement and he is not in a position to work as he
was doing earlier to the accident and as such, he has lost the
earning capacity.4. The contention of the petitioner is that, the
accident has occurred during the course of employment under
the respondent No.1 as he is the owner of the lorry and the
respondent No.2 is the insurer of the said vehicle and the policy
was in force as on the date of accident. Hence, both the
respondents are jointly and severally liable to pay compensation
to the petitioner. Contending the above facts, he prays to grant
for compensation with interest and cost.5. In response to the petition notice, the respondent
No.1 and 2 have appeared before the court through their
respective counsel and filed the objection statement.6. The brief contents of objection statement of
respondent No.1 are as under:The claim petition filed by the petitioner is not
maintainable either in law or on facts. Further, the respondent
no.1 has admitted that, he is the owner of the lorry bearing
Reg.No.KA-04-B-4853 and the petitioner was working as a lorry
driver under him and there is relationship of employer and
employee between him and the petitioner as contended in the
petition. Further, the respondent No.1 has admitted the
occurrence of accident as narrated in the petition. Further he
has admitted the injuries sustained by the petitioner and
medical expenses incurred for treatment. But the contention of
the respondent No.1 is that, he has paid the entire medical
expenses and other expenses to the hospital towards treatment
of petitioner. Further he has admitted the disablement
suffered by the petitioner and also admitted the age, occupation
and income of the petitioner as alleged in the petition. Further,
the contention of the respondent no.1 is that, the alleged
vehicle was insured with the respondent No.2 and the policy was
in force as on the date of accident and he has spent an amount
of Rs.7,50,000/- towards medical expenses to the petitioner and
as such, this respondent is not liable to pay compensation to the
petitioner. On the other hand, the respondent No.1 prays to
award an amount of Rs.7,50,000/- in his favour towards medical
expenses as he has paid the entire medical expenses of the
petitioner to the hospital and in this regard, he has produced the
medical bills and vouchers for having received the amount by the
petitioner and his wife and father. Contending the above facts,
he prays to pass necessary orders.7. The brief contents of objection statement of
respondent No.2 are as under:The claim petition filed by the petitioner is not
maintainable either in law or on facts. Further respondent No.2
has denied the relationship of employer and employee between
the 1st respondent and the petitioner and contended that, the
accident has not occurred during the course of employment.
Further the respondent No.2 has contended that, the issuance
of policy to the alleged Lorry bearing Reg. No.KA-04-B-4853 is
under verification and if the petitioner has proved the issuance
of policy, then the liability if any is subject to the terms and
conditions mentioned in the policy. Further the respondent
No.2 has denied the age, occupation and income of the petitioner
and injuries sustained by him and medical expenses incurred by
him and disablement suffered by him. Further he has
contended that, at the time of accident, the petitioner was not
an employee under the respondent No.1 and there was no
relationship of employee and employer between the petitioner
and the respondent No.1. Further he contended that, the
alleged accident has not at all occurred during the course of
employment and as such, the respondent No.2 is not liable to
indemnifying the respondent No.1. Contending the above facts,
the respondent No.2 prays to dismiss the claim petition as
against him with cost.8. On going through the above pleadings, this court has
framed the following issues.«ªÁzÁA±ÀUÀ¼ÀÄ1. CfðzÁgÀ£ÀÄ, CfðAiÀÄ 4£Éà RArPÉAiÀÄ°è
PÁtô¹zÀAvÉ, vÁ£ÀÄ ¢. 1-12-2014 gÀAzÀÄ ¨É¼ÀUÉÎ 2.15
UÀAmÉ ¸ÀªÀÄAiÀÄzÀ°è 1£Éà JzÀÄgÀÄzÁgÀ£À ¯ÁjAiÀÄ°è
ZÁ®PÀ£ÉAzÀÄ PÉ®¸À ¤ªÀð»¸ÀÄvÁÛ C¥À¥sÁvÀPÉÌ M¼ÀUÁV
wêÀæ ¸ÀégÀÆ¥ÀzÀ UÁAiÀÄUÉÆArgÀĪɣÉAzÀÄ ¸Á©ÃvÀÄ
¥Àr¸ÀĪÀ£ÉÃ?2. CfðzÁgÀ£ÀÄ CfðAiÀÄ°è PÉÆÃjzÀAvÉ ¥ÀjºÁgÀ
¥ÀqÉAiÀÄ®Ä CºÀð£ÉÃ?3. DzÉñÀªÉãÀÄ?9. In order to prove the case, the petitioner has
examined himself as PW-1 and got marked the documents as
Ex-P-1 to 9. In support of his evidence, he has examined the
MRO of Sridevi hospital, Tumkur and examined the MRT of
Mahaveer Jain hospital as PW-2 and 3 and examined
Dr.S.Ramachandra and Dr.Shivalingaiah as PW-4 and 5 and got
marked the documents as Ex.P.10 to 20 respectively.10. To disprove the case of the petitioner and to prove
the defence, the respondent No.1 has examined himself as RW-1
and the respondent No.2-Insurance company has examined its
official as RW-2 and got marked the documents as
Ex-R-1 to R-14 respectively.11. Heard the arguments and perused the records.12. My findings to the aforesaid issues are as follows:Issue No.1: In the affirmative
Issue No.2 : In the partly affirmative
Issue No.3: As per final order
for the following:R E A S O N S13. Issue No.1:- During the course of arguments, the
learned counsel for the petitioner argued by reiterating the
contents of petition and also evidence put forth by PW.1 to 5.
Further he argued that, to prove the relationship of employer
and employee between the respondent No.1 and the petitioner,
the petitioner has produced the copy of police investigation
papers and other documents and on perusal of the contents of
those documents, it reveals that, at the time of accident, the
petitioner was working as a driver of the lorry and the aid
vehicle is belonging to the respondent No.1 and the accident has
occurred during the course of employment and due to which, the
petitioner has sustained injuries. Further he argued that, the
defence of the respondent No.2 is that, at the time of accident,
the petitioner was not an employee under the respondent No.1
and as such, the claim petition filed by the petitioner is not
maintainable one. To prove the said fact, the respondent No.2
has not produced any supportive documents. On the other hand,
on perusal of the contents of written statement filed by the
respondent No.1 and on perusal of evidence of RW-1, itself
shows that, at the time of accident, the petitioner was working
as a driver of the lorry under the respondent No.1. Further he
argued that, to prove the disablement suffered by the
petitioner, he has examined the orthopedic surgeon and general
surgeon as PW-4 and 5 and on perusal of the evidence of PW-4 &
5, it reveals that, the petitioner has suffered disability to the
extent of 53% to the whole body and as such, the petitioner has
suffered functional disability to the extent of 100%. Further
he argued that, the petitioner has proved his case as contended
in the petition by producing proper documents. Accordingly, he
prays to allow the petition.14. Per contra, the learned counsel for the respondent
No.1 has filed the written arguments by reiterating the contents
of objection statement filed by the respondent No.1 and also
evidence put forth by RW-1. Further he contended that, the
respondent No.1 is the owner of the alleged lorry bearing
Reg.No.KA-04-B-4853 and at the time of accident, the
petitioner was working as a driver in the above said lorry and the
said lorry was met with an accident and as such, the petitioner
has sustained grievous injuries. Further he contended that,
immediately after the accident, his staff have shifted the
injured to hospital for treatment and during the course of
treatment, he has spent more than Rs.7,50,000/- towards
medical expenses of the petitioner and the same was paid by him
and to that effect, he has obtained the vouchers form the wife
and father of the petitioner. Further he contended that, he has
filed the claim petition before the respondent No.2 for claiming
the medical expenses incurred by him to the petitioner, but the
respondent No.2 has not paid the amount. Further he contended
that, the medical expenses incurred by him may be awarded in
his favour and prays to pass necessary orders.15. Per contra, the learned counsel for the respondent
No.2 argued by reiterating the contents of objection statement
filed by the respondent No.2 and also evidence put forth by
RW-2. Further he argued that, on perusal of the evidence of
PW-1 coupled with contents of copy of police investigation
papers produced by the petitioner itself shows that, the alleged
accident has occurred due to sole negligence on the part of the
petitioner and as such, the claim petition filed by the petitioner
is liable to be dismissed. Further he argued that, to prove the
disablement suffered by the petitioner, he has examined the
doctors as PW-4 and 5, but they are not the treated doctors
and as such, the evidence of PW-4 and 5 is not acceptable one.
Further he argued that, the petitioner has failed to prove his
occupation and income as contended in the petition by producing
proper documents and also he has failed to prove his case as
contended in the petition. Further he argued that, the
contention of the respondent No.1 is that, he has incurred an
amount of Rs.7,50,000/- towards medical expenses of
petitioner and in support of his contention, he has produced
some medical bills and vouchers, but the petitioner has denied
the genuineness of the said bills and as such, the respondent
No.2 is not liable to pay the alleged medical expenses incurred
by the petitioner and the respondent No.1. Contending the above
facts, he prays to dismiss the claim petition as against the
respondent No.2 with cost.16. On rival contention urged by the counsel for the
petitioner and counsels for respondent No.1 and 2, I intend to
discuss the case on merits.On perusal of records, it reveals that, to prove the case,
the petitioner has examined himself as P.w.1 and he has stated in
his evidence by reiterating the contents of petition. Further in
support of his evidence, he has produced the documents and the
same are marked as Ex.P.1 to 9.17. Thereafter, the counsels for the respondent
No.1 & 2 have cross-examined the P.W.1 at length. In the cross-
examination, the Pw-1 has clearly stated at Page No. 15 and 16
that:"1£Éà JzÀÄgÀÄzÁgÀgÀ ªÀiÁ°ÃPÀvÀézÀ ¯ÁjAiÀÄ°è £Á£ÀÄ
SÁAiÀÄA ZÁ®PÀ£AÉ zÀÄ PÉ®¸À ¤ªÀð»¸ÀzÃÉ CªÀjUÉ ZÁ®PÀgÀÄ
CªÀ±ÀåPÀvÉ EzÁÝUÀ, DUÁUÉÎ £À£ÀߣÀÄß PÀgɸÀÄwÛzÀÝgÀÄ JAzÀgÉ
¸ÀjAiÀÄ®è."On perusal of the above evidence, it reveals that, the
respondent No.1 and 2 have admitted the relationship of
employer and employee between the respondent No.1 and the
petitioner. On the other hand, on perusal of the evidence of
PW1, it reveals that, the defence of the respondent No.2 is that,
the petitioner is not a permanent employee under the respondent
No.1 and he has working as a driver of the lorry under the
respondent No.1 on temporary basis.18. To prove the said fact, the respondent No.2 has
examined its official as RW-2, who has stated in his evidence by
reiterating the contents of objection statement filed by the
respondent No.2. Further in support of his evidence, he has
produced the documents and the same are marked as
Ex-R-13 and 14.19. Thereafter, the counsel for the respondent
No.1 and the counsel for the petitioner have cross-examined the
R.W.2 at length. On perusal of the evidence of RW-2, it reveals
that, he is not an eyewitness to the accident and as such, the
evidence of RW-2 is not much helpful to disbelieve the version
of the petitioner. Further on perusal of the entire evidence of
PW-1, it shows that, though the counsel for the respondent
No.1 and 2 have cross-examined the PW-1 at length, but nothing
has been elicited from him to disbelieve his version regarding
the relationship of employee and employer between the
petitioner and the respondent No.1 and also occurrence of
alleged accident as contended in the petition.20. To prove the contention of the petitioner is that, at
the time of accident, he was working as a driver of the lorry and
he was driving the lorry bearing registration No.KA-04-B-4853,
he has relied upon the copy of FIR with complaint and charge
sheet and the same are marked as Ex.P.1 & 5. On perusal of
Ex.P.1 i.e. copy of FIR with complaint, it reveals that, one
Krishnamurthy has filed the complaint before the Rampura police
regarding the accident and after receipt of the said complaint,
the concerned police have registered a case against the
petitioner, who is the driver of the lorry and after completion of
investigation, the concerned police have filed the charge sheet
as against the petitioner.21. Further on perusal of Ex.P.4 i.e. copy of wound
certificate, it shows that, the petitioner has sustained grievous
injuries in the above said accident and the said accident has
occurred during the course of employment.22. On appreciation of evidence of P.W.1 and RW-1 and 2
coupled with documents and for the above reason, I am of the
opinion that, the petitioner has proved that, at the time of
accident, he is working as a driver in a lorry bearing registration
No. KA-04-B-4853 and which is belonging to the respondent No.1
and also proved that, he has sustained grievous injuries in the
above said accident and the said accident has occurred during
the course of employment as alleged in the petition by producing
oral and documentary evidence. For the above reason, I answer
this issue in the affirmative.23. Issue No.2:- The specific contention of the
petitioner is that, he was hale and healthy at the time of
accident, aged about 25 years, working as a driver in Lorry
bearing registration No.KA-04-B-4853 and drawing salary of
Rs.12,000/-p.m and batta of Rs.200/- per day and the accident
has occurred during the course of employment. Further the
contention of the petitioner is that, he has sustained grevious
injuries in the accident and due to the accidental injuries, he has
suffered permanent disablement and he is not in a position to
work as he was doing earlier to the accident and as such, he has
lost the earning capacity.On the other the respondent No.2 has denied the above
contention of the petitioner in toto.24. To prove the occupation and income, the petitioner
has relied upon the copy of FIR with complaint and charge sheet
and the same are marked as Ex.P1 and 5. On perusal of copy of
FIR with complaint, it appears that, at the time of accident, the
petitioner was working as a driver in lorry bearing registration
No.KA-04-B-4853 and which is belonging to the respondent No.1.25. Further on perusal of the evidence of P.W.1, it
appears that, though the counsel for the respondent No.2 has
cross-examined the P.W.1 at length, but nothing has been
elicited from him disbelieve his version regarding his occupation.
Further to prove the income, the petitioner has not produced
any supportive document. On the other hand, on perusal of the
evidence of RW-1 coupled with contents of written statement
filed by the respondent No.1, it shows that, as per the version of
the respondent No.1 he has paying an amount of Rs.350/- per day
as coolie to the petitioner. In support of his version, the RW-1
has not produced any supportive documents. Considering the
above facts and in the absence of positive evidence and the
recent amendment to theEmployee's Compensation Act, I am of
the opinion that, if the income of the petitioner is considered as
Rs.8,000/-p.m., certainly it would meet the ends of justice.26. To prove the age, the petitioner has not produced any
supportive documents. On the other hand, he has relied upon the
document at Ex-R-1 i.e. copy of driving licence produced by the
RW-1. On perusal of Ex.R.1 i.e., driving license standing in the
name of petitioner, wherein the date of birth of the petitioner
is shown as 25-5-1985 and the same is considered as date of
birth of the petitioner, then it is clear that, as on the date of
accident, the petitioner was aged about 29 years. Hence, the
proper factor applicable to the case on hand is 209.92.27. Further on perusal of Ex.P.4 i.e. copy of wound
certificate, it shows that, the petitioner has sustained the
following injuries:1. Swelling present over the upper and middle part of left
of thigh.2. Open wound present over the right leg 5 x 2 cm, below
knee and front of the leg.3. Open wound measuring 4 x 3 cm. present over the left
leg.4. Abrasion present over the right shoulder 5 x 4 cm. and
at right wrist (4x3) cm.5. Fracture of middle 1/3rd of left femur.6. Fracture of distal end of right radius comminuted
fracture.7. Fracture of the middle 1/3rd of right femur.28. Further to prove the disablement suffered by the
petitioner, he has examined Dr.S.Ramachandra and
Dr.Shivalingaiah.M as P.W.4 and 5, who have stated in their
evidence regarding the injuries sustained by the petitioner and
also difficulties facing by him. Further the P.W.4 has stated
that, the petitioner has suffered disability to the extent of
76.4% to the right lower limb and 38.2% to the whole body.
Further the PW-5 has stated that, the petitioner has suffered
disability to the extent of 45% to the abdomen part and 15% to
the whole body29. Thereafter, the counsels for the respondent
No.1 and 2 have cross-examined the P.W.4 and 5 at length. On
perusal of the entire evidence of PW-4 and 5, it reveals that,
the P.W.4 and 5 are not the treated doctors. Further on perusal
of evidence of PW-4, it shows that, the fracture of right femur,
fracture of left femur, fracture of pubic rami, fracture of right
distal radius and fracture of both medial malleolus and lateral
malleolus of right bimalleolar and fracture of right ankle were
united. Considering the above facts and for the above reason,
I am of the opinion that, if 1/3rd of the total disability of right
lower limb is considered as disability to the whole body, then it
comes to 25.46%. Further as per the version of the PW-5 i.e.
urologist, the petitioner has suffered disability to the extent of
15% to the whole body and as such, the same is included in the
above mentioned disability, then the total disability suffered by
the petitioner is comes to 40.46% and the same is considered as
40% to the whole body certainly it would meet the ends of
justice.Considering the above facts and looking to the age and
occupation of the petitioner and nature of injuries sustained by
him, I am of the opinion that, if the extent of disability
suffered by the petitioner is considered as 40%, to the whole
body certainly it would meet the ends of justice.30. The income of the petitioner is taken as
Rs.8,000/-p.m. and in view ofSec.4(1)(b)of Employee's
Compensation Act, if 60% of salary is taken for calculating of
loss of earning capacity and the disability is considered as 40%
to the whole body and proper factor 209.92 is applied, then the
loss of earning capacity come to Rs.4,03,046/-.
(Rs.8,000X209.92X40/100X60/100). Considering the above
facts, I deem it just and reasonable to grant for compensation
of Rs.4,03,000/-under the head of loss of earning capacity.31. The specific contention of the petitioner is that, he
has spent more than Rs.4,00,000/-towards medical expenses and
other incidental charges. In support of his contention, he has
relied upon the medical bills and the same are marked as Ex-P-8.
On the other hand, the respondent No.1 has contended in his
written statement and also stated in his evidence that, he has
paid the entire medical expenses of Rs.7,50,000/- incurred to
the petitioner and till today, the petitioner has not repaid the
said amount and as such, if this court grants the compensation
towards medical expenses, then he is entitled for the said entire
medical expenses. In support of his contention, he has relied
upon the medical bills and vouchers and the same are marked as
Ex-P-10 and 12. On the other hand, the respondent No.2 has
disputed the genuineness of the said bills produced by the
petitioner and the respondent No.1 and to that effect, the
counsel for the respondent No.2 has cross-examined the P.W.1
at length, but nothing has been elicited from him to disbelieve
those bills. But on perusal of the evidence of PW-1, it reveals
that, the PW-1 has denied the signature appeared in the Ex-R-12
i.e. vouchers produced by the respondent No.1 and contended
that, at no point of time, his wife and father have received the
amount from the respondent No.1. Considering the above facts,
I am of the opinion that, when the petitioner has not admitted
that, he has received the amount from the respondent No.1, then
it was the duty of the respondent No.1 to examine the wife or
father of the petitioner to know the genuineness of the said
vouchers. But the respondent No.1 did not do so. Further as pr
the version of the respondent No.1, if at all he has paid the
amount appeared in Ex-R-12-vouchers to the wife and father of
the petitioner, then, it was the duty of the respondent No.1 to
recover the said amount from them in accordance with law. On
the other hand, on perusal of Ex-P-10 i.e. receipts and medical
bills, produced by the respondent No.1, it reveals that, those
bills are the original bills. Considering the above facts, I am of
the opinion that, when the original bills are in possession of the
respondent No.1, then the amount appeared in the said bills are
paid by the respondent No.1.32. Further, on perusal of Ex.8. i.e. medical bills
produced by the petitioner, it shows that, those bills are also
original bills. Considering the above facts and for the above
reason, I am of the opinion that, the petitioner and the
respondent No.1 have incurred the medical expenses of
Rs.3,77,594/- appeared in Ex-P-8 and Ex-R-10. Considering the
above facts and looking to the nature of injuries and on perusal
of the evidence of P.W.1 coupled with medical bills and as perSec.4 (2A)of Employee's Compensation Act, I am of the opinion
that, the petitioner is entitled for the above said amount
towards medical expenses and out of that, the respondent No.1
is entitled for the medical bills amount appeared in Ex-R-10 i.e.
Rs.1,15,000/-. Further on perusal of Ex-P-8 and Ex-R-10, it
shows that, the petitioner and the respondent No.1 have spent
an amount of Rs.3,77,594/- towards medical expenses. For the
above reason, I deem it just and reasonable to grant a
compensation of Rs.3,78,000/- under the head of medical
expenses.Considering the above facts and circumstances of the case
and for the above reason, I am of the opinion that the petitioner
is entitled for total compensation of Rs.7,81,000/- under the
following heads along with interest at 12% p.a.:Compensation heads Compensation
amount
1. Towards loss of earning capacity Rs. 403,000/-
2. Towards Medical expenses. Rs. 3,78,000/-
Total Rs. 7,81,000/-33. LIABILITY: On perusal of the contents of petition and
contents of objection statement, it appears that, the respondent
No.1 is the owner and the respondent No.2 is the insurer of the
Lorry bearing registration No.KA-04-B-4853 and the policy was
in force as on the date of accident. Further as stated above
that, there is a relationship of employer and employee between
the respondent No.1 and the petitioner and the accident has
occurred during the course of employment. Considering the
above facts, I am of the opinion that the respondent No.1 and 2
are jointly and severally liable to pay compensation to the
petitioner as calculated above. However, the respondent No.2
being the insurer of the alleged lorry is liable to pay
compensation of Rs.7,81,000/-with interest @ 12% p.a. from
the date of accident till the date of deposit. Hence, I answer
this issue in the partly affirmative.34. Issue No. 3: In view of my findings on issue
No.1 & 2 , I proceed to pass the following;O R D E R
The claim petition filed by the petitioner
U/S.22of Workmen Compensation Act is hereby
partly allowed with cost.The petitioner is entitled for compensation of
Rs.7,81,000/-with interest @12% p.a. from the
date of accident till the date of deposit.The respondents No.1 and 2 are jointly and
severally liable to pay compensation to the
petitioner. However, in view of the policy, the
respondent No.2- insurance company is directed to
deposit the above said compensation amount in this
tribunal within a month from the date of this order.Out of the compensation amount, the
respondent No.1 is entitled for an amount of
Rs.1,15,000/- towards medical expenses incurred
by him to the petitioner.After deposit of amount, looking to the
medical expenses incurred by the petitioner, an
amount of Rs.1,50,000/- shall be kept in FD in the
name of petitioner and Rs.1,15,000/- shall be
released in the name of respondent No.1 and reaming
amount with accrued interest shall be released in the
name of petitioner through account payee cheque on
proper identification.Advocate fee is fixed at Rs.1,000/-.Draw award accordingly.(Dictated to stenographer, typed by her, corrected, signed and
then pronounced by me in open court on this 15th day of July
2017).(VEERANNA SOMESEKHARA)
III ADDL. SENIOR CIVIL JUDGE &
MACT, BENGALURU.ANNEXURE
List of witnesses examined for petitioner's side:PW-1: Sri. Rajashekar
PW-2: Dr.K.M. Siddesh.PW-3: Shivakumara H.R.
PW-4: Dr. Ramachandra
PW-5: Dr. Shivalingaiah M.
List of documents exhibited for petitioner's side:Ex-P1 True copy of FIR with complaint
Ex-P2 True copy of Vehicle seized panchanama
Ex-P3 True copy of MVI report
Ex-P4 True copy of wound certificate
Ex-P5 True copy of Charge sheet
Ex-P6&7 Discharge summaries
Ex-P8 Medical bills
Ex-P9 Medical prescriptions
Ex-P10 Case sheet
Ex-P11 Letter
Ex-P12 Copy of MLC extract
Ex-P13 Outpatient case sheet
Ex-P14 Inpatient case sheet
Ex-P15 X-rays
Ex-P16 Outpatient record
Ex-P17 X-ray
Ex-P18 Outpatient case sheet
Ex-P19 Ultrasound report
Ex-P20 X-rayList of witnesses examined for respondents' side:-RW.1: Rajashekarmurthy
RW.2: Rithesh Kumar
List of documents exhibited for respondents' side:Ex-R1 Driving licence
Ex-R2 RC
Ex-R3 Tax paid book
Ex-R4 FC
Ex-R5 Copy of 'B' Register extract
Ex-R6 to 8 Copy of policy
Ex-R9 Letter
Ex-R10 Medical Bills
Ex-R11 Claim farm
Ex-R12 Vouchers
Ex-R13 Authorization letter
Ex-R14 Copy of policy with terms and conditions
III ADDL. SMALL CAUSES JUDGE
& XXIX ACMM. |
001969e0-a1e2-5696-be51-d4690e41a842 | court_cases | Chattisgarh High CourtState Of Chhattisgarh vs Jasmeet Singh Bhatia @ Sonu Bhatia And ... on 7 March, 2018Author:Ram Prasanna SharmaBench:Ram Prasanna Sharma1
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
ACQA No. 153 of 2012
State Of Chhattisgarh Through The District Magistrate, Distt.
Rajnandgaon C.G.
---- Petitioner
Versus
1. Jasmeet Singh Bhatia @ Sonu Bhatia S/o Amritpal Singh Bhatia
Aged About 27 Years R/o Qrt. No. 22, Anupam Nagar,
Rajnandgaon C.G.
2. Duli Dewangan D/o Pawan Dewangan Aged About 24 Years R/o
House Of Premlal Shrivastava, Heeramoti Line, Rajnandgaon
C.G.
---- Respondent
For Appellant/State Mr. Ramakant Mishra, Dy. AG
For Respondent None
DB.: Hon'ble Mr. Justice Prashant Kumar Mishra &
Hon'ble Mr. Justice Ram Prasanna Sharma
Order On Board By
Ram Prasanna Sharma, J.7/3/20181. Heard.2. This acquittal appeal is directed against the judgment dated
8.6.2012 passed by the First Additional Sessions Judge,
Rajnandgaon in ST No.24/2011, wherein, the said Court
acquitted respondent No.1 Jasmeet Singh Bhatia @ Sonu Bhatia
for commission of offence underSections 304-Band306of IPC2and acquitted respondent No.2 Duli Dewangan for commission
of the offence underSection 306of IPC.3. In the present case, the name of the deceased is Kulvinder Kaur,
who was married to respondent No.1 Jasmeet Singh Bhatia @
Sonu Bhatia on 20.06.2004. It is alleged against respondent
No.1 that after marriage, he demanded dowry of Rs. 5 lakhs
from the parents of the deceased and on failing to fulfill the
demand, he harassed the deceased soon before her death. It is
further alleged against respondent No.2 Duly Dewangan, who is
having illicit relation with respondent No.1 Jasmeet Singh
Bhatia, that she instigated the deceased to commit suicide.4. The matter was reported to the concerned Police Station and
after investigation, the charge sheet was filed. After
completion of trial, the trial Court acquitted the respondents, as
mentioned above.5. Learned counsel for the State submits as under :(i) Ravinder Kaur (PW-9) and Amarjeet (PW-13), who are
mother and father of the deceased respectively, have
categorically stated before the trial Court that the
deceased was subjected to cruelty and was harassed for
non-fulfilling the demand of dowry and therefore, the
finding arrived at by the trial Court is not liable to be
sustained.(ii) The deceased had stated to her relatives regarding ill-treatment by both the respondents but the trial Court has3overlooked the same and passed the order of acquittal in a
very mechanical manner. The other corroborative piece of
evidence was also overlooked by the trial Court and
therefore, the finding of the trial Court is liable to be set-
aside.6. Ravinder Kaur (PW-9) is the mother of the deceased. As per the
version of this witness, after sometime of the marriage,
deceased Kulvinder Kaur came to their house and stated that
her husband (respondent No.1) is demanding Rs. 5 lakhs and has
asked her that she should not return to his house without the
aforesaid money. She further deposed that at that time, they
gave Rs. 1 lakh to respondent No.1 Jasmeet Singh Bhatia and
assured to give rest of the amount later. As per version of this
witness, her daughter called her on telephone and told that her
husband i.e. respondent No.1 Jasmeet Singh Bhatia has eloped
along with respondent No.2 Duly Dewangan. She and her
husband tried to convince the deceased that Jasmeet Singh
Bhatia will return soon, but on the next day, they received
information about the death of their daughter. Amarjeet (PW-13) is the father of the deceased. As per version of this witness,
respondent No.1 demanded Rs. 2 lakhs for business purpose.7. Surendra Singh (PW-2) is the maternal uncle of respondent
No.1. He deposed that no demand of dowry was made at the
time of the marriage. He further deposed that since there is no
custom of 'dowry' prevailing in their community and the
financial condition of the family of the deceased was also not4good, they have made arrangements of the marriage and borne
all its expenses and thus, prevented the other side to spend
money in the said ceremony.8. From the flow of evidence adduced by the prosecution, it is not
established that any demand of dowry was made at the time of
marriage.9. Definition of 'dowry' as defined underSection 2of the Dowry
Prohibition Act, 1961 reads as under :"2 Definition of 'dowry'- In this Act, "dowry" means
any property or valuable security given or agreed to be
given either directly or indirectly-(a) by one party to a marriage to the other party to the
marriage; or(b) by the parent of either party to a marriage or by any
other person, to either party to the marriage or to any
other person,
at or before (or any time after the marriage) (in
connection with the marriage of the said parties, but does
not include) dower or mahr in the case of persons to
whom the Muslim Personal Law (Shariat) applies.Explanation II The expression "valuable security' has the
same meaning as inSection 30of the Indian Penal Code."10. A plain reading of the above definition makes it clear that any
amount provided by the parents of a bride to the other party for
business purpose is not included under the definition of 'dowry'.11. From the evidence, it is established that both the respondents5eloped from the house since long back and therefore, there was
no case for them to harass the deceased. Further, no complaint
was made during the lifetime of the deceased for harassment
and no medical report was submitted before the trial Court
regarding physical violence on the deceased.12. The so called 'suicide note' seized in the case reveals that the
deceased held responsible both the respondents for her death
but it cannot be termed as dying declaration as perSection 32of the Indian Evidence Act, 1872. Statements made by mother,
father of the deceased and other persons are based on what
was informed to them by the deceased. Evidence of these
witnesses is hearsay evidence. Hearsay evidence is not received
as relevant evidence.13. Since demand of dowry is not proved and harassment to the
deceased is also not proved, presumption underSection 113-Bof the Indian Evidence Act, 1872 cannot be invoked in the facts
and circumstances of the present case. For establishing offence
underSection 304 (B)of IPC, the prosecution is under obligation
to pass proximity test. It has to be proved that there exist a
proximity and live link between cruelty and death, but that is
not the case here.14. Both the respondents have also been charged underSection
306of IPC. For commission of offence underSection 306of IPC,
ingredients ofSection 107of IPC i.e. abetment are to be
established.6Ingredients ofSection 107of the IPC are that
instigating a person to do a thing and "instigate" denotes
incitement or urging to do some drastic or inadvisable action
or to stimulate or incite to commit an act.15. There should be a clear mens rea to commit the offence underSection 306of IPC and there should be a direct or active act by
the accused which lead the deceased to commit suicide.
Intentionally aiding a person to do a thing also includes in
abetment, but from the record it cannot be inferred that any of
the respondents instigated or intentionally aided the deceased
to commit suicide. Their very presence in the house is also not
established.16. In view of the above, we are of the view that the arguments
advanced by learned Dy. AG for the State, is not sustainable.
The finding arrived at by the trial Court is well within its
jurisdiction and is based on proper appreciation of the evidence.17. In the result, the acquittal appeal is liable to be and is hereby
dismissed.Sd/- Sd/-
Judge Judge
(Prashant Kumar Mishra) (Ram Prasanna Sharma)
Shyna7 |
81dda718-dea9-586a-9b7b-32dade5278f6 | court_cases | Karnataka High CourtMohammad Iqbal vs Bhimaiah And Ors. on 15 October, 1984Equivalent citations: [1987]61COMPCAS435(KAR), ILR1984KAR1358, AIR 1985 KARNATAKA 171, ILR (1984) 2 KANT 1358, (1985) 2 ACC 289, (1985) ACJ 546JUDGMENTSabhahit J.1. This appeal by the owner of the vehicle in question is directed against the judgment the award dated December, 6, 1983, made on I.A.I. given by the claimants ordering that Rs. 15,000 shall be paid over by the second respondent, the owner of the vehicle, as compensation undersection 92Aof the Motor Vehicles Act, 1939, to the claimants.2. Learned counsel appearing for the appellant submitted that the amount of Rs. 15,000 awarded undersection 92Ashould have been directed to be paid by the insurer, third respondent, in this appeal, as the vehicle was insured on the date of the accident, and the award made was within the liability limit of the insurer.3. On June 6, 1983, deceased, Shrimanth, aged about 6 years, was involved in a motor accident that occurred at 4.00 p.m. on Gulbarga-Sedam Road in front of the Government General Hospital. The bus - HKMS Service No. MYN 3510 - caused the accident, resulting in the death of the young boy, namely, Shrimanth. His father made an application claiming compensation of Rs. 1,00,000 before the Motor Accidents Claims Tribunal Gulbarga, in MVC No. 51 of 1983 on its file. Therein, he gave an application - I. A. I - undersection 92A, praying that Rs. 15,000 should be held awarded expeditiously and further enquiry should be held with regard to the claim based on actionable negligence. Accordingly, I. A. I. was taken up for consideration and the Tribunal being satisfied that the boy was killed in the motor accident at the time and on the date mentioned in the petition, awarded Rs. 15,000 as compensation payable undersection 92Aagainst the owner of the vehicle in question.4. Learned counsel appearing for the appellant submitted, as stated above, that the insurance company should have been made liable to pay the compensation, whereas learned counsel for the insurance company submitted that as contemplated undersection 92A, the owner alone should be made liable and what was done by the Tribunal was just and proper.5. The short point of law, therefore, that arises for our consideration in this appeal is :"Whethersection 92Acontemplates that the liability should be saddled with only against the owner ? Or it should be fixed as contemplated undersection 110Bof the Motor Vehicles Act ?6.Section 92Aand other connected sections were incorporated in theMotor Vehicles Act, 1939, byAmending Act47 of 1982, which received the assent of the President on August 31, 1982.The Amending Actis called "The Motor Vehicles (Amendment) Act, 1982. Sub-section (2) ofsection 1of that Act speaks of the application of the provisions. It states :"(2) It shall come into force on such date as the Central Government may, by notification in the official Gazette, appoint and different dates may be appointed for different provisions of this Act."7. And it is notified that, "sections 2to7andsections 10to27of this Act shall come into force from 1st day of October, 1982", vide Notification No. S. O. 669 (E) dated September 15, 1982, Gazette of India, Extraordinary No. 412, part IIsection 3(II).8. It is further notified that "sections 8and9of the said Act shall come into force from 10th day of December, 1982, vide Notification No. S.O. 869(E), dated December 31, 1982, Gazette of India, Extraordinary, No. 564, part II,section 3(ii).9.Section 92Ais sought to be incorporated into the main Act bysection 11of the Amending Act, which as stated above, has come into force on the 1st day of October, 1982.10.Section 11of the Amending Act states :"Insertion of new Chapter VIIA. - After Chapter VII of the Principal Act, the following Chapter shall be inserted, namely :-CHAPTER VIIA
LIABILITY WITHOUT FAULT IN CERTAIN CASES
92A. Liability to pay compensation in certain cases of the principle of no fault. - (1) Where the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of shall death or disablement in accordance with the provisions of this section.(2) The amount of compensation which shall be payable under subsection (1) in respect of the death of any person shall be a fixed sum of fifteen thousand rupees and the amount of compensation payable under that sub-section in respect of the permanent disablement of any person shall be a fixed sum of seven thousand five hundred rupees.(3) In any claim for compensation under sub-section (1), the claimant shall not be required to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrongful act, neglect or default of the owners of the vehicle or vehicles concerned or of any other person.(4) A claim for compensation under sub-section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of those death or permanent disablement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement."11. Then comes the provision as to other right to claim compensation for death or permanent disability.12. It is contained in section 92B. That section states :"(1) The right to claim compensation under section 92A in respect of death or permanent disablement of any person shall be in addition to any other right (hereafter in this section referred to as the right on the principle of fault) to claim compensation in respect thereof under any other provision of this Act or of any other law for the time being in force."13. Sub-section (2) of section 92B states :"(2) A claim for compensation under section 92A in respect of death or permanent disablement of any person shall be disposed of as expeditiously as possible and where compensation is claimed in respect of such death or permanent disablement under section 92A and also in pursuance of any right on the principle of fault, the claim for compensation under section 92A shall be disposed of as aforesaid in the first place."14. Sub-section (3) of section 92B states that compensation awarded under section 92A shall be final and if anything more is given on fault liability, it should be added.15. Section 92C speaks of compensation to be awarded for permanent disablement of a person.16. Section 92D states that the provisions of the Act shall also apply in relation to any claim for compensation in respect of death or permanent disablement of any person under theWorkmen's Compensation Act, 1923.17. Section 92E speaks of the overriding effect.18.The Amending Actincorporates into the main Act section 93, clause (ba), wherein it is stated thus :"(ba) 'liability' wherever used in relation to the death of, or bodily injury to, any person includes liability in respect thereof under section 92A."19. Then comessection 13of the Amending Act, which, among other things, amends the original section 95, sub-section (2), with regard to the liability of the insurance company.20. Sections 109A, 109B and 109C are introduced by amending section No. 14. The special provisions as to compensation in cases of hit and run motor accidents, are contained in the newly introduced sections 109B and 109C.Section 15of the Amending Act amends the originalsection 110of the Motor Vehicles Act by adding an Explanation;"Explanation. - For the rem oval of doubts, it is hereby declared that the expression 'claims for compensation in respect of accidents involving the death of, or bodily injury to, persons arising out of the use of motor vehicles' includes claims for compensation under section 92A."21.Section 16of the Amending Act amends section 110A of the original Act adding the following proviso :"Provided that where any claim for compensation under section 92A is made in such application, the application shall contain a separate statement to that effect immediately before the signature of the applicant."22. In sub-section (3) of section 110A, for the words "compensation under this section", the words "such compensation" shall be substituted.23.Section 17of the Amending Act amends section 110AA. It states :"In section 110AA of the principal Act, for the words 'may claim such compensation', the words, figures and letters 'may, without prejudice to the provisions of Chapter VIIA, claim such compensation' shall be substituted.24. Then comes the amendment of sub-section (2) of section 110B of the main Act bysection 18of the Amending Act. It reads :"In section 110B of the principal Act, -(a) for the words "hold an inquiry into the claim and may make an award", the words "hold an inquiry into the claim or, as the case may be, each of the claims and, subject to the provisions of section 109B, may make an award" shall be substituted.25. After the amendment, section 110B (a) reads :"On receipt of an application for compensation made under section 110A, the claims Tribunal shall, after giving the parties an opportunity of being heard, hold an enquiry into the claim, or, as the case may be, each of the claims and, subject to the provisions of section 109B, may make an award determining the amount of compensation which appears to it just and specifying the person or persons to whom compensation shall be paid; and in making the award, the Claims Tribunal shall specify the amount which shall be paid by the insurer, or owner or driver of the vehicle involved in the accident or by all or any of them, as the case may be."26. Sub-section (b) ofsection 18of the Amending Act further states that the following proviso shall be inserted at the end, namely :"Provided that where such application makes a claim for compensation under section 92A in respect of the death or permanent disablement of any person, such claim and any other claim (whether made in such application or otherwise) for compensation in respect of such death or permanent disablement shall be disposed of in accordance with the provisions of Chapter VIIA."27. Then comessection 19of the Amending Act, which amends section 110CC of the main Act, andsection 20of the Amending Act which amends section 113A of the main Act. A new section 113B is incorporated bysection 21of the Amending Act. We are not, in this context, concerned with the other sections of theAmending Act.28. Thus, reading theAmending Actand the provisions of the main Act together, it becomes clear that after theAmending Act, namely, Act No. 47 of 1982, has come into force on the 1st day of October, 1982, the claimants would be entitled on the basis of "no fault liability" to the extent of Rs. 15,000 in the case of death of a person by the use of a motor vehicle and for Rs. 7,500 in the case of permanent disablement.29. All the claimant has to do is to include a separate statement to that effect immediately before the signature of the applicant-claimant (vide Section 110A), or he may also make the additional claim on no fault liability by an I.A. made along with the main application. (Vide proviso to section 110B).30. It may be clarified by the way, that section 92A can be invoked only if the accident occurs after the coming into force of the said section, namely, from the 1st day of October, 1982.31. The Tribunal is enjoined to dispose of the claim under section 92A expeditiously. A doubt is expressed at the Bar whether it is necessary to make an enquiry to award compensation under section 92A. The amended section 110B clearly states that "an inquiry into each of the claims" is necessary.32. The scope of enquiry is, no doubt, as contemplated insection 92Aof the Act, which is reproduced above. It states :"Where the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle."33. It would further be necessary to prove that death or permanent disablement has resulted from the accident arising out of the use of the motor vehicle unless it is admitted or not denied. It can be proved by getting the wound certificate or post mortem report marked by consent. If it is desired that the liability should be saddled with the insurance company, it is further necessary to produce evidence to show that the vehicle was insured at the relevant time unless it is not denied by the insurer.34. There cannot be any doubt that liability contemplated under Chapter VIII under section 93, would also include liability for death or bodily injury without fault liability, as section 93 is amended by incorporating "(ba)".35. Section 110B, after amendment, includes the award made under section 92A also, and states :"that liability should be saddled on the owner, or insurer or driver or by all of them, as the case may be."36. Therefore, there is no substance in the contention that since section 92A speaks of the liability of the owner alone, the insurance company cannot be made liable for the compensation awarded, in the first place, under section 92A. In fact, prior to the incorporation of sections 110A to 110F in theMotor Vehicles Act, no direct decree or award could be made against the insurer; the decree had to be obtained against the owner and he had to proceed against the insurance company to recover the amount, as the insurance company to recover the amount, as the insurance company has to indemnify the amount. That difficulty is overcome now by the amended section, as section 110B now states that the liability can be saddled with the insurance company and that applies to the claim awarded under section 92A also.37. In the circumstances, on the facts of this case, the Claims Tribunal was not justified in awarding the liability only against the owner without saddling the liability against the insurer. The insurance certificate is produced before us and it clearly shows that the National Insurance Company Ltd. did insure the vehicle in question from March 15, 1983, to January 14, 1984, in the name of Mobammad Iqbal, owner of the vehicle, and the accident occurred on June 6, 1983. Therefore, on the date of the accident, the policy was current and hence the insurer is liable for compensation.38. The next question is whether the Tribunal can award interest on the compensation awarded undersection 92Aof the Motor Vehicles Act. In this connection, it is necessary to read amendingsection 19of Act No. 47 of 1982. It clearly states that in section 110CC of the principal Act, for the word "Chapter", the word "Act" shall be substituted. Substituting accordingly the word "Act" in section 110CC, it becomes obvious that the Tribunal shall award interest for compensation made under this Act. Hence, the Tribunal shall also award simple interest at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf.39. In the result, we allow the appeal and direct undersection 110Bof the Motor Vehicles Act that the entire amount of compensation awarded at Rs. 15,000 in the first instance under section 92A along with interest on the same at 6% per annum from the date of petition till payment shall be paid by the insurance company. No costs. |
8f4da5b7-6b22-53ea-9b81-2e718d28c40d | court_cases | Allahabad High CourtLakhan Lal Ahirwar Son Of Late Chaman ... vs State Of U.P. Through Secretary ... on 10 April, 2007Author:Amitava LalaBench:Amitava Lala,V.C. MisraJUDGMENT
Amitava Lala, J.1. The petitioner was initially appointed to the post of Sub District Inspector of Schools. Later on he was promoted to the post of District Inspector of Schools and at the time of superannuation dated 28th February,2006 he was holding the post of Vice Principal in D.I.E.T. Charkhari, Mohaba.2. In the year 2001 when the petitioner was posted as District Inspector of Schools, Jalaun, the respondent No. 1 vide order dated 21st June 2001, placed him under suspension by exercising provisions of Rule 4 of the U.P. Government Servant (Discipline and Appeal) Rules 1999. Enquiry against him was contemplated in view of Rule 7 therein. Departmental proceeding had initiated on 21st June, 2001 and till date of retirement on 28th February, 2006 the same had not been concluded in spite of favourable enquiry report given by the Enquiry Officer on 6th April, 2004.3. The petitioner's contention is that in view of item No. 17 of the Time Schedule under the U.P. Pension Cases (Submission, Disposal and Avoidance of Delay) Rules,1995, the pending departmental proceeding as against the retired employee must be completed within six months after retirement. However, respondent No. 1 illegally and arbitrarily had issued the impugned order on 6th October,2006 for re-starting departmental proceeding under the U.P. Government Servant (Discipline and Appeal) Rules 1999 taking the advantage of the Regulation 351-A of the Civil Service Regulations (hereinafter called as CSR).4. Learned Standing Counsel, did not file any affidavit. But relied upon a letter written by Sri Shyam Sunder Agnihorti, Joint Secretary, Secondary Education, U.P. Government to Sri C.K. Rai, Standing Counsel dated 12th February, 2007 to establish before this Court that petitioner's entire retiral benefits have been deposited. For the purpose of consideration of representation by the authority a date has. been fixed being 20th February,2007. Alongwith the same, he has only intimated that the matter of disciplinary proceeding has been forwarded to the Higher Authorities by a letter of the Public Service Commission only on dated 20th December, 2006 but nothing in respect of any decision.5. The petitioner has thrown challenge not with regard to consideration or reconsideration of release of his retiral benefits or exoneration from the charges, if any but with regard to the applicability of regulation 351 A of CSR in his case. The regulation is as follows:351-A. The Provincial Government reserve to themselves the right to order the recovery from the pension of an officer who entered service on or after 7th August, 1940 of any amount on account of losses found in judicial or departmental proceeding to have been caused to Government by the negligence or fraud of such officer during his service.Provided that-(1) such departmental proceedings, if not instituted while the officer was on duty.(i) shall not be instituted save with the sanction of the specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if the pensioner is found in departmental or judicial proceedings to have been guilty of grave mis-conduct, or to have caused, pecuniary loss to government by misconduct or negligence, during his service, including service rendered on re-employment after retirement.Provided that -(a) such departmental proceedings, if not instituted while the officer was on duty either before retirement or during re-employment-(i) shall not be instituted save with the sanction of the Governor,(ii) shall be in respect of an event which took place not more than four years before the institution of such proceedings, and(iii) shall be conducted by such authority and in such place or places as the Governor may direct and in accordance with the procedure applicable to proceedings on which an order of dismissal from service may be made.(b) judicial proceedings, if not instituted while the officer was on duty either before retirement or during re-employment, shall have been instituted in accordance with Sub-clause (ii)(a), and(c) the Public Service Commission, U.P., shall be consulted before final orders are passed.Provincial Government:(ii) shall be instituted before the officer's retirement from service or within a year from the date on which he was last on duty whichever is later;(iii) shall be in respect of an event which took place not more than one year before the date on which the officer was last on duty and;(iv) shall be conducted by such authority and in such places whether in India or elsewhere, as the Provincial Government may direct;(2) all such departmental proceedings shall be conducted, if the officer concerned so requests in accordance with the procedure applicable to departmental proceedings on which an order of dismissal from service may be made; and
(3) such judicial proceedings, if not instituted while the officer was on duty, shall have been instituted in accordance with Sub-clauses (ii) and (iii) of Clause (1).Note- As soon as proceedings of the nature referred to in this article are instituted the authority which institutes such proceedings shall without delay intimate the fact to the Audit Officer concerned.Explanation- For the purpose of this article-(a) departmental proceedings shall be deemed to have been instituted when the charges framed against the pensioner are issued to him, or, if the officer has been placed under suspension from an earlier date, on such date; and(b) judicial proceedings shall be deemed to have been instituted;(i) in the case of criminal proceedings, on the date on which a complaint is made, or a charge-sheet is submitted to a criminal court; and(ii) in the case of civil proceedings, on the date on which the plaint is presented or, as the case may be, an application is made, to a civil court.Note- As soon as proceedings or the nature referred to in this article are instituted the authority which institutes such proceedings shall without delay intimate the fact to the Audit Officer concerned.6. From the first proviso to the Regulation, certain aspects are very much categorical. If departmental proceedings is not instituted prior to retirement, three conditions are to be fulfilled. Firstly, sanction of the Governor is required. Secondly, proceedings should not be beyond a period of four years. Thirdly it can be done where the order of dismissal may be passed. State instituted the enquiry proceedings under order impugned on 6th October, 2006 with the approval of the Governor under Article 351A of the CSR but no decision was taken before filing of the writ petition on 30th January,2007.7. From the fact, it appears to the Court that the petitioner was put under suspension on 21st June, 2001 and disciplinary proceedings were initiated on 30th June, 2001. Therefore, under no stretch of imagination such initiation of disciplinary proceeding can be construed less than the period of four years to attract the proviso (a)(ii) under Article 351A of the CSR. Moreover, Governor's sanction is required only when a departmental proceeding is not instituted before retirement but not in respect of disciplinary proceeding already instituted before retirement as per Clause (a) and sub Clause (i) thereunder of the proviso of Article 351-A CSR. In the instant case not only departmental proceedings were initiated but also the Enquiry Officer placed a favourable report on 6 April,2004, long before the date of retirement i.e. 28th February,2006.8. The State has cited a Supreme Court judgment reported in (2007) 1 UPLBEC 56 (State of U.P. and Ors. v Harihar Bhole Nath) in support of their cause. It was held therein that the right to initiate proceedings would include a right to continue the proceedings with the Governor. However, according to us, two significant parts of the judgment of the Supreme Court have been misconstrued by the respondents. In such case departmental inquiry was initiated and an Enquiry Officer was appointed but the order of suspension was stayed by the appropriate Court. In the present case the Enquiry Officer has already submitted a report long before the retirement of the petitioner on 6th April, 2004 but no order had been passed by the disciplinary authority either accepting or rejecting the enquiry report. So far as the question of suspension is concerned, although a stay order was obtained from a Division Bench of this High Court on 5th November,2001 keeping the enquiry proceeding pending but such suspension order was withdrawn by the State itself on 16th August, 2002. Secondly, it was held by the Supreme Court that the proceeding for recovery of amount from a government servant can be passed in the event he was held guilty of grave misconduct or caused pecuniary loss to the Government by his misconduct or negligence, during his service. In the present case out of four charges, the petitioner was exonerated from the two charges but in the third charge, he was held partial responsible, when the necessary step was taken to comply with the order of the High Court and under the fourth charge he was held responsible for showing sympathy to an ad hoc appointee and held the same was not done in accordance with departmental rules. Therefore, whether by virtue of first proviso i.e. (a) (iii) under Regulation 351-A of the CSR an order of dismissal from service can be passed against to the petitioner or not is a matter of doubt.9. Similarly the State has conceded that the ratio ofState of U.P. and Ors. v Harihar Bhole Nath(supra) is based only on the Regulation 351-A of the CSR but not in conformity with the U.P. Pension (Submission, Disposal and Avoidance of Delay) Rules, 1995 which is the basis of the present case. Serial No. 17 under the Time Schedule of such Rules speaks as follows:U.P.Governments Servants Manual
"TIME SCHEDULE
[ See Rule 3(b) and 3(k)]
Sl. Description of work Time within which Person responsible
No. work is to be done for the work.1. 2 3 4(1) .... .... ....
(2) .... .... ....
(3) .... .... ....
(4) .... .... ....
(5) .... .... ....
(6) .... .... ....
(7) .... .... ....
(8) .... .... ....
(9) .... .... ....
(10) .... .... ....
(11) .... .... ....
(12) .... .... ....
(13) .... .... ....
(14) .... .... ....
(15) .... .... ....
(16) .... .... ....
(17) Departmental As per Administrative
proceeding procedure laid Department of
against down in CSR the Government/
retired Article 351-A Appointing
employee. and decision
to be taken
within three
months after Authority.
receipt of
Government
Order. If
departmental
proceeding has
been instituted
before
retirement, it
must be
completed
within six
months after
retirement.
(18) .... .... ....10. As per time schedule there are two modes of taking decision. As per first part of the time schedule the decision will be taken within three months after receipt of Government Order. The impugned Government Order has been passed on 6th October, 2006 with the sanction of the Governor and even such period has expired before filing of the writ petition without any decision thereof. As per the second part of the time schedule i.e. departmental proceeding, which has been instituted before retirement must be completed within six months after retirement. Even such period has already expired since the petitioner retired from service on 28th February,2006.11. Even if we hold that right to initiate proceedings would include right to continue the proceedings but the mandatory part of the Rules 1995 says that the departmental proceedings, if instituted before retirement, it must be completed within six months after retirement. Therefore, such mandatory part of the Rules cannot be ignored being special in nature which overrides general. Such period is already over. If we go independently with authority of the Governor's as per Article 351-A CSR only on initiation, we are of the view that such period has also expired as per the aforesaid Rules.12. Therefore, we hold that the order impugned dated 6th October,2006 is inoperative in nature. The petitioner cannot be put under any embargo from getting pensionary benefits.13. Hence arrears and one time pensionary benefits will be released in favour of the petitioner within a period of two months from the date of communication of the order. The petitioner will also get monthly pension, if any, month by month regularly irrespective of time period of payment of such sum as aforesaid.14. Thus, the writ petition stands disposed of without imposing any cost.Amitava Lala, J.15. I agree. |
8e65cc3a-2b66-55df-b05c-841cd48f75fe | court_cases | Delhi District Court6293/2010, Titled As "Rai Singh vs . Union Of India" on 4 January, 2016IN THE COURT OF SH. SANJAY KUMAR, ADDITIONAL
DISTRICT JUDGE-02, WEST, DELHI.
Ex. No. 246/10
Paras Ram (Through LRs)
vs.
Union of India
ORDER04.01.20161. An execution petition filed for payment of interest
on solatium and additional amount in view of judgment of
Sunder Singh's case as per decree dated 21.05.1999 passed
in RFA No. 142/90 and order dated 30.07.2004. It is stated
that UOI filed SLP against the above said RFA which has been
dismissed by Apex Court on 13.08.2010.It is further stated
that Decree Holder has received enhancement as per
judgment of High Court except interest on solatium in view of
Sunder Singh's judgment, now followed in CA No.
6293/2010, titled as "Rai Singh Vs. Union of India"decided by Apex Court on 05.08.2010. The present execution
petition is for payment of interest part on solatium and 12%
additional amount. It is prayed that JD may kindly be directed
to deposit the decreetal amount with the Hon'ble Court as
detailed in the statement filed by Decree Holder and further
issue warrant of attachment on current amount of LAC
maintained with SBI, District Court, Tis Hazari, Delhi and /or
other properties of JD may also be attached in the interest of
justice.Ex. No. 246/10Paras Ram (Through LRs) vs. UOI1/92. During execution proceedings, a calculation
report submitted by District Nazir on the interest of solatium
and additional amount. The Decree Holder objected the same
and filed objections. In the objections, it is stated that the
report of District Nazir is totally wrong, illegal, misconceived
and contrary to law and decision of the Hon'ble Supreme
Court. A sum of Rs.9,44,289/- has been attached pursuant to
the report of the District Nazir, which is highly insufficient. It
is further stated that the District Nazir has committed serious
illegality in calculating the interest amount only on the
difference of compensation granted by the Hon'ble High
Court. The Ld. ADJ has fixed the market value of the acquired
land at a uniform rate of Rs.47,224/- per Bigha. Hence, the
9% and 15% interest on 30% solatium and 12% additional
amount has to be calculated on the market value of the land
fixed by the Hon'ble High Court i.e. interest on 30% solatuim
and 12% additional amount on the acquired land at the rate
of Rs.47,224/- per Bigha w.e.f. 09.10.1986 to 08.10.1987 @
9% and from 09.10.1987 till date of payment @ 15%.
However, the District Nazir has calculated the interest @ 15%
for the period between 09.10.1987 to 06.09.2006, which is
totally wrong, illegal, baseless and misconceived.3. The Decree Holders prayed that Nazir be directed
to file a fresh report/ calculation regarding the actual amount
of interest on 30% solatium and 12% additional amount,
payable to the Decree Holder. It is further prayed to direct the
attachment of the balance amount.Ex. No. 246/10Paras Ram (Through LRs) vs. UOI2/94. The Judgment Debtor filed detailed written
submissions to the objections in connected case titled 'Mir
Singh vs. UOI' Ex. No. 250/10/06.5. I have heard Sh. S.S. Pawar, Ld. Counsel for the
Decree Holder, Sh. Sachin Nawani, Ld. Counsel for the
Judgment Debtor and perused the record.6. In order to appreciate respective contentions of
parties, it is necessary to go through the record. It is
admitted case of the Decree Holder that the award
announced in way back in 1986-87 and as per award the
payment was received by Decree Holder. Thereafter, Decree
Holder filed reference underSection 18of the Land
Acquisition Act before the court of Ld. ADJ and the same was
decided in the year 1989. As per judgment/order of Ld. ADJ,
Decree Holder already received amount. Thereafter, an
appeal was filed before the Hon'ble High Court and the same
was decided in the year 1999 and the payment was received
as per enhancement by the Hon'ble High Court. In the
present case, execution no. 114/08/99 was filed by Decree
Holder. As per judgment and decree of Hon'ble High Court, in
which the enhanced amount along with other components as
per Sunder Singh's judgment were claimed. As per record, the
said execution petition was decided as satisfied and file was
consigned to Record Room on 15.10.2009.7. Now coming to the present execution. The
genesis of this execution petition lies with the order of
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI3/9
Hon'ble Supreme Court in CA No. 6293/2010, titled as "Rai
Singh Vs. Union of India" decided on 05.08.2010, the SLP
decided by the Hon'ble Supreme Court when the aggrieved
one of the Decree Holder approaches the Hon'ble Supreme
Court on dismissal of writ petition filed before the High Court
and the same was dismissed vide order dated 25.09.2008.The Hon'ble Supreme Court after considering the judgment ofSunder vs. Union of India, 2001 (7) SCC 211;Gurpreet Singh
vs. Union of India, 2006 (8) SCC 457; Patel Joitara Kalidas &
Ors. vs. Special LAC & Ors., 2007 (2) SCC 341;Land
Acquisition Officer vs. Assistant Commissioner & Anr., 2010
(6) SCALE 623, held as under:"7. In this case, the High Court, in its judgment
dated 02.11.1998 and 01.12.1998, did not
expressly or impliedly reject the claim for interest
on solatium amount. As on date, 12 years have not
expired from the date of final disposal of the
matters on 20.01.2004 by this Court, dismissing
the appeal of the Union of India against the
judgments of the High Court. The full satisfaction
of the award/decree has not been entered by the
Executing Court. On the principlelaid down bythis
Court, we are of the view that appellants will be
entitled to interest on the amount of solatium. In
fact, filing of the writ petition was misconceived
and unnecessary. Even without filing the writ
petition the appellants could have filed an
Execution claiming the interest on solatium also."8. Now the controversy emerges is that whether
Decree Holder is entitled to interest on the amount of
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI4/9
solatium from the Era of Collector's award and Reference
Award or appeal in High Court or only on High Court's
enhanced amount.In order to appreciate, it is essential that
the fundamental point has to be kept in mind that when the
present award kept by LAC and reference underSection 18of
the Act answered by the Ld. ADJ Court, at that point of time,
judgment of'Prem Nath Kapoor & others vs. National
Fertilizer', 1996 (2) SCC 71 was in force.Judgment of 'Sunder
vs. Union of India', 2001 (7) SCC 211, came into force even
after the decision of the High Court in respective appeals i.e.
after September, 2001.The interpretation ofSunder's Case
(Supra), judgmentlaid down inthe case of Gurpreet Singh's
(Supra). Hence, the entitlement of any compensation of
payable amount has to be calculated as per Gurpreet Singh's
(Supra) judgment.InGurpreet Singh's (Supra) case, it has
been discussed the interpretation the scheme ofLand
Acquisition Actregarding payment to the farmers. In para 32,
33, 34 and 35, held as under:"32. In the scheme of the Act, it is seen that the
award of compensation is at different stages. The
first stage occurs when the award is passed.
Obviously, the award takes in all the amounts
contemplated bySection 23 (1).Section 23(1-A),Section 23 (2)and the interest contemplated bySection 34of the Act. The whole of that amount is
paid or deposited by the Collector in terms ofSection 31of the Act. At this stage, no shortfall in
deposit as contemplated, since the Collector has
to pay or deposit the amount awarded by him. If a
shortfall is pointed out, it may have to be made up
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI5/9
at that stage and the principle of appropriation
may apply, though, it is difficult to contemplate a
partial deposit at that stage. On the deposit by the
Collector underSection 31of the Act, the first
stage comes to an end subject to the amount with
or without protest.33. The second stage occurs on a reference underSection 18of the Act. When the Reference Court
awards enhanced compensation, it has necessarily
to take note of the enhanced amounts payable
underSection 23 (1),Section 23(1-A),Section 23
(2)and interest on the enhanced amount as
provided inSection 28of the Act and costs in
terms ofSection 27. The Collector has the duty to
deposit these amounts pursuant to the deemed
decree thus passed. This has nothing to do with
the earlier deposit made or to be made under and
after the award. If the deposit made, falls short of
the enhancement decreed, there can arise the
question of appropriation at that stage in relation
to the amount enhanced on the reference.34. The third stage occurs, when in appeal, the
High Court enhanced the compensation as
indicated already. That enhanced compensation
would also bear interest on the enhanced portion
of the compensation whenSection 28is applied.The enhanced amount thus calculated will have to
be deposited in addition to the amount awarded
by the Reference Court if it had not already been
deposited.Ex. No. 246/10Paras Ram (Through LRs) vs. UOI6/935. The fourth stage may be when the Supreme
Court enhances the compensation and at that
stage too, the same rule would apply."Further in para 54 of the judgment, it is held as under:"54. One other question also was sought to be
raised and answered by this Bench though not
referred to it. Considering that the question arises
in various cases pending in courts all over the
country, we permitted the counsel to address us
on that question. That question is whether in the
light of the decision in Sunder, the
awardee/decree-holder would be entitled to claim
interest on solatium in execution through it is not
specifically granted by the decree. It is well
settled that an execution court cannot go behind
the decree. If, therefore, the claim for interest on
solatium had been made and the same has been
negatived either expressly or by necessary
implication by the judgment or decree of the
Reference Court or of the appellate court, the
execution court will have necessarily to reject the
claim for interest on solatium based on Sunder on
the ground that the execution court cannot go
behind the decree. But if the award of the
Reference Court or that of the appellate court
does not specifically refer to the question of
interest on solatium or in cases where claim had
not been made and rejected either expressly or
impliedly by the Reference Court or the appellate
court, and merely interest on compensation is
awarded, then it would be open to the execution
court to apply the ratio of Sunder and say that the
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI7/9
compensation awarded includes solatium and in
such an event interest on the amount could be
directed to be deposited in execution. Otherwise,
not. We also clarify that such interest on solatium
can be claimed only in pending executions and not
in closed executions and the execution court will
be entitled to permit its recovery from the date of
the judgment in Sunder (19-9-2001) and not for
any prior period. We also clarify that this will not
entail any reappropriation or fresh appropriation
by the decree holder. This we have indicated by
way of clarification also in exercise of our power
underArticle 141and142of the Constitution of
India with a view to avoid multiplicity of litigation
on this question."9. Now applying the above proposition of law in the
present circumstance, the Decree Holder is now entitled for
the payment for the third stage. They cannot revert back to
the stage of Collector or Reference Court especially when the
case ofSunder's (Supra) was not applicable.The judgment of
Hon'ble High Court in appeal was silent on the point of
interest on the amount of solatium and now as per order of
Hon'ble Supreme Court inRai Singh's case (Supra), they are
entitled for amount of solatium, which is emerging out from
the High Court judgment. Secondly, the Decree Holders have
already received all the due amount on the date of receiving
of the compensation amount along with different components
as per law was enforced at that relevant time period. It is
pertinent to mention here that no execution petition pending
on behalf of Decree Holder for payment as per award of LAC
or judgment of Reference Court.Furthermore, now 12 years
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI8/9
have elapsed, therefore, enforcement of payment on the
basis of award of LAC/Collector or Reference Court underSection 18of the Act is barred by limitation. Therefore,
Decree Holders are not entitled to any interest on the amount
of solatium on the award of LAC/Collector or Reference
answered by the court of Ld. Additional District Judge. The
Decree Holder is entitled to interest on the amount of
solatium only as per judgment of High Court on the enhanced
amount.In case Decree Holder has received interest on
solatium, then no interest is payable as per order of Hon'ble
Supreme Court inRai Singh's case (Supra). The execution
petition and the objections are decided accordingly.Announced in the open court
today the 4th January, 2016.(Sanjay Kumar)
ADJ-02,West/Delhi
04.01.2016
Ex. No. 246/10Paras Ram (Through LRs) vs. UOI9/9 |
0cf97c42-d5a0-58a9-8b86-18113e5969ed | court_cases | Bombay High CourtVaishnavi Sandeep Maniyar vs Central Board Of Sec. Edu., A National ... on 15 June, 2018Author:Z.A. HaqBench:B.P. Dharmadhikari,Z.A.HaqJudgment 1 wp2842.2018.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 2842/2018
Vaishnavi Sandeep Maniyar,
Age 18 years, Occu. Student,
C/o Sandeep Maniyar,
R/o 119, Wardhman Nagar,
Near Radha Krishna Mandir,
Nagpur- 440 008
.... PETITIONER
// VERSUS //
1] The Central Board of Secondary Education,
National Eligibility Cum Entrance Test Unit,
Shiksha Kendra, 2, Community Centre,
Preet Vihar, Delhi- 110 092,
Through its Secretary
1a] The District Collector,
Nagpur Collectorate,
Nagpur
Respondent no. 1a added as per Court's
Order dated 25/05/2018.
2] Distt. Coordination for NEET Exam 2018,
The District Collector/Distt. Magistrate,
Nagpur Collectorate, Nagpur
Respondent no. 2 deleted as per Court's
order dated 22/05/2018
3] Adarsh Sanskar Vidyalaya,
Centre in charge
For Centre Examination No. 508501
NEET UG-2018,
Hudkeshwar Police Station, Pipla Road,
Nagpur 440 037
::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::
Judgment 2 wp2842.2018.odt
4] Jayshree Shailesh Joge,
167, New Om Nagar,
Hudkeshwar,
Nagpur 440 037
Respondent no. 4 added as party as per Court's
Order dated 22/05/2018
.... RESPONDENT(S)
___________________________________________________________________
Shri F.T. Mirza, Adv with Ms. M. Chandurkar, Adv for the petitioner
Shri C.S. Kaptan, Senior Advocate a/b.
Shri P.S.Chauhan, Advocate for respondent no. 1
Shri N.R. Patil, AGP for the respondent no. 1a
Shri A.S. Kilor, Advocate for the respondent no. 3
___________________________________________________________________
CORAM : B.P. DHARMADHIKARI AND
Z.A.HAQ, JJ.
DATED : 12/06/2018
Date of Reserving for judgment :- 11/06/2018
Date of Pronouncement of judgment:-15/06/2018
ORAL JUDGMENT : (PER Z.A. HAQ, J.)1] Heard.
2] RULE.
3] Considering the nature of controversy and as the advocatesappearing for the respective parties submit that the pleadings are complete,
the petition is taken up for final hearing.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 3 wp2842.2018.odt
4] The petitioner appeared for NEET UG-2018 examination heldon 06/05/2018 from 10:00 am to 1:00 pm. The petitioner claims that though
the time of examination started at 10:00 am and the candidates were entitled
to start writing the answer papers from 10:00 am, the respondent no.
4/Invigilator supervising class room no. 39 where the petitioner was alloted
the seat, had not permitted the candidates in that room (about 24 in
number) to start writing the answer papers from 10:00 am and those 24
candidates of class room no. 39 were permitted to start writing the answer
papers at about 10:30 am. According to the petitioner, as the examination
was of three hours, she carried impression that the candidates in class room
no. 39 (including the petitioner) would be given time till 1:30 pm to
complete writing of the answer papers however, the respondent no.
4/Invigilator had asked the candidates of class room no. 39 to stop writing at
1:00 pm, and the answer sheets were taken.The petitioner claims that as she lost 30 precious minutes, the
respondent no. 1/Board be directed to conduct an enquiry on the complaint
of the petitioner that the candidates of class room no. 39 are not given three
hours time to write the papers. The petitioner has further prayed that the
respondent no. 1/Board be directed to grant appropriate proportionate marks
to the petitioner. Alternatively, it is prayed that the respondent no. 1/Board
be directed to conduct re-examination of the petitioner.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 4 wp2842.2018.odt
5] The petition was circulated during Summer 2018 Vacations. Thelearned Vacation Judge passed an order on 08/05/2018 directing issuance of
notice making it returnable on 18/05/2018. On 18/05/2018, the writ
petition was adjourned for 22/05/2018. On 22/05/2018, oral request made
on behalf of the petitioner to implead District Collector, Nagpur (District Co-
ordinator for NEET UG-2018 Exam) was granted and the writ petition was
adjourned for 25/05/2018. The petition was listed on 25/05/2018 and all
the respondents were represented by their advocates. On 25/05/2018, one of
us (Z.A.Haq, J.) was the Vacation Judge. Looking to the nature of
controversy, it transpired that an enquiry on the allegations made by the
petitioner was necessary. The learned Senior Advocate representing the
respondent no. 1/Board expressed inability of the respondent no. 1/Board to
conduct an enquiry on the ground that work of finalizing and declaring of
result of HSSC was going on.Considering the submissions made on behalf of the petitioner
and on behalf of the respondents, an order was passed on 25/05/2018
directing that the District Collector/Additional Collector/Deputy Collector
shall conduct an enquiry and shall ascertain whether any other candidate
who appeared for NEET UG-2018 examination at the respondent no.
3/School (Center) and was in class room no. 39, had any complaint similar
to that of the petitioner. To facilitate the enquiry, the respondent no. 1/Board
was directed to supply to the District Collector, Nagpur the list of 24
candidates who were in class room no. 39 at the respondent no. 3/School::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 5 wp2842.2018.odt
(Center). The respondent no. 1/Board was directed to supply the contact
numbers of the 24 candidates who were alloted seats in class room no. 39.
The authority conducting the enquiry was directed to submit report to the
Court till 01/06/2018.Accordingly, the enquiry is conducted by the Sub-Divisional
Officer, Nagpur City and report dated 31/05/2018 is submitted to the Court.
The copies of the enquiry report are given to the advocates for the respective
parties. None of the respondent has disputed the enquiry report submitted
by the Sub-Divisional Officer by filing affidavit.6] The learned advocate for the petitioner has submitted that the
complaint made by the petitioner stands vindicated by the report submitted
by the learned Sub-Divisional Officer. Relying on the report of the Grievance
Redressal Committee appointed by the Hon'ble Supreme Court in W.P. (Civil)
No. 551/2018 (Disha Panchal and others vs. Union of India, the Secretary
and others), the learned advocate for the petitioner has argued that such
incidents affecting the candidates are not uncommon and therefore, the
Hon'ble Supreme Court also felt it necessary to appoint a committee
(Grievance Redressal Committee) to examine the grievance of the candidates
about the illegalities or irregularities committed while conducting the
examination. Referring to para no. 2 of page no. 8 of the report, it is
submitted that Grievance Redressal Committee appointed by the Hon'ble
Supreme Court has suggested that the candidate/candidates who have been::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 6 wp2842.2018.odt
deprived of some time for which the candidate/candidates is/are entitled, the
candidate/candidates may be compensated by giving marks, adopting some
method for this purpose. Various other submissions, in the nature of
emotional appeal pointing out the importance of the NEET UG, 2018
examination are made which in our view are not required to be reproduced
as everyone is aware about the importance of NEET UG-2018 examination.
7] The claim of the petitioner is opposed by the respondent
no. 1/Board, the respondent no. 3/School (Center) and the respondent
no. 4/Invigilator. All these respondents have filed their affidavits stating that
the claim made by the petitioner about loss of 30 precious minutes because
of the alleged illegal act of the respondent no. 4/Invigilator, is not correct.
8] The respondents have submitted that though the examination
was till 1:00 pm, the petitioner and her parents made complaint about loss of
time, at about 3:00 pm and there is no explanation for this delay in making
the complaint. The respondents have explained in the affidavits the
chronology to substantiate that the candidates in class room no. 39 were
asked at 10:00 am to start writing the answer papers. Much is argued,
relying on the fact that no other candidate had made any complaint about
loss of time as alleged by the petitioner.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 7 wp2842.2018.odt
9] We have examined the affidavits filed on behalf of therespondent no. 1/Board, the respondent no. 3/School (Center) and the
respondent no. 4/Invigilator.We are not not only surprised but irked because of the attitude
of the respondent no. 1/Board. In the additional affidavit sworn by Dr.
Sanyam Bhardwaj - Director, Central Board of Secondary Education, Preet
Vihar, Delhi on 09/06/2018, it is stated that the report of the Sub-Divisional
Officer that the candidates were permitted to start writing the answer papers
after about 20 minutes of the scheduled time of the examination, cannot be
accepted. It is stated in the affidavit that the other candidates who have
responded in the enquiry by the Sub-Divisional Officer have not specified
about the time of commencement of the examination. In para no. 17 of the
additional affidavit, it is stated that the performance of some of the
candidates who have responded in the enquiry at the NEET UG-2018
examination is poor and their future is not at stake and therefore their
statements do not carry any value. Again, the all time excuse of being
overloaded with work, having responsibility of conducting the examination
involving lacs of candidates, is putforth to oppose the prayers of the
petitioner. It is stated that if any relief is granted to the petitioner, it will open
pandora's box and lacs of petitions would be filed across the country.10] Dr. Vandana S. Rokade, Principal of the respondent no. 3/School::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 8 wp2842.2018.odt(Center) has sworn the affidavit on behalf of the respondent no. 3/School. In
reply/affidavit on behalf of the respondent no. 3/School, it is stated that
three External Observers including the representative of the respondent no.
1/Board and five other supervisors were present at the examination center
(respondent no. 3/School) and the conducting of the NEET UG-2018
examination was videographed using two video cameras and this includes
video recording of class room no. 39. Again, demeaning statement is made in
para no. 11 of this reply/affidavit to the effect that video recording of class
room no. 39 shows that the petitioner was sitting idle and was not solving
the test booklet given to her.The respondent no. 4/Invigilator has filed affidavit sworn on
25/05/2018 reiterating the stand taken by the respondent no. 3/School
(Center).11] After examining the material placed on record, the report
submitted by the Sub-Divisional Officer and considering the submissions
made by the learned advocates for the respective parties, we find that the
approach of the respondent no. 1/Board and the respondent no. 3/School
(Center) in the matter is completely unjustified. It is unfortunate that the
respondent no. 1/Board who is custodian of the career and the future of
candidates, has opposed the petition treating it as an adversarial litigation.
The petitioner has not made any complaint against the respondent
no. 1/Board and had only requested the respondent no. 1/Board to::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:34 :::Judgment 9 wp2842.2018.odt
compensate her for the loss of 30 precious minutes because of the
illegality/irregularity committed by the respondent no. 4/Invigilator. We are
of the view that the respondent no. 1/Board should have on its own directed
the enquiry in the matter. The respondent no. 1/Board came out with the
defence that the petitioner had not made any complaint to it and has directly
approached this Court. The learned advocate for the petitioner has pointed
out that the petitioner had immediately sent complaint to the following :-1. The examination-in-charge, NEET Exam 2018, CBSE
Board Preet Vihar, New Delhi.2. The District Collector/District Magistrate, District Co-ordinator for NEET Exam 2018, Nagpur Collectorate, Nagpur.3. The Police Station In-charge, Hudkeshwar Police
Station, Nagpur City, Nagpur.According to the petitioner, the copies of the complaint were
sent to the Hon'ble Prime Minister of India, Hon'ble HRD Minister,
Government of India, Shri Nitin Gadkari, MP, Lok Sabha, Nagpur and the
Hon'ble Chief Minister, Government of Maharashtra. We find that the
respondent no. 1/Board has shirked its obligation of taking cognizance of
the complaint made by the petitioner. Not only this, the respondent
no. 1/Board has tried to find out loopholes in the report submitted by the
Sub-Divisional Officer and this is done without any basis and without co-::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 10 wp2842.2018.odt
operating with the Sub-Divisional Officer in the enquiry. In the affidavit filed
on behalf of the respondent no. 3/School (Center), it is stated that the three
External Observers including the representative of the respondent
no. 1/Board were present at the respondent no. 3/School (Center) at the
time of examination. It is not explained why the respondent nos. 1, 3 and 4
have not requested the Sub-Divisional Officer to record the statements of
those three External Observers including the representative of the respondent
no. 1/Board. Though it is stated in para no. 11 of the affidavit filed on behalf
of the respondent no. 3/School (Center) that conducting of the NEET UG-
2018 examination at the respondent no. 3/School (Center) is videographed
and it shows that the petitioner was sitting idle and was not solving the test
booklet given to her, the relevant details are not given. It is not stated in the
affidavit as to for how long the petitioner was found to be sitting idle.In para no. 4.9 of the affidavit filed on behalf of the respondent
no. 4/Invigilator, it is stated that the NEET UG-2018 examination was
conducted in class room no. 39 uninterruptedly and in peaceful manner from
10:00 am to 1:00 pm and during this time, videography of the candidates
was done. Again, it is not explained by the respondent nos. 3 and 4 as to why
this video recording is not produced before the Sub-Divisional Officer at the
time of the enquiry conducted by him.12] In the statement of Dr. Vandana S. Rokde recorded in the
enquiry, it is stated that Dr. Vandana S. Rokade alongwith the representative::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 11 wp2842.2018.odt
of the respondent no. 1/Board visited all the class rooms of the respondent
no. 3/School (Center) between 10:15 am and 10:45 am and at that time,
she had not received any complaint from any candidate. Again Dr. Vandana
S. Rokade has not pointed out at what time she visited class room no. 39.
Moreover, there was no occasion for the petitioner or any other candidate of
class room no. 39 to make complaint at the time of visit of Dr. Vandana S.
Rokade. The petitioner has stated that she carried an impression that as the
paper started at 10:30 am, the candidates would be given time till 1:30 pm.
13] The respondent no. 4/Invigilator in her statement given in the
enquiry before the Sub-Divisional Officer has stated that after the OMR
sheets and question papers were distributed, instructions were given to the
candidates at 10:00 am to start writing the answer papers. Shri Krunal
Gaikwad who was deputed in class room no. 39 to assist the respondent
no. 4/Invigilator, has stated in the enquiry before the Sub-Divisional Officer
that booklet box was opened at 9:50 am and the question papers and the
OMR sheets were distributed and then he had gone out of the class room to
bring ink pad for taking thumb impression of the candidates as required as
per the guidelines issued by the respondent no. 1/Board. Shri Krunal
Gaikwad has not stated that the respondent no. 4/Invigilator had asked the
candidates at 10:00 am to start writing the answer papers. The conclusions
of the Sub-Divisional Officer about loss of time are in consonance with the
factual position which has come on record in the statement of Krunal::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 12 wp2842.2018.odt
Gaikwad, that he had gone out of Room No.39 to get inkpad. The petitioner
has claimed that the candidates in class room No.39 were not permitted to
start writing the answer paper till 10.30 a.m. Considering the facts which
have come on record and as the respondent Nos. 3 and 4 have not produced
the alleged video recording which they claimed to be available with them,
drawing adverse inference against the respondents, we accept the
contentions of the petitioner about the loss of time.14] The learned advocate for the petitioner has pointed out from the
Information Bulletin, Chapter no. 5 which provides for instructions to be
followed in the examination hall. Clause (o) of this Chapter no. 5 of the
Information Bulletin laid down that the candidate was required to sign twice
on the attendance sheet at the specified place, first time immediately after
the commencement of the examination and second time while handing over
the answer sheet to the Invigilator. It provided that the candidates were also
required to put their thumb impressions at the place provided on the
attendance sheet. The statement of Krunal shows that the ink pad was not
available in class room no. 39 and therefore he had gone out to get the ink
pad to get the finger impression of the candidates of class room no. 39. This
statement of fact is not disputed by anybody. We find that the learned Sub-
Divisional Officer has recorded that time of 20 minutes was lost by the
candidates of class room no. 39. It appears that the respondent no.
4/Invigilator had not permitted the candidates of class room no. 39 to start::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 13 wp2842.2018.odt
writing the answer papers till Krunal returned to class room no. 39 with the
ink pad and the finger impressions of the candidates were taken.
15] We are conscious that while exercising the extra-ordinary
jurisdiction underArticle 226of the Constitution of India, the Court should
be loathe in examining the factual position but in the present case, we feel it
necessary to examine the facts of the case and if it is not done perhaps, we
will be failing in our duty. The issue is not that lacs of candidates appear at
the examination and the Board has been discharging its obligation in the best
possible manner. The issue is about the right and entitlement of the
petitioner and the career and future of the petitioner. If any wrong is done to
the petitioner, she is entitled to invoke extra-ordinary jurisdiction of this
Court to set right the wrong done to her in the present case.
16] After assessing the material on record and going through the
report submitted by the Sub-Divisional Officer, we find substance in the
complaint made by the petitioner. It being so, she has to be compensated.We accept the claim of the petitioner that she was given only
150 minutes instead of 180 minutes to write the answer paper.
17] After hearing, we closed the matter, reserving the judgment. On
13/06/2018 at 4:30 pm., Shri F.T. Mirza, Advocate for the petitioner, Shri::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 14 wp2842.2018.odt
A.S. Kilor, Advocate for the respondent no. 3 and Shri N.R. Patil, AGP for the
respondent no. 1a mentioned the matter and pointed out the judgment given
by the Hon'ble Supreme Court in W.P. (Civil) No. 551/2018 (Disha Panchal
and ors. vs. Union of India, The Secretary and ors.) on 13/06/2018. The
learned advocate for the petitioner submitted that the petitioner would be
entitled for additional proportionate marks as per the formula applied by the
Hon'ble Supreme Court in the case of Disha Panchal and ors. (supra). It is
pointed out that the formula applied by the Hon'ble Supreme Court is given
in para no. 8 of the judgment. The learned advocate for the respondent no. 3
submitted that the petitioner cannot claim additional proportionate marks as
the record shows that the petitioner had attempted to solve only two
questions of Physics and out of it, only one is right. It is submitted that the
petitioner attempted to solve the questions upto Serial No. 178 out of 180
and this shows that the petitioner has not suffered because of loss of 30
minutes as alleged by the petitioner.18] Be that as it may, we find that the formula applied by the
Hon'ble Supreme Court in the case of Disha Panchal and ors. as reflected in
para no. 8 of the judgment delivered in W.P. (Civil) No. 551/2018 takes care
of all such contingencies. In our view, the interests of justice would be sub-
served by directing the respondent no. 1/Board to award additional
proportionate marks to the petitioner by applying the formula given in para
no. 8 of the judgment delivered in W.P. (Civil) No. 551/2018.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 15 wp2842.2018.odt
19] As we have held that all the candidates who were alloted seatsin class room no. 39 at the respondent no. 3/School (Center) have suffered
loss of 30 minutes while writing the NEET-UG 2018 examination, we direct
the respondent no. 1/Board to give same benefit to all the candidates who
were alloted seats in class room no. 39 of the respondent no. 3/School
(Center) by applying the formula referred in para no. 8 of the judgment
delivered in W.P. (Civil) No. 551/2018.20] The respondent no. 1/Board shall undertake the exercise till
22/06/2018 and make available to the petitioner and other concerned
candidates the corrected mark sheets immediately.At this stage, the advocate for the petitioner submitted that the
last date to pay by challan is 18th June, 2018 and the mark sheets which
would be supplied till then will be taken into consideration in the admission
process. It is prayed that the respondent No.1 Board be directed to complete
the exercise as per the directions given above till 17th June, 2018. Paragraph
12(F) of the judgment passed by the Hon'ble Supreme Court in Writ Petition
(Civil) No.551 of 2018 and other connected petitions, is pointed out and it is
submitted that in case the respondent No.1 Board fails to complete the
exercise before 18th June, 2018, the directions be given to consider the
corrected mark-sheets as would be made available to the petitioner.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 16 wp2842.2018.odt
We feel that the respondent No.1 Board will not be able to
complete the exercise before 18th June, 2018, however, even if the exercise
as per the directions given above is completed till 22nd June, 2018, the
respondents and concerned authorities can be directed to consider the
revised mark-sheets of the petitioners and the other students in respect of
whom we have given directions, in the second round of counselling. We,
accordingly, direct the respondent and the concerned authorities to consider
the revised mark-sheets of the petitioners and other students regarding
whom directions are given in this judgment, in the second round of
counselling.21] The writ petition is allowed accordingly. In the circumstances,
the parties to bear their own costs.JUDGE JUDGE
22] At this stage, Shri C.S. Kaptan, learned Senior Advocateappearing on behalf of respondent-Board requests that the effect and
operation of the judgment be kept in abeyance for a period of four weeks, so
as to enable the Board to take appropriate steps in the matter. The request is
opposed by the learned Advocate appearing for the petitioner.::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 :::Judgment 17 wp2842.2018.odt
23] Considering the facts of the case, we find that thepetitioner and other similarly situated students would be adversely affected if
the request as made on behalf of the respondent-Board is granted. Therefore,
the request is rejected.Steno copy of this judgment be furnished to the parties.JUDGE JUDGE
Ansari::: Uploaded on - 15/06/2018 ::: Downloaded on - 16/06/2018 01:38:35 ::: |
7e0c9bcd-9116-5dbd-bb6e-18102ed6657d | court_cases | Jharkhand High CourtPurushottam Dubey vs State Of Jharkhand & Ors. on 27 April, 2010Author:D.G.R. PatnaikBench:D.G.R. PatnaikIN THE HIGH COURT OF JHARKHAND AT RANCHI.
Cont. Case (C) No. 633 of 2009
with
Cont. Case (C) No. 624 of 2009
with
Cont. Case (C) No. 625 of 2009
with
Cont. Case (C) No. 626 of 2009
with
Cont. Case (C) No. 627 of 2009
with
Cont. Case (C) No. 628 of 2009
with
Cont. Case (C) No. 629 of 2009
with
Cont. Case (C) No. 630 of 2009
...
Savitri Verma & Others... ... Petitioners[Cont. Case (C) No. 633/09]
Ramni Bhushan Prasad ... ... Petitioner [Cont. Case (C) No. 624/09]
Rash Behari Ghosh ... ... Petitioner [Cont. Case (C) No. 625/09]
Mantu Banerjee ... ... Petitioner [Cont. Case (C) No. 626/09]
Ashwini Kumar ... ... Petitioner [Cont. Case (C) No. 627/09]
Pratima Ghosh ... ... Petitioner [Cont. Case (C) No. 628/09]
Anand Kand Prasad Verma...... Petitioner [Cont. Case (C) No. 629/09]
Purushottam Dubey ... ... Petitioner [Cont. Case (C) No. 630/09]
V e r s u s-
The State of Jharkhand & Ors. ... Opposite parties [In all cases]
...
CORAM: - HON'BLE MR. JUSTICE D.G.R. PATNAIK.
...
For the Petitioners : - Mr. Rajendra Prasad, Advocate.
For the Respondents : - M/s. Srijit Choudhary and A. Allam, Sr. S.C. II
...
14/27.04.2010In compliance with the directions contained in the order
dated-19.04.2010, the Registrar, Vinoba Bhave University, Hazaribagh
(Respondent No. 3) has appeared in Court in person today and has filed a
supplementary show-cause, informing thereby that the total amount, which was
due and payable to the sole remaining petitioner, namely, Purushottam Dubey,
has been assessed at Rs.2,67,096/- and a cheque dated-22.04.2004, for the said
amount drawn on the United Bank of India has already been forwarded to the
petitioner's Bank account.Learned counsel for the petitioners acknowledges that the
payment as informed above, has been made to the petitioner, Purushottam
Dubey and upon such payment being made to him, the grievance of the
petitioner, Purushottam Dubey has been redressed. Learned counsel adds that
the grievances of all the petitioners including the petitioner, Purushottam
Dubey (in Cont. Case (C) No. 630 of 2009) have also been redressed.In the light of the above facts and circumstances, there appears
no further reason to retain these contempt applications on board. Accordingly,
all these contempt applications (Cont. Case (C) No. 633 of 2009, Cont. Case
(C) No. 624 of 2009, Cont. Case (C) No. 625 of 2009, Cont. Case (C) No. 626
of 2009, Cont. Case (C) No. 627 of 2009, Cont. Case (C) No. 628 of 2009,
Cont. Case (C) No. 629 of 2009 and Cont. Case (C) No. 630 of 2009) are
dropped.The personal appearance of the Registrar, Vinoba Bhave
University, Hazaribagh (Respondent No. 3) is dispensed with.(D.G.R. Patnaik, J.)
APK |
e6df8802-bc67-5e25-b9e2-890923844b9b | court_cases | High Court of MeghalayaUnknown vs Ms. B.Kharwanlang on 25 January, 2018Author:S.R.SenBench:S.R.SenWP(C). No. 43/2016
BEFORE
THE HON'BLE MR. JUSTICE S.R.SEN
25-01-2018
Mr. AS Siddiqui, learned counsel for the petitioner is
present.
Ms. B.Kharwanlang, learned counsel for the respondentNo. 4 seeks adjournment on the ground that she is not prepared
today. Similar prayer is made by Ms. QB Lamare, learned
counsel for the respondents-GHADC.Hence, the matter could not be taken up. Since the matter
is pending from 2016, list the matter for hearing after 3(three)
weeks as a last chance.JUDGE
S.Rynjah |
dd592fd9-a88c-5acb-836b-c5307a062e98 | court_cases | Monopolies and Restrictive Trade Practices CommissionBhim Sen vs Delhi Development Authority on 3 January, 2003Equivalent citations: I(2003)CPJ124(MRTP)ORDERMr. R.K. Anand, Member1. The complainant - Shri Bhim Sen has filed a complaint petition charging the respondent, the Delhi Development Authority, with adoption of and indulgence in unfair trade practices and stating therein that he applied for a flat under the Low Income Group Scheme of the respondent and paid a sum of Rs. 1,500/- as the initial deposit and he was registered at Sl. No. 40447. In support of this averment, the applicant has annexed the registration slip issued to him. He has also enclosed the deposit receipt, issued by the respondent, for the amount of Rs. 1,500/-. Thereafter, the complainant approached the respondent by writing a letter dated 11.3.1993 for issuing the allotment-cum-demand letter and also sent a reminder dated 13.4.1993 but there was no response from the respondent. The correspondence with the respondent, however, continued till 1998. Subsequently, the complainant came to know that the flat in question, had been allotted to somebody else by the respondent.2. In reply to the aforsesaid complaint petition, on the basis of which U.T.P.E. No. 8/ 2001 was instituted, it was stated by Shri V.K. Singhal, Director (Housing) II on behalf of the respondent that inadvertently the allotment-cum-demand letter was issued by the concerned clerks at the wrong address. It has been further stated that the respondent has since made amends and offered allotment of a flat No. 521, GR-17, Pockets 5 and 7, Paschim Vihar, New Delhi and also asked the complainant to deposit a sum of Rs. 4,15,890.86.3. The respondent, however, failed to file a reply to the Notice of Enquiry dated 29.1.2001 despite the opportunity given for this purpose and accordingly, the respondent was set ex parte. The learned Advocate for the respondent was
also asked to seek instructions whether the respondent was willing to give allotment of the flat in question, at the price prevailing in 1991--the year when the flat was originally to be allotted to the applicant.4. We have heard the learned Advocates representing the parties. The learned Advocate representing the respondent states that the flat in question can be offered to the applicant/ complainant at the price prevailing in 1991 but with compound interest @ 7% for the intervening period and the price of the flat calculated on that basis works out to Rs. 3,76,800/-. This amount also includes interest as mentioned above till September, 2002. The contention of the complainant, however, is that he is being burdened with interest amount for no fault of his. The complainant further states that he did not receive the demand letter as the same was sent by the respondent at the wrong address, otherwise he would have made the instalments within the stipulated time frame, The mistake on the part of the respondent is not denied or disputed and as stated above, the respondent has offered allotment of an alternative flat vide its letter dated 19.3.2001. The aforesaid letter of the respondent however reflects the current cost of the flat, which subsequently has been modified by the respondent and the complainant has been asked to pay the price prevailing in 1991 with compound interest @ 7%. This offer has been made by the learned Advocate representing the respondent in the Court, in response to the Commission's oral order dated 8.1.2002.5. It appears to us that the respondent has been guilty of gross negligence by sending the demand letter at the wrong address. We do not want to go into the motives of the official working in the respondent's office, as we are of the view that it is for the Vice-Chairman of the respondent to take appropriate action against the delinquent officers so that such instances do not occur again. The fact remains that the complainant was deprived of the allotment for no fault of his and is now being asked to pay compound interest @ 7% per annum which is an avoidable financial hardship. It also
transpires that the complainant also deposited an amount of Rs. 15,000/- on 9.4.2001 and has also been corresponding with the respondent asking the respondent to issue the allotment-cum-demand letter so as to enable him to fnake the full payment and get the possession of the flat in question. The bona fides of the complainant, therefore, cannot be called into question and the complainant has even today made the offer that the entire amount towards the cost of the flat as prevailing in 1991 would be paid in lump sum within a month's time in order to get possession of the flat in question.6. In view of our aforesaid discussions, we find that the respondent is guilty of not only gross negligence, it is also guilty of adoption of and indulgence in unfair trade practices within the meaning ofSection 36A(1)of the Monopolies and Restrictive Trade Practices Act, 1969 (the Act for brief) in so far as it made a misrepresentation or false representation to the complainant that a flat would be allotted to him but failed to offer the allotment and failure on the part of respondent also tantamounts to deficiency in service.Section 2(r)of the Act spells out definition of service and "service" envisages dealings in real estate. Thus the present grievance of the complainant attracts the provisions ofSection 36A(1)of the Act and the impugned trade practice also appears to the prejudicial to the interest of the consumer. Therefore, the respondent is directed to discontinue the aforesaid unfair trade practices forthwith and also give an undertaking not to repeat the same or similar unfair trade practices, in future, We also direct the respondent to give possession of the flat in question at the price prevailing in 1991, without burdening the complainant with compound interest @ 7%. The complainant is also directed to deposit the entire amount in lumpsum within four weeks. The respondent is further directed to file an affidavit by way of compliance, within six weeks. |
2c8e5f1f-b8d5-5ce6-9bb7-c841f37d4082 | court_cases | Madhya Pradesh High CourtManish Kumar Pandey vs The State Of Madhya Pradesh on 8 February, 2018THE HIGH COURT OF MADHYA PRADESH
WP-10944-2014
(MANISH KUMAR PANDEY Vs THE STATE OF MADHYA PRADESH)
20
Jabalpur, Dated : 08-02-2018
Shri A.M. Trivedi, learned senior counsel with Shri Jayant Patel, learned counsel
for the petitioner.
Smt. Janhvi Pandit, learned Government Advocate for respondents no.1 to 7.Shri Parag Tiwari, learned counsel for respondent no.6.
With consent the matter is heard finally at motion stage.
Respondent no.6 published an advertisement thereby inviting applications for
sh
appointment on the post of Cashier on emergency basis on 13.09.2012 as the
post of cashier was lying vacant for long time.e
ad
The petitioner has submitted his application for appointment on the said post,
accordingly, executive committee of the society passed a resolution in favour of
Pr
the petitioner on 01.10.2012. The said resolution was sent to the Deputy
a
Commissioner Co-operative Society which was approved by him vide letter
hy
dated 21.11.2012 thereby the petitioner was appointed on the post of Cashier
ad
vide order dated 23.11.2012 and he joined the same post on 24.11.2014 and
since then he is continued to work on the said post. In the meanwhile one
M
Rajnish Pandey has made a false complaint against the appointment of the
of
petitioner and Joint Commissioner without any authority and in political pressure
directed Deputy Commissioner vide letter dated 06.03.2013 to make enquiry in
rt
respect of complaint made by respondent no.7. Accordingly, Deputy
ou
Commissioner vide letter dated 06.03.3013 called the explanation to respondent
C
no.6. The society has given his reply in favour of the petitioner, thereafter, the
Deputy Commissioner submitted an enquiry report before the Joint
h
ig
Commissioner on 20.06.2013. In the meanwhile, respondent no.7 filed a writ
H
petition before this Court which was registered as W.P. No.12879/2013. The said
writ petition was disposed of vide order dated 08.08.2013 and directed the
respondent no.7 to file a fresh dispute before the competent authority within a
period of 15 days of the said order. Respondent no.7 did not file any dispute
before the competent authority till this date. Thereafter, the Deputy
Commissioner vide its letter dated 06.09.2013 directed the Cooperative
Inspector to make enquiry in respect of complaint about the petitionerâs
appointment. The Cooperative Inspector without giving the sufficient opportunity
to the petitioner submitted his enquiry report on 27.09.2013. Respondent no.7
again filed a writ petition i.e. W.P. No.5139/2014 before this Court. The said writ
peitition was disposed of vide order dated 05.04.2014 with a direction to
respondent no.3 to take appropriate action against the petitioner on the report
which is submitted pursuant to the order dated 08.08.2013 passed in writ
petition no.12879/2013. In pursuance of the directions issued by this Court the
Joint Director asked the petitioner to submit his explanation. Accordingly, the
petitioner has submitted his explanation on 05.07.2014 thereafter without
considering the explanation submitted by the petitioner the Joint Registrar
passed an order dated 14.07.2014 thereby terminating the services of the
petitioner. Being aggrieved by that order, the petitioner has filed the present
petition.Learned senior counsel appearing on behalf of the petitioner argues that the
order passed by the Joint Registrar is illegal and without jurisdiction. He submits
that the petitioner is the employee of the Cooperative Society and, therefore,
the Joint Registrar has no power to pass the order of termination. He further
sh
submits that the Joint Registrar should have forwarded his report to the
e
Cooperative Society and thereafter it is for the society to pass the order of
ad
termination. For the said purpose, he relied on the judgment passed by this
Pr
Court in the case ofBindravan Yadav Vs. State of M.P. and Otherspassed
in W.P. No.10944/2015 on 15.11.2016.a
hy
Learned Government Advocate argues that the order impugned has been
passed in pursuance of the direction issued by this court in W.P. No.5139/2014
ad
and the same has been passed after giving proper opportunity of hearing to the
M
petitioner.Learned counsel for respondent no.6 submits that the appointment of the
of
petitioner was made in accordance with law.rt
Heard learned counsel for the parties and perused the record. This Court in the
ou
case ofBindravan Yadav Vs. State of M.P. and Othersin para 4 has held as
under:-C
h
Parties agreed that this matter is covered by the recent order passed by
ig
this Court in W.P. No.19591/2015 (Dinendra Kumar Pandey Vs.
H
Commissioner Rewa and Ors.). In the said case, this Court held as
under:-â 7. The petitioner has specifically pleaded in Para 1 (iv) and
Ground 6 (G) that he was appointed on the post of Salesman by Sewa
Sehkari Samiti. This contention is not denied by the respondents.
This Court in Amrendra Singh (supra) held that the petitioner is
an employee of Cooperative Society and Sub-Divisional Officer has
no authority in law to remove the employee of said society. Reliance
is placed on Clause 13 of Control Order, which reads as under:-
â 13 Power to give necessary directions- The
Commissioner, Collector and allotment authority/notified
authority may issue directions under their competency to
ensure the planned distribution of essential commodities
under the public distribution system and the fair price
shop/society/lead society are duty bound to follow the
directions.â
[Emphasis Supplied]8. I have carefully gone through Clause 13 and other provisions, which
are mentioned in the impugned order dated 31.01.2013(Annexure P-4).The said provisions do not provide any power of termination of a society
employee to the Sub-Divisional Officer. In other words, the provisions
on which reliance is placed do not give any power to the Sub-Divisional
Officer to terminate the services of an employee of the society. Thus,
sh
the case of the petitioner is covered by the judgment of this Court in
e
Amrendra Singh (supra). Resultantly, the impugned order dated
ad
31.01.2013 (Annexure P-4) is set aside. Respondents will be at liberty to
Pr
take an appropriate action against the petitioner in accordance with
law.a
hy9. Petition is allowed. No cost.â
ad
Thus, as per the said judgment, the State Government has no power to
M
terminate the services of the employee of the society. In the present case,
admittedly, the petitioner is the employee of the Cooperative Society and,
of
therefore, the Joint Registrar has no power to terminate his service. At the best
rt
after making enquiry the Joint Registrar should have forwarded the report to the
ou
society and the society should have been directed to take necessary action
against the petitioner.C
Thus, in light of the aforesaid judgment as well as discussion, the present writ
h
petition is allowed. The impugned order dated 14.07.2014 is hereby set aside
ig
and the Joint Registrar is directed to forward its report to the concerned society
H
i.e. respondent no.6 and the respondent no.6 is further directed to take
appropriate action against the petitioner in accordance with law.
Certified copy as per rules.(MISS VANDANA KASREKAR)
JUDGE
TabishDigitally signed by MOHAMMADTABISH KHANDate: 2018.02.12 17:43:47 +05'30' |
aecdc715-1fe4-577e-affe-d2c6b385d9a6 | court_cases | Uttarakhand High CourtUnknown vs In on 14 March, 2013Author:Alok SinghBench:Alok SinghCLMA Stay Application No. 2035 of 2013
In
CEXA No. 01 of 2013
Hon'ble Barin Ghosh, C.J.Hon'ble Alok Singh, J.Mr. Surendra Kumar Posti, Advocate for the
appellant.Ms. Sonam Nagrath, Advocate for the
respondent.In the instant case, it appears to be the
contention of the appellant that the assessment order
is against a dead person. Learned counsel appearing
on behalf of the respondent submitted that she needs
some time to take instructions.We personally feel, as it appears to us, that
an assessment order passed against a dead person is
not enforceable in law. We would, accordingly,
request the respondent to consider, whether he
would agree for recalling the assessment order and
taking fresh steps to assess the liability of the
deceased, after making the heirs of the deceased
parties to the assessment proceedings.List three weeks hence.Since the assessment order is against
somebody else and the recovery is being made
against somebody else, we stay the order of
recovery.Let a copy of this order be handed over to the
learned counsel for the respondent.(Alok Singh, J.) (Barin Ghosh, C.J.)
14.03.2013
Rathour |
387529f0-b770-52f5-82e5-d63b74386b96 | court_cases | Bombay High CourtShaikh Jaber Abdulah J Ai Sabah vs Ravindra Mukund Chafe & Anr on 19 December, 2013Author:Roshan DalviBench:Roshan Dalvijsn 1 S No.2955_2010
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUIT NO.2955 OF 2010
Shaikh Jaber Abdulah J AI Sabah ... Plaintiff
Vs.
Ravindra Mukund Chafe & Anr. ... Defendants
Mr. Haresh Jagtiani, Sr. Advocate, a/w. Ms. Olga Lume-Pereira, Adv.
& Ms. Vandana Mehta, Adv. i/b. Yashpal Jain & Mr. Suprabh Jain,
Adv. for the Plaintiff.
Mr. Rohan Cama, Adv., Mr. T.N. Tripathi, Adv. a/w. Sapna Rachure,
Adv. i/b. T.N. Tripathi & Co. for the Defendant No.1.
Mr. Shailesh Shah, Sr. Counsel, a/w. Mamta Sadh, Adv. & Sunil
Jadhav, Adv., i/b. Hemant Deshpande, Adv. for Defendant No.2.
CORAM : MRS. ROSHAN DALVI, J.DATE OF RESERVING THE JUDGMENT : 25th November, 2013
DATE OF PRONOUNCING THE JUDGMENT : 19th December, 2013
J U D G M E N T1. The Plaintiff is the owner of the building Al-Jabriya Court
at 69, Marine Drive, Mumbai 400 020. The Defendant No.1 is stated
to be the trespasser who has illegally encroached upon Flat No.6 and
a garage in the aforesaid building. Defendant No.2 is also claimed to
be stranger and trespasser illegally inducted in flat No.6 by Defendant
No.1. The Plaintiff claims that the Defendants have entered upon the
suit premises without his consent or permission and by breaking open
the locks of the suit premises and dispossessed the Plaintiff from
possession constraining the Plaintiff to recover possession of the suit
premises.2. It is the Plaintiff's case that the premises was tenanted to
one Jayantilal Desai. Rent receipts were issued to him. He died in::: Downloaded on - 23/12/2013 20:36:12 :::jsn 2 S No.2955_2010
April, 1976. His wife Urmila Desai and thereafter his married
daughter Mrs Renuka Shah lived and died in the suit premises. Mrs.
Renuka has not left any legal heirs surviving her, residing with her at
the time of her death on 23rd April, 2010. The Plaintiff, therefore,
claims that the tenancy rights came to an end upon her death. The
Plaintiff claims that the right, title and interest including the
possession of the suit premises devolves upon and reverts to the
Plaintiff as the owner and accordingly he has constructive / symbolic
possession.3. The Plaintiff claims to be an absentee landlord. He claims
the revisionary rights in respect of the suit premises upon the death of
the last surviving tenant.4. The Plaintiff has further claimed that on 31st August, 2010
Defendant No.1 broke open the lock of the suit premises and entered
therein. The Plaintiff obtained knowledge of the trespass committed
by Defendant No.1 from the neighboring tenants through his
constituted attorney (CA) one Nabil Rashid Gani (Nabil).5. Upon such a case the Plaintiff has sued for possession
underSection 6of the Specific Relief Act. Defendant No.1 claimed
that he had earlier entered upon the suit premises and was occupying
it. Defendant No.1 claims to have been living with deceased Renuka
Shah, the Plaintiff's statutory tenant. He claims to have been
transferred and bequeathed the suit Flat to him. Defendant No.1 has
relied upon a photocopy of the Will of the deceased, yet unprobated.
Without the grant of probate and consequent title Defendant No.1 has
sought to transfer the tenancy to Defendant No.2.6. Defendant No.2 claims to be a tenant upon the issue of a
single rent receipt by the erstwhile CA of the Plaintiff whose Power of
Attorney (POA) was since revoked. The receipt is shown to be rubber
stamped with his name.::: Downloaded on - 23/12/2013 20:36:12 :::jsn 3 S No.2955_20107. The Plaintiff applied for interim reliefs essentially of the
appointment of the Receiver in respect of the suit premises upon his
claim of recovery of possession of the property of which he was
dispossessed underSection 6of the Specific Relief Act. The
Defendants claim that the Plaintiff was not in possession and could
not have been dispossessed. It is, therefore, contended that the
Plaintiff is required to sue U/s.5 of theSpecific Relief Acton his title.
Defendant No.2 claims to be a tenant.8. Consequently two preliminary issues have been earlier
raised and framed and are required to be answered; (1) relating to
the maintainability of the suit U/s.6 of theSpecific Relief Actand
(2) relating to the bar U/s.41 of thePresidency Small Cause Courts
Act, 1882(PSCCA) as preliminary issue U/s.9A of the Civil Procedure
Code (CPC).9. The issues are as follows and answered as follows :ISSUES
1 Is the suit not maintainable U/s.6 of theSpecific No
Relief Act, 1963.2 Is the suit barred by provision ofSection 41of the No
Presidency Small Cause Court Act, 1882.10. The bar of jurisdiction created U/s.41 of the Presidency
Small Cause Court, 1882 is required to be determined first because if
the Courts inherent jurisdiction is ousted, the Court would not be able
to consider the maintainability of this suit U/s.6 ofSpecific Relief Act.
Hence the issues shall be determined accordingly.Issues relating to bar of jurisdiction U/s.41 of thePresidency Small Cause Courts Act, 1882.11. U/s.41 of the PSCCA suits inter-alia between landlord and
tenants for recovery of possession of property are enjoined to be filed
in the Court of Small Causes. The relevant portion ofSection 41runs::: Downloaded on - 23/12/2013 20:36:12 :::jsn 4 S No.2955_2010
thus:"41. (1) Notwithstanding anything contained elsewhere in
this Act but subject to the provisions of sub-section (2), the
Court of Small Causes shall have jurisdiction to entertain
and try all suits and proceedings between a licensor and
licensee, or a landlord and tenant, relating to the recovery
of possession of any immovable property situated in Greater
Bombay, or relating to the recovery of the licence fee or
charges or rent therefor, irrespective of the value of the
subject matter of such suits or proceedings.12. Even U/s.33 of theMaharashtra Rent Control Act, 1991the
bar of jurisdiction is in similar terms. The relevant part of which runs
thus :... shall have jurisdiction to entertain and try any suit or
proceedings between a landlord and a tenant relating to the
recovery of rent or possession of any premises and to decide
any application made under this Act..... and ....no other Court shall have jurisdiction to entertain any such
suit, proceeding, or application or to deal with such claim or
question.13. It is a settled and an elementary rule of law that to see
whether a suit is between a landlord and tenant one must see the
Plaintiff's case from the plaint, whatever be the defence. The Plaintiff
is the dominus litis. It is for him to sue. It is for the Plaintiff to show
whether his suit is between him as the landlord and the Defendant as
the tenant for recovery of possession, for recovery of rent of any other
application under theMaharashtra Rent Control Act. It will have to be
seen by the Court whether this is one such suit.14. It can be seen that the Plaintiff's suit is against trespassers.
The Plaintiff's suit is not against his tenants. The suit is not filed as a
suit between a landlord and tenant for recovery of possession.::: Downloaded on - 23/12/2013 20:36:12 :::jsn 5 S No.2955_2010
Defendant No.2 has sought to show that he has become a tenant. The
Plaintiff has not accepted the tenancy. It is for the Defendant No.2 to
prove that he is tenant. If the Defendant proves that he is Plaintiff's
tenant, the Plaintiff's contentions would belied. The Plaintiff's suit
itself would be dismissed.In the case ofLaxmipat Singhania Vs.
Larsen and Toubro LtdAIR (38) 1951 Bombay 205 which was a
case of a 99 year lease agreement allowing construction of a building
on the land of the Lessor the Court considered the title to the land and
the title to the building in English and Indian law and the Lessee's
rights thereto even after the expiration of the lease. Having concluded
that the suit as filed by the Lessor fell within the provisions of the
Bombay Rent Act, 1947 it held that the Civil Court had no jurisdiction
to try the suit and consequently dismissed the suit.15. If, however, the Defendant No.2 cannot prove the tenancy
the Plaintiff's suit on trespass would be justified and his reliefs would
require to be granted. It does not matter that the Defendant calls
himself a tenant. It only matters whether the suit is for the reliefs of
recovery of possession or rent or any other application under the rent
Act even between the admitted landlord and the tenant. Unless the
suit specifies the requirements ofSection 41of the Presidency Small
Cause Court Act, 1882 the Civil Court's jurisdiction cannot be barred.16.In the case ofKanji Manji Vs. The Trustees of the Port of
Bombay, AIR 1963 Supreme Court 468, a monthly lease of land was
made by BPT to five lessees. BPT sued to recover the land from the
lessees in the Bombay City Civil Court which suit came to be decreed.
The suit was for eviction from BPT land only. Such land was not
included in the definition of premises U/s.5(8) of the Bombay Rent
Control Act. Similarly, U/s.4A land belonging to BPT as the local
authority was exempt. Hence the Civil Court's jurisdiction was held::: Downloaded on - 23/12/2013 20:36:12 :::jsn 6 S No.2955_2010
not barred.17. An analogy can also be drawn from the judgments of this
Court in the cases ofMohinder Kaur Kochar Vs. Mayfair Housing
Pvt. Ltd. & Ors., AIR 2013 Bom 57 and Vardhman Developers Vs.
Thailambal Co-Op. Hsg. Soc. Ltd. & Ors. in Notice of Motion
No.3274 of 2010 in Suit No.2725 of 2010 dated 7th March, 2011 in
which it has been held that the civil court's jurisdiction is not barred
by the provisions contained inSection 91of the Maharashtra Co-
Operative Societies Act, 1960 in case of redevelopment of the Society
building in a suit for claiming rights upon redevelopment as
redevelopment is not a business of the society.18 Even if the contentions of the Defendants have to be
considered, the claims of Defendant No.1 is not of tenancy but under
a transfer and a bequest. Such a claim would have to be adjudicated
in a Civil Court. Upon the ruling in the case ofVasant Pratap Pandit
Vs. Dr. Anant Trimbak Sabnis1994 Mh. L.J. 1450 a legatee is held
not to be an heir as contemplated under Section 5(11)(c) of the
Bombay Rent Act, 1947.The analysis ofSection 5(11)(c)(i)in paras 14 & 15 of the
judgment shows the protection given to members of the family
residing with the tenant at the time of the death of the tenant as the
tenancy would be taken by the tenant not only for his benefit but also
for the benefit of the members of the family residing with him. Such
members of the family of the tenant would be protected under the
avowed object of the legislation whether or not those family members
were heirs in the strict sense. The Court, therefore, held that such
heirs are given priority to be treated as tenants and it is only when
such members of the family are not there that the heirs would be
entitled to be treated as tenants. It is observed in para 14 of the::: Downloaded on - 23/12/2013 20:36:12 :::jsn 7 S No.2955_2010
judgment that a bequest under a Will which would require the court
to honour the wishes of the deceased tenant as a Testator would
render nugatory a provision of the section requiring the Court to
decide the tenant amongst the heirs in case of default of agreement
between the heirs themselves.Consequently it is held in para 14 of the judgment that the
legislature had not intended to confer the statutory tenancy upon a
testamentary heir. Even the reasoning for this ultimate conclusion is
given in the said para thus:"Otherwise the right of the landlord to recover possession will
stand excluded even though the original party (the tenant)
with whom the landlord had contracted is dead".It is thereafter observed:"Besides, a statutory tenancy is personal to the tenant".The further analysis of the reasoning in para 15 of the judgment
shows why a legatee under a Will of a tenant cannot claim as an heir.
It is observed that if an "heir is to be interpreted to include a legatee
even a stranger may have to be inducted as a tenant for there is no
embargo upon a stranger being a legatee".19. The oral evidence led by parties is essentially to show the
relationship between the deceased statutory tenant and the Defendant
No.1 as also the tenancy of Defendant No.2. No relationship of
Defendant No.1 with the last statutory tenant of the Plaintiff is shown,
admitted or established. Defendant No.1 is shown to be a stranger.
The provisions of theMaharashtra Rent Control Actdo not apply to
such relationship. Defendant No.2 claims through Defendant No.1 as
having been transferred the suit premises. His case similarly follows.20. Upon seeing the plaint the above suit on trespass is::: Downloaded on - 23/12/2013 20:36:12 :::jsn 8 S No.2955_2010
required to be filed in the Civil Court and the Civil Court's jurisdiction
is not seen to be barred U/s.41 of thePresidency Small Cause Courts
Act, 1882. The issue relating to bar of jurisdiction is, therefore,
answered in the negative holding that the Civil Court's inherent
jurisdiction is not barred.Issue relating to the maintainability of the suit U/s.6 of
theSpecific Relief Act.21. The owner of a property can sue in a Civil Court for
recovery of possession of the property from any party who he claims is
in wrongful possession of the property owned by him. The Plaintiff
has produced the property register cards showing the ownership. In
this case the Plaintiff is the admitted owner of the building and
consequently also the suit flat No.6 therein. Defendant No.2 has
admitted the ownership of the Plaintiff. None of the Defendants claim
that any other person is the owner.22. The Plaintiff may recover possession either U/s.5 of theSpecific Relief Acton his title or U/s.6 of theSpecific Relief Actmerely on his possession, if the Plaintiff has been dispossessed
therefrom without his consent.23. For the Plaintiff to recover such possession on title the
Plaintiff would sue U/s.5 of theSpecific Relief Actwhich runs thus :5. Recovery of specific immovable property. -A person entitled to the possession of specific immovable
property may recover it in the manner provided bythe Code
of Civil Procedure, 1908.24. The Plaintiff has valued the suit flat at Rs.16 crores and
paid Court fee on the entire amount. The Plaintiff has not valued the
suit under item 2 of schedule I to the Bombay Court Fees Act, 1959 at
half its value as a suit U/s.6 of theSpecific Relief Act. The Plaintiff::: Downloaded on - 23/12/2013 20:36:12 :::jsn 9 S No.2955_2010
has prayed for recovery of possession as also compensation and mesne
profits for the unlawful occupation of the suit premises by the
Defendants. The reliefs are essentially as in a suit filed on title U/s.5.25. However the Plaintiff has not chosen to sue on title. He
has chosen to sue on dispossession. The Plaintiff claims to be in
constructive or juridical or symbolic possession only. He has
described himself as absentee landlord in paragraph 7 of the plaint
being absent from India. He has claimed the entitlement to the suit
premises upon juridical or symbolic possession as an owner in
paragraph 11 of the plaint. However he has claimed forcible
dispossession of such symbolic possession on the specific date - 31 st
August, 2010 upon the trespass by Defendant No.1.26. The Plaintiff has claimed in paragraph 5 of the plaint that
when his CA visited the suit premises on 4 th September, 2010 "to take
possession" Defendant No.1 was not available. He did not state when
he would handover possession. The Plaintiff was given to understand
that Defendant No.1 was residing with his family and would not
handover possession. The Plaintiff claims that Defendant No.1
intentionally made duplicate keys of the suit premises and changed
the outer door lock to restrain the Plaintiff's entry and thus
dispossessed the Plaintiff. The Plaintiff accordingly claims right of
recovery of possession U/s.6 of theSpecific Relief Actthe relevant
part of which runs thus :6. Suit by person dispossessed of immovable property. -(1) If any person is dispossessed without his consent of
immovable property otherwise than in due course of law, he
or any person claiming through him may, by suit, recover
possession thereof, notwithstanding any other title that may
be set up in such suit.27. It is argued on behalf of the Plaintiff that all that the::: Downloaded on - 23/12/2013 20:36:12 :::jsn 10 S No.2955_2010
section requires is dispossession upon lack of consent. The section
does not state that there should be "forcible" dispossession of "actual
possession". The dispossession may, therefore, be of symbolic
possession of an owner of an immovable property.28. The title ofsection 6shows a suit by a person dispossessed
of immovable property. He must prove his possession. If a person
shows his actual possession such actual possession would be restored
even if he does not have title. It has to be seen whether a person who
has title can be dispossessed of possession not actually with him
because possession would follow his title and he would be in symbolic
possession.29. A suitu/s.6of the Specific Relief Act would essentially be
filed against a person who has taken possession. Such possession is
taken without his consent. Hence it would be illegal possession, even
if it is not forcibly taken as in this case by breaking open the locks and
entering upon the suit premises.30. However the averments in the plaint more specially
paragraph 20 do show that the suit is filed only U/s.6 of theSpecific
Relief Act. The Defendants have contended that the suit is not
maintainable as aSection 6suit. Yet the averments in the plaint also
show the Plaintiff's right of recovery U/s.5 of theSpecific Relief Act.
It may be for the Plaintiff to amend plaint to bring it within either of
the aforesaid two sections of theSpecific Relief Act.31. What is the jurisdictional issue or the plea that concerns
the jurisdiction of the Court must be first understood. The earliest
case ofPandurang Vs. Maruti, AIR 1966 SC lays down that law
thus :It is well settled that a plea of limitation or a plea of res
judicata is a plea of law which concerns the jurisdiction of
the Court.::: Downloaded on - 23/12/2013 20:36:12 :::jsn 11 S No.2955_201032. This has been the principle followed in various decisions of
this Court, the first which is the caseSmithkline Beecham Consumer
Health Care Gmbhy & Ors. Vs. Hindustan Lever Ltd. & Anr.,
2002(1) ALL MR 1043, in which the learned Single Judge of this
Court considered what was the plea which concerned the jurisdiction
of the Court and the finding on which its jurisdiction could be ousted.33. That was a case of plea raised underOrder 2 Rule 2 of the
CPC. The Court considered that under Order 2 Rule 1 the Plaintiff
had to raise all the grounds available to him in his suit for the matter
in dispute. The object of that provision was to prevent further
litigation. Hence the Plaintiff must include all the causes of action in
one suit so far as was practicable and known to him. If that was not
done, the later suit would be barred UnderOrder 2 Rule 2 of the CPC.The Court held that Order 2 Rule 1 was much likeSection 11- Explanation 4 which dealt with res judicata.
Consequently if a subsequent suit was instituted after the earlier suit
was finally decided it would be barred U/s.11. The Court held that
this bar was pursuant to the bar U/s.9of the CPCrelevant part of
which runs thus :9. Courts to try all civil suits unless barred. -The Courts shall (subject to the provisions herein contained)
have jurisdiction to try all suits of a civil nature excepting
suits of which their cognizance is either expressly or
impliedly barred.34 In the case ofForeshore Co-operative Housing Society
Ltd. Vs. Praveen D. Desai & Ors., 2009(1) Bom CR 757, the Division
Bench of this Court, following the case ofPandurang(Supra)
observed that the plea of limitation would deal with the power of
jurisdiction of the Court to decide the matter.Referring to the case
ofSmithkline(Supra) it held that if a suit was barred by any statute::: Downloaded on - 23/12/2013 20:36:12 :::jsn 12 S No.2955_2010
the Court would have no authority to hear or decide the same. Hence
the expression "jurisdiction" is used in the wider sense to include the
bar to the maintainability of the suit. That is the statutory bar to the
maintainability of the suit. It held thatSection 3of the Limitation Act
was such a statutory bar and hence the suit had to be dismissed if it
was barred by limitation because the Court would have no jurisdiction
to entertain it and the parties cannot confer jurisdiction by consent.
Consequently the Court concluded in paragraph 21 of the judgment
that the plea of limitation is a plea which goes to the jurisdiction of
the Court and it is plea on law which would preclude the Court from
proceeding with the merits of the contentions and obliged it to dismiss
the suit.35 It can be easily seen that there is no such bar U/s.6 (1) of
theSpecific Relief Actunder which this suit is filed. It would be
worthwhile to citeSection 6(1)and6(2)of the Specific Relief Act to
understand what is a statutory bar and what is not.Section 6(1)&
(2) run thus :6. Suit by person dispossessed of immovable property. -(1) If any person is dispossessed without his consent of
immovable property otherwise than in due course of law, he
or any person claiming through him may, by suit, recover
possession thereof, notwithstanding any other title that may
be set up in such suit.(2) No suit under this section shall be brought -(a) after the expiry of six months from the date of
dispossession; or(b) against the Government36.Section 6(1)only entitles the person dispossessed without
his consent to sue. It does not bar any suit. In fact the only bar is
underSection 6(2)if the suit U/s.6 is filed after six months from the
date of dispossession or it is filed against the government. If that was
so, the Court would not have the jurisdiction to try the suit. Section::: Downloaded on - 23/12/2013 20:36:12 :::jsn 13 S No.2955_2010
6(2) would bar the Court's jurisdiction. The Court would be obliged
to dismiss the suit upon such statutory bar.37.In the case ofRoyal Palms (I) Pvt. Ltd. & Ors. Vs. Bharat
Shantilal Shah & Ors., 2009 (2) Bom C R 622, Smithkline (Supra)
has been followed.38.In the case ofJagshi K Shah Vs. Shaan Builders Pvt. Ltd.&Ors., 2012(3) Bom C R 770, Foreshore(Supra) has been
followed.39. Hence it is now settled law that when a statute creates a
bar, the Court's jurisdiction is barred. When the Court's inherent
jurisdiction is barred, the Court cannot try the suit and must dismiss
it. Hence it must follow as a matter of corollary that if the Courts
jurisdiction is not statutorily barred either expressly or impliedly, the
Court must try the suit on merits and may dismiss it if the provision
under which it is tried is not satisfied or if reliefs cannot be granted
under the provision under which it is tried or under any other
provision of law considering the merits of the case.40. In the case of Erasmo (Supra) which was filed U/s.6 by
the owner who claimed to be dispossessed the Court held that the
Court must consider on merits his ownership rights and not only
possession. The Court must go that extra mile against a wrongful
party in possession. That judgment, therefore, considered thatSection 5prevails overSection 6if the owner of the suit property sued
U/s.6 since both theSections 5&6of the Specific Relief Act are in
fact for recovery of property. The suit on title, which is filed only by
the owner of the suit property, must get precedence over only
possession that the owner claims upon the case of being dispossessed
without his consent. Of course, if a party is only in possession but is
not the owner of the property, he can sue only U/s.6 and not Section::: Downloaded on - 23/12/2013 20:36:12 :::jsn 14 S No.2955_2010
5 of theSpecific Relief Act.41. This suit is filed U/s.6 of theSpecific Relief Actas
aforesaid. The Plaintiff has paid full Court fee. He has valued the suit
property at the market value. He has not filed a misconceived action
to avoid payment of court fee which of course, cannot be entertained
by any Court. There is no bar to the jurisdiction of the Court in trying
the suit.42 The issue of maintainability of the suit was sought to be
tried as a preliminary issue upon evidence led. The evidence is to
show that a suit underSection 6could not be filed upon the facts of
the case. It may be mentioned that Plaintiff as the owner of the suit
premises may sue underSection 5also. Nevertheless the Plaintiff's
case in the plaint, the Defendants defence and the evidence led may
be considered.43. The Plaintiff claims in paragraph 4 of the plaint that the
Defendants have trespassed into suit premises. The suit is, therefore,
on trespass. The Plaintiff is not in actual possession. The Plaintiff has
sued for recovery of possession. The Plaintiff's suit is, therefore, on
title.44. Mr. Jagtiani argued that the mere fact that the Defendants
broke open the lock of the suit premises as averred in paragraph 4 of
the plaint, the Plaintiff must be taken to be forcibly dispossessed of his
symbolic possession as the owner of the premises in actual occupation
of his tenant. Accordingly the Plaintiff claims that the suit U/s.6 can
lie.45. Paragraph 5 of the plaint shows that the CA of the Plaintiff
went to take possession of the suit premises on 4 th September, 2010.
Mr. Shah and Cama drew my attention specially to the fact that this
averment shows that until then the Plaintiff was not in possession.
What is contemplated is actual possession. The Plaintiff concedes that::: Downloaded on - 23/12/2013 20:36:12 :::jsn 15 S No.2955_2010
the Plaintiff was not in actual possession. The only question of law to
consider upon the averments in the plaint itself is whether a suit
U/s.6 of theSpecific Relief Actcan be maintained by an owner in
symbolic possession of the suit property to recover possession from a
trespasser.46. It may be mentioned that the evidence of the Plaintiff's CA
in his cross examination relied upon by the Defendants shows that
neither the Plaintiff nor even his CA actually had the keys of the suit
premises. Though he claimed to have had a key of the suit flat after
the death of the tenant, he did not remember who gave him the key
and when. He did not keep the key in his possession because he
thought it was useless to keep the key. He deposed that he cannot
ascertain its whereabouts and produce the key. The suit flat
admittedly was in the actual possession of the tenant and hence the
key must be expected to be with her. The case of the breaking open
the lock on 31st August, 2010 is upon information derived from a
certain neighbour by the CA of the Plaintiff and informed to the
Plaintiff. The evidence of the CA in his cross examination in this
regard shows that one Sanghvi, the other tenant of building, orally
informed him. He lodged police complaint but could not produce it.47. Though the Plaintiff's cross examination would show a very
nebulous case with regard to the actual act of dispossession or the
Plaintiff being in possession of the suit flat by way of holding a key
thereof as aforesaid, the Plaintiff cannot be non suited for any lapse in
the plaint U/s.9Aof the CPCunder which the objection to the
jurisdiction of the Court alone would have to be decided as a
preliminary issue.48.In the case ofKumar Kalyan Prasad & Anr. Vs.
Kulanand Vaidik & Ors.AIR 1985 Patna 374 dispossession of
symbolic possession has been considered. It is relied upon by Mr.::: Downloaded on - 23/12/2013 20:36:12 :::jsn 16 S No.2955_2010
Jagtiani to show that the Plaintiff has not had to be in actual
possession of the suit property to sue underSection 6. In that case
the Plaintiffs sued to recover the possession in execution of a decree
obtained by them. The decree was for eviction of the Defendants as
also for arrears of rents. The Nazir handed over the symbolic
possession to the Plaintiffs in execution of the decree. The Plaintiff
claims that they were handed over actual possession and upon taking
delivery of possession they locked the house and deputed two of the
servants to keep a watch over the same. Despite that the Defendants
forcibly entered and took possession of the house by ousting the
Plaintiffs' servants and also assaulted them. A criminal case was then
filed and accused persons were convicted and the conviction had been
maintained by the High Court. The Defendant started erecting new
structures and demolished the old ones. The Plaintiffs sued for
recovery of possession U/s.6 upon such actual dispossession. What is
claimed by the Defendant in that suit was that the Plaintiffs were not
in actual possession but in symbolic possession under a paper
transaction of the Nazir regarding the delivery of possession in the
execution proceedings. It was contended that because the Plaintiffs
were delivered symbolic possession they could not sue U/s.6. It was
held that flagrant and contumacious violation of symbolic possession
duly delivered by the court of law would merit the suit U/s.6 for its
recovery. In that case the possession was obtained by the Plaintiff
from those very Defendants in accordance with law and by the Courts
of law in execution proceedings. Possession obtained admittedly in
execution proceedings was allowed to be recovered.In this case the Plaintiff claims a symbolic possession only upon
the statutory tenant having expired without leaving behind any heirs
living with her at the time of her death in the suit premises. She
expired in April, 2010. The Plaintiff would not come to be in::: Downloaded on - 23/12/2013 20:36:12 :::jsn 17 S No.2955_2010
symbolic possession ipso facto.49. The word dispossession implies that the Plaintiff must
show his possession. The Plaintiff must show how he came to be in
possession, either actual or symbolic. Possession has to be obtained
by following due legal process. If the Plaintiff had actually taken
possession of the suit premises after the death of the tenant peaceably
and put his own lock on the suit premises and was in possession of its
key, he would be taken to be in symbolic possession even though he
was an absentee landlord and did not actually reside in the premises
but kept it locked. In this case the Plaintiff has not locked the suit
premises himself. That is not even his case. He has not taken
possession at all, actually or symbolically. He was consequently not in
possession at all actual or symbolic. He is certainly entitled to recover
possession on the basis of his title, but that is to be recovered in
accordance with law if there is any contest. Consequently the
possession claimed by the Plaintiff is the possession which he is
entitled to but which he has not secured for himself. Hence merely
upon Defendant No.1 wrongfully coming into suit premises and
trespassing thereupon the Plaintiff could not be taken to be
"dispossessed" as is required U/s.6.50. Mr. Jagtiani drew an analogy to a person owning a flat and
going abroad. He questioned as to whether such a person, whilst he
was abroad, could be taken to be dispossessed if another person broke
open his lock. Mr. Cama rightly contrasted that analogy from that of
the Plaintiff's case. Such a person would put his own lock on the
premises. He would, therefore, be in symbolic possession. If the lock
is broken and stranger entered upon suit premises during his absence,
such a person would be "dispossessed" and would be entitled to
maintain an action U/s.6 of theSpecific Relief Act. The Plaintiff is not
one such person. The Plaintiff never put his lock on the suit premises.::: Downloaded on - 23/12/2013 20:36:12 :::jsn 18 S No.2955_2010
He, therefore, cannot claim such symbolic possession. He is,therefore, not "dispossessed".Section 6suit, therefore, would not lie.51. Mr. Jagtiani relied upon the case of Sadashiv Shyama
Sawant (Dead) thru LRs. &Ors. Vs. Anita Anant Sawant, (2010) 3
Supreme Court Cases 385 to contend that theSection 6suit can be
filed by the person dispossessed or any person claiming through him.In that case though a tenant was dispossessed, the landlord was held
entitled to sue as a person claiming possession through such tenant.
The Plaintiffin that casewas held entitled to suein that caseas
person claiming through the tenant. The tenant was in exclusive
possession; he was forcibly dispossessed.The Plaintiff's case is not one such; he has not sued though his
tenant on his tenant's behalf.Mr. Jagtiani relied upon the extract of the case ofRatanlal
Ghelabhai V. Amarsing Rupsing, AIR 1929 Bom 467 made in
paragraph 14 of the judgment in which it is observed that there is
nothing inSection 6to show that the possession is confined to actual
physical possession and that the landlord is in possession through his
tenant and that the landlord can sue for revisionary interest in his
own name.However the point that is missed is thatin that case, as rightly
pointed out by Mr. Shah, the landlord sued through the tenant. The
Plaintiff does not sue through his tenant. The Plaintiff has sought to
sue in his own right as the owner to whom the property would revert
after the death of the last statutory tenant. Consequently the Plaintiff
cannot fall under the category of the "person claiming through"another - i.e. his tenant.Consequently in the extract of the judgment in the case of
Gobind Ram Jamma Dass V. Mewa, Air 1953 Pepsu 188 whilst::: Downloaded on - 23/12/2013 20:36:13 :::jsn 19 S No.2955_2010
holding that the word "dispossession" is not confined only to actual
possession, it is immediately added that a suit by a landlord is
competent even if the landlord is not in actual possession but in
possession through a tenant at the time of illegal dispossession. The
discussion about why the landlord in such symbolic possession must
be held entitled to sue is that a contrary view would defeat the aims
and objects of thesection 6because if the tenant dispossessed refuses
to sue, the landlord would suffer dispossession until he is forced to
file a recovery suit. Thus the wrong door would be put in an
advantageous position and that would be putting a premium on a
wrongful act of the trespasser.52. After considering the various judgments the proposition of
law laid down in paragraph 18 is not of any person dispossessed but
relates only to a landlord dispossessed in respect of the property let
out to the tenant of which the tenant has been dispossessed forcibly
by the third party. Consequently the forcible dispossession is the
essential requirement. Dispossession contemplates the actual
possession either of the landlord himself or of his tenant through
whom he claims or sues.Mr. Jagtiani would rely upon the following specific part of
paragraph 18 of the judgment which runs thus :A person is said to have been dispossessed when he has been
deprived of his possession; such deprivation may be of actual
possession or legal possession. Possession in law follows
right to possession. The right to possession, though distinct
from possession, is treated as equivalent to possession itself
for certain purposes.He would argue that any person dispossessed may be in actual
possession or legal possession and that the Plaintiff is certainly in
legal possession since he has the right to possess. However, the right::: Downloaded on - 23/12/2013 20:36:13 :::jsn 20 S No.2955_2010
to possess must be followed by possession since it is held that the
possession in law follows the right to possession. It may be treated as
equivalent to possession but there must be possession for a Plaintiff to
be dispossessed.The explanation of the distinction between physical and legal
possession in Halsbury Laws of England set out in paragraph 19 of the
Judgment further shows that the legal possession may exist without
de facto possession. A person may be deemed to be in legal
possession though not having de facto possession. Such is
constructive possession. Consequently it is held in paragraph 21 of
the judgment that dispossession of the tenant is dispossession of the
landlord. If the tenant was forcibly thrown out by a trespasser, the
landlord has the implied right of entry to recover possession. As the
landlord would continue in legal possession through his tenant who is
in actual possession but not contrary to his tenant who was in
possession. Hence if the tenant is in physical possession the landlord
retains possession through him.Consequently one of them must be in actual physical possession
and must be forcibly dispossessed.If a landlord is in such constructive possession and claims
through the tenant, he can certainly sue U/s.6 because his tenant is in
possession and has been wrongfully, illegally and forcibly
dispossessed without his consent. If not, the landlord himself must be
in possession and must be wrongfully, illegally and forcibly
dispossessed without his consent.53. In this case the landlord's right is certainly impinged by the
claim of the Defendants. Such a claim may be wholly false, frivolous,
misconceived, malicious and even vexatious. The Plaintiff as the
landlord would certainly have right to recover the possession but only
by following due legal process. He cannot claim to be in possession::: Downloaded on - 23/12/2013 20:36:13 :::jsn 21 S No.2955_2010
merely because his last statutory tenant has expired without any act
on his part in taking possession of the suit flat after her death and
putting up a lock thereon. This the landlord can do by suing on title.
That would be the action on trespass such as this case is. That would
be for recovery of possession from the Defendants as trespassers.
However, that is not an action U/s.6 of theSpecific Relief Act; it is an
action for recovery of immovable property on title U/s.5 of the Act as
the person "entitled" to possession of the suit property.54. Defendant No.1, however, claims that he was transferred
the suit premises and also bequeathed the suit premises. Mr. Shah on
behalf of Defendant No.1 relies upon the case ofBhavarlal
Labhchand Shah Vs. Kanaiyalal Nathalal Intawala, (1986) 1
Supreme Court Cases 571 in which the Plaintiff had not obtained
even symbolic possession in accordance with law. The Plaintiff had
not sued for any declaration and obtained possession under any
decree in favour of the Plaintiff executed by the Plaintiff. The Plaintiff
claimed to be in symbolic possession ipso facto.Such is not the
symbolic possession contemplated in the judgment in the caseKumar
Kalyan(Supra).55. Mr. Cama on behalf of the Defendant No.2 relied upon the
judgment in the case of Lalji Yeshwant Singh (Dead) by hisLRs Vs.
Rao Jagdish Singh, 1967 DFLS (Soft.) 305 in which it has been held
by the Supreme Court that a person in actual possession could not be
dispossessed even though he has no title because law respects
possession even if there is no title to support it if possession is taken
without having recourse to law.It, therefore, contemplates
dispossession of actual possession as held in the case ofBhavarlal
Shah & Vasant Pratap Pandit(Supra). The Plaintiff is certainly
entitled to sue on title though not simplicitor on possession. The::: Downloaded on - 23/12/2013 20:36:13 :::jsn 22 S No.2955_2010
Plaintiff claims to be the landlord of suit building in which the suit flat
is situate. Defendant No.2 has admitted that the Plaintiff is the owner
of the suit property in a criminal complaint filed by Defendant No2
against the erstwhile CA of the Plaintiff.56. In any event Defendant No.1 claims through the Plaintiff's
tenant during the continuance of her tenancy. He cannot, therefore,
be permitted to deny that the Plaintiff was the landlord of such tenant
at the beginning of the tenancy and had title to the immovable
property.57. Defendant No.2 also claims to be a Plaintiff's tenant. He
claims to be issued a single rent receipt by the erstwhile CA of the
Plaintiff. He also cannot deny the Plaintiff's title. The Plaintiff's suit
on title for recovery of the possession from the Defendants as
trespassers. Though the Plaintiff has averred in paragraph 20 of the
plaint that he has sued U/s.6 of theSpecific Relief Act, the suit for
recovery to possession and mense profits is seen to be a suit on title
U/s.5 of theSpecific Relief Act.58. However, the filing the suit under one or other of the
provisions is not a jurisdictional issue and is capable of correction by
amendment, if required. The Plaintiff cannot be non suited at the
threshold. There is no bar to the filing of the suit underSection 6of
the Specific Relief Act. Seeing of the entire evidence which is on
merits of whether the suit can succeed or fail as aSection 6suit is,
therefore, seen to be an act of frivolity undertaken in futility.59. Consequently the issue relating to the maintainability of
the suit U/s.6 of theSpecific Relief Actis answered in the negative
holding that the suit is maintainable.( ROSHAN DALVI, J. )::: Downloaded on - 23/12/2013 20:36:13 ::: |
f71944c0-e1ed-57dc-b5e7-559aa54eaf44 | court_cases | Income Tax Appellate Tribunal - BangaloreCanara Bank vs Joint Commissioner Of Income Tax on 26 February, 2002Equivalent citations: [2003]84ITD310(BANG), (2003)79TTJ(BANG)398ORDERDeepak R. Shah, A.M.1. These two appeals by the assessee arise out of the common order of the CIT, Karnataka-III, Bangalore passed underSection 263of the IT Act, 1961, and relate to asst. yrs. 1993-94 and 1994-95. For the sake of convenience the appeals are heard together and are being disposed of by this common order.2. For the asst. yr. 1993-94 the assessee has raised a ground as follows :"The learned CIT erred in holding that the revision underSection 263for the asst. yr. 1993-94 was within time although clearly the action underSection 263was time-barred."But at the time of hearing the learned counsel for the assessee fairly stated that, the action underSection 263by the CIT was not time-barred and did not want to press this ground. We accordingly reject this ground of appeal.3. The only common issue to be decided in these appeals is whether the CIT was right in assuming jurisdiction underSection 263of the IT Act, 1961. The facts briefly stated are that: The assessee is a nationalised bank wholly owned by Government of India. The assessee bank has inter alia income from interest on securities and for the assessment years under consideration it had taken into account in the books of account broken period interest on these securities calculated up to 31st March. In the assessment made underSection 143(3), the AO followed the instructions issued by the CBDT to the Chief CITs not to bring to tax the broken period interest as such interest had not been accrued. However, while completing the assessment for the asst. yr. 1995-96 in the case of the assessee-bank, despite the instruction of the CBDT the AO included the broken period interest in the total income of the assessee for that year and simultaneously proposed the CIT to initiate action underSection 263for the assessment years under consideration, on the ground that the action of the AO in not including the broken period interest was erroneous and prejudicial to the interest of Revenue. Before the CIT the assessee relied on the judgment of the Hon'ble Karnataka High Court in the assessee's own case holding that the broken period interest was not taxable as the interest on securities did not accrue from day to day but only on certain fixed days. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case ofVijaya Bank Ltd. v. Addl. CIT (1991) 187 ITR 541 (SC). However, the CIT in his common order dt. 15th March, 1999, held that interest on securities for the broken period is chargeable to tax on accrual basis, and accordingly directed the AO to suitably modify the assessments for the asst. yrs. 1993-94 and 1994-95. It is against this order of the CIT, that the assessee has come up in appeal before the Tribunal.4. Before us Sri V.R. Gupta, Advocate appeared for the assessee and Dr. R.B. Krishnan appeared for the Revenue. The learned counsel for the assessee argued that for invokingSection 263two conditions are required to be satisfied i.e., (1) the order has to be erroneous and (2) the order has to be prejudicial to the interests of Revenue. If either of the conditions is absent, the CIT cannot revise an order invoking the provisions ofSection 263. For this proposition he relied upon the decision of the Hon'ble Supreme Court inMalabar Industrial Co. Ltd. v. CIT(2000) 243 ITR 83 (SC). It is argued by the learned counsel that the provisions ofSection 263cannot be invoked to correct each and every type of mistake or error committed by the AO and it is only when an order is erroneous that the said section will be attracted. An incorrect assumption of facts and/or an incorrect application of law will satisfy the requirement of the order being erroneous. The learned counsel went on to add that when the AO adopted one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless and until the view taken by the AO is unsustainable in law. It is therefore, pleaded that the order passed by the CIT underSection 263be set aside and the assessee's appeals allowed.5. On the other hand, Dr. R.B. Krishnan argued on behalf of Revenue that the decision of the Supreme Court relied on behalf of the assessee is distinguishable on facts. He stated that the Supreme Court inthe said decisionhas categorically held that the CIT is right in invoking the provisions ofSection 263if the view adopted by the AO is unsustainable in law. He further argued that after the deletion of the Chapter dealing with income from interest on securities the income of the nature in the present situation is taxable under the head 'profits and gains of business or profession'. According to him the income under the head 'profits and gains of business or profession' is to be computed underSection 145i.e., as per the method of accounting regularly employed by an assessee. Since the assessee bank itself had credited the interest on securities for the broken period to its P&L a/c and since this method is regularly employed by it, the AO was not correct in deleting the same and holding that the income has not accrued to the assessee.Dr. Krishnan submitted that this view was unsustainable in law and hence applying the same decision of the Hon'ble Supreme Court inMalabaz Industrial Co.'s case (supra) the CIT was right in assuming jurisdiction underSection 263.6. We have given our careful consideration to the rival submissions, facts and circumstances of the case and also the decision of the Hon'ble Supreme Courtreferred to above. The prerequisite for the exercise of jurisdiction by the CIT underSection 263is that the order of the AO has not only to be erroneous but has also to be prejudicial to the interests of Revenue. Thus the twin conditions are required to be satisfied. Moreover, the CBDT had opined for asst. yr. 1992-93 that the income being interest on security for the broken period is not required to be included in the assessee's total income. The letter of the CBDT dt. 2nd Jan., 1995, addressed to the Chief CIT, Bangalore to this effect is reproduced below for the sake of understanding the matter correctly :"Subject : Representation of Canara Bank, Bangalore, reg. assessment of broken period interest on Government securities.Sir,
I am directed to enclose a copy of letter No. PDGAW : BSCA : IT : 92-93/1668 NVG dt. 14th Nov., 1994, received from Canara Bank, Bangalore, on the above subject. Taking in consideration the fact that the Committee of Secretaries had refused to give approval to the Department to file Special Leave Petition against the High Court's decision on the above issue in favour of the assessee for asst. yr. 1984-85 and for the purpose of minimising litigation in the case of "Public Sector Undertakings", you are requested to take necessary action so that broken period interest is not assessed as income of the bank during asst. yr. 1992-93 and also for withdrawing pending appeals in the case of Canara Bank, Bangalore before the Tribunal/ High Court on the above issue,
Yours faithfully
sd/-(Rajib Hota)
Under Secretary to the Government of India."It is seen that based on the decision of the Hon'ble Karnataka High Court in the assessee's own case for asst. yr. 1984-85 the CBDT thought it fit even for asst.yr. 1992-93 not to assess The interest income of the broken period as income accrued during the year. It is seen that the provisions ofSections 18to21of the Act dealing with 'Interest on Securities' were deleted w.e.f. 1st April, 1989, i.e., asst. yr. 1989-90. But the aforesaid letter of the Board pertains to asst. yr. 1992-93. There is no amendment in the law after asst. yr. 1992-93 in respect of charging the same income. It can, therefore, be held that the view which is correct for the asst. yr. 1992-93 can still prevail for asst. yrs.1993-94 and 1994-95 also. This is one of the possible view which the AO has followed. The CIT acting underSection 263might not agree with the view of the AO. However, so long as the view' adopted by the AO is not proved to be unsustainable in law, the CIT cannot assume jurisdiction underSection 263. Respectfully following the decision of the Hon'ble Supreme Court inMalabai Industrial Co.'s case (supra) we hold that the CIT was not correct in invoking the provisions ofSection 263and hence the order passed by him thereunder is set aside.7. We could also examine the provisions ofSection 263from another angle i.e., whether the order is prejudicial to the interests of the Revenue or not. In the asst. yrs. 1993-94 and 1994-95 the loss returned by the assessee was Rs. 262,41,52,430 and Rs. 210,41,59,100 while the assessments completed were on net loss of Rs. 220,93,00,570 and Rs. 161,45,74,759 respectively. As per the method of accounting followed, the assessee first credits the broken period interest to its P&L a/c. However, while filing returns of income the interest income for the broken period is excluded from the total income/loss, as the same is not treated as accrued to the assessee. However, while doing so the interest income of the broken period of earlier previous year which has accrued during the year is offered for taxation, thereby the income credited in the books of account in an earlier previous year is offered for taxation in the immediately subsequent assessment year, as having accrued to the assessee. Ultimately there is no loss to the Revenue except that the year of chargeability is different. If for the purpose of determining the prejudice to the Revenue the interest income for the broken period is assumed to be even Rs. 100 crores, then even for the assessment years under consideration the assessed income will still be loss. The loss to be carried forward for asst. yr. 1993-94 will be less. However, the income offered for taxation in asst. yr. 1994-95 will be reduced since it has suffered tax in asst. yr. 1993-94 and for the purpose of calculating income-tax the resultant figure will not affect the Revenue in any manner. In the circumstances of the case it is not proved that there is any prejudice to the Revenue by way of less tax payable by the assessee. When the question was put to the learned Departmental Representative by the Bench with regard to the prejudice caused to the interests of Revenue the learned Departmental Representative simply stated that it will affect the amount of carried forward loss only. In our opinion even if the carried forward loss to certain extent will be reduced, similar amount will be reduced from the income offered in the subsequent year and hence the ultimate effect is not going to cause any prejudice to the Revenue. On this count also the action of the CIT in invoking the provisions ofSection 263is not warranted. We, therefore, hold that in the absence of any prejudice caused to the Revenue action underSection 263could not have been invoked by the CIT and hence such an order is liable to be set aside.8. We shall now discuss whether the interest for the broken period can still be included in the assessee's total income on the merits of its case or not. The learned authorised representative stated that interest on Government securities accrues to the assessee only on specified dates and not day-to-day basis. The assessee has no right to claim interest at the close of the financial year. The income which can be said to have been accrued is only that portion which the assessee is entitled to receive or on which the assessee has a right to receive. In the absence of any right of the assessee to claim the interest for the broken period interest at the end of the relevant previous year cannot be said to have been accrued to the assessee and hence even applying the provisions ofSection 145no interest can be charged. In the absence of any accrual of income to the assessee the position will not change, whether it was taxed as per the earlier provision of interest on securities or by subsequent amendment whereby such income is taxed under the head 'profits and gains of business1. He also relied upon the Karnataka High Court's decision in the assessee's own case inCIT v. Canara Bank(1992) 195 ITR 66 (Kar) and the decision of the Tribunal, Jaipur Bench inState Bank of Bikaner & Jaipur v. Dy. CIT(1999) 65 TTJ (Jp) 480 : (2000) 74 ITD 203 (Jp). It was further argued that the case before the Jaipur Bench of the Tribunal related to the asst. yrs. 1991-92 and 1992-93 i.e., subsequent to the removal of Chapter on taxation of 'Interest on Securities' and simultaneous amendments inSection 145w.e.f. asst. yr. 1989-90. On the other hand, the learned Departmental Representative argued that after the deletion of the Chapter relating to taxation of interest on securities w.e.f. 1st April, 1989, the interest on securities is to be taxed under the head "profits and gains of business" in assessee's case. It was, therefore, prayed that for computing the profits and gains of businessSection 145is to be applied. The learned Departmental Representative further argued that as perSection 145the income under the head "profits and gains of business" is to be computed in accordance with the method of accounting regularly employed by the assessee. The assessee credits the interest on securities for the broken period in its books of account. The assessee maintains the books of account on mercantile system. It, therefore, cannot be said that as per the method of accounting employed, the interest had not accrued to the assessee. It was further argued that if the method of accounting is not regularly employed it is only the AO who has the power to reject the books of account and compute the income to the best of his satisfaction. What was emphasised was that it is only the AO who could reject the book-results.However, the assessee has no right to say that even though the income is accounted in the books of account as accrued to it for the purpose of taxation, it is not open to the assessee to argue that the income had not accrued to it. The learned Departmental Representative further relied upon the decision of the Kerala High Court in CJT v. Catholic Syrian Bank Ltd. (1997) 228 ITR 363 (Ker). It was argued that the decision of the jurisdictional High Court in assessee's own case (supra) was in respect of the year whenSections 18to21of the IT Act were on the statute book. It was therefore, argued that the decision of the Karnataka High Court does not apply after the amendment in the Act w.e.f. asst. yr. 1989-90. Dr. Krishnan further argued that the interest for the broken period can be said at the most not due to the assessee but cannot be said that it has not accrued to it. The income of the nature of interest accrues day to day and not on specific date when the same is payable. The concept of income accruing and income due is different and whatever income that has accrued till the end of the previous year has to be taxed only in the relevant previous year and not in the subsequent year when the same is due.9. In reply, the learned counsel for the assessee also argued that though there is amendment in the provision relating to taxation of interest on securities, yetSection 5of the Act is not amended. What is not an income as perSection 5cannot be said to have accrued to the assessee and by invokingSection 145the same cannot be taxed. He further relied on the decision of the Supreme Court inUnited Commercial Bank v. CIT(1999) 240 ITR 355 (SC) for the proposition that the assessee though have made an entry in the books of account, however for the purpose of taxation the assessee is free to follow the method as permissible under law and he cannot be precluded by saying that once the income has been shown to have accrued in the books of account the assessee is not allowed to withdraw the same from the computation of his total income.10. We have considered the arguments of both the parties and gone through the decisions relied upon by them. It appears that the decision of theJaipur Bench of the Tribunal(supra) is directly on the point now under consideration. The only point we are required to decide is whether income has accrued to the assessee or not. Government securities are offering interest on the specified dates, which may be subsequent to the end of the accounting year. As per the terms of issue of Government securities, the interest is not payable at any time. The assessee does not get a right to claim the interest on the closing date of the financial year. For e.g., if the interest is payable, say in the month of May and November proportionate interest for four months from 1st December to 31st March does not become right of the assessee to claim. In the absence of any right to claim the income such income cannot be said to have accrued to the assessee. Thus the income from interest on securities becomes the income of the bank only when it becomes due. The assessee becomes entitled for the interest only during those days which are specified at the time of issue of those securities and it cannot claim that it had become entitled to the interest earlier than those specified dates. If the assessee sells the security prior to the due date, the holder of the security i.e., transferee would be entitled to the interest for the entire period and the issuing authority of the securities will make the payment of interest to the holder only. In such a situation the assessee would not have any right or claim whatsoever for the interest of the broken period. The amount is accounted for only because of the requirements of theBanking Regulation Act. But in fact, the amount cannot be said to have accrued to the assessee. Even though the Chapter relating to charging of income from interest on securities i.e.,Sections 18to21are deleted, yetSection 5is unamended. So long as the income cannot be said to have accrued within the meaning ofSection 5of the IT Act, which is the charging section,Sections 28to44Dcomputing the income under the head "profits and gains of business" cannot be brought into operation. Drawing the conclusion further, since the amount does not become income underSections 28to44D,Section 145cannot be brought into operation. The provisions ofSection 145cannot overrideSection 5. If an income has neither accrued nor received within the meaning ofSection 5whateverSection 145may say, such income cannot be charged to tax even though the accounting entry has been made in the books of account. The computation provision ofSection 145cannot enlarge or even restrict the content of taxable income.11. We are not convinced by the argument thatSection 145(1)confers a discretionary power upon the AO to compute the income correctly. Along with power there is a statutory duty upon the AO to examine in every case whether the income chargeable to tax in the relevant year has been correctly calculated by the assessee or not. If on proper appreciation of facts if the accounting entry includes any income which has not been accrued to the assessee, the AO is supposed to tax only those income which in fact had accrued to the assessee within the meaning ofSection 5. The Hon'ble Supreme Court has time and again held that the income is not calculated based on accounting entry but only on the accrual principle. Unless and until the assessee has a right to receive the income, such income cannot be said to have accrued to him. For this proposition we are fortified in our view as per the decisions of the Hon'ble Supreme Court inE.D. Sassoon & Co. Ltd. v. CIT(1954) 26 ITR 27 (SC), CIT v. Shoorji Vallabhdas & Co.(1962) 46 ITR 144 (SC) and Kedarnath Jute Mfg. Co. Ltd. v. CIT(1971) 82 ITR 363 (SC).The decision relied upon by the learned Departmental Representative in Catholic Syrian Bank Ltd.'s case (supra) is found to be on a different issue. The ratio of the said decision is not applicable to the facts of the case inasmuch as in that case the assessee tried to reduce the interest for the broken period from the cost of the securities. However, their Lordships has held that the amount being interest for the broken period was income of the assessee and could not be deducted in computing the income from securities. We are unable to agree that the decision of the Kerala High Court in Catholic Syrian Bank Ltd.'s case (supra) is applicable to the facts or even the issue on hand.12. In the result, we hold that though the assessee has accounted interest for the broken period in its books of account, yet the same has not accrued to the assessee and the same cannot be included in the total income of the assessee for the assessment years under appeal.13. In the result, the assessee's appeals are allowed. |
261a1563-5416-59d0-8d1a-bb62f7cd61a6 | court_cases | Calcutta High CourtGirin (Girindra) Das Gupta And Ors. vs Emperor on 2 January, 1935Equivalent citations: AIR1935CAL246, 159IND. CAS.385, AIR 1935 CALCUTTA 246ORDER
Nasim Ali, J.1. The facts which give rise to this Rule are as follows:2. One Bhudeb Mukherjee, Sub-Deputy Magistrate, was an accused in a case underSection 409, I.P.C., before the District Magistrate of Dacca. He was absconding. A non-bailable warrant was issued for his arrest on 28th February 1934. This was followed by proclamation and attachment issued on 22nd March 1934. He was arrested by the police on 3rd June 1934 in a house on Strand Road in Calcutta. On that date the police addressed a petition to the Additional District Magistrate of Alipore praying that the accused should be remanded to custody for being escorted to Dacca. The second Police Magistrate of Alipore, Mr. G.R. Mnkherjee, however released him on a bail on that date. The petitioners who have obtained this rule became surety for the appearance of Bhudeb before the District Magistrate of Dacca on 18th June 1934 and bound themselves in default thereof to forfeit the sum of Rs. 1,000 each of His Majesty the King-Emperor of India. On 9th June 1934 the proceedings before the Second Police Magistrate of Alipore were withdrawn by Sadar, Subdivisional Officer of Alipore, to his own file.3. The learned Subdivisional Officer then cancelled the order for bail, issued a warrant for the arrest of the accused and also isssued notices on the sureties i.e., the petitioners, to produce the accused before him on 11th June 1934. This case after two adjournments was fixed for 18th June 1934 on which date a telegram was received from the District Magistrate of Dacca that the accused did not appear before that Court. On 23rd June 1934 the learned Subdivisional Officer drew up proceedings against the petitioners under Section 514, Criminal P. C, and asked them to show cause why their bail bonds should not be forfeited. The petitioners thereupon showed cause. The cause shown was not accepted and the learned Subdivisional Officer forfeited the entire amounts of the bonds. On appeal the learned Additional District Magistrate of Alipore held that the learned Subdivisional Officer had no jurisdiction to take action under Section 514, Criminal P.C., for failure of Bhudeb to appear on the due date before the District Magistrate of Dacca. He accordingly set aside the order of forfeiture of the Subdivisional Officer and directed a copy of his order to be sent to the District Magistrate of Dacca for his information on 21st August 1934.4. On 17th September 1934 the District Magistrate of Dacca started proceedings under Section 514 and directed the petitioners to pay Rs. 3,000 (Rs. 1,000 each) or to show cause on or before 28th September 1934 why payment of the said sum should not be enforced against them. The petitioners thereupon showed cause on 28th September 1934. The main defences of the petitioners were: (1) that the Second Police Magistrate of Alipore, Mr. G.R. Mukherjee, had no jurisdiction to entertain the remand petition addressed to the Additional District Magistrate of Alipore. (2) that the Police Magistrate of Alipore had no jurisdiction to admit the accused Bhudeb to bail as the latter was arrested at Strand Road within the jurisdiction of the Chief Presidency Magistrate, Calcutta, (3) that the Subdivisional Officer of Alipore having cancelled the order for bail, the bail bonds became inoperative and consequently cannot be enforced under Section 514, Criminal P.C.5. The learned District Magistrate however did not accept the defence and passed an order on 28th September 1934 directing each of the petitioners to pay Rs. 1,000 to the Crown. The petitioners thereupon obtained the present rule from this Court upon the District Magistrate of Dacca to show cause why the sentence passed on the petitioners should not be reduced on the ground that the order passed on the petitioners was too severe in view of the facts disclosed in the petition for revision filed in this Court. Under Section 514, 01. (5) the Court may at its discretion remit any portion of the penalty mentioned in a bail bond and enforce payment in part only. The section therefore gives a discretion to the Court but does not indicate what facts and circumstances are to be taken into consideration in the exercise of that discretion.6. From the reported cases however it appears that the Court remitted portions of the penalty in cases: (a) where the accused had been subsequently arrested and the amount forfeited was excessive and the surety was unable to pay: see Jora Singh y. Emperor 1933 Lah 42 (b) where the surety did not act irresponsibly and there had been no connivance or negligence on the part of the surety: see Probhudayal v. Emperor 1927 All 831. In this case it appears that the accused has been arrested subsequently. It further appears that the amount forfeited is excessive and the petitioners are liable to pay. The learned District Magistrate's reasons for enforcing the penalty in full are these:They stood surety without knowing anything about Bhudeb Mukherjee but say that the Sub-Deputy Magistrate who granted the bail stated that Bhudeb Mukherjee was known to him and had property. A perusal of the police report dated 3rd June 1934 which was on the file would have disclosed the fact that Bhudeb Mukherjee had been absconding and that proclamation and attachment had been issued. The sureties did not even trouble to read this.7. In other words the learned Magistrate was of opinion that the petitioners did not act in the matter with due care and caution. But it appears that they are junior Mukhtears and the Magistrate who released Bhudeb on bail informed the petitioners that the accused was a Sub-Deputy Magistrate and was known to him. He further told the petitioners that the accused was accidentally involved in a criminal case and asked the petitioners to stand sureties. Under the circumstances I am inclined to think that the mere fact that the petitioners did not look into the file would not go to indicate that they had been grossly negligent in the matter or that they acted irresponsibly. In view of the statements of Mr. G.R. Mukherji it cannot be said that the petitioners had any suspicion that the accused would abscond. In view of the peculiar facts and circumstances of the case I am of opinion that the ends of justice will be served if each of the petitioners be directed to pay Rs. 200 to the Crown within a month from this date failing which proper steps will be taken for realising the said amount from them. |
84fb648e-2c26-5ca6-af59-4f03c291f81a | court_cases | Delhi High CourtCommissioner Of Income Tax vs Smt. Angira Devi on 7 December, 2000Equivalent citations: (2001)165CTR(DEL)604Author:Arijit PasayatBench:Arijit PasayatORDER
Arijit Pasayat, C.J.At the instance of revenue following question has been referred for opinion of this court undersection 256(1)of the Income Tax Act, 1961 (hereinafter referred to as `the Act), by the Income Tax Appellate Tribunal, Delhi Bench 'E' (hereinafter referred to as `the Tribunal)."Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that there was no transfer of the property within the meaning ofsection 2(47)of Income Tax Act, 1961 ?2. Factual position as set out in the statement of case is as follows:Assessee, Smt. Angira Devi, is the only daughter of late Shri Raghumal. Her mother was Smt. Bhagwati Devi. Assessee was married to Shri Hans Raj Gupta and had four sons, namely, Desh Raj, Shiv Raj, Rajinder Kumar and Mahender Kumar. Raghumal had several immovable and movable properties. By a will dated 4-9-1926, he bequeathed certain specified amount to several persons named in the will and appointed his wife and daughter (assessee) and his two nephews as residuary legatees. Several persons were appointed as executors of the will including one Shri Gopal Das Modi. Raghumal died on 5-9-1926. Dispute started in respect of administration of the estate of the deceased under the will. A civil suit for administration of estate under the will was instituted by Gopal Das Modi in the High Court at Calcutta against his co-executors, the beneficiaries and others. During the pendency of the suit, a receiver was appointed to manage the estate. The two residuary legatees, the nephews of the deceased were paid off and the estate was finally administered on the basis of the decree passed by the High Court on 4-7-1944. The executors were discharged. The estate was thereafter handed over to residuary legatees, i.e., the assessee and her mother having equal shares as per the will, but subject to the overriding charge of payments to the other beneficiaries under the will. The estate was jointly managed by the assessee and her mother. Assessee's mother Smt. Bhagwati Devi made a will of her 1/2 share in the joint properties in favour of her four grandsons, i.e., assessee's four sons. Bhagwati Devi died on 16-7-1954. Thus, in the joint properties the assessee had 1/2 share while each of her four sons had 1/8th share. It is to be noted that the receiver was assessed as association of persons since 1939 till he was discharged by the High Court. Income from the properties was divided in favour equal shares in the hands of four residuary legatees as per the will of late Reaghumal. Assessments were made in the status of association of persons in respect of joint properties till assessment year 1972-73. On 9-11-1972, a deed of partition of the joint properties was executed between the assessee and her four sons. The joint properties were valued at Rs. 4,20,000 after deducting the value of overriding charges. One property, i.e., one situated at Ajmeri Gate was valued at Rs. 1,69,500 and was allotted along with certain other properties to the four sons of the assessee in equal shares as per Schedule 'C' to the partition deed. Certain other properties were allotted to the assessee as per Schedule 'B'. Four sons of the assessee constituted a partnership on 9-12-1972, and each of them contributed his share in the Ajmeri Gate property as his capital in the partnership. Value of the whole property was taken at Rs. 48 lakhs for this purpose. In the assessment proceedings for the assessment year 1973-74, Income Tax Officer treated the deed of partition between the assessee and her four sons as a deed of settlement. He was of the view that valuation of property at Rs. 1,69,000 was a paltry sum and in reality fair market value of the property was Rs. 48 lakhs. Matter was referred for valuation to the Valuation Officer, who valued the property at Rs. 48 lakhs and 1/2 share of assessee was fixed at Rs. 24 lakhs. Income Tax Officer was of the view that there was transfer of assessee's 1/2 share to her sons by the deed of 9-11-1972, and, therefore,section 52(2)of the Act was attracted. Assessee was required to explain as to why capital gains should not be charged on the said sum. Assessee took the stand that there was no transfer involved in favour of her sons as after the decree of Calcutta High Court, assessee along with her mother had decided to manage the estate jointly by contributing capital for that purpose and the estate was assessed in the hands of association of persons of which assessee was a member. By deed dated 9-11-1972, there was distribution of capital assets on dissolution of the association of persons and that in any case there was a partition of joint properties amongst the co-owners of the general joint properties including the property in question. It was also submitted thatsection 52had no application as there was no money transfer involved. Income Tax Officer took the view that the assessee and her four sons held the properties as co-owners after 1954 and not as members of an association of persons. He held that assessee had 1/2 share in the property at Ajmeri Gate which was transferred to her four sons and the case was covered bysection 52(2)of the Act was clearly applicable on the basis of fair market value determined. Matter was carried in appeal before the Appellate Assistant Commissioner (hereinafter referred to as `the AAC'). Appellate Assistant Commissioner held that an association of persons continued to exist with assessee and her four sons being members thereof and it continued till the execution of deed dated 9-11-1972. Even otherwise assessee and her four sons constituted a body of individuals till the deed of partition dated 9-11-1972, was executed and said deed cannot be treated as a deed of settlement. He held that the deed dated 9-11-1972, was a partition deed and there was dissolution of association of persons as properties mentioned in Schedule 'D' could not be legally divided and association of persons could not remain in existence with respect to those properties and association of persons ceased to exist on 9-11-1972. Matter was carried in appeal by the revenue before the Tribunal. Considering the rival submissions, Tribunal was of the view that it was not necessary to enter into the controversy whether the assessee along with her sons constituted association of persons and whether there was dissolution of that association of persons so as to attractsection 47(ii)of the Act. The assessing officer himself had held that the assessee as a result of decree of Calcutta High Court as well as the will of assessee's mother held the properties along with her four sons as co-owners.Section 45of the Act applies only when there is a transfer of a capital asset as defined insection 2(47)of the Act. Noticing the essence of a partition it was held that there was no conveyance involved and also there was no exchange. Each one of the co-sharers who had an antecedent title did not acquire a new title and no conveyance was involved in the process. Accordingly revenue's appeal was dismissed. On being moved for reference as aforesaid, the question as set out above has been referred.3. We have heard learned counsel for the revenue. However, there is no appearance on behalf of the assessee in spite of notice. Learned counsel for revenue submitted that Tribunal erroneously proceeded to examine the case as if it was relatable to a case of co-owners. We find that revenue 's case all through was that assessee and her four sons were co-owners. The deed, dated 9-11-1972, was treated by the Income Tax Officer as a deed of settlement. In fact the Tribunal on a reading thereof has come to hold that it was a partition deed by which properties which were earlier held as joint. (tenants-in-common) by the parties to the deed were partitioned between the assessee on the one hand and her four sons on the other. The true character of a partition is that it converts joint enjoyment into enjoyment in severality. Partition is not an exchange of undivided share of a co-sharer over the whole common property in exchange of the whole share in definite portion thereof, namely the portion that was allotted to him in exchange thereof. By partition co-sharer gets a separate allotment by virtue of his antecedent title as co-sharer. There is thus no acquisition of property in another independent right. That being the position the Tribunal was correct in holding that there was no transfer involved. Our answer to the question, therefore, is in the affirmative, in favour of assessee and against the revenue.The reference stands disposed of. |
1a9c9a7d-09a4-5b21-b568-6f873ecbb85f | court_cases | Chattisgarh High CourtBharat Petroleum Corporation Limited vs Khatanand Alias K. Anand Saraf And Ors. on 11 May, 2005Equivalent citations: AIR2006CHH22, 2006(2)MPHT89(CG)ORDER
Vijay Kumar Shrivastava, J.1. This is an appeal directed against the order dated 292002, passed by learned IIIrd Additional District Judge, Bilaspur in Miscellaneous Civil Case No. 19/ 2002, rejecting an application under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure.2. Facts material for disposal of this appeal are that, the plaintiffs had filed a civil suit for possession of land bearing Khasra No. 748/2 area 0.76 acres situated at Village Tifra, District Bilaspur as also for recovery of arrears of rent of Rs. 2,175/- and damages against, the defendant M/s. Bharat Petroleum Corporation Limited, in the Court of Civil Judge Class-1, Bilaspur. The said suit was registered as Civil Suit No. 69-A/ 1998. The defendant remained ex parte in the suit. Learned IVth Civil Judge Class-I, Bilaspur, vide judgment and decree dated 1-12-1998, partly allowed the suit and passed decree against the defendant, for payment of arrears of rent. Being aggrieved by the said judgment and decree, the plaintiffs preferred Civil Appeal No. 7A/1999 in the Court of District Judge, Bilaspur. The defendant M/s. Bharat Petroleum Corporation Limited remained ex parte in the appeal. By ex parte judgment and decree dated 21-9-1999, the District Judge, Bilaspur allowed the appeal and for possession and mesne profit passed decree in favour of the plaintiffs.3. The defendant M/s. Bharat Petroleum Corporation Limited filed an application under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure through its Power of Attorney Holder B. Krishna Murthy for setting aside the ex parte decree dated 21-9-1999 passed in Civil Appeal No. 7A/1999 on the ground that it was not duly served with the notice of appeal and hence could not appear and contest: the appeal before the Court. The defendant came to know about the decree on 12-4-2000 when in execution proceedings process server came to execute the possession warrant. Therefore, on 15-4-2000, the defendant filed an application for setting aside the ex parte decree along with a separate application underSection 5of the Limitation Act for condonation of delay. The plaintiffs opposed both the applications not only on merit but also on their maintainability.4. Learned Court below i.e. first appellate Court tried the issues involved in the matter, and after appreciating the evidence, held that, the defendant M/s. Bharat Petroleum Corporation Limited failed to explain the delay in filing the application, as also the Power of Attorney executed by it bears the signature of only one Director and one Secretary, whereas legally, it was required to be signed by two Directors, as such, the said two applications were not filed by a competent person and, therefore, by the impugned order dated 29-10-2002, dismissed those applications.5. Heard learned Counsel for both the parties and perused the records of the Courts below.6. Learned Court below i.e. first appellate Court, vide impugned order, has held that, no notice hearing of the appeal on 7-7-1999 was served on the defendant; Learned Counsel for the respondents /plaintiffs, in arguments, contended that, the said finding of the Court below i.e. first appellate Court is incorrect. On the other hand, learned Counsel for the appellant/defendant supported the said finding.7. On 3-4-1999, Civil Appeal No. 7A/ 1999 was admitted for final hearing and the plaintiffs were directed to pay P. F. within 3 days for issuing notice to the defendant and the date for final hearing was fixed for 7-7-1999. On 7-7-1999, the District Judge was on leave, therefore, the Court Reader fixed the case for 16-7-1999. On 16-7-1999, learned District Judge held that, notice for 7-7-1999 was served on the defendant and, therefore, he proceeded ex parte against the defendant. The defendant has challenged the service of notice, and in its application, stated that, it was not duly served with the notice, therefore, it remained absent in the appeal. Learned Court below i.e. first appellate Court, after deeply examining the matter, found that, no order for issuance of notice by registered post acknowledgment due was passed by the Court, and according to law, only in addition to service of notice by ordinary process, it can be ordered and served by registered post. Neither notice for service by ordinary process was issued by the Court nor the defendant was served with such notice. Relying on Electric Construction and Equipment Co. Limited v. Parmali Vailes Limited, reported in 1991 Jab LJ 45, the Court below i.e. first appellate Court held that, the service of notice by registered post is not a due service in accordance with law, and accordingly, held that, no legal notice for the hearing date 7-7-1999 was served on the defendant.8. For proper appreciation of the lis, the relevant provisionsof the Code of Civil Procedure, which were in force on the disputed date, are quoted below :Order XLI Rule 14: "Publication and service of notice of day for hearing appeal.--(1) Notice of the day fixed under Rule 12 shall be affixed in the Appellate Court-house, and a like notice shall be sent by the Appellate Court to the Court from whose decree the appeal is preferred, and shall be served on the respondent or on his pleader in the appellate Court in the manner provided for the service on a defendant of a summons to appear and answer; and all the provisions applicable to such summons, and to proceedings with reference to the service thereof, shall apply to the service of such notice.(2) Appellate Court may itself cause notice to be served.-- Instead of sending the notice to the Court from whose decree the appeal is preferred, the Appellate court may itself cause the notice to be served on the respondent or his pleader under the provisions above referred to."Order V Rule 19-A : "Simultaneous issue of summons for service by post in addition to personal service.-- (1) The Court shall, in addition to, and simultaneously with, the issue of summons for service in the manner provided in Rules 9 to 19 (both inclusive), also direct the summons to be served by registered post, acknowledgment due addressed to the defendant, or his agent empowered to accept the service, at the place where the defendant, or his agent, actually and voluntarily resides or carries on business or personally works for gain:Provided that nothing in this sub-rule shall require the Court to issue a summons for service by registered post, where, in the circumstances of the case, the Court considers it unnecessary.9. As per the law applicable on the disputed date, for valid service on the defendant, it was necessary that, the notice, accompanied with copy of memorandum of appeal, should have been issued by the means provided under Order V. Rules 9 to 19of the Code of Civil Procedure, and if the Court had ordered, in addition to and simultaneously with the issue of notice by those modes, notice for service by registered post could have been issued, Here, it is pertinent to note that, the first appellate court never asked the plaintiffs to pay P, F. and expenses for service by registered post in addition to normal mode, therefore, neither the notice for service by registered post could have been issued nor was required to be served. Therefore, when no order for issuance of notice by registered post, in addition to ordinary mode, was passed by the first appellate Court, and no notice for service by the modes provided under Order V Rules 9 to 19of the Code of Civil Procedurewas issued, the service of notice, in violation of those rules, effected on the defendant by registered post, shall certainly be held illegal and, therefore, learned Court below i.e. first appellate court, after minutely appreciating the material on record, in holding the service illegal, did not commit any illegality or irregularity.10. During the arguments, it has also been raised that, on 16-7-1999, the Court below i.e. first appellate Court had no right or power to proceed ex parte against the defendant as the date 16-7-1999 was not the date fixed for hearing of the appeal. That date was fixed by clerical staff of the Court. On 7-7-1999, the Presiding Officer was on leave, therefore, on that date also, the case could not be called for hearing. From the record, it is apparent that on 7-7-1999, the Presiding Officer i.e. District Judge was on leave, therefore, on that date, the case could not have been called for hearing. Another date 16-7-1999 was fixed by the Clerk, that too not for hearing. Therefore, on 16-7-1999, the case was not fixed for hearing therefore, on that date, the defendant could not have been proceeded ex parte by the Court. Hence, the defendant was not required to appear on 7-7-1999 and 16-7-1999, therefore according to Order XLI Rule 17(2)of the Code of Civil Procedure, the first appellate Court had no power to proceed ex parte on those two dates against the defendant.11. Learned Counsel for the appellant/ defendant vehemently contended that, the respondents/plaintiffs, without preferring cross-appeal or cross-objection, have no right to raise the dispute regarding finding given vide impugned order by the Court below i.e. first appellate Court on the service of notice. On the other hand, learned Counsel for the respondents/plaintiffs urged that, the plaintiffs are supporting the impugned order, therefore, in absence of any cross appeal or cross objection, they have right to assail the finding of the Court below i.e. first appellate Court, which is against them.12. The relevant provisions, having vital impact on the case, contained under Order XLI, Rules 21 and 22(1)of the Code of Civil Procedureare quoted below :Order XLI, Rule 21 : "Re-hearing on application of respondent against whom ex parte decree made.-- Where an appeal is heard ex parte and judgment is pronounced against the respondent, he may apply to the Appellate Court to re-hear the appeal; and, if he satisfies the Court that the notice was not duly served or that he was prevented by sufficient cause from appearing when the appeal was called on for hearing, the Court shall re-hear the appeal on such terms as to costs or otherwise as it thinks fit to impose upon him."Order XLI. Rule 22(1) : "Upon hearing respondent may object to decree as if he had preferred a separate appeal -- (1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any cross-objection to the decree which he could have taken by way of appeal provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.Explanation. -- A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.13. From bare reading of the aforesaid provisions, it is as clear as crystal that, if the defendant satisfies the Court that the notice was not duly served on it and files application in accordance with law, the court was bound to set aside the ex parte decree and re-hear the appeal. In the present case, learned Court below i.e. first appellate Court although held that, no valid notice was served on the defendant, but only on the ground of limitation, the application filed by the defendant was dismissed by the impugned order. Therefore, the impugned order is based on the finding arrived at by the Court below i.e. first appellate Court regarding non service of notice on the defendant as well as the period of limitation.14. TheOrder XLI Rule 22 of the Code of Civil Procedureempowers the respondents/ plaintiffs, to support the decree, and without filing any appeal, to raise the grounds for deciding issues in their favour, if had been decided against them, but it is necessary for them to raise the same by filing cross-objection. It is also apparent from the explanation provided underOrder XLI Rule 22 of the Code of Civil Procedureand the language used under Order XLI Rule 22(1)of the Code of Civil Procedurethat, if any substantial issue had been decided against the respondents/plaintiffs, and without that being decided in their favour, they are not in a position to support the order, it is necessary for them to file a cross-objection and to challenge the finding recorded against them.15. From the aforesaid discussions, it is held that--(1) learned Court below i.e. first appellate Court did not commit any illegality by recording the finding that no legal notice was served on the defendant for 7-7-1999.(ii) only on the date fixed for hearing of the appeal if the respondent does not appear can be ordered ex parte. Here in the present case, neither the date 7-7-1999 nor 16-7-1999 was the date fixed for hearing the appeal.(iii) It is not permissible for the plaintiffs to challenge the finding recorded by the Court below i.e. first appellate Court regarding non-service of legal notice on the defendant without filing any cross-objection regarding it.16. The ex parte judgment and decree was passed on 21-9-1999. For setting aside the same, limitation has been prescribed underArticle 123of theLimitation Act, which reads as below :---------------------------------------------------------------------------------------------Description of suit Period of Limitation Time from which
period begins to run---------------------------------------------------------------------------------------------Article 123.-- To set aside a Thirty days. The date of the decree or where
decree passed ex parte or to the summons or notice was
re-hear an appeal decreed or not duly served, when the ap-
heard ex parte. plicant had knowledge of the
Explanation.-- For the pur- decree.
poses of this Article, substi-
tuted service under Rule 20
ofOrder V of the Code of Civil
Procedure, 1908, shall not be
deemed to be due service.---------------------------------------------------------------------------------------------17. From the aforesaid provision, the limitation for presenting the application has been prescribed i.e. 30 days from the date of the decree or where the summons or notice was not duly served when the applicant had knowledge of the decree. In the present case, learned Court below i.e. first appellate Court held that, no legal notice was served on the defendant, therefore, for limitation, the date of knowledge of the decree plays a vital role as the limitation of 30 days will start from the date of knowledge. Learned Court below i.e. first appellate Court held that, the defendant came to know on 21-9-1999 that the judgment and decree has been passed on that date in Civil Appeal No. 7A/1999, if not, at least they had come to know the same on 21-2-2000, the date on which letter Ex. D/3 was received by it.18. B. Krishna Murthy (AW-1), the Territory Manager of the defendant deposed on oath that, for the first time, he came to know on 12-4-2000 when the Court's Process Server came to execute the possession warrant. In cross-examination, he admitted the fact that, a talk of compromise between the parties was going on. Nowhere he accepted that he came to know the complete details of the judgment and decree earlier to 12-4-2000. The fact that, B. Krishna Murthy (AW-1) came to know about the passing of the judgment and decree against the defendant on 12-1-2000, finds support also from the statement of Ashok Dayashankar Tiwari (AW-2) and Kisan Budhiya (AW-3). To rebut the fact that only on 12-4-2000, the defendant came to know about the ex parte judgment and decree, witness Dharam Prakash Saraf (NAW-1) has been produced, who in his statement, deposed that, on 21-9-1999, he telephoned to Sales Manager Ashok Tiwari and informed him that, decree has been passed. He also informed the Territory Manager B. Krishna Murthy. On 24-9-1999, he told B. Krishna Murthy that, he was not taking interest in the case, therefore, he will proceed to take possession of the land. On 22-10-1999, again he gave the information regarding the case. On 8-2-2000, he visited Mumbai to meet Chairman U. Sunderajan, who was on leave, therefore, he gave information regarding the judgment to his P. A. On 18-2-2000, he sent a letter, Ex. D-3. In that letter, he disclosed that on 21-9-1999, information regarding judgment passed in appeal has been given. Ex. D-3 and Ex. D-11 are the letters issued by this witness and also proved by him. In both the letters, he has stated that the Chairman was on leave, therefore, at Mumbai, he could not meet the chairman and talk to him. In both the letters, he did not mention that he unveiled the facts regarding passing of the judgment and decree to his P. A. from both the documents, it is also apparent that, regarding passing of the judgment and decree, except stating in Ex. D-3 that on 21-9-1999, on telephone, he gave information regarding judgment dated 21-9-1999, no other details have been mentioned. Therefore, it appears that, in oral evidence, he exaggerated the fact regarding unveiling the passing of judgment and decree, therefore, on 21-9-1999 or thereafter, any information regarding judgment and decree was given by the plaintiffs to the defendant, other than Ex. D-3, was not acceptable. Although from the date of receipt, of the letter Ex. D-3, it can be held that, the information that, the ex parte judgment was passed on 21-9-1999, was received by the defendant, but whether, as enumerated underArticle 123of theLimitation Act, that will amount to knowledge or not, is an important stake, which requires to be decided on the facts of the case.19. Before coming into force the Act of 1963, the Act of 1908 was in force, and presentArticle 123of theLimitation Actcorresponds toArticle 164of the oldLimitation Act. Hon'ble the Apex Court, while dealing with the matter underArticle 164of theLimitation Actin Panna Lal v. Murari Lal (dead) by his legal representatives reported in AIR 1967 SC 1384, observed as below (Para 4) :(A) Limitation Act (1908), Article 164 --"Knowledge of the decree" -- Meaning of.The expression "knowledge of the decree" inArticle 164means knowledge of the particular decree which is sought to be set aside. When the summons was not duly served, limitation underArticle 164does not start running against the defendant because he has received some vague information that some decree has been passed against him. It is a question of fact in each case whether the information conveyed to the defendant is sufficient to impute to him knowledge of the decree within the meaning ofArticle 164.The test of the sufficiency is not what the information would mean to a stranger, but what it meant to the defendant in the light of his previous dealing with the plaintiff and the facts and circumstances known to him. If from the information conveyed to him the defendant has knowledge of the decree sought to be set aside, time begins to run against him underArticle 164.It is not necessary that a copy of the decree should be served on the defendant. It is sufficient that the defendant has knowledge of the material facts concerning the decree, so that he has a clear perception of the injury suffered by him and can take effective steps to set aside the decree.20. Hon'ble the High Court of Madhya Pradesh, while dealing with the expression "knowledge of decree" in Smt. Chhutbai V. Madanlal reported in AIR 1989 Madh Pra 330, observed as below :Para 7 : "Now coming to the question of application being barred by time, we are of the opinion that the appellate Court has completely misdirected itself in holding that the application was barred by time. The expression "knowledge of the decree" used inArticle 123of theLimitation Act, 1963, means the knowledge of a particular decree, which is sought to be set aside. It has been held that when the summons was not duly served on the petitioners, the limitation underArticle 123of theLimitation Actdoes not start running against the petitioners because they received some vague information that some decree has been passed against them See AIR 1967 SC 1384 Pannalal v. Murarilal.No doubt in this case, it has been held that it is a question of fact in each case whether the information communicated to the defendant is sufficient to impute to him knowledge of the decree within the meaning ofArticle 164of the oldLimitation Act. In the present case, the appellate Court, itself has held that in the notice Ex. P-4, it has not been mentioned that from which Court the decree was passed nor the date of the decree has been mentioned but as the case No. 1 has been mentioned the petitioner could have gathered the knowledge by inspecting the Register of Civil Suit maintained by the Courts. Admittedly in Mhow, there is not only one Civil Judge Class II, but there are two or three Civil Judges. Therefore, this type of information cannot be said to be the knowledge of the decree. There is no finding of the Appellate Court that from the notice Ex. A-4, the petitioners got the knowledge of the decree, but, on the other hand, the finding is different that the petitioners could have inspected the record and could have got the knowledge by finding out the particulars of the decree. In our opinion, on such a finding of the appellate Court, the order of the appellate Court holding that the application under Order 9, Rule 13, C. P. C. was barred by time, cannot be sustained and deserves to be quashed.21. From the aforesaid enunciations, it is clear that, only vague information that, judgment has been passed on 21-9-1999, is not sufficient to satisfy the requirement of knowledge. The plaintiffs have not given any information regarding the name of the Court, the name of the parties and the particulars of the judgment and decree i.e. the decree passed, therefore, only mentioning in letter Ex.D-3 that, on 21-9-1999, passing of judgment dated 21-9-1999 was informed on telephone, does not come within the purview of knowledge. Hence, by virtue of the letter, Ex. D-3, whether it has been served on the defendant or not, no inference can be drawn that the defendant had received knowledge on 21-9-1999 or on 21-2-2000 regarding the decree.22. From the aforesaid discussions and evidence tendered by both the parties, which are on record, it was not proved that, the defendant had knowledge of the decree on 21-9-1999 or 21-2-2000, but was proved that, the defendant came to know about the said judgment and decree on 12-4-2000, when the Process Server of the Court came to execute the possession warrant, and thereafter, the application for setting aside the ex parte decree was filed on 15-4-2000 i.e. within 30 days from 12-4-2000. The application was filed within the prescribed period of limitation, therefore, learned Court below i.e. first appellate Court, in holding the application to be barred by time, committed illegality.23. Learned Counsel for the respondents/plaintiffs has contended that, B. Krishna Murthy is not a competent person to sign the application under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure filed by the defendant on the ground that the power of attorney in his favour is not in accordance with law. On the other hand, learned Counsel for the appellant/defendant vehemently contended that, the power of attorney, issued in favour of B. Krishna Murthy, is valid and according to law, as also he, being an authorised officer of the defendant M/s. Bharat Petroleum Corporation Limited, entitled to file and sign the said application.24. The Court below i.e. first appellate Court, in para 23 of the impugned order, held that, although the power of attorney, Ex. P-2 was issued by M/s. Bharat Petroleum Corporation Limited under its common seal, yet the same bears signature of only one Director and one Secretary, whereas signatures of two Directors were required for execution of the said document, and finding the same, the Court below i.e. first appellate Court held that, the application under Order XLI Rule 21 read withSection 151of the Code of Civil Procedure was not filed by a competent person.25. Admittedly, the defendant is a corporation, therefore, the provisions ofOrder XXIX Rule 1 of the Code of Civil Procedurewill attract. The said provision reads as below :Order XXIX. Rule 1 : "Subscription and verification of pleading.-- In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.26.Order VI Rule 14 of the Code of Civil Procedurecontains the provisions for signing the pleadings. That provision reads as below :Order VI. Rule 14 : "Pleading to be signed.-- Every pleading shall be signed by the party and his pleader (if any) : Provided that where a party pleading is, by reason of absence or for other good cause, unable to sign the pleading, it may be signed by any person duly authorised by him to sign the same or to sue or defend on his behalf.27. From perusal of the aforesaid provisions, not only the power of attorney holder but also the principal officer of the corporation was permitted to verify and sign the pleading. B. Krishna Murthy, who signed the application, was the Territory Manager of the office established at Bhilai by the defendant M/s. Bharat Petroleum Corporation Limited, and this fact has not been disputed by the plaintiffs, therefore, B. Krishna Murthy, had power to sign the application even without power of attorney, and at the most, that was required by the corporation to rectify the said action.28. Hon'ble the Apex Court, inUnited Bank of India v. Naresh Kumar, reported in AIR 1997 SC 3, held that, (Para 9) --In cases where suits are instituted or defended on behalf of a public corporation like bank; public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, underthe Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.29. During the arguments, learned Counsel for the appellant/defendant, relying on Clause 95 of the Memorandum and Articles of Association of Bharat Petroleum Corporation Limited, urged that, for issuing power of attorney, signature of only one Director and counter-signature of Secretary is sufficient. The said provision has not been challenged by the plaintiffs. Learned Court below i.e. first appellate Court, vide impugned order, has held that, the power of attorney has been signed by one of Directors of M/s. Bharat Petroleum Corporation Limited and also bears the signature of its Secretary.30. From the aforesaid discussions, it appears that, the application under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure has been signed by B. Krishna Murthy, a Principal Officer of M/s. Bharat Petroleum Corporation Limited and duly authorised under power of attorney to act on behalf of it, therefore, the application was filed by a competent person.31. Apart from that, from the aforesaid provisions and the law enunciated by Hon'ble the Apex Court, it is held that, when any case is prosecuted or defended by a corporation or company, that can be signed by the principal officer of the company/corporation subject to rectification by the company/corporation. Further held that, only on such type of irregularities, which can be cured at any stage, justice should not be denied to the party entitled for it. Hence, if at all, learned Court below i.e. first appellate Court was of the opinion that, the application was not signed by a competent person, that should not be made a ground for its rejection.32. It is manifest that, the application under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure was filed by a competent person and also within the time prescribed for it, therefore, the findings recorded by the Court below i.e., first appellate Court on these issues suffer from gross illegality and are required to be set aside.33. The appeal is allowed. On payment of cost of Rs. 5,000/- (Rupees Five Thousand only) to the plaintiffs by the defendant within a period of one month from today, the impugned order, passed by the Court below i.e. first appellate Court, so far as it relates to dismissal of the application filed by the defendant under Order XLI Rules 19 and 21 read withSection 151of the Code of Civil Procedure, is set aside. The Court below i.e. first appellate Court shall re-hear the Civil Appeal No. 7A/1999, and after affording proper opportunities to both the parties, decide the same afresh as early as possible preferably within a period of three months from the date of receipt of copy of this order.34. Both the parties are directed to appear before the Court below i.e. first appellate Court on 13th June, 2005. No further notice shall be required to be served on the parties for their appearance before the first appellate Court. |
a408bdd1-15d3-5bec-8e95-fefbbb60eeab | court_cases | Supreme Court of IndiaFirm Laxmi Dutt Roopchand vs Union Of India (Uoi) And Anr. on 21 January, 1975Equivalent citations: AIR1975SC760, (1975)77PLR647, (1975)1SCC341, 1975(7)UJ153(SC)Author:A.N. RayBench:A.N. Ray,H.R. Khanna,P.K. GoswamiJUDGMENT
A.N. Ray, C.J.1. This appeal by special leave turns on the question as to whether the appellant can claim damages against the Union in respect of a consignment delivered for carriage by the Railway Administration.2. The respondent Jhanak Lal on 11 January, 1956 consigned 35 bags of brass for carriage by Railway from Sindi Railway Station to Mirzapur. The railway receipt was consigned to self. The Railway Police on 15 January, 1956 seized the goods at Sindi Railway Station.3. Jhanak Lal was prosecuted in respect of the goods for an offence underSection 379/411, Indian Penal Code. He was acquitted on 27 June, 1957. The Magistrate mentioned in the judgment that the brass which had been seized be returned to Jhanak Lal. It may be stated here that the Criminal Court made the aforesaid order because Jhanak Lal being the consignor and consignee was prima facie entitled to possession.4. Jhanak Lal received the goods back from the Police in whose custody they were.5. The appellant in a letter dated 26 July, 1956 asked the Railways to pay Rs. 7098/- as the price for non-delivery of 35 bags of brass. The Railway Administration informed the appellant on 16 January, 1957 that the consignment had been seized by the Railway police in a theft case. The appellant was asked to, approach the Court for release of the consignment. The appellant did not take any steps in the criminal Court. It is to be noticed that the appellant never claimed to be the indorsee of the Railway Receipt.6. The appellant brought a suit on 27 August, 1958 against the Union and Jhanak Lal. The appellant claimed to be indorsee of the Railway Receipt. The Courts found that there was no negligence on the part of the Railway Administration in respect of carriage of goods.7. The appellant obtained a decree against Jhanak Lal. The decree represents the value of the goods. The Railway Administration committed no breach of duty in respect of carriage. The appellant obtained a remedy against Jhanak Lal, who obtained the goods.8. The appeal is dismissed. Parties will pay and bear their own costs. |
14acc1c5-d0f5-5217-9731-595c903fc8d0 | court_cases | Patna High Court - OrdersImdad Mian & Anr vs State Of Bihar on 9 December, 2010IN THE HIGH COURT OF JUDICATURE AT PATNA
CR. REV. No.1062 of 2010
1. IMDAD MIAN
2. AHMAD MIAN
...PETITIONERS
Versus
STATE OF BIHAR
... OPPOSITE PARTY
For the petitioners :Mr. Umesh Chandra Verma
For the State :Mr. J.K.Singh, APP
-----------
03. 09.12.2010Rule confined to the question of sentence only.Learned APP waives service of notice on behalf of
the State.Heard. With the consent of the parties, this
application is now finally disposed of at the stage of admission
itself.Petitioners herein are aggrieved by judgment and
order dated 210.04.2010, passed learned Sessions Judge, West
Champaran, Bettiah in Cr. Appeal No. 29 of 1998, whereby the
appeal stood dismissed and the judgment and order of conviction
recorded by learned trial court was affirmed.The two petitioners are brothers. They were tried for
an offence punishable under section 25(1)(a) as well as 26/35 of
theArms Act. As per the FIR, on getting confidential
information about manufacturing of fire-arms in the house of the
petitioners, the police raided the same. Few persons tried to
escape from the house in question who were offered chase and
captivated. Petitioners are among those persons. A search was
carried out in the house of the petitioners and seizure(s)2was/were effected. At the trial, 11 witnesses were examined to
support the prosecution case. P.Ws. 5 & 6 are seizure list
witnesses. P.Ws. 1 & 2 have not been relied upon by the
prosecution and have thus been declared hostile. Remaining
witnesses have supported the prosecution case. So far as P.Ws.
5 & 6 are concerned, they admitted their signatures on the
seizure list (Exts. 1 and 2) but deposed to the effect that the
same was not prepared in their presence. On a consideration of
materials available on record, trial court found and held the
petitioners were guilty of aforesaid charges and accordingly
sentenced them to undergo R.I. for three years with fine having
default clause and also R.I. for six months with fine having
default clause undersections 25(1)(a)and26/35Arms Act
respectively. Aggrieved by aforesaid judgment and order, they
preferred appeal which was dismissed, as noted above. Hence
the application.Learned counsel for the petitioners submits that
although the trial concluded in less than a year, but the appeal
remained pending for about 12 years. It is next contended that at
the time of recording conviction they were found fairly young.
Referring to trial court judgment, it is submitted that there was
no past conviction found and recorded against them. It is the
submission of the petitioners that in view of these facts
appearing from the records, they ought to have been dealt with
under the provisions ofProbation of Offenders Act. By not
doing so, learned trial court has committed an illegality. It3appears from paragraph 13 of the appellate court judgment that
entire aspect of the matter including appraisal of evidence was
made by the appellate court whereafter it has been found that
having regard to the evidence on record conviction and sentence
recorded by trial court did not require any interference. The
appellate court, therefore, re-scanned the evidence and materials
on record and found in paragraph 13 that they were sufficient
enough to prove the guilt.Learned APP, on the other hand, submits that there
is/are concurrent findings of guilt recorded by two courts below
which cannot be said to be perverse and/or perfunctory. It is
submitted that appellate court also re-scanned and re-appraised
the evidence and thereby concurred with the findings recorded
by trial court.I have considered the submissions advanced on
behalf of the parties.Petitioners were found involved in manufacturing
fire-arms. The offence for which they have been held guilty is
serious in nature and has become a menace. It is seen from the
trial court judgment that relevant consideration in this regard
was not made by trial court but having regard to the materials on
record and charge(s) for which they have been held guilty, this
Court is of the view that they do not graduate for their release
under the provisions ofProbation of Offenders Act. However,
having regard to the facts that they had to fight the trial and the
appeal remained pending for 12 years, a lenient view of the4matter, so far as the quantum of sentence is concerned, can be
taken in the present case.Consequently, while upholding the conviction
recorded by learned trial court and duly affirmed by learned
lower appellate court, R.I. for three years awarded undersection
25(1)(a)of the Arms Act is reduced to R.I. for two years. Other
part(s)/condition(s) of the sentence/conviction shall remain
intact.With this modification in sentence, the application is
dismissed.( Kishore K. Mandal )
hr |
52de8aef-8328-56d5-86c8-200e71891814 | court_cases | Central Information CommissionMs.Roseline Kumari Das vs Ministry Of Communications And ... on 16 August, 2012CENTRAL INFORMATION COMMISSION
Club Building, Opposite Ber Sarai Market,
Old JNU Campus, New Delhi - 110067.
Tel: +91-11-26101592
File No. CIC/LS/C/2011/000494/BS/0623
COMPLAINT REMANDED TO : First Appellate Authority
BSNL
O/o The GMTD
Katihar - 854105, Bihar
Complainant : Ms. Roseline Kumari Das
D/o Late Mantosh Kumar Das,
C/o. Susmita Das, Mafarganj: Near FCI Godown,
Ward No. 28: Katihar- 854105, Bihar
Public Information Officer : PIO & DGM
BSNL
O/o GMTD
Katihar - 854105, Bihar.
Facts arising from the Complaint:The Complainant has filed a RTI application with the PIO on 24/11/2010 asking for certain
information. On not having received any reply from the PIO within the mandated time, she
approached the Commission directly by filing a Complaint underSection 18of the RTI Act on
25/01/2011 received on 01/02/2011.Upon perusal of the Complaint, it was observed that the Complainant did not utilize the channel
of the First Appellate Authority-as prescribed under theRTI Act. The Commission is therefore
instituting an enquiry as per the provision ofSection 18(2)of the RTI Act.Decision:In view of the aforesaid, the instant mater is now remanded to the FAA.The Commission hereby directs the FAA to treat the copy of the Complaint (enclosed herewith)
as the First Appeal and decide the matter in accordance with the provisions of theRTI Actafter
perusing the relevant documents and giving all concerned parties an opportunity to be heard.While deciding the matter, the FAA is directed to examine whether any information was
provided by the PIO within the mandated period and if provided, whether it was complete,
relevant and correct. Where the FAA is satisfied that the information provided by the PIO is as
per the records, the First Appeal shall be disposed of. The Commission shall be intimated of the
same.Page 1 of 2In the event, no information has been provided or if there are any deficiencies in the information
furnished by the PIO, the FAA may direct the PIO to provide the complete information in reply
to the RTI application dated 24/11/2010 to the Complainant, with a copy to the Commission.
Further, the FAA may also enquire and send an enquiry report to the Commission containing the
reasons for not furnishing and/or the delay in furnishing the complete information by the PIO
affixing responsibility and identifying the officer(s) so responsible, if any.Furthermore, if the Complainant is not satisfied with the orders of the FAA, he will be free to
move a Second Appeal before the Commission underSection 19(3)of the RTI Act.The Complaint is disposed of.Notice of this decision be given free of cost to the parties.Basant Seth
Information Commissioner
August 16, 2012
Enclosed: Copy of Complaint received on 01/02/2011; and
Copy of RTI application dated 24/11/2010.(In any correspondence on this decision, mention the complete decision number.)SurenderPage 2 of 2 |
349eea31-bbe8-5ba8-8b2e-4d85f32b6556 | court_cases | Lok Sabha DebatesNeed To Take Suitable Punitive Action Against Fraudulent Investment Companies. on 25 February, 2016Sixteenth Loksabha
an>
Title: Need to take suitable punitive action against fraudulent investment companies.DR.KIRIT SOMAIYA(MUMBAI NORTH EAST): It is understood SEBI has prepared a list of 1489 suspicious collective investment schemes companies. In the last couple of months half a dozen major illegal collective investments schemes/Ponzy Companies operators/owners are understood to have been arrested by various states police etc, against whom SEBI had also passed interim orders, observations. Lakhs of investors' money getting lost in these scams. Attention of Finance Ministry, SEBI is being drawn to fraudulent dealings of such Ponzy/illegal collective investment scheme companies. I want status of action coordination among various investigative agencies including SEBI, SFIO, RBI, State Police, seizing of properties, returning of money to small investors etc. by the companies. I want to know the present status of action taken against these companies. |
ccb22d70-5424-5f96-90cd-9bb1322efce6 | court_cases | Delhi High CourtParminder Singh & Anr. vs Virender Pal Singh Jolly on 1 April, 2014Author:Valmiki J.MehtaBench:Valmiki J.Mehta* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No.71/2012 and C.M. Nos.17081/2010 (stay)
&2039/2013 (stay)
% 1st April, 2014
PARMINDER SINGH & ANR. ....Appellants
Through: Mr. Manjit Singh Ahluwalia,
Advocate.
VERSUS
VIRENDER PAL SINGH JOLLY ...... Respondent
Through: Mr. Maninderjeet Singh, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)1. This first appeal is filed under Order 43(1)(u)of Code of Civil
Procedure, 1908 (CPC) impugning the order of the appellate court dated
23.8.2008 by which the appellate court set aside the order of the trial court
dated 19.12.2006 which had allowed the application of the
defendants/appellants underOrder 7 Rule 11 CPCand rejected the plaint.2. Respondent/plaintiff filed a suit for challenging the ex parte
judgment and decree dated 27.11.1997 against him (in suit No.114/1993)and
in favour of the defendants/appellants on the ground that the same was
obtained by practicing fraud. The admitted facts however were that theFAO No.71/2012 Page 1 of 9application filed by the respondent/plaintiff underOrder 9 Rule 13 CPCseeking setting aside of the ex parte judgment dated 27.11.1997 was firstly
dismissed on 23.2.2001. That order dated 23.2.2001 was however set aside
by this Court in a revision application by remanding the matter back for
recording evidence and thereafter deciding the application underOrder 9
Rule 13 CPC. Trial court allowed the application underOrder 9 Rule 13
CPCby the order dated 2.7.2002, however this Court in civil revision
no.902/2002 set aside the order of the trial court and dismissed the
application underOrder 9 Rule 13 CPC. Respondent/plaintiff had filed an
SLP before the Supreme Court but the same was dismissed. Therefore the
ex parte judgment and decree dated 27.11.1997 became final.3. The ex parte judgment and decree dated 27.11.1997 pertains to
a suit for possession filed by the appellants/defendants against the
respondent/plaintiff being suit No.305/1987. The suit property bearing
no.125-C, Pocket A-2/B, Paschim Vihar, New Delhi had been allotted to the
father of the appellants/defendants by the DDA vide allotment letter dated
10.1.1983. Possession of the same was taken from the DDA on 10.3.1984.
Appellants/defendants' father had handed over keys of the flat in question to
one Sh. Surjan Singh (brother-in-law) for looking after the flat. The father
of the appellants/defendants died in unfortunate circumstances as he wasFAO No.71/2012 Page 2 of 9murdered while travelling in a train. The keys of the flat were handed over
by Sh. Surjan Singh to the respondent/plaintiff to get repairs done.
Respondent/plaintiff however illegally occupied the flat and since he refused
to vacate, the suit for possession came to be filed. Respondent/plaintiff had
relied upon fraudulent and fabricated documents being agreement to sell,
power of attorney etc allegedly executed in his favour dated 28.9.1984 by
the father of the appellants/defendants, and as per which respondent/plaintiff
claimed ownership of the flat. As already stated above, this suit was
ultimately decreed ex parte against the respondent/plaintiff vide ex parte
judgment and decree dated 27.11.1997 and the application of the
respondent/plaintiff underOrder 9 Rule 13 CPCwas dismissed till the
Supreme Court.4. The respondent/plaintiff did not rest there and filed objections
in execution. These objections were dismissed by the executing court vide
its order dated 3.6.2006 and appeal against the said order was also dismissed
by the appellate court on 1.12.2006.5. By the application filed by the appellants/defendants underOrder 7 Rule 11 CPCin the present suit it was pleaded that the judgment in
the earlier suit bearing no.305 of 1987 operated as res judicata against the
respondent/plaintiff underSection 11CPC taken with the fact that the suitFAO No.71/2012 Page 3 of 9was barred underSection 47CPC inasmuch as even the objections filed by
the respondent/plaintiff were dismissed and the appeal of the
respondent/plaintiff against the order dismissing objections was also
dismissed as per details already stated above. Trial court allowed the
application underOrder 7 Rule 11 CPCand held that the suit was barred by
the provisions ofSections 11and47CPC noting that no particulars of fraud
were pleaded in the plaint.6. The appellate court has allowed the appeal by the impugned
judgment and dismissed the application of the appellants/defendants, inter
alia by making the following observations on the aspect of fraud andSection
11CPC:-"7. I have seen the trial court records, impugned order, grounds
of appeal and feel that the order of the Ld. Civil Judge with
respect to the order u/o 7Rule 11 CPCbe set aside and file be
sent back to the Ld. Trial Court for further trial as per law on the
following grounds:Firstly, so far as the order u/o.8Rule 10 CPCis concerned,
plaintiff/appellant is not registered. Hence the order of the Ld.
Civil Judge with respect to the application u/o 8Rule 10 CPCis maintained.Secondly, the Ld. Civil Judge stated that the present suit is
barredu/s. 41(a)of the Specific Relief Act.Section 41(a)of the
Specific Relief Act provides as under:FAO No.71/2012 Page 4 of 9(a) to restrain any person from prosecuting a judicial
proceeding pending at the institution of the suit in which
injunction is sought, unless such restraint is necessary to
prevent a multiplicity of proceedings.This section only speaks about the injunction. Reasoning may
be correct had the suit been filed only with respect to the
injunction but the suit is for declaration as well as fokr
injunction.Thirdly, I have seen the prayer of the injunction in the original
suit. Though the relief should be interim relief, the relief is
worded in the absolute terms. Plaintiff is seeking in relief of
injunction that till the suit is decided and disposed defendant be
restrained from executing the decree in the previous suit and that
is allowed. Hence the relief is not coveredu/s 41(a)of Specific
Relief Act.Fourthly, so far as relief of declaration is concerned it is stated
that the previous judgment/decree has to be sought to be null
and void on the ground of fraud. However, the fraud is not
explained. Merely because the fraud has not been explained
cannot be the ground for rejection of the plaint. If the particulars
has not been given it could have been taken by examining the
pleadings and then the Ld. Civil Judge could pass the
appropriate order.Fifthly, Order 7 Rule 11 provides as under:Rejection of plaint-The plaint shall be rejected in the
following cases:a) where it does not disclose a cause of action;b) where the relief claimed is under-valued, and the
plaintiff, on being required by the Court to so correct theFAO No.71/2012 Page 5 of 9valuation within a time to be fixed by the Court, fails to do
so;c) where the relief claimed is properly valued, but the
plaint is written upon paper insufficiently stamped, and the
plaintiff, on being required by the Court to supply the
requisite stamp-paper within a time to be fixed by the Court,
fails to do so.d) Where the suit appears from the statement in the plaint
to be barred by any law;e) Where it is not filed in duplicate:f) Where the plaintiff fails to comply the provisions of Rule9:Only ground (a) ofOrder 7 Rule 11 CPCis applicable in the
present case. There is no finding that the order is based on Order
7 Rule 11 (a). So far as the relief of injunction in concerned that
may be barred u/o. 7 Rule 11(d) but the reliefs of declaration
are not barred u/o. 7 Rule 11(d)by virtue ofSection 41 (a)of
Specific relief Act.Sixthly, it is well established and even noted by the Ld. Civil
Judge that while dealing with application u/o. 7Rule 11 CPConly plaint has to be seen but the order shows that the Ld. Civil
Judge has travelled beyond the pleadings. It is stated in the order
that the plaintiff has not stated the facts and concealed the facts
with respect to the dismissal of the application and even
dismissal of review application. If these facts were notstated in
the plaint then how Ld. Civil Judge note these facts and from
where. During the order the Ld. Civil Judge discussed about the
res judicata and then it is stated by Ld. Civil Judge that the suit
is not barred by res judicata even otherwise res judicata is not
the ground u/o 7Rule 11 CPC. That may be the ground on a
separate applicationu/s. 11of the CPC.8. In view of the above, the appeal of the appellant is
hereby allowed. The case is remanded back to the Ld. Trial
Court for fresh trial as per law."FAO No.71/2012 Page 6 of 97. In my opinion, the appellate court committed gross illegality
inasmuch as one fails to understand as to how the appellate court has
overlooked the mandate ofOrder 6 Rule 4 CPCwhich required that in any
suit in which fraud is pleaded there have to be pleaded detailed particulars of
the fraud. This is all the more so required in the present case because the
suit was to nullify the earlier judgment and decree dated 27.11.1997 which
operated as res judicata and to which proceedings the respondent/plaintiff
was very much a party. No doubt, a suit can be filed alleging perpetuation
of fraud, however, in cases such as the present, the plea of fraud cannot be
easily used to overcome the bar underSections 11and47CPC especially
when not only the application underOrder 9 Rule 13 CPCwas dismissed
right till the Supreme Court but also objections filed by the
respondent/plaintiff in execution of the judgment and decree dated
27.11.1997 were dismissed and even an appeal against that order dismissing
objections was also dismissed.8. Clearly therefore the impugned judgment of the appellate court
is totally illegal and perverse to say the least. If the impugned judgment is
allowed to stand, really respondent/plaintiff will profit from false litigation,
and continue to illegally hold on to possession of the suit property, and of
which respondent/plaintiff has been illegally in possession way backFAO No.71/2012 Page 7 of 9from around the year 1997. The appellate court has passed the impugned
judgment in a very cursory and mechanical manner without giving reasoning
as to why particulars of fraud ought not to have been mentioned inasmuch as
it is only after fraud is pleaded that evidence can be led with respect to the
pleadings of fraud and in the absence of pleadings, no evidence can be led
with respect to plea of fraud. In this case, the plea of fraud was clearly a
malafide and dishonest plea to avoid handing over possession of the suit
property to the appellants/defendants and prevent execution of the judgment
and decree dated 27.11.1997 in favour of the appellants/defendants.9. In view of the above, this appeal is allowed. Impugned
judgment of the appellate court dated 23.8.2008 is set aside and the
judgment of the trial court dated 19.2.2006 is sustained whereby the plaint of
the respondent/plaintiff shall stand rejected underOrder 7 Rule 11 CPC.
Considering the facts of the present case, the appeal is allowed with costs of
Rs.50,000/- because I find that the respondent/plaintiff is engaging in
unnecessary false litigation and has been continuing to illegally occupy the
suit property of which the appellants/defendants are the owners. Supreme
Court in the case ofRamrameshwari Devi & Ors. Vs Nirmala Devi & Ors.(2011) 8 SCC 249 has held it is high time that in certain litigations heavy
costs must be imposed. I am also empowered to impose costs in terms ofFAO No.71/2012 Page 8 of 9Volume V of the Punjab High Court Rules and Orders (as applicable to
Delhi) Chapter VI Part I Rule 15.APRIL 01, 2014 VALMIKI J. MEHTA, J.
NeFAO No.71/2012 Page 9 of 9 |
5d57e932-7815-50fb-959b-f33eaf9c27ae | court_cases | Punjab-Haryana High CourtSharad Kapoor vs Manjit Singh And Ors on 1 June, 2018Equivalent citations: AIR 2018 PUNJAB AND HARYANA 169, (2018) 2 RENTLR 27, (2018) 3 PUN LR 282, (2018) 2 RENCR 89Author:Gurvinder Singh GillBench:Gurvinder Singh Gill(1) CR-6877 of 2017 (O&M)
In the High Court of Punjab and Haryana at Chandigarh
CR-6877 of 2017(O&M)
Reserved on : 23.5.2018
Date of Decision:- 1.6.2018
Sharad Kapoor ......Petitioner
Versus
Manjit Singh and others .....Respondents
CORAM: HON'BLE MR. JUSTICE GURVINDER SINGH GILL
Present : Mr. Vaibhav Narang, Advocate, for the petitioner.
Mr. T.S.Sandhu, Advocate, for respondents No.2 and 3.
******
GURVINDER SINGH GILL, J.The petitioner-landlord assails order dated 18.5.2017 passed by
learned Rent Controller, Amritsar whereby an application underOrder 1 Rule
10 CPCfiled by respondents No.2 and 3 i.e. Uma Kapoor and Vinay Kapoor
for being impleaded as a party to the ejectment proceedings has been accepted.The petitioner-landlord Sharad Kapoor had filed an ejectment
application seeking eviction of tenant namely Manjit Singh from the demised
premises on the ground of non-payment of rent which is being contested by
respondent No.1 Manjit Singh. During the course of proceedings of the
ejectment application, respondents No.2 and 3 namely Uma Kapoor and Vinay
Kapoor i.e. the brother and mother of the petitioner, moved an application
underOrder 1 Rule 10 CPCfor being impleaded as party to the ejectment
proceedings while stating therein that in fact the demised premises were
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owned by father of the present petitioner-Sharad Kapoor who had died
intestate on 11.12.2013 but the petitioner, after his death fabricated a forged
Will dated 27.2.2013 of his father and upon coming to know about the same,
applicants i.e. respondents No.2 and 3 filed a civil suit against the present
petitioner titled as "Uma Kapoor and others Vs. Sharad Kapoor and others"which is still pending. It is further stated in the application that present
petitioner Sharad Kapoor is not the exclusive owner of the demised premises
and since the applicants-respondents No.2 and 3 are also the co-owners,
therefore, they be also impleaded as a party especially since the respondent-tenant Manjit Singh has colluded with petitioner Sharad Kapoor.Petitioner Sharad Kapoor filed reply to the aforesaid application
denying all the material averments stated therein while asserting that his father
late Sh. Madan Mohan had executed a Will in his favour. The learned Rent
Controller after considering the matter regarding impleadment of the
applicants accepted application underOrder 1 Rule 10 CPC. The relevant
portion of the impugned order reads as under:"...... However, it is also an admitted fact that the
applicant Uma Kapoor and Vinay Kapoor have
challenged a Will dated 27.02.2013 allegedly executed
by Sh. Madan Mohan in favour of petitioner Sharad
Kapoor. The said case is pending for adjudication
before the Court of Ms. Gurpreet Kaur, CJ(JD),
Amritsar who has granted status quo with regard to
properties of Sh. Madan Mohan. Now the title of the
suit property cannot be decided by this Court and as
such, the applicant Uma Kapoor and Vinay Kapoor are
also a necessary party as no adjudication can be made
by this Court without impleading them as parties in the
present suit. As such the application in hand is allowed2 of 9::: Downloaded on - 11-06-2018 02:27:08 :::(3) CR-6877 of 2017 (O&M)
and applicant Uma Kapoor w/o late Sh. Madan Mohan
Kapoor and Vinay Kapoor s/o Late Sh. Madan Mohan
Kapoor are impleaded as parties in the present rent
petition. ......"Learned counsel for the petitioner while assailing the impugned
order has submitted that the lis pertaining to ejectment proceedings cannot be
converted into a lis regarding ownership and that a person can be a landlord
even without being an owner and that the learned Rent Controller by accepting
the application underOrder 1 Rule 10 CPChas virtually forced the petitioner-landlord to enter into lis with the said applicants when in fact a separate
litigation on the basis of Will is already pending. Learned counsel for the
petitioner in order to hammer forth his aforesaid submission has pressed into
recent judgment of Hon'ble Supreme Court reported asKanaklata Das and
others Vs. Naba Kumar Das and others2018 (2) SCC 352.As against the aforesaid submission, the learned counsel for
respondents No.2 and 3 has submitted that admittedly the petitioner and
respondents No.2 and 3 are related interse and that dispute regarding
ownership of the demised premises has arisen on account of the petitioner
having set up a Will of his father whereas in fact he had died intestate. The
learned counsel has submitted that since it is not disputed that the demised
premises were owned by father of the petitioner and litigation regarding
inheritance of his property is still pending, therefore, it will be certainly in the
interest of justice to avoid multiplicity of litigation and that even propriety
demands that respondents No.2 and 3 who are none else but brother and
mother of the petitioner be also arrayed as a party so as to enable him to watch
their interest.3 of 9::: Downloaded on - 11-06-2018 02:27:08 :::(4) CR-6877 of 2017 (O&M)I have considered rival submissions addressed before this Court.There is certainly no dispute as regards the fact that the demised premises
were owned by father of the petitioner and that respondents No.2 and 3 are
brother and mother of the petitioner who had moved an application underOrder 1 Rule 10 CPCfor impleading them as a party asserting therein that
owner of the demised premises had died intestate and that they being his
widow and son have acquired interest in the same. The ejectment application
had been filed in the year 2016 wherein the petitioner had specifically asserted
that a rent note dated 19.5.2014 had been executed by respondent No.1 Manjit
Singh in favour of petitioner Sharad Kapoor @ Rs.4200/- per month. It is
however noteworthy that father of the petitioner had admittedly expired in the
year 2013 whereas the present ejectment application was filed in year 2016. A
perusal of the application, filed by respondents No.2 and 3 shows that
applicants-respondents No.2 and 3 have nowhere averred that there exists a
relationship of landlord and tenant amongst them and respondent No.1 Manjit
Singh. Rather a stand has been taken therein that Manjit Singh and Sharad
Kapoor have colluded. However, a perusal of the written statement filed on
behalf of respondent No.1 Manjit Singh shows that it is tenant Manjit Singh
who has himself taken an objection regarding non-joinder of necessary parties.The relevant extract of preliminary objection No.3 from the written statement,
annexed with the application reads as under:"3. The application is bad for the non-joinder and mis-
joinder of the necessary parties. Late Sh. Madan
Mohan Kapoor, father of the applicant, was the
landlord of the respondent, who had inducted the
respondent in the tenanted shed as tenant on a monthly
rent of Rs.4200/-. Sh. Madan Mohan Kapoor has
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expired and he was survived by his widow Uma
Kapoor, daughter Sanjna and two sons Sharad Kapoor
and Vinay Kapoor. There is a dispute amongst all the
legal heirs of the deceased Landlord Sh. Madan Mohan
Kapoor, with respect to the survivorship and
inheritance of the properties left by the deceased. They
have filed civil and criminal cases against each other
with respect to the claims of their ownership of the
properties left by Late Sh. Madan Mohan Kapoor.Under such circumstances, the respondent is unable to
ascertain about the landlord of the tenanted shed,
however the respondent had paid the rent to Uma
Kapoor wife of Madan Mohan Kapoor after the death
of Madan Mohan Kapoor. The respondent is going to
file an inter-pleader suit against all the legal heirs of
the deceased landlord so that the question of the
landlord ship could be decided by a competent court."Had there been any collusion between respondent No.1 Manjit
Singh and petitioner Sharad Kapoor, then they would have taken steps to
ensure that respondents No.2 and 3 i.e. the brother and mother of the
petitioner-landlord do not get to know anything and would have tried to secure
some order in a clandestine manner.In this regard, observations of Hon'ble Supreme Court inKanaklata Das and others Vs. Naba Kumar Das and othersCivil Appeal
No.3018 of 2008 need to be borne in mind which read as follows:"11. There are some well-settled principles of law on the
question involved in this appeal, which need to be taken
into consideration while deciding the question arose in
this appeal. These principles are mentioned infra.12. First, in an eviction suit filed by the plaintiff (Landlord)
against the defendant (Tenant) under the State Rent Act,
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the landlord and tenant are the only necessary parties.13. In other words, in a tenancy suit, only two persons are
necessary parties for the decision of the suit, namely, the
landlord and the tenant.14. Second, the landlord (plaintiff) in such suit is required
to plead and prove only two things to enable him to
claim a decree for eviction against his tenant from the
tenanted suit premises. First, there exists a relationship
of the landlord and tenant between the plaintiff and the
defendant and second, the ground(s) on which the
plaintiff-landlord has sought defendant's-tenant's
eviction under theRent Actexists. When these two
things are proved, eviction suit succeeds.15. Third, the question of title to the suit premises is not
germane for the decision of the eviction suit. The reason
being, if the landlord fails to prove his title to the suit
premises but proves the existence of relationship of the
landlord and tenant in relation to the suit premises and
further proves existence of any ground on which the
eviction is sought under theTenancy Act, the eviction
suit succeeds.16. Conversely, if the landlord proves his title to the suit
premises but fails to prove the existence of relationship
of the landlord and tenant in relation to the suit
premises, the eviction suit fails. (See-Dr. Ranbir Singh
vs. Asharfi Lal, 1995(6) SCC 580).17. Fourth, the plaintiff being a dominus litis cannot be
compelled to make any third person a party to the suit,
be that a plaintiff or the defendant, against his wish
unless such person is able to prove that he is a necessary
party to the suit and without his presence, the suit
cannot proceed and nor can be decided effectively.18. In other words, no person can compel the plaintiff to
allow such person to become the co-plaintiff or
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defendant in the suit. It is more so when such person is
unable to show as to how he is a necessary or proper
party to the suit and how without his presence, the suit
can neither proceed and nor it can be decided or how his
presence is necessary for the effective decision of the
suit. (See-Ruma Chakraborty vs. Sudha Rani Banerjee
& Anr., 2005(8) SCC 140)19. Fifth, a necessary party is one without whom, no order
can be made effectively, a proper party is one in whose
absence an effective order can be made but whose
presence is necessary for a complete and final decision
on the question involved in the proceeding. (See-Udit
Narain Singh Malpaharia vs. Additional Member Board
of Revenue, Bihar & Anr., AIR 1963 786)20. Sixth, if there are co-owners or co-landlords of the suit
premises then any co-owner or co-landlord can file a
suit for eviction against the tenant. In other words, it is
not necessary that all the owners/landlords should join
in filing the eviction suit against the tenant. (See-
Kasthuri Radhakrishnan & Ors. vs. M. Chinniyan &
Anr., 2016(3) SCC 296)21. Keeping in mind the aforementioned well settled
principles of law and on examining the legality of the
impugned order, we find that the impugned order is not
legally sustainable and hence deserves to be set aside.22. In our considered opinion, respondent No. 1, who
claims to be the co-sharer or/and co-owner with the
plaintiffs (appellants herein) of the suit property is
neither a necessary and nor a proper party in the
eviction suit of the appellants against respondent Nos. 2
to 5. In other words, such eviction suit can be decreed or
dismissed on merits even without the impleadment of
respondent No.1.23. In the eviction suit, the question of title or the extent of
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the shares held by the appellants and respondent No. 1
against each other in the suit premises cannot be
decided and nor can be made the subject matter for its
determination.24. The reason being that this is not a suit between the
appellants (plaintiffs) and respondent No.1 where their
inter se rights relating to the suit premises can be gone
into but rather is an ejectment suit filed by the
appellants against respondent Nos. 2 to 5 for their
eviction from the suit premises.25. Therefore, the Lis in the suit is between the appellants
on the one hand and respondent Nos. 2 to 5 on the other
hand and the decision in the suit would depend upon the
question as to whether there exists any relationship of
landlord and tenant between the appellants and
respondent Nos. 2 to 5 in relation to the suit premises
and, if so, whether the grounds pleaded in the plaint for
claiming eviction of respondent Nos. 2 to 5 are
established or not. For deciding these two main
questions, the presence of respondent No. 1 is not
necessary.26. For these reasons, we are of the considered opinion that
respondent No. 1 is neither a necessary and nor a proper
party in the suit."Applying the ratio of the above referred judgment to the facts of
the present case, where a dispute as regards the ownership of the demised
premises raised after the death of the original owner is pending in a separate
suit and apparently there is nothing on record to suggest any collusion
between the petitioner and respondent No.1, there is certainly no ground for
impleading any other person as a party to the lis. Consequently, the impugned
order cannot sustain and deserves to be set aside.8 of 9::: Downloaded on - 11-06-2018 02:27:08 :::(9) CR-6877 of 2017 (O&M)The revision petition merits acceptance and is hereby accepted.The impugned order dated 18.5.2017 passed by learned Rent Controller,
Amritsar, impleading respondents No.2 and 3 as a party to the ejectment
application is set aside. It is, however, made clear that any findings returned
by Rent Controller, directly or indirectly, as regards title of petitioner over suit
property shall not be binding on respondents No.2 and 3 and will not, in any
manner, affect the outcome of civil suit regarding title pending amongst the
petitioner and respondents No.2 and 3.(GURVINDER SINGH GILL)
June 1, 2018 JUDGE
mohan
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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47a49eaa-ad65-5e48-9c4d-c8b99a2d1ad6 | court_cases | Customs, Excise and Gold Tribunal - MumbaiGujarat Raffia Industries Ltd. vs Commissioner Of Customs And Central ... on 29 October, 2001JUDGMENT1. The applicants are not present. On perusal of the facts leading to the application for waiver of pre-deposit I find that on a legal issue the appeal itself could be taken up for disposal. I do so by granting waiver of pre-deposit of duty of Rs.2,91,392/-.2. The Commissioner (Appeals) dismissed the appeal before him for failure of the appellants to comply with the directions to make pre-deposit. In doing so he did not direct the appellants to appear before him either for the hearing on the Stay Application or for the hearing on the Modification Application. He termed the efforts of the appellants as "endless correspondence". The appellant apart from making arguments on merit have claimed that the Commissioner (Appeals)'s order suffers from denial of natural justice. Following the judgments in identical circumstances the Tribunal had allowed the appeal:Electronic Devices v. Commissioner1999(113)ELT 89
Orgo Pharma Chemicals v. Commissioner1999(113)ELT 310
Gujarat Narmada Valley Fertilizer Co. Ltd. v. Collector1999(114)ELT 403. Following the ratio so laid down the appeal is allowed and the matter is remanded to the Commissioner (Appeals) who shall afford an opportunity to the appellants to be heard and then pass appropriate orders on the stay application. |
262993d4-73d2-5d6a-9b1d-d782cddf3cf8 | court_cases | Supreme Court of IndiaPayal Malik vs Nagesh Malik on 9 July, 2012Equivalent citations: AIRONLINE 2012 SC 480Bench:Chandramauli Kr. Prasad,H.L. DattuIN THE SUPREME COURT OF INDIA
CRIMINAL ORIGINAL JURISDICTION
CONTEMPT PETITION (C)NO.146 OF 2012
IN
CRIMINAL APPEAL NO.732 OF 2011
PAYAL MALIK ... PETITIONER
VERSUS
NAGESH MALIK ... RESPONDENT
O R D E R1. Shri Basava Prabhul Patil, learned senior counsel appearing for
the contemnor/respondent would submit that pursuant to the directions
issued by this Court, the respondent herein has deposited a sum of Rs.2
lacs before the learned Magistrate (Mahila Court), South East District, New
Delhi. Further, today he is offering a demand draft for a sum of
Rs.50,000/- to the learned counsel appearing for the complainant. Both
sides would agree that the aforesaid amounts would satisfy the interim
directions issued by this Court upto the end of July, 2012.2. The complainant, if she so desires, is at liberty to withdraw
the sum of Rs.2 lacs deposited by the contemnor before the learned
Magistrate. The learned counsel appearing for the complainant
acknowledges the draft handed over by Shri Patil,: 2 :learned senior counsel, for and on behalf of the contemnor. In view of
this, nothing survives in this Contempt Petition and the same is
accordingly, disposed of.Ordered accordingly........................J.
(H.L. DATTU)
.......................J.
(CHANDRAMAULI KR. PRASAD)
NEW DELHI;9TH JULY, 2012
ITEM NO.60 COURT NO.8 SECTION II
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
CONTEMPT PETITION (C) NO. 146 OF 2012 IN APPEAL(CRL) 732/2011
PAYAL MALIK Petitioner(s)
VERSUS
NAGESH MALIK Respondent(s)
(With appln(s) for exemption from filing records of Crl.Appeal No.732/2011
and office report )
Date: 09/07/2012 This Petition was called on for hearing today.CORAM :HON'BLE MR. JUSTICE H.L. DATTU
HON'BLE MR. JUSTICE CHANDRAMAULI KR. PRASAD
For Petitioner(s) Mr.Randhir Singh Jain, Adv.Mr.Dhananjai Jain, Adv.Ms.Ruchika Jain, Adv.For Petitioner(s) Mr.Basava Prabhu Patil, Sr.Adv.Mr.Dharam Raj, Adv.Dr. Sushil Balwada,Adv.UPON hearing counsel the Court made the following
O R D E R
The Contempt Petition is disposed of, in terms of the signed order.(G.V.Ramana) (Vinod Kulvi)
Court Master Court Master(signed order is placed on the file) |
ddee8fec-487f-5f16-91fc-ac1f19311d52 | court_cases | Kerala High CourtBhaskaran vs Pushpa on 28 March, 2005IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
&
THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
FRIDAY, THE 20TH DAY OF JANUARY 2017/30TH POUSHA, 1938
Mat.Appeal.No. 153 of 2005 ( )
-------------------------------
AGAINST THE ORDER IN OP 122/2003 of FAMILY COURT,KOZHIKODE DATED
28-03-2005
APPELLANT/RESPONDENT:
--------------------
BHASKARAN, AGED 45 YEARS,
S/O. KELAPPAKURUP, THEKKEDATHKANDY,
KAYANNA AMSOM, DESOM, PERAMBRA,
KOYILANDY TALUK, PERAMBRA.
BY ADV. SRI.P.R.SREEJITH
RESPONDENT/PETITIONER:
---------------------
1. PUSHPA, AGED 39 YEARS,
D/O. CHATHUKUTTY KURUP, PTUHIYOTTIL,
KOKKALLUR AMSOM, KOONANCHERY DESOM,
KOYILANDY TALUK.
2. JINISHA, 17 YEARS, D/O. PUSHPA,
MINOR REPRESENTED BY THE 1ST RESPONDENT.
R1 & R2 BY ADV. SRI.SANTHARAM.P
THIS MATRIMONIAL APPEAL HAVING BEEN FINALLY HEARD ON
20-01-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
A.M.SHAFFIQUE, J
&
K.RAMAKRISHNAN, J
* * * * * * * * * * * * * *
Mat.Appeal No.153 of 2005
----------------------------------------
Dated this the 20th day of January 2017
J U D G M E N TRamakrishnan, J
This appeal is filed by the appellant who is the respondent
before the court below against the order of past maintenance
passed in O.P.No.122/2003 of the Family Court, Kozhikode.2. The original petition was filed by the wife along with
the child who are the petitioners in the original petition seeking
past maintenance. It is alleged in the original petition that the
marriage between the 1st petitioner and the respondent was
solemnised on 30/04/1982 and they lived together as husband
and wife. They purchased 10 cents of property near their house
and started residing there. In the wedlock, the 2nd petitioner was
born. She is a student in CKG Memorial College. After some time,
there was some strain in the relationship, on account of which
they have started living separately. It is also alleged that theMat.Appeal No.153/20052respondent is having illicit relation with a lady which was
interfered by others. In spite of that, the respondent continued
the relationship and left the house deserting the petitioners from
11/12/2000. Thereafter the respondent did not pay any
maintenance to the petitioners. Since the respondent had
married again during the subsistence of his marriage with the 1st
petitioner, she had preferred a complaint underSection 494I.P.C.
Since the petitioners have no source of income, they had claimed
for a maintenance @ Rs.1,500/- each per month and claimed a
total amount of Rs.72,000/- at that rate for a period of 24 months.3. Respondent entered appearance and admitted the
marriage and paternity of the child. It is also admitted that the
property was purchased and the building was constructed. He
also admitted the birth of the child in the marriage. He denied
the allegation of illicit relationship with another lady. He also
denied the allegation that there was any ill-treatment. According
to the respondent, the 1st petitioner left the company of the
respondent and she is not entitled for any maintenance.
According to the respondent, he is working in the Postal
Department and is getting a salary of Rs.10,000/- per month. TheMat.Appeal No.153/200531st petitioner is working in Kodassery Khadi Weaving Centre and
earning Rs.150/- per day. Therefore, she is not entitled for
maintenance. He prayed for dismissal of the petition.4. The case was tried along with M.C.No.76/2003 which
was filed for future maintenance. The 1st petitioner was examined
as PW1 and the respondent was examined as RW1 and a
document was marked as Ext.A1 on the side of the petitioner.
After considering the evidence on record, the court below granted
maintenance at the rate of Rs.1,500/- to the 1st respondent and
Rs.1,000/- to the 2nd respondent and granted a decree
Rs.60,000/- as past maintenance for the period from 11/12/2000
to 04/12/2002. The court below also granted future maintenance
at the rate of Rs.1,500/- to the 1st petitioner and Rs.1,000/- to the
2nd petitioner. Dissatisfied with the same, present appeal has
been preferred.5. Heard both sides.6. Learned counsel for the petitioners submitted that the
award of maintenance to the 1st petitioner is unsustainable as she
is employed and getting a reasonable income and the quantum of
maintenance awarded is also high.Mat.Appeal No.153/200547. The learned counsel for the respondent supported
the order passed.8. Marriage with the 1st petitioner and birth of the 2nd
petitioner is not in dispute. It is also not in dispute that they are
separately living from 11/12/2000. Respondent has no case that
the petitioners were provided with any maintenance after they
had left the company of the respondent. Though there is a case
that the 1st petitioner is working and getting Rs.150/- per day, the
same was denied by the 1st petitioner when she was in the
witness box. There is no document to prove that fact. It is an
admitted fact that the respondent is working in the Postal
Department and getting Rs.10,000/- per month. Further, it was
brought out in evidence that the respondent is having property
and is getting income from that property as well.9. Considering the status of the parties and also the
income of the respondent, the court below was perfectly justified
in fixing the quantum of maintenance at the rate of Rs.1,500/-
and Rs.1,000/- to petitioners 1 and 2 respectively and rightly
allowed Rs.60,000/- as past maintenance. We do not find any
reason to interfere with the order passed by the court below.Mat.Appeal No.153/20055This Mat.Appeal fails and is hereby dismissed. Considering
the circumstances, parties shall bear the respective costs of the
appeal.(sd/-)
(A.M.SHAFFIQUE, JUDGE)
(sd/-)
(K.RAMAKRISHNAN, JUDGE)
jsr |
83eb46fe-0721-5bb0-a804-977aeeebb99b | court_cases | Calcutta High Court (Appellete Side)Sudhir Kumar Pandey vs The State Of West Bengal & Ors on 1 October, 2013Author:Debasish Kar GuptaBench:Debasish Kar GuptaSn 1.10.2013 W.P. No. 31201 (W) of 2013
87
Sudhir Kumar Pandey
-vs-
The State of West Bengal & Ors.
Mr. Uttam Kumar Roy ... for the Petitioner.
Mr. J.P. Chatterjee .. for the State
Let the affidavit-of-service filed today be kept
with the record.
This writ petition is filed by the writ petitioner
for a direction upon the respondent authorities to payinterest on gratuity for belated payment of the same.Having heard the learned Counsel appearing for the
respective parties and also considering the facts and circumstances of
the case, I find that the petitioner was an assistant teacher of Biltora
High School , District-Purulia and the petitioner retired from the above
service on September 30, 2006 on attaining the age of retirement on
superannuation.First payment was made to the petitioner on
October 20, 2006. First payment on the basis of revision
was made on June 30, 2011.A prayer is made on behalf of the petitioner
not to press the claim of interest on gratuity on first
payment for delayed payment of the same and to
confine the prayer of the petitioner in respect of the
benefit of West Bengal Non-Government Aided
Educational Institutions Employees (Revision of Pay
and Allowances) Rules, 2009 or interest for delayed
payment of that benefit, as the case may be.
The point of law, which is involved in this writ
application, has already been settled by a judgment
delivered by a Single Bench of this Court in W.P. 10750 (W)
of 2007 on July 9, 2008 in the matter of Abha Acharya -vs-
State of West Bengal & Others. In the above case the
petitioner was a primary school teacher and there was delay
in releasing his gratuity money. Operative portion of the
above decision is quoted below :"Following the said Judgment and/or Order, I dispose of W.P. No.
1867 (W) of 2007 on 04.04.2008 and in other similar matters, I
observed that since the issue was similar, the Order that I had passed
in the said W.P. No. 1867 (W) of 2007 should govern those cases also.However today when this huge pile of cases were heard, a
submission was made which was not made in the cases before me
referred to above, and which was to the effect that there cannot be any
adjudication on the question as to who was responsible for delay in
matters pertaining to payment of gratuity because the entitlement to
gratuity is automatic and is to be paid on the very day the person
retires. Even the learned Advocate General did not dispute this
contention and very frankly and fairly stated that so far as the gratuity
is concerned, it has to be paid on the date the person retires with the
only exception that it can be withheld in cases where a departmental
action is pending against the concerned employee."On the basis of the above observation, direction was
given to the respondent authority to pay interest of gratuity at the rate
of 10% per annum. I do not find any reason for disagreeing with the
above decision.Accordingly, I direct the respondent authority to give 9%
interest per annum on the revised gratuity amount paid to the
petitioner from the date when it was due and payable till the date of its
actual payment. Such payment shall be made within 90 days from the
date of communication of this order along with copy of this writ
application upon the Director of Pension, Provident Fund and Group
Insurance, Government of West Bengal as also the concerned Treasury
Officer.It is further made clear that failure on the part
of the respondent authority to pay the aforesaid interest
within the stipulated time, an additional interest at the rate
of 2% per annum shall be paid to the petitioner.It is necessary to point out that the rate of
interest is fixed at 9% per annum taking into consideration
the highest rate of interest payable by a nationalised bank
on fixed deposit.The writ petition, is, thus, disposed of.
However, there will be no order as to costs.Urgent photostat certified copy be supplied to the parties,
if applied for, on priority basis.(Debasish Kar Gupta, J.) |
65c3721357bc567107068125 | reports | Standing Committee Report SummaryThe Standing Committee on Energy (Chair: Dr. Kambhampati Haribabu) submitted its report on ‘Hydro Power’ on January 4, 2019. Key observations and recommendations of the Committee include:Hydro power as renewable energy source:Currently, hydro power plants with up to 25 MW capacities are considered as renewable energy sources and are under the purview of the Ministry of New and Renewable Energy. Hydro plants with capacities over 25 MW are considered as conventional energy sources and come under the purview of Ministry of Power. The Committee noted that there is no logic in segregating hydro power into renewable and conventional energy on the basis of capacity. The green-house gas emissions from hydro power is 4-10 gram CO2/kWh which is lesser than that from solar power at 38 gram CO2/kWh, and from coal based thermal power at 957 gram CO2/kWh. It recommended that all hydro projects should be classified as renewable sources of energy.Clearance issues:The Committee noted that land acquisition is a persistent issue with hydro power projects, which results in project delays and cost escalation. It found that the actual problem lies in the execution of land acquisition and the implementation of resettlement and rehabilitation schemes for which the district administration is responsible. The district administrators have limited time as they are entrusted with plethora of work. Further, due to the complexity of land related matters, delays and unresolved issues are observed in the land acquisition and resettlement process. It recommended that the district administration should expedite such cases with the cooperation of the central and state governments and the project developer.The Committee also noted that three types of clearances are mandatory from three different wings of the Ministry of Environment and Forest (MoEF), which makes the process cumbersome. These are: (i) environmental clearance from Expert Appraisal Committee, (ii) forest clearances from Forest Advisory Committee, and (iii) wildlife clearances from National Board of Wildlife. The Committee suggested that while hydro power projects should be cleared after assessing their impact on the environment, due consideration should also be given to their net impact on the environment. The net effect of hydro projects has always been positive for the surroundings in terms of ground water recharge, flourishing of flora and fauna, flood mitigation, and availability of water for various purposes.The Committee observed that in last few years, MoEF has carried out river basin studies for the major river basins in Arunachal Pradesh, and the Chenab basin in Himachal Pradesh. It suggested that in order to avoid issues related to ecology and environmental-flow as faced in some states, hydro power projects should be identified and planned on the basis of such studies instead of developing them in isolation.Financial issues:The Committee noted that a typical hydro station is financed based on a debt to equity ratio of 70:30. It noted that despite the long life of hydro power projects, only short tenure loans are being issued to them. Since, the loan amount has to be repaid in 10-12 years, it leads to significant increase in tariff during the initial years. Further, due to uncertainties involved in development of hydro power projects, banks or financial institutions are not keen to finance these projects. Currently, of the 16 hydro projects, 10 are stalled due to financing issues. The higher interest rate charged on the loan further aggravates the problem of higher tariff of hydro power. It noted that cheaper financing is the major factor in enhancing viability of hydro projects. Therefore, long term loan at cheaper interest rate will help with projects becoming viable.Incentives:The Committee observed that due to higher hydro power tariff, developers find it difficult to sign Power Purchase Agreements (PPAs). It recommended that hydro power should be promoted in the same manner as solar power by providing for Hydro Power Purchase Obligation.Water cess:The Committee noted that certain states levy a water cess for every cubic meter of water used by a hydro power plant. However, there is no rationale in levying such cess as the water used by the pants goes back into the rivers. It adds to the burden of the already stressed sector. The Committee suggested that the levy of such cess be looked into. Further, the MoEF must persuade states to not levy such cess.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c3721357bc5671070681b7 | reports |
## Report Summary Report Of The Ex Report Of The Ex Report Of The Ex Report Of The Expert Group For Modernization Of Indian Pert Group For Modernization Of Indian Pert Group For Modernization Of Indian Pert Group For Modernization Of Indian Rrrrailways Ailways Ailways Ailways
The Ministry of Railways had appointed an Expert Group on the Modernization of Indian Railways under the chairmanship of Mr. Sam Pitroda. The Expert Group recently presented its report. The Modernization plan proposed by the Expert Group envisages a funding of Rs 5,60,396 crore over the next ten years. Of this, Rs 3,96,000 crore (or 71%) is to be spent in the first five years i.e. during the duration of the 12th Plan. The report recommends that this amount be raised by leveraging four main sources of funds:
- Budgetary support
- Internal revenue generation by Railways
- Monetization of blocked assets such as surplus land
available with the Railways, and Public Private Partnerships
- Fund raising from financial institutions and markets
The report also points out that many of the proposed measures will increase track life, improve loading capacity and allow operations at higher speeds. These improvements will contribute to system efficiency and improve revenue generation in Railways. The key observations and recommendations of the Expert Group are listed below:
Track & Bridges (Estimated cost Rs 33,046 crore)
- Modernize 19,000 kms of existing tracks on routes A, B
and D special. The tracks should be upgraded to carry heavier freight trains and achieve higher speeds. A, B and D special routes comprise nearly 40% of the total network and carry 80% of the traffic.
- Eliminate level crossings and provide fencing alongside
tracks.
- Provide 100% mechanized track maintenance on routes A
and B.
Signaling (Estimated cost Rs 25,000 crore)
- Implement Automatic Block Signaling on A and B routes.
- Introduce GSM-based mobile train control communication
systems on A, B and C routes.
Rolling-stock (Estimated cost Rs 72,571 crore)
- Modernize rolling stock with investments in newgeneration electric and diesel locomotives, high speed LHB
coaches and heavy haul freight bogies.
## Stations (Estimated Cost Rs 1,27,000 Crore)
- Of the total 7,083 stations, modernize 100 major stations
immediately.
- Modernize the top 50 freight terminals. - Develop 34 multi-modal logistics parks to provide
integrated transport infrastructure facilities for users.
*Dedicated Freight Corridors (DFCs)*
(Estimated cost Rs 2,04,000 crore)
- Construct Eastern and Western DFCs in the next 5 years.
- Construct North-South, East-West, East-Coast and
Southern DFCs in the next 10 years.
- Upgrade feeder routes to DFCs.
High Speed Passenger Train Corridors
(Estimated cost Rs 60,000 crore)
- Construct a High Speed (350 kmph) railway line between
Ahmedabad & Mumbai within the next 10 years.
- Undertake studies for other tracks.
Other PPP Initiatives
(Estimated cost Rs 37,000 crore)
- Attract private investment to augment locomotive and
coach manufacturing units, captive power units, private freight terminals, etc.
Information and Communication Technology (ICT)
(Estimated cost Rs 1,315 crore)
- Set up Real Time Information Systems (RTIS) to provide
real time information at stations on running trains.
- Set up Radio frequency Identification (RFID) tracking
system for wagons, coaches and locomotives to enhance wagon management and real time monitoring.
- Computerize Railway files and expedite decision making.
## Indigenous R&D (Estimated Cost Rs 464 Crore)
- Develop indigenous capabilities to be a global leader in
state-of-the-art railway technologies.
- Establish Indian Institute of Railway Research with Centers
of Excellence in safety, wagon prototyping etc.
## Human Resource
- Install and operationalize a modern Computerized Human
Resource Management System.
- Rationalize and consolidate multiple services and cadres.
- Enable lateral recruitment from market for specialist
functions.
- Create a system of reward for collective performance linked
to incremental surplus generated by various units.
## Organization
- Re-organize the Railway Board along business disciplines.
The Chairman should serve as the Chief Executive Officer
and Members should be responsible for disciplines such as:
− Safety
− Business development/ commercial
− Technology/ ICT and signalling
− Freight
− Passenger Services
− Infrastructure
− Finance
− HR
− Public Private Partnership
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
- Create commodity wise Key Account Directors for major
commodities like coal, iron ore, steel, foodgrain, fertiliser etc. Coal forms 45% of total freight traffic and needs special attention.
- Similarly, create Key Account Directors of suburban, long
distance passenger etc.
- Empower Zonal Railways. The present system of seeking
sanction for capital investment from the Railway Board should give way to a more decentralized form or decisionmaking. GMs of Zonal Railways should be empowered to
take decisions within certain investment limits.
- Revamp accounting systems so that train-wise and routewise profitability analysis is available.
- Review the existing PPP policy framework to attract better
investments.
- Constitute a Railways Tariff Regulatory Authority.
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65c3721357bc56710706815d | reports | Standing Committee Report SummaryTransformation towards a Digital EconomyThe Standing Committee on Finance (Chair: Dr. M Veerappa Moily) submitted its report on the ‘Transformation towards a Digital Economy’ on January 3, 2017. The report makes recommendations on transforming the Indian economy by increasing digital transactions, and improving cyber security, among others. These are discussed below.Objective under demonetisation:The Committee observed that digitisation was added as a supplementary objective of demonetisation (of Rs 500 and Rs 1,000 currency notes in November 2016). It noted that promotion of digital transactions has the capacity to transform India’s economy through formalisation of payments. Further, this can: (i) accelerate financial inclusion, (ii) open new business models and markets, (iii) curb tax leakages, and (iv) reduce cash related costs and inconvenience.Pace of digitisation:The pace of digitisation has been slower than envisaged. While transactions using certain digital modes had peaked after demonetisation, they tapered with greater availability of cash (see Table 1). The Committee noted some roadblocks in the path of rapid digitalisation, which include unreasonable costs on digital transactions, and issues with telecom coverage. It recommended that the government should rationalise digital transaction costs and incentivise lower value transactions.Table 1: Volume and value of digital transactionsMonthVolume('lakh transactions)Value(Rs Crore)2016-17April58.61,500.5May60.01,673.0June59.81,811.8July63.21,742.3Aug62.71,822.4Sept62.41,952.0Oct71.21,700.1Nov83.31,861.6Dec123.01,937.2Jan113.31,788.8Feb100.41,623.6March118.02,363.62017-18April116.81,839.0Note: Includes transactions in RTGS, CCIL, NEFT, ECS, NACH, IMPS, Cards, PPIs.Sources: Report No. 56 on ‘Transformation towards a Digital Economy’, Standing Committee on Finance; PRS.Cyber security:The Committee noted that the government has kept pace with information technology (IT), and responded by enacting necessary laws, among taking other steps. It observed that an expanding cyber space has implications for national security and protection of the national information infrastructure. Robust cyber security requires creation of structures cutting across ministries and disciplines. It suggested that consultations should be carried out with experts, and an empowered coordinating authority should be established, which reports directly to the Prime Minister’s Office. Further, the Committee also recommended that capacity building on cyber security should be taken up in mission mode.Digital literacy:The Committee noted that digital literacy is sparsely and unevenly distributed across the population. It recommended that suitable programmes should be included in the school curriculum to cover aspects such as ease of transaction, costs, benefits, and other related risks.Data protection:The Committee observed that it is necessary to have a sound consumer privacy and data protection law in India. This would ensure security of public and private data. It urged the government to bring a legislation to Parliament at the earliest.Mobile-based payments:The Committee noted that the Unified Payments Interface (UPI) and the BHIM app have become important mobile based payment platforms. It suggested that the government should further popularise these platforms with the common man and merchant establishments.Grievance redressal:The Committee noted that instances of transactional hassles and other consumer grievances (including ATM frauds, cloning, phishing, etc.) have been increasing. It suggested that the government should bring necessary legal provisions to fix liability on the bank or financial institution for such a fraud. Further, the customer should be provided with a common helpline number. There should also be a dispute settlement mechanism to assist in fixing the onus of the fraud.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c3721357bc56710706814e | reports | The Reserve Bank of India (RBI) had constituted a High Level Task Force (Chair: Mr. Y. M. Deosthalee) to assess the need and scope of setting up a Public Credit Registry in India. The task force submitted its report on April 4, 2018.A public credit registry refers to an extensive database of credit information of borrowers that is accessible to all lending and credit decision-making institutions. Typically, the registry is managed by a public authority like the central bank of the country, and reporting of loan details to the registry by lenders and/or borrowers is mandated by the law.The terms of reference of the task force included: (i) reviewing the current availability of credit information in India and assessing its gaps, (ii) studying the best international practices on credit registries, and (iii) determining the scope and structure of a comprehensive credit registry, if any.Current Indian context:Presently, India has both public and private sector entities storing credit data:(i) There are four private Credit Information Companies (CICs) – TransUnion Credit Information Bureau (India) Limited (TransUnion CIBIL), Equifax, Experian and CRIF High Mark. RBI has mandated all regulated credit institutions to report borrower credit information to all CICs.(ii) Entities within RBI are: (i) Central Repository of Information on Large Credits (CRILC), and (ii) Basic Statistical Return-1 (BSR-1). CRILC contains credit information on all borrowers having exposure greater than five crore rupees. BSR-1 provides sectoral distribution of credit for all borrowings regardless of amount; and hence it does not have individual borrower identification.(iii) There are also institutions that capture specific credit information – for example, Information Utilities, registered under the Insolvency and Bankruptcy Code 2016, store financial information such as debt, liabilities, and balance sheet details that helps establish defaults.Challenges with current scenario:The task force identified various shortcomings of the current credit information infrastructure in India, such as: (i) the data stored is not comprehensive, and is fragmented across different entities, for example, data on borrowings from banks, inter-corporate borrowings, overseas borrowings etc., are not available in a single repository; (ii) it is reliant on self-disclosure, for example, income details, assets and liabilities are disclosed by the borrower; (iii) the data has to be cross-validated, for example, income tax websites have to be checked for listed companies; (iv) there are time lags and discrepancies between multiple sources of information; (v) there is increased reporting burden on credit institutions from having to report to multiple entities; and (vi) portals like CIBIL are paid portals and the lender has to bear the cost of extracting data.Consequences of the current Indian structure:The information asymmetry and fragmented nature of credit reporting leads to the following inefficiencies in the credit market: (i) since lending institutions do not have complete credit information on all borrowers, all borrowers pay similar interests irrespective of their risk or credit ratings; (ii) lenders may pick up clients who have a history of delinquency that is unknown to all lenders, and thereby face greater overall credit risk; (iii) it prevents credit supply to some subsections of the market, for example, small and medium industries are perceived as risky by default, and often denied timely credit due to lack of adequate credit history.Public credit registry:The task force noted that transparency in credit markets helps creditors and borrowers alike by removing information asymmetry and improving access to credit. To bring about such transparency, it recommended setting up a public credit registry. The credit registry should: (i) be backed by a suitable legal framework, (ii) store information on all loans regardless of the amount, (iii) capture information currently not recorded in the credit information system, for example, data on external borrowings, (iv) store supplementary credit data, like utility bill payments history, for the benefit of individuals with no credit history, and (vi) ensure security and privacy of the stored information. Borrowers may access their own credit report, and access to all stakeholders should be on a need-to-know basis and be used only for the authorised purpose. Additionally, the reporting entities should ensure the quality of data reported to the registry.International practice:Several countries, such as most members of the European Union, have a central credit registry usually managed by the central bank of the country. Reporting to the registry is mandatory by law. It provides credit reports to lenders and borrowers (on their own situation). Along with the public registry, there also exist multiple private credit bureaus, reporting to which tend to be voluntary in nature. Private bureaus augment their credit information with data from other sources like public registries, tax authorities, utility bill payments databases and legal proceedings database, and provide such data to lenders. They also provide services like credit assessment and scoring.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
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## Vital Stats Corruption Cases Against Government Officials Corruption Cases Against Government Officials Corruption Cases Against Government Officials Corruption Cases Against Government Officials
The agitation led by Anna Hazare has focussed on the formation of a Lok Pal to address the issue of corruption. We look at some data on the existing systems of identifying and prosecuting cases of corruption against public officials.
## The Government Has Frequently Delayed Sanction For Prosecuting Officials
� Prosecution of public servants for corruption may usually be
taken up only after the respective government gives sanction to do so. This provision is designed to protect honest officials
from harassment.
� However, the provision may be misused by delaying response
to requests for sanction.
� As of end-2010, the central government had not provided
responses to 236 requests. Of these, 155 requests (66%) were
pending for over three months.
� State governments had not responded to 84 requests, of which
13 (15%) were pending for more than three months.
## 6% Of The Cases Were Taken Up For Prosecution, And 94% Were Given Departmental Penalties
� The Central Vigilance Commission (CVC) is the premier
agency tasked to tackle corruption cases within the central government.
� Between 2005 and 2009, penalties were imposed on 13,061
cases (average 2612 per year) based on the CVC's advice.
� This included 846 cases (annual average 169) in which
sanction was granted for criminal prosecution.
� Major penalties were imposed in 4895 cases (annual average
979). These include dismissal, reduction to lower rank, cut in
pension etc.
� Minor penalties such as censure were imposed on 5356 cases
(annual average 1071), and administrative action was taken in 1964 cases (annual average 393).
## The Main Investigating Agency, The Cbi, Is Understaffed
� The Central Bureau of Investigation (CBI) is the main agency
used by the CVC to investigate cases of corruption and
misuse of office by public officials.
� As of December 2010, 21% of the sanctioned posts in CBI
were vacant.
� This includes 52% of the posts of law officers, 65% of
technical officers and 21% of executive officers.
## The Courts Have Also Been Slow In Deciding Cbi Cases
� The criminal justice system has also been slow in
prosecuting the CBI cases.
� As of end-2010, there were 9,927 CBI cases pending in
courts.
� Of these, 2,245 cases (23% of the total) were pending for
more than 10 years.
## The Whistleblower Mechanism Has Received Only A Few Hundred Complaints Every Year Number Of Whistleblower Complaints Received By Cvc
� After the murder of Satyendra Dubey, the Supreme Court
directed the government in 2004 to put a mechanism to act on complaints from whistleblowers.
� In April 2004, the government passed a resolution to
empower the CVC to act on complaints from whistleblowers.
� In the five years from 2005 to 2009, the CVC received a
total of 1,731 complaints, or an annual average of 346.
� The government has introduced the Public Interest
Disclosure Bill, 2010, which is currently being examined by the Parliamentary Standing Committee.
##
�ote:
The composition of CBI cases is not readily available. Whereas a majority of the cases relate to corruption, CBI investigates other cases too. This note is based on data obtained from the websites of the CVC and the CBI.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c3721357bc567107068153 | reports | The Committee on Optimal Energy Mix in Power Generation on Medium and Long Term Basis (Chair: Chairperson, Central Electricity Authority) submitted its report on January 1, 2018. The Committee was constituted by the Ministries of Power, and New and Renewable Energy in October 2017. Power is generated through various sources of energy such as coal, hydro, natural gas, and renewables (solar, wind). An optimal energy mix is one that uses a mix of these generation sources in the most efficient manner.The terms and references of the Committee included: (i) formulating the mission statement for aiming at clean, affordable, reliable and sustainable power for all, (ii) formulating the optimal generation mix for the next 15 years, considering India’s targets under the Paris Climate Agreement, economic growth, and environmental concerns, (iii) developing scenarios to integrate renewables at various energy generation mixes, and (iv) suggesting the road map to reduce the dependence on import of fuel for power generation.Key observations and recommendations of the Committee include:Optimal generation mix:As per the National Electricity Plan, for the period 2017-2022, the committed capacity addition for various energy sources is: (i) hydro - 6.,823 MW, (ii) gas - 406 MW, (iii) nuclear - 3,300 MW, (iv) renewables - 1,17,756 MW, and (v) coal – 47,855 MW (with a retirement of 22,716 MW of coal based capacity). The Committee noted that only 6,445 MW of additional coal based capacity would be required during 2017-2022, to meet the peak demand and energy requirement in the year 2021-22, as compared to the 47,855 MW that is currently at various stages of construction. The overall efficiency (or plan load factor) for coal based capacity is likely to be 56.5% during 2021-22.The Committee noted that considering all these factors such as: (i) existing and under construction power projects, (ii) targets for renewable energy generation, (iii) energy requirement in 2021-22, and (iv) the availability of domestic gas, there is not much scope in optimizing the generation mix by the year 2021-22.Scenario building:The Committee carried out two scenarios to find optimal generation mix, for the period post 2017-22. The first scenario was to achieve India’s Intended Nationally Determined Contribution (INDC) targets under the Paris Climate Agreement, and the second was to give impetus to hydro power. India’s INDC targets include: (i) reducing the emissions intensity of its GDP by 33% to 35% by 2030, from 2005 levels, and (ii) achieving about 40% electric power capacity from non-fossil fuel based energy resources by 2030. The Committee noted that INDC targets can be achieved with a renewable energy installed capacity of 1,25,000 MW by 2027 (1,00,000 MW by 2022). With such renewable capacity, carbon intensity will reduce by 53% from 2005 levels to 2027.Since renewable energy is variable (weather dependent), high renewable capacity addition will require providing balancing power and ramping requirement (during peak demand). Under the second scenario, giving an impetus to hydro power will help with balancing the power requirement and ramping up of power generation, at minimal cost. If 50% of the total hydro potential of 1,48,000 MW by 2026-2027 is exploited, along with 2,75,000 MW of renewable capacity by 2026-27, coal based capacity can be reduced (from 2,38,150 MW to 2,22,652 MW) resulting in lower carbon emissions.Integration of renewable energy:The Committee noted that, to accommodate the variability in renewable generation, the conventional generating plants (coal based) will need to be flexible (provide energy when the renewable plants are unable to). This will help with the balancing and ramping up of grid (when more capacity is required). States can also use a combined cycle gas based capacity for providing peaking and balancing support. Coordinated scheduling and utilisation of hydro generation for providing secondary and tertiary services would also help in integrating renewable generation resources into the grid.Roadmap to reduce dependency on fuel imports:The Committee suggested a few actions to reduce dependency on fuel imports for power generation. These include: (i) improving coordination between Railways and coal companies for optimum utilization of resources, (ii) augmenting the production and availability of domestic coal for the power sector, (iii) expediting environmental and forest clearances and land acquisition, (iv) following Coal India Limited’s roadmap to substantially enhance production of coal by 2019-20 to one billion tonne, (v) allocating additional natural gas to power sector for better utilization of gas based power plants, and (vi) improving gas pipeline for transportation of natural gas to transport it from remote fields to power plants.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c3721357bc5671070680ad | reports | Standing Committee Report SummaryThe Standing Committee on Coal, Mines and Steel (Chair: Mr. Rakesh Singh) submitted its report on ‘Development of Aluminium and Copper Industries in the Country’ on March 23, 2022. The Ministry of Mines is responsible for survey, exploration, and mining of all minerals, other than natural gas, petroleum, atomic minerals, and coal. Key observations and recommendations of the Committee include:Aluminium production capacity:Aluminium is the second largest metal market in the world after iron and steel. The Indian primary aluminium (aluminium produced directly from mined ore) market consists of three major producers: (i) National Aluminium Company Limited (NALCO), (ii) Hindalco Industries, and (iii) Vedanta Limited. These three have a total production capacity of about four million tonne. The Committee noted that presently NALCO is the only public sector enterprise producing bauxite and primary aluminium in India. Further, it noted that the aluminium sector has not been able to achieve its desired level of production with respect to its installed capacity. The Committee recommended the Ministry to improve the physical performance of the sector thereby allowing India to be self-reliant for aluminium.Consumption and demand of aluminium:The Committee observed that the per capita consumption of aluminium was 2.9 kg in 2018-19 as compared to a global average of 11 kg. Aluminium is a recyclable and environment friendly metal having its use in several sectors such as transport, power, and construction. The Committee noted that there is an urgent need for aluminium manufacturing companies to identify new aluminium value added products of mass consumption to achieve high per capita aluminium usage. It recommended the Ministry to coordinate and collaborate with Ministries of Railways, Defence, Transport, Power, and Civil Aviation to identify and explore areas where aluminium can replace other metals without compromising quality, strength, and cost.Imports of aluminium:The Committee observed that aluminium imports have remained consistently high, forming 60% of the total domestic consumption in 2020-21. The Committee recommended to enhance the custom duty on imported aluminium to discourage imports.Development of bauxite:The Committee noted that out of 3,896 million tonne of bauxite resources 3,240 million tonne (83%) are yet to be fully explored. Granting of mining lease, environmental clearances, land acquisition, and forest clearances are the major constraints in development of new mines. The Committee recommended the Ministry to take concrete steps to bring the unproven bauxite reserves in different states under proven and probable category.Development of copper:The Committee observed that India has very limited known reserves of exploitable copper ore and currently its copper share of world's reserve is only 0.31%. It noted that Hindustan Copper Limited (public sector enterprise) plans to increase its mining capacity: (i) from current level of 4.0 million tonne per annum to 12.2 million tonne in Phase–I (under implementation), and (ii) from 12.2 million tonne per annum to 20.2 million tonne in Phase-II. The Committee recommended the Ministry to prepare a holistic plan to ensure a proportionate increase in production of copper ore on an yearly basis in order to meet the targets.Demand of copper:The Committee noted that as the global demand of products such as electric vehicles, electrical equipment, and transportation equipment goes up, the demand of copper will also increase. To meet the enhanced demand of copper in India, the Committee recommended to exploit more copper deposits. According to the Committee, the per capita consumption of copper in the country is expected to increase from the current level of 0.6 kg to 1 kg in the coming years. Therefore, the Committee recommended the Ministry to pursue with the Ministry of Finance and the Ministry of Commerce to give more incentives to domestic copper industries in order to increase production.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c3721357bc5671070681d3 | reports | The Standing Committee on Social Justice and Empowerment (Chairperson: Mr. Hemanand Biswal) submitted its report on the implementation of the Prime Minister’s New 15 Point Programme for the welfare of religious minorities on February 15, 2014.The Programme, launched in 2005, seeks to ensure the welfare of religious minorities through: (a) increasing educational and employment opportunities, (b) improving living conditions, and (c) preventing and controlling communal riots.Currently, Muslims, Christians, Sikhs, Buddhists, Parsis and Jains are identified as religious minorities. Jains were notified as a religious minority community in January 2014. Major observations and recommendations of the Committee are:Increasing educational opportunities:The Committee recommended that the literacy rate of Muslims be improved, with a special focus on the educational and social development of Muslim women. Measures must be taken to promote Urdu.The number of educational scholarships for minorities must be increased such that every minority student has access to scholarships till the university level. Coaching academies to prepare students from minority communities for competitive examinations must be established.The Ministry of Human Resource Development should collected data on children dropping out of school, and the number of children finally completing school, in addition to the number of children enrolled.The Committee pointed out that while there has been an increase in the allocation of funds for improving the quality of education in madrasas, data on the output from these madrasas has not been collected.Increasing employment opportunities:Large and medium scale industries must be developed in notified minority concentration districts by members of minority communities as well as others.The Committee noted that the government employed close to 10% of people from minority communities in 2010-11 and public sector undertakings employed approximately 7%. It recommended that both recruit at least 15% of people from minority communities. Data on schemes such as the Seekho and Kamao scheme must be collected to determine their impact.Improving living conditions:The Committee noted that the poverty ratio is highest for Muslims in urban areas at 34%. Additionally, the ratio of workers in the total population (worker population ratio) is much higher for males than for females in all religious groups, especially in urban areas.While there has been a decline in unemployment and an increase in the worker population ratio among Muslims, the worker population ratio remains much lower that all India figures.The Committee recommended that planning, sanctioning of projects, and allocation of funds be done at the block level and not the district level. A list of persons below the poverty line belonging to minority communities must be prepared.Each minority concentration block should have a nodal officer to liaison with various government agencies. The Programme must provide for primary health care to minority communities with special facilities for women and children.Preventing and controlling communal riots:The Committee noted that 668 incidents of communal violence were reported in the country in 2012 in which 703 persons were killed and 1,506 persons were injured.The Committee recommended that an elaborate block-wise programme involving various stakeholders should be evolved to address communalism. This should involve confidence building measures, speedy rehabilitation of riot victims, and mobilisation of human resources and investment. Police forces must be sensitised on communal issues. |
65c3721357bc5671070681b9 | reports | The Standing Committee dealt with the functioning of the Screening Committee, guidelines on allocation of coal blocks, the monitoring mechanism and the review of the coal blocks by the Inter Ministerial Group.The Standing Committee on Coal and Steel submitted its 31st report on the “Review of Allotment, Development and Performance of Coal/Lignite Blocks” on April 23, 2013. The Committee dealt with the functioning of the Screening Committee, guidelines on allocation of coal blocks, the monitoring mechanism and the review of the coal blocks by the Inter Ministerial Group (IMG).The Screening Committee is responsible for making recommendations for the allotment of coal blocks, the Monitoring Committee reviews the development of the coal blocks and the milestones achieved, and the IMG is reviewing the allotment of coal blocks that were made.Need for coal mining by the private sector:The Committee recommended that the Ministry work on making the captive coal regime (mining by the private sector) an effective instrument of increased production of coal.Acquisition of coal mines abroad by CIL:Coal India Ltd (CIL) is acquiring mining assets abroad even though it could not undertake coal production within India and was leasing out coal mines to private companies. The Committee concluded that the government coal companies failed to develop coal blocks, which led to the captive coal block regime. The Committee would like to be informed of the detailed action plan of CIL for acquiring mining concessions abroad.Price pooling of domestic and imported coal:Domestic coal can be used in states where coal mines are available, while those along the coast, with infrastructure for coal handling, can use a certain quantum of imported coal. To make imports viable, CIL planned to mix domestic and international coal. They would sell this at a pooled price to power producers, which are mostly private firms. A mechanism of pooling coal price for domestic and imported coal would make this possible.Coal should be available throughout India at a uniform price and the price should be based on the calorific value of the coal. A policy mechanism should be evolved by the states for the use of domestic and imported coal.Allotment: During 1993 and 2010, natural resources were distributed without following a transparent system and without generating revenue for the central government. The Committee recommended that the central government frame a policy for allocating coal blocks to private parties. Public Sector Undertakings (PSUs) should get priority in allotment.The Committee recommended that the coal blocks allocated for captive use based on wrong information about the eligibility criteria furnished by the allottees should be cancelled immediately and the companies be black listed for future allocation of coal blocks and other minerals.Certain coal block allottees, approved by the Screening Committee, have failed to start production. The Committee was of the view that this indicated that the blocks were allotted without taking into account the techno-economic feasibility of the end use projects (generation of power, manufacture of cement, etc.), past track record of the developers in execution of the projects and their technical and financial capabilities. The Committee recommended that the government review all the allocations and report on the action taken on the defaulter allottees.The Review/Monitoring Committee allotted coal blocks to companies that did not have any end use project. The Committee suggests that in the future the Review Committee should function in a more objective and transparent manner for the timely development of coal blocks and necessary action should be taken against non-serious coal allottees.Coal blocks allotted to the private coal companies, atleast where coal production has not started, should be cancelled immediately.Development of coal blocks:Due to the inordinate delay in commissioning of the captive projects, the Committee was concerned to note that not only has the country been unable to achieve the targets for power production and other end use products, but has also resulted in revenue loss to the state on account of royalty payable to the state.The Ministry of Coal allocated 119 blocks to CIL in July, 2012. However, project reports have been prepared only in respect of two blocks. The Committee strongly urges the Ministry to act swiftly to ensure that these 119 blocks allocated to CIL start production. The Committee would like to be apprised of a perspective plan for the development of these blocks.The central government should take appropriate action against the exploitation of coal blocks allocated to government PSUs by a private party, without following a transparent procedure and bidding process.Performance:The Committee recommended that there is a need for a Coal Regulator to be established to ensure the development and regulation of coal blocks. Until then, the IMG should expeditiously and transparently review the development of all coal blocks that have been allocated.The states are the owner of minerals found in the state. However, the Committee noted that they are not associated with the IMG meetings for the deallocation of coal blocks. Receiving consent of the state government must be made a requirement for the allocation and deallocation of coal blocks.The Committee noted that the IMG is not headed by a Secretary level officer. The Committee recommended that the legality of implementation the recommendations of the IMG for the cancellation of coal blocks should be examined by the Ministry of Coal.The government should take immediate steps to strengthen the office of the Coal Controllers Organisation, by ensuring there is enough technical staff to monitor the progress of work in allocated captive coal blocks besides other statutory functions.Blocks allocated for coal to liquid:The Committee failed to understand why two coal blocks for coal to liquid with estimated explorable reserves of 3 billion tonnes were allocated to private companies ignoring the government companies. The Committee recommends that the allocation of coal to liquid blocks to the private companies should be examined by the government and the Committee should be apprised of details of the technology used to exploit the reserves and the present status of these projects. The Committee also recommended that these projects should be given only to PSUs.Participation of IPPs in Discom bids:The Committee noted that there was no condition included by the Screening Committee in the allocation letter of coal to private sector power projects, that the benefit of allocating coal free of cost should be passed on to the consumer. The Committee was of the view that the government should ensure that Independent Power Producers (IPPs) who have been allocated coal blocks should participate in the bids for power procurements called by Discoms and enter into long term Power Purchase Agreements (PPAs).Miscellaneous:The production of coal from underground mines is very small in comparison with open cast mines. The production of coal from open cast mines is gradually decreasing due to exhaustion of available reserves. The Committee recommended that an action plan be prepared by the government for coal production from underground mines.The Committee recommended that the Ministry of Coal enquire into the officers of the Ministry of Coal, CIL, etc. who are joining private mining companies after retirement against guidelines set for this purpose.The government should complete the process of consultation to implement the competitive bidding process for allocation of coal without delay. |
65c3721357bc56710706819c | reports | The Comptroller and Auditor General of India (CAG) submitted a report on the ‘Preparedness for Implementation of the National Food Security Act (NFSA), 2013’ on April 29, 2016.The objectives of conducting the audit were to assess whether states and union territories (UTs) had: (i) identified eligible households and issued ration cards to the beneficiaries, (ii) developed an adequate infrastructure to implement the Act, (iii) initiated reforms with regard to the existing Targeted Public Distribution Scheme (TPDS), and (iv) put in place an effective grievance redressal system and monitoring mechanism. Key findings of the audit report include:Identification of eligible beneficiaries:It was observed that since the NFSA was enacted in 2013, 18 states/UTs had implemented it as of March 2015. Only 51% of the eligible beneficiaries in the country had been identified. The NFSA states that respective states have to notify guidelines for identifying priority households under NFSA. However, CAG found that barring Chhattisgarh, Delhi and Jharkhand, states had simply re-stamped old ration cards (under TPDS) as being NFSA compliant without carrying out a fresh process of identification. Most states had also failed to adhere to provision of the Act which mandates having the ration cards in the name of women in the household who are above 18 years of age.Implementation of NFSA:The NFSA had provided a deadline of one year for states to complete its implementation. Only 11 states completed the identification of beneficiaries within this deadline. The Ministry extended this timeline three times, the last being in September 2015. Subsequently, 7 more states identified beneficiaries by October 2015.Infrastructure and logistics:The states/UTs were reported to have inadequate infrastructure to handle the logistics of storage and movement of food grains under NFSA. The CAG noted that 95% of the food grains in the country are transported by railways. After implementing NFSA, the quantity of food grains transported between states would be expected to increase, indicating a higher requirement of rakes (group of freight wagons) for the transportation of food grains. The CAG stated that 20% more rakes would be required for this purpose. However, it was observed that the availability of rakes had been falling short of their requirement (shortfall of 13% to 18%) from 2010-11 to 2014-15.With regard to storage capacity, it was found that the available capacity in states was inadequate for the allocated quantity of food grains. As of October 2015, of the 233 godowns sanctioned for construction in Maharashtra, only 93 had been completed. In Assam, although the storage capacity was enough for the state’s allocation, the conditions of the godown were found to be too damp for storage. Some of the storage in Jharkhand was also found to be unfit, either because of its remote location or the damaged condition of the godowns.Doorstep delivery of food grains:The Act states that it is the state governments’ responsibility to deliver food grains from state depots to fair price shops (FPS), and on to entitled beneficiaries. It was observed that doorstep delivery was only happening in Bihar and Delhi. In Maharashtra, doorstep delivery of food grains was done only in tribal and drought prone areas of the state, while in Uttar Pradesh, doorstep delivery was being done in a few districts (15 out of 75) by hiring contractors.Grievance redressal and monitoring mechanisms:The NFSA states that every state must have (i) a grievance redressal mechanism, (ii) a District Grievance Redressal Officer (DGRO), (iii) a State Food Commission, and (iv) Vigilance Committees at the state, district, block, and fair price shop levels, to monitor the implementation of the Act.As of March 2015, all nine states which were selected by CAG had set up an internal grievance mechanism of a toll free number. In terms of monitoring, state level Vigilance Committees were set up in six out of nine states. However, they were not set up in most districts. In addition, state governments had either not conducted inspections to monitor the implementation of the Act, or the frequency of inspections was lower than the targeted number (at least once every six months) under the Act. |
65c3721357bc567107068175 | reports |
The Standing Committee on Defence (Chair: Maj Gen B. C. Khanduri) submitted its report on 'Resettlement of Ex-Servicemen' on August 10, 2017. The Committee examined the issue of rehabilitation and welfare of ex-servicemen. Every year, nearly 60,000 armed forces personnel retire or are released from active service, and most of them are in the age bracket of 35-45 years. The salient observations and recommendations of the Committee include:
**Restructuring of DGR:** The Directorate
General Resettlement (DGR) under the Ministry of Defence facilitates re-settlement of exservicemen by organising pre and post retirement training, re-employment and self-employment. The Committee noted that presently, there are no specialised experts available in the fields of management, finance, insurance and marketing consultancy in the DGR. In addition, the DGR does not have any powers to ensure that central government organisations that have not prescribed a certain percentage of vacancies for ex-servicemen do so. It also observed that reservations made for SCs, STs, OBCs, and Persons with Disability (PWD) are statutorily backed and consequently, implemented by all central government organisations. However, this is not the case for reservations made for exservicemen, as the directions of DGR are presently only executive in nature.
The Committee recommended that the DGR
should be re-structured and granted statutory powers. The Committee noted that this will enable them to function in a professional manner and generate self-employment projects for exservicemen on a large scale. It will also ensure that reservation for ex-servicemen are implemented on the lines of those for SCs, STs, OBCs, and PWD.
Enhancement of percentage of reservations:
Post the implementation of the 6th Central Pay Commission, group 'D' posts have been merged with group 'C' posts in central government services. In light of this, the Committee DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The recommended that there was need to upgrade reservation for ex-servicemen in group 'D' to group 'B' and 'C' posts, and raise the percentage of reservation in group 'C' posts from 10% to 20% in central government jobs. In addition, reservation of 10% in group 'B' posts should also be provided as result of upgradation of group 'D' posts, which previously had a higher percentage of reservations. The Committee reasoned that re-settlement measures such as these will boost the morale of serving personnel, and attract talented youth.
**Re-employment of ex-servicemen:** For access
to better employment opportunities, the DGR
empowers retiring/ retired service personnel with additional skills through training courses. The Committee noted that DGR does not have a mechanism to find out the number of trained personnel who have been employed. In the absence of this, money spent on training is not efficiently utilised. Additionally, there is no rule for providing re-employment to ex-servicemen by the corporate sector under their Corporate
Social Responsibility programs.
The Committee recommended that a mechanism
should be designed by the DGR to collaborate with the private sector and seek greater employment opportunities for ex-servicemen. In addition, a clause for providing job placement assistance to all ex-servicemen receiving training should be incorporated in the agreement with all training institutes. The duration of all training courses should be made greater than six months for the training certificates to be accepted for government jobs as per recruitment rules.
**Welfare measures for ex-servicemen:** Key
welfare measures recommended by the Committee include: (i) 100% pension to the widow of a deceased soldier; (ii) exemption of income-tax for family pensioners of soldiers who have lost life in war-like/ counter-insurgency situations or on the line of control; and (iii) financial assistance to world war veterans. |
65c3721357bc567107068102 | reports | Expert Committee Report on Non-Personal Data Governance FrameworkReport SummaryNon-Personal Data Governance FrameworkThe Expert Committee constituted by the Ministry of Electronics and Information Technology (Chair: Mr. Kris Gopalakrishnan) to study various issues relating to non-personal data submitted its report in July, 2020. The Committee observed that non-personal data should be regulated to: (i) enable a data sharing framework to tap the economic, social, and public value of such data, and (ii) address concerns of harm arising from the use of such data.Non-personal data:Any data which is not personal data (data pertainingto characteristics, traits or attributes of identity, which can be used to identify an individual) is categorised as non-personal data. In terms of origin, non-personal data can be data which never related to natural persons (such as data on weather or supply chains), or data which was initially personal data, but has been anonymised (through use of certain techniques to ensure that individuals to whom the data relates to cannot be identified).Non-personal data can further be classified as: (i) Public non-personal data: data collected or generated by the government in course of publicly funded works. For example, anonymised data of land records or vehicle registration can be considered as public non-personal data. (ii) Community non-personal data: raw or factual data (without any processing) which is sourced from a community of natural persons. For example, datasets collected by municipal corporations or public electric utilities. (iii) Private non-personal data: data which is collected or generated by private entities through privately owned processes (derived insights, algorithms or proprietary knowledge).Risks associated with non-personal data:The Committee observed that even when personal data has been anonymised, the possibility of harm to the original data principal exists as no anonymisation technique is perfect. Therefore, it is necessary to address privacy concerns arising from possible re-identification of anonymised personal data, to ensure no harm is caused due to such processing. The Committee recommended certain categories of data to be considered as sensitive based on the risks: (i) non-personal data which is derived from sensitive personal data (such as health, caste or tribe) which bears a risk of re-identification, (ii) data which bears risk of collective harm to a group, and (iii) data related to national security or strategic interests.Key roles in non-personal data governance framework:The data principal is the entity to whom the non-personal data relates to. This entity can be an individual, a community, or a company. A data custodian collects, stores and processes data in a manner that is in the best interest of data principal. Data principals may exercise rights over their data through a representative entity, called data trustee. For example, Ministry of Health would be the trustee for health data of the citizens. Trustees can recommend transparency and reporting obligations to the regulator for data custodians to follow. The Committee recommended establishing ‘data business’ as a new category of business in the country. Entities (including government agencies) which collect, process or store data beyond a threshold (as specified by the regulator) will be classified as data businesses.Non-Personal Data Authority:This regulatory authority will be established for putting in place the framework for governance of non-personal data. It will consist of experts in fields such as data governance and technology. The Authority will be responsible for framing guidelines with respect to data sharing and risks associated with non-personal data.Sharing of non-personal data:Any entity may raise a data-sharing request for a: (i) sovereign purpose (such as national security or legal requirements), (ii) public interest purpose (policy making or better delivery of services), or (iii) economic purpose (to provide for a level playing field or for a monetary consideration). The Committee recommended that public data, community data or private data (limited to raw/factual data collected by a private entity) can be requested at no remuneration. Private data where the processing value add is significant may be shared based on remuneration which is fair, reasonable and non-discriminatory. Algorithms or proprietary knowledge may not be considered for data sharing. Data sharing request can be made to a data custodian. If the custodian refuses the request, the request will go to the Authority which will evaluate it based on social, public or economic benefits of such data sharing.Further, all entities will have open access to meta-data of data collected by data businesses (including government). Meta-data provides information about other data. The Committee observed that this will encourage innovation in the country. For example, automobile companies may collect data about roads through censors. The meta-data provided by such companies can be used by a startup to combine it with traffic data to identify safest routes for citizens.DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgment of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
23f8fd66-5341-5226-a956-889e9621abaa | constitution |
# The Constitution Of India
[*As on May*, 2022]
# 2022
## Preface
This is the fifth pocket size edition of the Constitution of India in the diglot form. In this edition, the text of the Constitution of India has been brought up-to-date by incorporating therein all the amendments up to the Constitution (One Hundred and Fifth Amendment) Act, 2021. The foot notes below the text indicate the Constitution Amendment Acts by which such amendments have been made.
The Constitution (One Hundredth Amendment) Act, 2015
containing details of acquired and transferred territories between the Governments of India and Bangladesh has been provided in APPENDIX I.
The Constitution (Application to Jammu and Kashmir)
Order, 2019 and the declaration under article 370(3) of the Constitution have been provided respectively in Appendix II and Appendix III for reference.
New Delhi;
Dr. Reeta Vasishta,
*Secretary to the Government of India.*
##
Art., arts. ........................................................ *for* Article, articles.
| Cl., cls | ″ | Clause, clauses. |
|---------------------|-----|------------------------|
| C.O | ″ | Constitution Order. |
| Ins | ″ | Inserted. |
| P., pp | ″ | Page, pages. |
| Pt | ″ | Part. |
| Rep | ″ | Repealed. |
| Ss., ss | ″ | Section, sections. |
| Sch | ″ | Schedule. |
| Subs | ″ | Substituted. |
| w.e.f | ″ | with effect from. |
| w.r.e.f | ″ | with |
| r | | |
| etrospective effect | | |
from.
## Contents
__________
PREAMBLE
## Part I The Union And Its Territory
ARTICLES
1.
Name and territory of the Union.
2.
Admission or establishment of new States.
[2A. Sikkim to be associated with the Union.—*Omitted.*]
3.
Formation of new States and alteration of areas, boundaries or
names of existing States.
4.
Laws made under articles 2 and 3 to provide for the amendment of
the First and the Fourth Schedules and supplemental, incidental and consequential matters.
## Part Ii Citizenship
5.
Citizenship at the commencement of the Constitution.
6.
Rights of citizenship of certain persons who have migrated to
India from Pakistan.
7.
Rights of citizenship of certain migrants to Pakistan.
8.
Rights of citizenship of certain persons of Indian origin residing
outside India.
9.
Persons voluntarily acquiring citizenship of a foreign State not to
be citizens.
10.
Continuance of the rights of citizenship.
11.
Parliament to regulate the right of citizenship by law.
## Part Iii Fundamental Rights General
12.
Definition.
13.
Laws inconsistent with or in derogation of the fundamental
rights.
Right to Equality
14.
Equality before law.
15.
Prohibition of discrimination on grounds of religion, race, caste,
sex or place of birth.
16.
Equality of opportunity in matters of public employment.
17.
Abolition of Untouchability.
18.
Abolition of titles.
Right to Freedom
19.
Protection of certain rights regarding freedom of speech, etc.
20.
Protection in respect of conviction for offences.
21.
Protection of life and personal liberty.
21A.
Right to education.
22.
Protection against arrest and detention in certain cases.
Right against Exploitation
23.
Prohibition of traffic in human beings and forced labour.
24.
Prohibition of employment of children in factories, etc.
Right to Freedom of Religion
25.
Freedom of conscience and free profession, practice and
propagation of religion.
26.
Freedom to manage religious affairs.
27.
Freedom as to payment of taxes for promotion of any particular
religion.
28.
Freedom as to attendance at religious instruction or religious
worship in certain educational institutions.
## Articles Cultural And Educational Rights
29.
Protection of interests of minorities.
30.
Right of minorities to establish and administer educational
institutions.
[31.
Compulsory acquisition of property. —*Omitted*.]
Saving of Certain Laws
31A.
Saving of Laws providing for acquisition of estates, etc.
31B.
Validation of certain Acts and Regulations.
31C.
Saving of laws giving effect to certain directive principles.
[31D.
Saving of laws in respect of anti-national activities.—*Omitted.*]
Right to Constitutional Remedies
32.
Remedies for enforcement of rights conferred by this Part.
[32A.
Constitutional validity of State laws not to be considered in
proceedings under article 32.—*Omitted.*]
33.
Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.
34.
Restriction on rights conferred by this Part while martial law is in force in any area.
35.
Legislation to give effect to the provisions of this Part.
## Part Iv Directive Principles Of State Policy
36.
Definition.
37.
Application of the principles contained in this Part.
38.
State to secure a social order for the promotion of welfare of the people.
39.
Certain principles of policy to be followed by the State.
39A.
Equal justice and free legal aid.
## Articles
40.
Organisation of village panchayats.
41.
Right to work, to education and to public assistance in certain cases.
42.
Provision for just and humane conditions of work and maternity
relief.
43.
Living wage, etc., for workers.
43A.
Participation of workers in management of Industries.
43B.
Promotion of co-operative societies.
44.
Uniform civil code for the citizens.
45.
Provision for early childhood care and education to children below the age of six years.
46.
Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections.
47.
Duty of the State to raise the level of nutrition and the standard of living and to improve public health.
48.
Organisation of agriculture and animal husbandry.
48A.
Protection and improvement of environment and safeguarding of forests and wild life.
49.
Protection of monuments and places and objects of national importance.
50.
Separation of judiciary from executive.
51.
Promotion of international peace and security.
## Part Iva Fundamental Duties
51A.
Fundamental duties.
## Part V The Union
## Chapter I.The Executive The President And Vice-President
52.
The President of India.
53.
Executive power of the Union.
54.
Election of President.
## Articles
55.
Manner of election of President.
56.
Term of office of President.
57.
Eligibility for re-election.
58.
Qualifications for election as President.
59.
Conditions of President's office.
60.
Oath or affirmation by the President.
61.
Procedure for impeachment of the President.
62.
Time of holding election to fill vacancy in the office of President
and the term of office of person elected to fill casual vacancy.
63.
The Vice-President of India.
64.
The Vice-President to be *ex officio* Chairman of the Council of States.
65.
The Vice-President to act as President or to discharge his
functions during casual vacancies in the office, or during the
absence, of President.
66.
Election of Vice-President.
67.
Term of office of Vice-President.
68.
Time of holding election to fill vacancy in the office of Vice-President
and the term of office of person elected to fill casual vacancy.
69.
Oath or affirmation by the Vice-President.
70.
Discharge of President's functions in other contingencies.
71.
Matters relating to, or connected with, the election of a President
or Vice-President.
72.
Power of President to grant pardons, etc., and to suspend, remit
or commute sentences in certain cases.
73.
Extent of executive power of the Union.
Council of Ministers
74.
Council of Ministers to aid and advise President.
75.
Other provisions as to Ministers.
The Attorney-General for India
76.
Attorney-General for India.
## Articles Conduct Of Government Business
77.
Conduct of business of the Government of India.
78.
Duties of Prime Minister as respects the furnishing of
information to the President, etc.
## Chapter Ii.Parliament General
79.
Constitution of Parliament.
80.
Composition of the Council of States.
81.
Composition of the House of the People.
82.
Readjustment after each census.
83.
Duration of Houses of Parliament.
84.
Qualification for membership of Parliament.
85.
Sessions of Parliament, prorogation and dissolution.
86.
Right of President to address and send messages to Houses.
87.
Special address by the President.
88.
Rights of Ministers and Attorney-General as respects Houses.
## Officers Of Parliament
89.
The Chairman and Deputy Chairman of the Council of States.
90.
Vacation and resignation of, and removal from, the office of
Deputy Chairman.
91.
Power of the Deputy Chairman or other person to perform the
duties of the office of, or to act as, Chairman.
92.
The Chairman or the Deputy Chairman not to preside while a
resolution for his removal from office is under consideration.
93.
The Speaker and Deputy Speaker of the House of the People.
94.
Vacation and resignation of, and removal from, the offices of
Speaker and Deputy Speaker.
95.
Power of the Deputy Speaker or other person to perform the
duties of the office of, or to act as, Speaker.
## Articles
96.
The Speaker or the Deputy Speaker not to preside while a
resolution for his removal from office is under consideration.
97.
Salaries and allowances of the Chairman and Deputy Chairman
and the Speaker and Deputy Speaker.
98.
Secretariat of Parliament.
## Conduct Of Business
99.
Oath or affirmation by members.
100.
Voting in Houses, power of Houses to act notwithstanding vacancies and quorum.
## Disqualifications Of Members
101.
Vacation of seats.
102.
Disqualifications for membership.
103.
Decision on questions as to disqualifications of members.
104.
Penalty for sitting and voting before making oath or affirmation under article 99 or when not qualified or when disqualified.
Powers, Privileges and Immunities of Parliament and its
Members
105.
Powers, privileges, etc., of the Houses of Parliament and of the members and committees thereof.
106.
Salaries and allowances of members.
Legislative Procedure
107.
Provisions as to introduction and passing of Bills.
108.
Joint sitting of both Houses in certain cases.
109.
Special procedure in respect of Money Bills.
110.
Definition of "Money Bills".
111.
Assent to Bills.
Procedure in Financial Matters
112.
Annual financial statement.
113.
Procedure in Parliament with respect to estimates.
114.
Appropriation Bills.
## Articles
115.
Supplementary, additional or excess grants.
116.
Votes on account, votes of credit and exceptional grants.
117.
Special provisions as to financial Bills.
Procedure Generally
118.
Rules of procedure.
119.
Regulation by law of procedure in Parliament in relation to financial business.
120.
Language to be used in Parliament.
121.
Restriction on discussion in Parliament.
122.
Courts not to inquire into proceedings of Parliament.
## Chapter Iii.Legislative Powers Of The President
123.
Power of President to promulgate Ordinances during recess of Parliament.
## Chapter Iv. The Union Judiciary
124.
Establishment and constitution of the Supreme Court.
124A.
National Judicial Appointments Commission.
124B.
Functions of Commission.
124C.
Power of Parliament to make law.
125.
Salaries, etc., of Judges.
126.
Appointment of acting Chief Justice.
127.
Appointment of *ad hoc* Judges.
128.
Attendance of retired Judges at sittings of the Supreme Court.
129.
Supreme Court to be a court of record.
130.
Seat of Supreme Court.
131.
Original jurisdiction of the Supreme Court.
[131A.
Exclusive jurisdiction of the Supreme Court in regard to questions
as to constitutional validity of Central laws.*Omitted*.]
132.
Appellate jurisdiction of the Supreme Court in appeals from High Courts in certain cases.
133.
Appellate jurisdiction of the Supreme Court in appeals from High Courts in regard to civil matters.
134.
Appellate jurisdiction of the Supreme Court in regard to criminal matters.
## Articles
134A.
Certificate for appeal to the Supreme Court.
135.
Jurisdiction and powers of the Federal Court under existing law
to be exercisable by the Supreme Court.
136.
Special leave to appeal by the Supreme Court.
137.
Review of judgments or orders by the Supreme Court.
138.
Enlargement of the jurisdiction of the Supreme Court.
139.
Conferment on the Supreme Court of powers to issue certain
writs.
139A.
Transfer of certain cases.
140.
Ancillary powers of the Supreme Court.
141.
Law declared by Supreme Court to be binding on all courts.
142.
Enforcement of decrees and orders of the Supreme Court and
orders as to discovery, etc.
143.
Power of the President to consult the Supreme Court.
144.
Civil and judicial authorities to act in aid of the Supreme
Court.
[144A.
Special provisions as to disposal of questions relating to
constitutional validity of laws.*Omitted*.]
145.
Rules of Court, etc.
146.
Officers and servants and the expenses of the Supreme Court.
147.
Interpretation.
## Chapter V.Comptroller And Auditor- General Of India
148.
Comptroller and Auditor-General of India.
149.
Duties and powers of the Comptroller and Auditor-General.
150.
Form of accounts of the Union and of the States.
151.
Audit reports.
## Part Vi The States Chapter I. General
152.
Definition.
## Articles Chapter Ii. The Executive The Governor
153.
Governors of States.
154.
Executive power of State.
155.
Appointment of Governor.
156.
Term of office of Governor.
157.
Qualifications for appointment as Governor.
158.
Conditions of Governor's office.
159.
Oath or affirmation by the Governor.
160.
Discharge of the functions of the Governor in certain
contingencies.
161.
Power of Governor to grant pardons, etc., and to suspend, remit
or commute sentences in certain cases.
162.
Extent of executive power of the State.
Council of Ministers
163.
Council of Ministers to aid and advise Governor.
164.
Other provisions as to Ministers.
The Advocate-General for the State
165.
Advocate-General for the State.
Conduct of Government Business
166.
Conduct of business of the Government of a State.
167.
Duties of Chief Minister as respects the furnishing of
information to Governor, etc.
## Chapter Iii.The State Legislature General
168.
Constitution of Legislatures in States.
169.
Abolition or creation of Legislative Councils in States.
170.
Composition of the Legislative Assemblies.
## Articles
171.
Composition of the Legislative Councils.
172.
Duration of State Legislatures.
173.
Qualification for membership of the State Legislature.
174.
Sessions of the State Legislature, prorogation and dissolution.
175.
Right of Governor to address and send messages to the House or
Houses.
176.
Special address by the Governor.
177.
Rights of Ministers and Advocate-General as respects the
Houses.
Officers of the State Legislature
178.
The Speaker and Deputy Speaker of the Legislative Assembly.
179.
Vacation and resignation of, and removal from, the offices of
Speaker and Deputy Speaker.
180.
Power of the Deputy Speaker or other person to perform the
duties of the office of, or to act as, Speaker.
181.
The Speaker or the Deputy Speaker not to preside while a
resolution for his removal from office is under consideration.
182.
The Chairman and Deputy Chairman of the Legislative Council.
183.
Vacation and resignation of, and removal from, the offices of
Chairman and Deputy Chairman.
184.
Power of the Deputy Chairman or other person to perform the
duties of the office of, or to act as, Chairman.
185.
The Chairman or the Deputy Chairman not to preside while a
resolution for his removal from office is under consideration.
186.
Salaries and allowances of the Speaker and Deputy Speaker and
the Chairman and Deputy Chairman.
187.
Secretariat of State Legislature.
Conduct of Business
188.
Oath or affirmation by members.
189.
Voting in Houses, power of Houses to act notwithstanding
vacancies and quorum.
Disqualifications of Members
190.
Vacation of seats.
## Articles
191.
Disqualifications for membership.
192.
Decision on questions as to disqualifications of members.
193.
Penalty for sitting and voting before making oath or affirmation
under article 188 or when not qualified or when disqualified.
Powers, privileges and immunities of State Legislatures and
their Members
194.
Powers, privileges, etc., of the Houses of Legislatures and of the
members and committees thereof.
195.
Salaries and allowances of members.
Legislative Procedure
196.
Provisions as to introduction and passing of Bills.
197.
Restriction on powers of Legislative Council as to Bills other
than Money Bills.
198.
Special procedure in respect of Money Bills.
199.
Definition of "Money Bills".
200.
Assent to Bills.
201.
Bills reserved for consideration.
Procedure in Financial Matters
202.
Annual financial statement.
203.
Procedure in Legislature with respect to estimates.
204.
Appropriation Bills.
205.
Supplementary, additional or excess grants.
206.
Votes on account, votes of credit and exceptional grants.
207.
Special provisions as to financial Bills.
Procedure Generally
208.
Rules of procedure.
209.
Regulation by law of procedure in the Legislature of the State in
relation to financial business.
## Articles
210.
Language to be used in the Legislature.
211.
Restriction on discussion in the Legislature.
212.
Courts not to inquire into proceedings of the Legislature.
## Chapter Iv.Legislative Power Of The Governor
213.
Power of Governor to promulgate Ordinances during recess of Legislature.
## Chapter V.The High Courts In The States
214.
High Courts for States.
215.
High Courts to be courts of record.
216.
Constitution of High Courts.
217.
Appointment and conditions of the office of a Judge of a High Court.
218.
Application of certain provisions relating to Supreme Court to
High Courts.
219.
Oath or affirmation by Judges of High Courts.
220.
Restriction on practice after being a permanent Judge.
221.
Salaries, etc., of Judges.
222.
Transfer of a Judge from one High Court to another.
223.
Appointment of acting Chief Justice.
224.
Appointment of additional and acting Judges.
224A.
Appointment of retired Judges at sittings of High Courts.
225.
Jurisdiction of existing High Courts.
226.
Power of High Courts to issue certain writs.
[226A.
Constitutional validity of Central laws not to be considered in
proceedings under article 226.*Omitted.*]
227.
Power of superintendence over all courts by the High Court.
228.
Transfer of certain cases to High Court.
[228A.
Special provisions as to disposal of questions relating to
constitutional validity of State laws.*Omitted.*]
## Articles
229.
Officers and servants and the expenses of High Courts.
230.
Extension of jurisdiction of High Courts to Union territories.
231.
Establishment of a common High Court for two or more States.
[232.
Articles 230, 231 and 232 substituted by articles 230 and 231].
CHAPTER VI.SUBORDINATE COURTS
233.
Appointment of district judges.
233A.
Validation of appointments of, and judgments, etc., delivered by, certain district judges.
234.
Recruitment of persons other than district judges to the judicial service.
235.
Control over subordinate courts.
236.
Interpretation.
237.
Application of the provisions of this Chapter to certain class or classes of magistrates.
[PART VII.—Omitted]
THE STATES IN PART B OF THE FIRST SCHEDULE
[238.
Omitted.]
PART VIII
## The Union Territories
239.
Administration of Union territories.
239A.
Creation of local Legislatures or Council of Ministers or both for certain Union territories.
239AA.
Special provisions with respect to Delhi.
239AB.
Provision in case of failure of constitutional machinery.
239B.
Power of administrator to promulgate Ordinances during recess of Legislature.
240.
Power of President to make regulations for certain Union territories.
241.
High Courts for Union territories.
[242.
Coorg.*Omitted.*]
PART IX
## The Panchayats
243.
Definitions.
## Articles
| 243A. | Gram Sabha. |
|--------------------------------------------------------|----------------------------------------------------------|
| 243B. | Constitution of Panchayats. |
| 243C. | Composition of Panchayats. |
| 243D. | Reservation of seats. |
| 243E. | Duration of Panchayats, etc. |
| 243F. | Disqualifications for membership. |
| 243G. | Powers, authority and responsibilities of Panchayats. |
| 243H. | Powers to impose taxes by, and Funds of, the Panchayats. |
| 243-I. | |
| Constitution of Finance Commission to review financial | |
| position. | |
| 243J. | Audit of accounts of Panchayats. |
| 243K. | Elections to the Panchayats. |
| 243L. | Application to Union territories. |
243M.
Part not to apply to certain areas.
243N.
Continuance of existing laws and Panchayats.
243-O.
Bar to interference by courts in electoral matters.
PART IXA
## The Municipalities
| 243P. | Definitions. |
|----------|----------------------------------------------------------------|
| 243Q. | Constitution of Municipalities. |
| 243R. | Composition of Municipalities. |
| 243S. | Constitution and composition of Wards Committees, etc. |
| 243T. | Reservation of seats. |
| 243U. | Duration of Municipalities, etc. |
| 243V. | Disqualifications for membership. |
| 243W. | Powers, authority and responsibilities of Municipalities, etc. |
| 243X. | Power to impose taxes by, and Funds of, the Municipalities. |
| 243Y. | Finance Commission. |
ARTICLES
243Z.
Audit of accounts of Municipalities.
243ZA.
Elections to the Municipalities.
243ZB.
Application to Union territories.
243ZC.
Part not to apply to certain areas.
243ZD.
Committee for district planning.
243ZE.
Committee for Metropolitan planning.
243ZF.
Continuance of existing laws and Municipalities.
243ZG.
Bar to interference by courts in electoral matters.
## Part Ixb The Co-Operative Societies
243ZH.
Definitions.
243Z-I.
Incorporation of co-operative societies.
243ZJ.
Number and term of members of board and its office bearers.
243ZK.
Election of members of board.
243ZL.
Supersession and suspension of board and interim management.
243ZM.
Audit of accounts of co-operative societies.
243ZN.
Convening of general body meetings.
243Z-O.
Right of a member to get information.
243ZP.
Returns.
243ZQ.
Offences and penalties.
243ZR.
Application to multi-State co-operative societies.
243ZS.
Application to Union territories.
243ZT.
Continuance of existing laws.
## **Part X** The Scheduled And Tribal Areas
244.
Administration of Scheduled Areas and Tribal Areas.
244A.
Formation of an autonomous State comprising certain tribal areas in Assam and creation of local Legislature or Council of Ministers or both therefor.
## Part Xi Relations Between The Union And The States Chapter I.Legislative Relations Distribution Of Legislative Powers
245.
Extent of laws made by Parliament and by the Legislatures of States.
246.
Subject-matter of laws made by Parliament and by the Legislatures of States.
246A.
Special provision with respect to goods and services tax.
247.
Power of Parliament to provide for the establishment of certain additional courts.
248.
Residuary powers of legislation.
249.
Power of Parliament to legislate with respect to a matter in the State List in the national interest.
250.
Power of Parliament to legislate with respect to any matter in the
State List if a Proclamation of Emergency is in operation.
251.
Inconsistency between laws made by Parliament under articles 249 and 250 and laws made by the Legislatures of States.
252.
Power of Parliament to legislate for two or more States by consent and adoption of such legislation by any other State.
253.
Legislation for giving effect to international agreements.
254.
Inconsistency between laws made by Parliament and laws made by the Legislatures of States.
255.
Requirements as to recommendations and previous sanctions to be regarded as matters of procedure only.
## Chapter Ii. Administrative Relations General
256.
Obligation of States and the Union.
257.
Control of the Union over States in certain cases.
[257A.
Assistance to States by deployment of armed forces or other
forces of the Union.*Omitted.*]
258.
Power of the Union to confer powers, etc., on States in certain cases.
## Articles
258A.
Power of the States to entrust functions to the Union.
[259.
Armed
Forces
in
States
in
Part
B
of
the
First
Schedule.*Omitted.*]
260.
Jurisdiction of the Union in relation to territories outside India.
261.
Public acts, records and judicial proceedings.
Disputes relating to Waters
262.
Adjudication of disputes relating to waters of inter-State rivers
or river valleys.
Co-ordination between States
263.
Provisions with respect to an inter-State Council.
## Part Xii Finance, Property, Contracts And Suits Chapter I.Finance General
264.
Interpretation.
265.
Taxes not to be imposed save by authority of law.
266.
Consolidated Funds and public accounts of India and of the
States.
267.
Contingency Fund.
Distribution of Revenues between the Union and the States
268.
Duties levied by the Union but collected and appropriated by the
States.
[268A.
Service tax levied by Union and collected by the Union and the
States.*Omitted.]*
269.
Taxes levied and collected by the Union but assigned to the
States.
269A.
Levy and collection of goods and services tax in course of inter-
State trade or commerce.
270.
Taxes levied and distributed between the Union and the States.
271.
Surcharge on certain duties and taxes for purposes of the Union.
[272.
Taxes which are levied and collected by the Union and may be
distributed between the Union and the States.*Omitted.*]
273.
Grants in lieu of export duty on jute and jute products.
274.
Prior recommendation of President required to Bills affecting taxation in which States are interested.
## Articles
275.
Grants from the Union to certain States.
276.
Taxes on professions, trades, callings and employments.
277.
Savings.
[278.
Agreement with States in Part B of the First Schedule with
regard to certain financial matters.*Omitted.*]
279.
Calculation of "net proceeds", etc.
279A.
Goods and Services Tax Council.
280.
Finance Commission.
281.
Recommendations of the Finance Commission.
## Miscellaneous Financial Provisions
282.
Expenditure defrayable by the Union or a State out of its revenues.
283.
Custody, etc., of Consolidated Funds, Contingency Funds and moneys credited to the public accounts.
284.
Custody of suitors' deposits and other moneys received by public servants and courts.
285.
Exemption of property of the Union from State taxation.
286.
Restrictions as to imposition of tax on the sale or purchase of goods.
287.
Exemption from taxes on electricity.
288.
Exemption from taxation by States in respect of water or electricity in certain cases.
289.
Exemption of property and income of a State from Union taxation.
290.
Adjustment in respect of certain expenses and pensions.
290A.
Annual payment to certain Devaswom Funds.
[291.
Privy purse sums of Rulers.*Omitted*.]
## Chapter Ii. Borrowing
292.
Borrowing by the Government of India.
293.
Borrowing by States.
## Articles Chapter Iii. Property, Contracts, Rights, Liabilities, Obligations And Suits
294.
Succession to property, assets, rights, liabilities and obligations in certain cases.
295.
Succession to property, assets, rights, liabilities and obligations
in other cases.
296.
Property accruing by escheat or lapse or as *bona vacantia.*
297.
Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.
298.
Power to carry on trade, etc.
299.
Contracts.
300.
Suits and proceedings.
## Chapter Iv. Right To Property
300A.
Persons not to be deprived of property save by authority of law.
## Part Xiii Trade, Commerce And Intercourse Within The Territory Of India
301.
Freedom of trade, commerce and intercourse.
302.
Power of Parliament to impose restrictions on trade, commerce and intercourse.
303.
Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce.
304.
Restrictions on trade, commerce and intercourse among States.
305.
Saving of existing laws and laws providing for State monopolies.
[306.
Power of certain States in Part B of the First Schedule to
impose restrictions on trade and commerce.*Omitted*]
307.
Appointment of authority for carrying out the purposes of
articles 301 to 304.
## Part Xiv Services Under The Union And The States Chapter I. Services
308.
Interpretation.
## Articles
309.
Recruitment and conditions of service of persons serving the
Union or a State.
310.
Tenure of office of persons serving the Union or a State.
311.
Dismissal, removal or reduction in rank of persons employed in
civil capacities under the Union or a State.
312.
All-India services.
312A.
Power of Parliament to vary or revoke conditions of service of
officers of certain services.
313.
Transitional provisions.
[314.
Provision for protection of existing officers of certain services.
Omitted.]
## Chapter Ii.—Public Service Commissions
315.
Public Service Commissions for the Union and for the States.
316.
Appointment and term of office of members.
317.
Removal and suspension of a member of a Public Service
Commission.
318.
Power to make regulations as to conditions of service of
members and staff of the Commission.
319.
Prohibition as to the holding of offices by members of
Commission on ceasing to be such members.
320.
Functions of Public Service Commissions.
321.
Power to extend functions of Public Service Commissions.
322.
Expenses of Public Service Commissions.
323.
Reports of Public Service Commissions.
## Part Xiva Tribunals
323A.
Administrative tribunals.
323B.
Tribunals for other matters.
## Articles Part Xv Elections
324.
Superintendence, direction and control of elections to be vested
in an Election Commission.
325.
No person to be ineligible for inclusion in, or to claim to be
included in a special, electoral roll on grounds of religion, race, caste or sex.
326.
Elections to the House of the People and to the Legislative
Assemblies of States to be on the basis of adult suffrage.
327.
Power of Parliament to make provision with respect to elections
to Legislatures.
328.
Power of Legislature of a State to make provision with respect to
elections to such Legislature.
329.
Bar to interference by courts in electoral matters.
[329A.
Special provision as to elections to Parliament in the case of
Prime Minister and Speaker.*Omitted.*]
## Part Xvi Special Provisions Relating To Certain Classes
330.
Reservation of seats for Scheduled Castes and Scheduled Tribes
in the House of the People.
331.
Representation of the Anglo-Indian community in the House of
the People.
332.
Reservation of seats for Scheduled Castes and Scheduled Tribes
in the Legislative Assemblies of the States.
333.
Representation of the Anglo-Indian community in the
Legislative Assemblies of the States.
334.
Reservation of seats and special representation to cease after
certain period.
335.
Claims of Scheduled Castes and Scheduled Tribes to services
and posts.
336.
Special provision for Anglo-Indian community in certain
services.
337.
Special provision with respect to educational grants for the
benefit of Anglo-Indian Community.
ARTICLES
338.
National Commission for Scheduled Castes.
338A.
National Commission for Scheduled Tribes.
338B.
National Commission for Backward Classes.
339.
Control of the Union over the administration of Scheduled Areas
and the welfare of Scheduled Tribes.
340.
Appointment of a Commission to investigate the conditions of
backward classes.
341.
Scheduled Castes.
342.
Scheduled Tribes.
342A.
Socially and educationally backward classes.
## Part Xvii Official Language Chapter I.—Language Of The Union
343.
Official language of the Union.
344.
Commission and Committee of Parliament on official language.
## Chapter Ii. Regional Languages
345.
Official language or languages of a State.
346.
Official language for communication between one State and
another or between a State and the Union.
347.
Special provision relating to language spoken by a section of the
population of a State.
## Chapter Iii.Language Of The Supreme Court, High Courts, Etc.
348.
Language to be used in the Supreme Court and in the High
Courts and for Acts, Bills, etc.
349.
Special procedure for enactment of certain laws relating to language.
## Chapter Iv.Special Directives
350.
Language to be used in representations for redress of grievances.
350A.
Facilities for instruction in mother-tongue at primary stage.
ARTICLES
350B.
Special Officer for linguistic minorities.
351.
Directive for development of the Hindi language.
## Part Xviii Emergency Provisions
352.
Proclamation of Emergency.
353.
Effect of Proclamation of Emergency.
354.
Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation.
355.
Duty of the Union to protect States against external aggression and internal disturbance.
356.
Provisions in case of failure of constitutional machinery in States.
357.
Exercise of legislative powers under Proclamation issued under article 356.
358.
Suspension of provisions of article 19 during emergencies.
359.
Suspension of the enforcement of the rights conferred by Part III
during emergencies.
[359A.
Application of this Part to the State of Punjab.*Omitted.*]
360.
Provisions as to financial emergency.
## Part Xix Miscellaneous
361.
Protection of President and Governors and Rajpramukhs.
361A.
Protection of publication of proceedings of Parliament and State Legislatures.
361B.
Disqualification for appointment on remunerative political post.
[362.
Rights and privileges of Rulers of Indian States.*Omitted.*]
363.
Bar to interference by courts in disputes arising out of certain treaties, agreements, etc.
363A.
Recognition granted to Rulers of Indian States to cease and privy purses to be abolished.
364.
Special provisions as to major ports and aerodromes.
365.
Effect of failure to comply with, or to give effect to, directions given by the Union.
## Articles
366.
Definitions.
367.
Interpretation.
## Part Xx Amendment Of The Constitution
368.
Power of Parliament to amend the Constitution and procedure therefor.
## Part Xxi Temporary, Transitional And Special Provisions
369.
Temporary power to Parliament to make laws with respect to certain matters in the State List as if they were matters in the Concurrent List.
370.
Temporary provisions with respect to the State of Jammu and Kashmir.
371.
Special provision with respect to the States of Maharashtra and Gujarat.
371A.
Special provision with respect to the State of Nagaland.
371B .
Special provision with respect to the State of Assam.
371C.
Special provision with respect to the State of Manipur.
371D.
Special provisions with respect to the State of Andhra Pradesh or the State of Telangana.
371E.
Establishment of Central University in Andhra Pradesh.
371F.
Special provisions with respect to the State of Sikkim.
371G.
Special provision with respect to the State of Mizoram.
371H.
Special provision with respect to the State of Arunachal Pradesh.
371-I.
Special provision with respect to the State of Goa.
371J.
Special provisions with respect to the State of Karnataka.
372.
Continuance in force of existing laws and their adaptation.
372A.
Power of the President to adapt laws.
373.
Power of President to make order in respect of persons under
preventive detention in certain cases.
374.
Provisions as to Judges of the Federal Court and proceedings
pending in the Federal Court or before His Majesty in Council.
## Articles
375.
Courts, authorities and officers to continue to function subject to
the provisions of the Constitution.
376.
Provisions as to Judges of High Courts.
377.
Provisions as to Comptroller and Auditor-General of India.
378.
Provisions as to Public Service Commissions.
378A.
Special provision as to duration of Andhra Pradesh Legislative Assembly.
[379.
Provisions as to provisional Parliament and the Speaker and
Deputy Speaker thereof.*Omitted.*]
[380.
Provision as to President. *Omitted.*]
[381.
Council of Ministers of the President.*Omitted.*]
[382.
Provisions as to provisional Legislatures for States in Part A of the First Schedule. *-- Omitted.*]
[383.
Provision as to Governors of Provinces. *-- Omitted.*]
[384.
Council of Ministers of the Governors.*Omitted.*]
[385.
Provision as to provisional Legislatures in States in Part B of the
First Schedule.*Omitted.*]
[386.
Council of Ministers for States in Part B of the First Schedule. - - Omitted.]
[387.
Special provision as to determination of population for the
purposes of certain elections.*Omitted.*]
[388.
Provisions as to the filling of casual vacancies in the provisional
Parliament and provisional Legislatures of the States.
Omitted.]
[389.
Provision as to Bills pending in the Dominion Legislatures and
in the Legislatures of Provinces and Indian States.*Omitted.*]
[390.
Money received or raised or expenditure incurred between the commencement of the Constitution and the 31st day of March,
1950. *Omitted.*]
## Articles
[391.
Power of the President to amend the First and Fourth Schedules
in certain contingencies.*Omitted.*]
392.
Power of the President to remove difficulties.
## Part Xxii Short Title, Commencement, Authoritative Text In Hindi And Repeals
393.
Short title.
394.
Commencement.
394A.
Authoritative text in the Hindi language.
395.
Repeals.
## Schedules First Schedule
I. —The States. II. —The Union territories.
## Second Schedule
PART A—Provisions as to the President and the Governors of States. PART B— [Omitted.]
PART C—Provisions as to the Speaker and the Deputy Speaker of the
House of the People and the Chairman and the Deputy
Chairman of the Council of States and the Speaker and
the Deputy Speaker of the Legislative Assembly and the
Chairman and the Deputy Chairman of the Legislative
Council of a State.
PART D— Provisions as to the Judges of the Supreme Court and of the High Courts. PART E— Provisions as to the Comptroller and Auditor-General of India.
THIRD SCHEDULE— Forms of Oaths or Affirmations. FOURTH SCHEDULE—Allocation of seats in the Council of States.
## Articles
FIFTH SCHEDULE—
Provisions as to the Administration and Control of Scheduled Areas and Scheduled Tribes
PART A—General.
PART B—Administration and Control of Scheduled Areas and Scheduled Tribes. PART C— Scheduled Areas. PART D—Amendment of the Schedule.
SIXTH SCHEDULE—
Provisions as to the Administration of Tribal Areas in the States of Assam, Meghalaya, Tripura and Mizoram.
SEVENTH SCHEDULE—
List I - Union List. List II— State List. List III— Concurrent List.
EIGHTH SCHEDULE— Languages.
NINTH SCHEDULE—Validation of certain Acts and Regulations. TENTH SCHEDULE— Provisions as to disqualification on ground of defection. ELEVENTH SCHEDULE— Powers, authority and responsibilities of Panchayats. TWELFTH SCHEDULE— Powers, authority and responsibilities of Municipalities, etc.
## Appendices
APPENDIX I.—The Constitution (One Hundredth Amendment) Act, 2015. APPENDIX II.—The Constitution (Application to Jammu and Kashmir) Order, 2019. APPENDIX III.— Declaration under article 370(3) of the Constitution.
## The Constitution Of India Preamble
WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a
1[SOVEREIGN SOCIALIST SECULAR DEMOCRATIC
REPUBLIC] and to secure to all its citizens:
JUSTICE, social, economic and political; LIBERTY of thought, expression, belief, faith and worship; EQUALITY of status and of opportunity; and to promote among them all
FRATERNITY assuring the dignity of the individual and the 2[unity
and integrity of the Nation]; IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, do HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.
______________________________________________
## Part I The Union And Its Territory
1. Name and territory of the Union.—(1) India, that is Bharat, shall be a Union of States.
1[(2) The States and the territories thereof shall be as specified in the First Schedule.]
(3) The territory of India shall comprise—
(a) the territories of the States;
2[(b) the Union territories specified in the First Schedule;
and]
(c) such other territories as may be acquired.
2. Admission or establishment of new States.—Parliament may by law admit into the Union, or establish, new States on such terms and conditions as it thinks fit.
3[2A. [*Sikkim to be associated with the Union.*].—Omitted by the Constitution (Thirty-sixth Amendment) *Act,* 1975, s. 5 (*w.e.f.* 26-4-1975).]
3. Formation of new States and alteration of areas, boundaries or names of existing States.—Parliament may by law—
(a) form a new State by separation of territory from any State or by uniting two or more States or parts of States or by uniting any territory to a part of any State;
(b) increase the area of any State; (c) diminish the area of any State; (d) alter the boundaries of any State; (e) alter the name of any State:
1[Provided that no Bill for the purpose shall be introduced in either House of Parliament except on the recommendation of the
______________________________________________
## (Part I.—Union And Its Territory)
President and unless, where the proposal contained in the Bill affects the area, boundaries or name of any of the States 2***, the Bill has been referred by the President to the Legislature of that State for expressing its views thereon within such period as may be specified in the reference or within such further period as the President may allow and the period so specified or allowed has expired.]
3[*Explanation I.*—In this article, in clauses (a) to (e), "State"
includes a Union territory, but in the proviso, "State" does not include a Union territory.
Explanation II.—The power conferred on Parliament by clause
(a) includes the power to form a new State or Union territory by uniting a part of any State or Union territory to any other State or Union territory.]
4. Laws made under articles 2 and 3 to provide for the amendment of the First and the Fourth Schedules and supplemental, incidental and consequential matters.—(1) Any law referred to in article 2 or article 3 shall contain such provisions for the amendment of the First Schedule and the Fourth Schedule as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions (including provisions as to representation in Parliament and in the Legislature or Legislatures of the State or States affected by such law) as Parliament may deem necessary.
(2) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.
##
Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
3. Ins. by the Constitution (Eighteenth Amendment) Act, 1966, s. 2 (w.e.f. 27-8-1966).
## Part Ii Citizenship
5. Citizenship at the commencement of the Constitution.—At the commencement of this Constitution, every person who has his domicile in the territory of India and—
(a) who was born in the territory of India; or (b) either of whose parents was born in the territory of India; or (c) who has been ordinarily resident in the territory of India for not less than five years immediately preceding such commencement,
shall be a citizen of India.
6. Rights of citizenship of certain persons who have migrated to India from Pakistan.—Notwithstanding anything in article 5, a person who has migrated to the territory of India from the territory now included in Pakistan shall be deemed to be a citizen of India at the commencement of this Constitution if—
(a) he or either of his parents or any of his grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted); and
(b)(i) in the case where such person has so migrated before the nineteenth day of July, 1948, he has been ordinarily resident in the territory of India since the date of his migration, or
(ii) in the case where such person has so migrated on or after the nineteenth day of July, 1948, he has been registered as a citizen of India by an officer appointed in that behalf by the Government of the Dominion of India on an application made by him therefor to such officer before the commencement of this Constitution in the form and manner prescribed by that Government: Provided that no person shall be so registered unless he has been resident in the territory of India for at least six months immediately preceding the date of his application.
**7. Rights of citizenship of certain migrants to Pakistan**.—
Notwithstanding anything in articles 5 and 6, a person who has after the first day of March, 1947, migrated from the territory of India to the territory now included in Pakistan shall not be deemed to be a citizen of India:
## (Part Ii.—Citizenship)
Provided that nothing in this article shall apply to a person who, after having so migrated to the territory now included in Pakistan, has returned to the territory of India under a permit for resettlement or permanent return issued by or under the authority of any law and every such person shall for the purposes of clause (b) of article 6 be deemed to have migrated to the territory of India after the nineteenth day of July, 1948.
8. Rights of citizenship of certain persons of Indian origin residing outside India.—Notwithstanding anything in article 5, any person who or either of whose parents or any of whose grand-parents was born in India as defined in the Government of India Act, 1935 (as originally enacted), and who is ordinarily residing in any country outside India as so defined shall be deemed to be a citizen of India if he has been registered as a citizen of India by the diplomatic or consular representative of India in the country where he is for the time being residing on an application made by him therefor to such diplomatic or consular representative, whether before or after the commencement of this Constitution, in the form and manner prescribed by the Government of the Dominion of India or the Government of India.
9. Persons voluntarily acquiring citizenship of a foreign State not to be citizens.— No person shall be a citizen of India by virtue of article 5, or be deemed to be a citizen of India by virtue of article 6 or article 8, if he has voluntarily acquired the citizenship of any foreign State.
10. Continuance of the rights of citizenship.—Every person who is or is deemed to be a citizen of India under any of the foregoing provisions of this Part shall, subject to the provisions of any law that may be made by Parliament, continue to be such citizen.
11. Parliament to regulate the right of citizenship by law.—Nothing in the foregoing provisions of this Part shall derogate from the power of Parliament to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship.
## Part Iii Fundamental Rights General
12. Definition.—In this Part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
13. Laws inconsistent with or in derogation of the fundamental rights.—(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.
(2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void.
(3) In this article, unless the context otherwise requires,—
(a) "law" includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law;
(b) "laws in force" includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas.
1[(4) Nothing in this article shall apply to any amendment of this Constitution made under article 368.]
## Right To Equality
14. Equality before law.—The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.
15. Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.—(1) The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
(2) No citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of them, be subject to any disability, liability, restriction or condition with regard to—
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1. Ins. by the Constitution (Twenty-fourth Amendment) Act, 1971, s. 2 (w.e.f. 5-11-1971).
## (Part Iii.—Fundamental Rights)
(a) access to shops, public restaurants, hotels and places of public entertainment; or
(b) the use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated to the use of the general public.
(3) Nothing in this article shall prevent the State from making any special provision for women and children.
1[(4) Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.]
2[(5) Nothing in this article or in sub-clause (g) of clause (1) of article 19
shall prevent the State from making any special provision, by law, for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes or the Scheduled Tribes in so far as such special provisions relate to their admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions referred to in clause (1) of article 30.]
3[(6) Nothing in this article or sub-clause (g) of clause (1) of article 19 or clause (2) of article 29 shall prevent the State from making,—
(a) any special provision for the advancement of any economically weaker sections of citizens other than the classes mentioned in clauses (4) and (5); and
(b) any special provision for the advancement of any economically weaker sections of citizens other than the classes mentioned in clauses (4) and (5) in so far as such special provisions relate to their admission to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions referred to in clause (1) of article 30, which in the case of reservation would be in addition to the existing reservations and subject to a maximum of ten per cent. of the total seats in each category.
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## (Part Iii.—Fundamental Rights)
Explanation.—For the purposes of this article and article 16,
"economically weaker sections" shall be such as may be notified by the State from time to time on the basis of family income and other indicators of economic disadvantage.]
## 16. Equality Of Opportunity In Matters Of Public Employment.—(1)
There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
(3) Nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office 1[under the Government of, or any local or other authority within, a State or Union territory, any requirement as to residence within that State or Union territory] prior to such employment or appointment.
(4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.
2[(4A) Nothing in this article shall prevent the State from making any provision for reservation 3[in matters of promotion, with consequential seniority, to any class] or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State.]
4[(4B) Nothing in this article shall prevent the State from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause (4) or clause (4A) as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent. reservation on total number of vacancies of that year.]
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1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "under
any State specified in the First Schedule or any local or other authority within its territory, any requirement as to residence within that State" (w.e.f. 1-11-1956).
2. Ins. by the Constitution (Seventy-seventh Amendment) Act, 1995, s. 2 (w.e.f. 17-6-1995).
3. Subs. by the Constitution (Eighty-fifth Amendment) Act, 2001, s. 2, for certain words
(retrospectively w.e.f. 17-6-1995).
4. Ins. by the Constitution (Eighty-first Amendment) Act, 2000, s. 2 (w.e.f. 9-6-2000).
## (Part Iii.—Fundamental Rights)
(5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination.
1[(6) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any economically weaker sections of citizens other than the classes mentioned in clause (4), in addition to the existing reservation and subject to a maximum of ten per cent. of the posts in each category.]
17. Abolition of Untouchability.—"Untouchability" is abolished and its practice in any form is forbidden. The enforcement of any disability arising out of "Untouchability" shall be an offence punishable in accordance with law.
18. Abolition of titles.—(1) No title, not being a military or academic distinction, shall be conferred by the State.
(2) No citizen of India shall accept any title from any foreign State.
(3) No person who is not a citizen of India shall, while he holds any office of profit or trust under the State, accept without the consent of the President any title from any foreign State.
(4) No person holding any office of profit or trust under the State shall, without the consent of the President, accept any present, emolument, or office of any kind from or under any foreign State.
## Right To Freedom 19. Protection Of Certain Rights Regarding Freedom Of Speech, Etc.—
(1) All citizens shall have the right—
(a) to freedom of speech and expression; (b) to assemble peaceably and without arms;
(c) to form associations or unions 2[or co-operative societies];
(d) to move freely throughout the territory of India;
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## (Part Iii.—Fundamental Rights)
(e) to reside and settle in any part of the territory of India; 1[and] 2[(f)* * * * *]
(g) to practise any profession, or to carry on any occupation, trade or business.
3[(2) Nothing in sub-clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of 4[the sovereignty and integrity of India], the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.]
(3) Nothing in sub-clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of 4[the sovereignty and integrity of India or]
public order, reasonable restrictions on the exercise of the right conferred by the said sub-clause.
(4) Nothing in sub-clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of 4[the sovereignty and integrity of India or]
public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub-clause.
(5) Nothing in 5[sub-clauses (d) and (e)] of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular,
1[nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to,—
(i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or
(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.] 20. Protection in respect of conviction for offences.—(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
(2) No person shall be prosecuted and punished for the same offence more than once.
(3) No person accused of any offence shall be compelled to be a witness against himself.
21. Protection of life and personal liberty.—No person shall be deprived of his life or personal liberty except according to procedure established by law.
2**[21A. Right to education.**—The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.]
22. Protection against arrest and detention in certain cases.—(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice.
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(2) Every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the court of the magistrate and no such person shall be detained in custody beyond the said period without the authority of a magistrate.
(3) Nothing in clauses (1) and (2) shall apply—
(a) to any person who for the time being is an enemy alien; or (b) to any person who is arrested or detained under any law providing for preventive detention.
(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than three months unless—
(a) an Advisory Board consisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court has reported before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention:
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"(4) No law providing for preventive detention shall authorise the detention of a person for a longer period than two months unless an Advisory Board constituted in accordance with the recommendations of the Chief Justice of the appropriate High Court has reported before the expiration of the said period of two months that there is in its opinion sufficient cause for such detention:
Provided that an Advisory Board shall consist of a Chairman and not less than two other members, and the Chairman shall be a serving Judge of the appropriate High Court and the other members shall be serving or retired Judges of any High Court :
Provided further that nothing in this clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by Parliament under sub-clause (a) of clause (7).
Explanation.—In this clause, "appropriate High Court" means,—
(i) in the case of the detention of a person in pursuance of an order of detention made by the Government of India or an officer or authority subordinate to that Government, the High Court for the Union territory of Dehli;
(ii) in the case of the detention of a person in pursuance of an order of detention
made by the Government of any State (other than a Union territory), the High Court for that State; and
(iii) in the case of the detention of a person in pursuance of an order of detention
made by the administrator of a Union territory or an officer or authority subordinate to such administrator, such High Court as may be specified by or under any law made by Parliament in this behalf.".
## (Part Iii.—Fundamental Rights)
Provided that nothing in this sub-clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by Parliament under sub-clause (b) of clause (7); or
(b) such person is detained in accordance with the provisions of any law made by Parliament under sub-clauses (a) and (b) of clause (7). (5) When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
(6) Nothing in clause (5) shall require the authority making any such order as is referred to in that clause to disclose facts which such authority considers to be against the public interest to disclose.
(7) Parliament may by law prescribe—
(a) the circumstances under which, and the class or classes of cases in which, a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an Advisory Board in accordance with the provisions of subclause (a) of clause (4);
(b) the maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention; and
(c) the procedure to be followed by an Advisory Board in an inquiry under sub-clause (a) of clause (4).
be notified).
"sub-clause (a) of clause (4)" shall stand substituted as "clause (4)" by s. 3(b)(iii),
ibid. (date yet to be notified).
## Right Against Exploitation
23. **Prohibition of traffic in human beings and forced labour.**—(1)
Traffic in human beings and *begar* and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.
(2) Nothing in this article shall prevent the State from imposing compulsory service for public purposes, and in imposing such service the State shall not make any discrimination on grounds only of religion, race, caste or class or any of them.
24. Prohibition of employment of children in factories, etc.—No child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment.
## Right To Freedom Of Religion
25. Freedom of conscience and free profession, practice and propagation of religion.—(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion.
(2) Nothing in this article shall affect the operation of any existing law or prevent the State from making any law—
(a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice;
(b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus. Explanation I.—The wearing and carrying of *kirpans* shall be deemed to be included in the profession of the Sikh religion.
Explanation II.—In sub-clause (b) of clause (2), the reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion, and the reference to Hindu religious institutions shall be construed accordingly.
26. Freedom to manage religious affairs.—Subject to public order, morality and health, every religious denomination or any section thereof shall have the right—
(a) to establish and maintain institutions for religious and charitable purposes;
## (Part Iii.—Fundamental Rights)
(b) to manage its own affairs in matters of religion;
(c) to own and acquire movable and immovable property; and
(d) to administer such property in accordance with law.
27. Freedom as to payment of taxes for promotion of any particular religion.—No person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religious denomination.
28. Freedom as to attendance at religious instruction or religious worship in certain educational institutions.—(1) No religious instruction shall be provided in any educational institution wholly maintained out of State funds.
(2) Nothing in clause (1) shall apply to an educational institution which is administered by the State but has been established under any endowment or trust which requires that religious instruction shall be imparted in such institution.
(3) No person attending any educational institution recognised by the State or receiving aid out of State funds shall be required to take part in any religious instruction that may be imparted in such institution or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto.
## Cultural And Educational Rights
29. Protection of interests of minorities.—(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same.
(2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
30. Right of minorities to establish and administer educational institutions.—(1) All minorities, whether based on religion or language, shall have the right to establish and administer educational institutions of their choice.
## (Part Iii.—Fundamental Rights)
1[(1A) In making any law providing for the compulsory acquisition of any property of an educational institution established and administered by a minority, referred to in clause (1), the State shall ensure that the amount fixed by or determined under such law for the acquisition of such property is such as would not restrict or abrogate the right guaranteed under that clause.]
(2) The State shall not, in granting aid to educational institutions, discriminate against any educational institution on the ground that it is under the management of a minority, whether based on religion or language.
2*
*
*
*
31. [Compulsory acquisition of property.].—Omitted by the Constitution
(Forty-fourth Amendment) *Act,* 1978, s. 6 (*w.e.f.* 20-6-1979).
## 3*[Saving Of Certain Laws]* 4**[31A. Saving Of Laws Providing For Acquisition Of Estates, Etc**.—
5[(1) Notwithstanding anything contained in article 13, no law providing for—
(a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights, or
(b) the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, or
(c) the amalgamation of two or more corporations either in the public interest or in order to secure the proper management of any of the corporations, or
(d) the extinguishment or modification of any rights of managing agents, secretaries and treasurers, managing directors, directors or managers of corporations, or of any voting rights of shareholders thereof, or
## ______________________________________________ (Part Iii.—Fundamental Rights)
(e) the extinguishment or modification of any rights accruing by virtue of any agreement, lease or licence for the purpose of searching for, or winning, any mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by 1[article 14 or article 19]:
Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent:]
2[Provided further that where any law makes any provision for the acquisition by the State of any estate and where any land comprised therein is held by a person under his personal cultivation, it shall not be lawful for the State to acquire any portion of such land as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto, unless the law relating to the acquisition of such land, building or structure, provides for payment of compensation at a rate which shall not be less than the market value thereof.]
(2) In this article,—
3[(a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include—
(i) any jagir, inam or *muafi* or other similar grant and in the States of 4[Tamil Nadu] and Kerala, any *janmam* right;
(ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;]
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## (Part Iii.—Fundamental Rights)
(b) the expression "rights", in relation to an estate, shall include any rights vesting in a proprietor, sub-proprietor, under-proprietor, tenureholder, 1[*raiyat, under-raiyat]* or other intermediary and any rights or privileges in respect of land revenue.]
2**[31B. Validation of certain Acts and Regulations.**—Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or Tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force.]
3**[31C. Saving of laws giving effect to certain directive principles**.—
Notwithstanding anything contained in article 13, no law giving effect to the policy of the State towards securing 4[all or any of the principles laid down in Part IV] shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by 5[article 14 or article 19;]
6[and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy]:
Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.]
731D. [Saving of laws in respect of anti-national activities.].—Omitted
by the Constitution (Forty-third Amendment) *Act,*1977, s. 2 (*w.e.f.*13-4-1978).
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3. Ins. by the Constitution (Twenty-fifth Amendment) Act, 1971, s. 3 (w.e.f. 20-4-1972). 4. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 4, for "the principles
specified in clause (b) or clause (c) of article 39" (w.e.f. 3-1-1977). Section 4 has been declared invalid by the Supreme Court in Minerva Mills Ltd. and Others Vs Union of India and Others, AIR 1980 SC 1789.
5. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 8, for "article 14, article
19 or article 31" (w.e.f. 20-6-1979).
6. The words in italics struck down by the Supreme Court in Kesavananda Bharati vs. State of
Kerala, AIR 1973, SC 1461.
## (Part Iii.—Fundamental Rights) Right To Constitutional Remedies
32. Remedies for enforcement of rights conferred by this Part.—(1)
The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.
(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of *habeas corpus, mandamus,* prohibition, quo warranto and *certiorari,* whichever may be appropriate, for the enforcement of any of the rights conferred by this Part.
(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).
(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.
132A. [Constitutional validity of State laws not to be considered in proceedings under article 32.].—Omitted by the Constitution (Forty-third Amendment) *Act,* 1977, s. 3 (*w.e.f.* 13-4-1978).
2[33. Power of Parliament to modify the rights conferred by this Part in their application to Forces, etc.—Parliament may, by law, determine to what extent any of the rights conferred by this Part shall, in their application to,—
(a) the members of the Armed Forces; or (b) the members of the Forces charged with the maintenance of public order; or
(c) persons employed in any bureau or other organisation established by the State for purposes of intelligence or counter intelligence; or
(d) person employed in, or in connection with, the telecommunication systems set up for the purposes of any Force, bureau or organisation referred to in clauses (a) to (c), be restricted or abrogated so as to ensure the proper discharge of their duties and the maintenance of discipline among them.]
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## (Part Iii.—Fundamental Rights)
34. Restriction on rights conferred by this Part while martial law is in force in any area.—Notwithstanding anything in the foregoing provisions of this Part, Parliament may by law indemnify any person in the service of the Union or of a State or any other person in respect of any act done by him in connection with the maintenance or restoration of order in any area within the territory of India where martial law was in force or validate any sentence passed, punishment inflicted, forfeiture ordered or other act done under martial law in such area.
35. Legislation to give effect to the provisions of this Part.—
Notwithstanding anything in this Constitution,—
(a) Parliament shall have, and the Legislature of a State shall not have, power to make laws—
(i) with respect to any of the matters which under clause (3) of article 16, clause (3) of article 32, article 33 and article 34 may be provided for by law made by Parliament; and
(ii) for prescribing punishment for those acts which are declared to be offences under this Part,
and Parliament shall, as soon as may be after the commencement of this Constitution, make laws for prescribing punishment for the acts referred to in sub-clause (ii);
(b) any law in force immediately before the commencement of this Constitution in the territory of India with respect to any of the matters referred to in sub-clause (i) of clause (a) or providing for punishment for any act referred to in sub-clause (ii) of that clause shall, subject to the terms thereof and to any adaptations and modifications that may be made therein under article 372, continue in force until altered or repealed or amended by Parliament. Explanation.—In this article, the expression "law in force'' has the same meaning as in article 372.
## Part Iv Directive Principles Of State Policy
36. Definition.—In this Part, unless the context otherwise requires, "the State" has the same meaning as in Part III.
37. Application of the principles contained in this Part.—The provisions contained in this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws.
38. State to secure a social order for the promotion of welfare of the people.—1[(1)] The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.
2[(2) The State shall, in particular, strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations.]
39. Certain principles of policy to be followed by the State.—The State shall, in particular, direct its policy towards securing—
(a) that the citizens, men and women equally, have the right to an adequate means of livelihood;
(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good;
(c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment;
(d) that there is equal pay for equal work for both men and women; (e) that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength;
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## (Part Iv.— Directive Principles Of State Policy)
1[(f) that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity and that childhood and youth are protected against exploitation and against moral and material abandonment.]
2**[39A. Equal justice and free legal aid.**—The State shall secure that the operation of the legal system promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.]
40. Organisation of village panchayats.—The State shall take steps to organise village panchayats and endow them with such powers and authority as may be necessary to enable them to function as units of self-government.
41. Right to work, to education and to public assistance in certain cases.—The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.
42. Provision for just and humane conditions of work and maternity relief.—The State shall make provision for securing just and humane conditions of work and for maternity relief.
43. Living wage, etc., for workers.—The State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas.
3[43A. **Participation of workers in management of industries**.—The State shall take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry.]
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1[43B. **Promotion of co-operative societies**.—The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies.]
44. **Uniform civil code for the citizens**.—The State shall endeavour to secure for the citizens a uniform civil code throughout the territory of India.
2[45. Provision for early childhood care and education to children below the age of six years.—The State shall endeavour to provide early childhood care and education for all children until they complete the age of six years.]
46. Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections.—The State shall promote with special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation.
47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health.—The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.
48. Organisation of agriculture and animal husbandry.—The State shall endeavour to organise agriculture and animal husbandry on modern and scientific lines and shall, in particular, take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle.
3[48A.
Protection and improvement of environment and safeguarding of forests and wild life.—The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.]
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## (Part Iv.— Directive Principles Of State Policy)
49. Protection of monuments and places and objects of national importance.—It shall be the obligation of the State to protect every monument or place or object of artistic or historic interest, 1[declared by or under law made by Parliament] to be of national importance, from spoliation, disfigurement, destruction, removal, disposal or export, as the case may be.
50. Separation of judiciary from executive.—The State shall take steps to separate the judiciary from the executive in the public services of the State.
51. Promotion of international peace and security.—The State shall endeavour to—
(a) promote international peace and security; (b) maintain just and honourable relations between nations; (c) foster respect for international law and treaty obligations in the
dealings of organised peoples with one another; and
(d) encourage settlement of international disputes by arbitration.
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## 1[**Part Iva** Fundamental Duties
51A. Fundamental duties.—It shall be the duty of every citizen of India—
(a) to abide by the Constitution and respect its ideals and institutions, the National Flag and the National Anthem;
(b) to cherish and follow the noble ideals which inspired our national struggle for freedom;
(c) to uphold and protect the sovereignty, unity and integrity of India;
(d) to defend the country and render national service when called upon to do so;
(e) to promote harmony and the spirit of common brotherhood amongst all the people of India transcending religious, linguistic and regional or sectional diversities; to renounce practices derogatory to the dignity of women;
(f) to value and preserve the rich heritage of our composite culture;
(g) to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have compassion for living creatures;
(h) to develop the scientific temper, humanism and the spirit of inquiry and reform;
(i) to safeguard public property and to abjure violence; (j) to strive towards excellence in all spheres of individual and collective activity so that the nation constantly rises to higher levels of endeavour and achievement; ]
2[(k) who is a parent or guardian to provide opportunities for education to his child or, as the case may be, ward between the age of six and fourteen years.]
## ______________________________________________ Part V The Union Chapter I.—The Executive
The President and Vice-President
52. The President of India.—There shall be a President of India. 53. Executive power of the Union.—(1) The executive power of the Union shall be vested in the President and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.
(2) Without prejudice to the generality of the foregoing provision, the supreme command of the Defence Forces of the Union shall be vested in the President and the exercise thereof shall be regulated by law.
(3) Nothing in this article shall—
(a) be deemed to transfer to the President any functions conferred by any existing law on the Government of any State or other authority; or
(b) prevent Parliament from conferring by law functions on authorities other than the President. 54. Election of President.—The President shall be elected by the members of an electoral college consisting of—
(a) the elected members of both Houses of Parliament; and (b) the elected members of the Legislative Assemblies of the States.
1[*Explanation.—*In this article and in article 55, "State" includes the National Capital Territory of Delhi and the Union territory of *Pondicherry.]
55. Manner of election of President.—(1) As far as practicable, there shall be uniformity in the scale of representation of the different States at the election of the President.
(2) For the purpose of securing such uniformity among the States inter se as well as parity between the States as a whole and the Union, the number of votes which each elected member of Parliament and of the Legislative Assembly of each State is entitled to cast at such election shall be determined in the following manner:—
(a) every elected member of the Legislative Assembly of a State shall have as many votes as there are multiples of one thousand in the quotient obtained by dividing the population of the State by the total number of the elected members of the Assembly;
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(b) if, after taking the said multiples of one thousand, the remainder is not less than five hundred, then the vote of each member referred to in sub-clause (a) shall be further increased by one;
(c) each elected member of either House of Parliament shall have such number of votes as may be obtained by dividing the total number of votes assigned to the members of the Legislative Assemblies of the States under sub-clauses (a) and (b) by the total number of the elected members of both Houses of Parliament, fractions exceeding one-half being counted as one and other fractions being disregarded. (3) The election of the President shall be held in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.
1[*Explanation.—*In this article, the expression "population" means the population as ascertained at the last preceding census of which the relevant figures have been published:
Provided that the reference in this *Explanation* to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 2[2026] have been published, be construed as a reference to the 1971 census.]
56. Term of office of President.—(1) The President shall hold office for a term of five years from the date on which he enters upon his office:
Provided that—
(a) the President may, by writing under his hand addressed to the Vice-President, resign his office;
(b) the President may, for violation of the Constitution, be removed from office by impeachment in the manner provided in article 61;
(c) the President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office. (2) Any resignation addressed to the Vice-President under clause (a) of the proviso to clause (1) shall forthwith be communicated by him to the Speaker of the House of the People.
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2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, s. 2, for "2000"
(w.e.f. 21-2-2002).
57. Eligibility for re-election.—A person who holds, or who has held, office as President shall, subject to the other provisions of this Constitution, be eligible for re-election to that office.
58. Qualifications for election as President.—(1) No person shall be eligible for election as President unless he—
(a) is a citizen of India, (b) has completed the age of thirty-five years, and (c) is qualified for election as a member of the House of the People.
(2) A person shall not be eligible for election as President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.
Explanation.—For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor 1*** of any State or is a Minister either for the Union or for any State.
59. Conditions of President's office.—(1) The President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as President.
(2) The President shall not hold any other office of profit. (3) The President shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
(4) The emoluments and allowances of the President shall not be diminished during his term of office.
60. Oath or affirmation by the President.—Every President and every person acting as President or discharging the functions of the President shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of India or, in his absence, the senior-most Judge of the Supreme Court available, an oath or affirmation in the following form, that is to say—
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(Part V.—The Union)
"I, A.B., do swear in the name of God that I will faithfully execute the office solemnly affirm of President (or discharge the functions of the President) of India and will to the best of my ability preserve, protect and defend the Constitution and the law and that
I will devote myself to the service and well-being of the people of India.".
61. Procedure for impeachment of the President.—(1) When a President is to be impeached for violation of the Constitution, the charge shall be preferred by either House of Parliament.
(2) No such charge shall be preferred unless—
(a) the proposal to prefer such charge is contained in a resolution which has been moved after at least fourteen days' notice in writing signed by not less than one-fourth of the total number of members of the House has been given of their intention to move the resolution, and
(b) such resolution has been passed by a majority of not less than two-thirds of the total membership of the House.
(3) When a charge has been so preferred by either House of Parliament, the other House shall investigate the charge or cause the charge to be investigated and the President shall have the right to appear and to be represented at such investigation.
(4) If as a result of the investigation a resolution is passed by a majority of not less than two-thirds of the total membership of the House by which the charge was investigated or caused to be investigated, declaring that the charge preferred against the President has been sustained, such resolution shall have the effect of removing the President from his office as from the date on which the resolution is so passed.
62. Time of holding election to fill vacancy in the office of President and the term of office of person elected to fill casual vacancy.—(1) An election to fill a vacancy caused by the expiration of the term of office of President shall be completed before the expiration of the term.
(2) An election to fill a vacancy in the office of President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after, and in no case later than six months from, the date of occurrence of the vacancy; and the person elected to fill the vacancy shall, subject to the provisions of article 56, be entitled to hold office for the full term of five years from the date on which he enters upon his office.
63. The Vice-President of India.—There shall be a Vice-President of India. 64. The Vice-President to be *ex officio* Chairman of the Council of States.—The Vice-President shall be *ex officio* Chairman of the Council of the States and shall not hold any other office of profit:
Provided that during any period when the Vice-President acts as President or discharges the functions of the President under article 65, he shall not perform the duties of the office of Chairman of the Council of States and shall not be entitled to any salary or allowance payable to the Chairman of the Council of States under article 97.
65. The Vice-President to act as President or to discharge his
functions during casual vacancies in the office, or during the absence, of President.—(1) In the event of the occurrence of any vacancy in the office of the President by reason of his death, resignation or removal, or otherwise, the Vice-President shall act as President until the date on which a new President elected in accordance with the provisions of this Chapter to fill such vacancy enters upon his office.
(2) When the President is unable to discharge his functions owing to absence, illness or any other cause, the Vice-President shall discharge his functions until the date on which the President resumes his duties.
(3) The Vice-President shall, during, and in respect of, the period while he is so acting as, or discharging the functions of, President, have all the powers and immunities of the President and be entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
66. Election of Vice-President.—(1) The Vice-President shall be elected by the 1[members of an electoral college consisting of the members of both Houses of Parliament] in accordance with the system of proportional representation by means of the single transferable vote and the voting at such election shall be by secret ballot.
(2) The Vice-President shall not be a member of either House of Parliament or of a House of the Legislature of any State, and if a member of either House of Parliament or of a House of the Legislature of any State be elected Vice-President, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Vice-President.
(3) No person shall be eligible for election as Vice-President unless he—
(a) is a citizen of India; (b) has completed the age of thirty-five years; and
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1. Subs. by the Constitution (Eleventh Amendment) Act, 1961, s. 2, for "members of both Houses of Parliament assembled at a joint meeting" (w.e.f. 19-12-1961).
(c) is qualified for election as a member of the Council of States.
(4) A person shall not be eligible for election as Vice-President if he holds any office of profit under the Government of India or the Government of any State or under any local or other authority subject to the control of any of the said Governments.
Explanation.—For the purposes of this article, a person shall not be deemed to hold any office of profit by reason only that he is the President or Vice-President of the Union or the Governor 1*** of any State or is a Minister either for the Union or for any State.
67. Term of office of Vice-President.—The Vice-President shall hold office for a term of five years from the date on which he enters upon his office:
Provided that—
(a) a Vice-President may, by writing under his hand addressed to the President, resign his office;
(b) a Vice-President may be removed from his office by a resolution of the Council of States passed by a majority of all the then members of the Council and agreed to by the House of the People; but no resolution for the purpose of this clause shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution;
(c) a Vice-President shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office. 68. Time of holding election to fill vacancy in the office of Vice-
President and the term of office of person elected to fill casual vacancy.— (1) An election to fill a vacancy caused by the expiration of the term of office of Vice-President shall be completed before the expiration of the term.
(2) An election to fill a vacancy in the office of Vice-President occurring by reason of his death, resignation or removal, or otherwise shall be held as soon as possible after the occurrence of the vacancy, and the person elected to fill the vacancy shall, subject to the provisions of article 67, be entitled to hold office for the full term of five years from the date on which he enters upon his office.
69. Oath or affirmation by the Vice-President.—Every Vice-
President shall, before entering upon his office, make and subscribe before the
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President, or some person appointed in that behalf by him, an oath or affirmation in the following form, that is to say—
"I, A.B., do swear in the name of God that I will bear true faith and solemnly affirm
allegiance to the Constitution of India as by law established and that I will faithfully discharge the duty upon which I am about to enter.".
70. Discharge of President's functions in other contingencies.—
Parliament may make such provision as it thinks fit for the discharge of the functions of the President in any contingency not provided for in this Chapter.
1[71. Matters relating to, or connected with, the election of a President or Vice-President.—(1) All doubts and disputes arising out of or in connection with the election of a President or Vice-President shall be inquired into and decided by the Supreme Court whose decision shall be final.
(2) If the election of a person as President or Vice-President is declared void by the Supreme Court, acts done by him in the exercise and performance of the powers and duties of the office of President or Vice-President, as the case may be, on or before the date of the decision of the Supreme Court shall not be invalidated by reason of that declaration.
(3) Subject to the provisions of this Constitution, Parliament may by law regulate any matter relating to or connected with the election of a President or Vice-President.
(4) The election of a person as President or Vice-President shall not be called in question on the ground of the existence of any vacancy for whatever reason among the members of the electoral college electing him.]
72. Power of President to grant pardons, etc., and to suspend, remit or commute sentences in certain cases.—(1) The President shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence—
(a) in all cases where the punishment or sentence is by a Court Martial;
(b) in all cases where the punishment or sentence is for an offence
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against any law relating to a matter to which the executive power of the Union extends;
(c) in all cases where the sentence is a sentence of death.
(2) Nothing in sub-clause (a) of clause (1) shall affect the power conferred by law on any officer of the Armed Forces of the Union to suspend, remit or commute a sentence passed by a Court Martial.
(3) Nothing in sub-clause (c) of clause (1) shall affect the power to suspend, remit or commute a sentence of death exercisable by the Governor 1***
of a State under any law for the time being in force.
73. Extent of executive power of the Union.—(1) Subject to the provisions of this Constitution, the executive power of the Union shall extend—
(a) to the matters with respect to which Parliament has power to make laws; and
(b) to the exercise of such rights, authority and jurisdiction as are
exercisable by the Government of India by virtue of any treaty or agreement: Provided that the executive power referred to in sub-clause (a) shall not, save as expressly provided in this Constitution or in any law made by Parliament, extend in any State 2*** to matters with respect to which the Legislature of the State has also power to make laws.
(2) Until otherwise provided by Parliament, a State and any officer or authority of a State may, notwithstanding anything in this article, continue to exercise in matters with respect to which Parliament has power to make laws for that State such executive power or functions as the State or officer or authority thereof could exercise immediately before the commencement of this Constitution.
## ______________________________________________ (Part V.—The Union) Council Of Ministers
74. Council of Ministers to aid and advise President.—1[(1) There shall be a Council of Ministers with the Prime Minister at the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such advice:]
2[Provided that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration.]
(2) The question whether any, and if so what, advice was tendered by Ministers to the President shall not be inquired into in any court.
75. Other provisions as to Ministers.—(1) The Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister.
3[(1A) The total number of Ministers, including the Prime Minister, in the Council of Ministers shall not exceed fifteen per cent. of the total number of members of the House of the People.
(1B) A member of either House of Parliament belonging to any political party who is disqualified for being a member of that House under paragraph 2 of the Tenth Schedule shall also be disqualified to be appointed as a Minister under clause (1) for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or where he contests any election to either House of Parliament before the expiry of such period, till the date on which he is declared elected, whichever is earlier.]
(2) The Ministers shall hold office during the pleasure of the President. (3) The Council of Ministers shall be collectively responsible to the House of the People.
(4) Before a Minister enters upon his office, the President shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.
3. Ins. by the Constitution (Ninety-first Amendment) Act, 2003, s. 2 (w.e.f. 1-1-2004).
(5) A Minister who for any period of six consecutive months is not a member of either House of Parliament shall at the expiration of that period cease to be a Minister.
(6) The salaries and allowances of Ministers shall be such as Parliament may from time to time by law determine and, until Parliament so determines, shall be as specified in the Second Schedule.
## The Attorney-General For India
76. Attorney-General for India.—(1) The President shall appoint a person who is qualified to be appointed a Judge of the Supreme Court to be Attorney-General for India.
(2) It shall be the duty of the Attorney-General to give advice to the Government of India upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the President, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.
(3) In the performance of his duties the Attorney-General shall have right of audience in all courts in the territory of India.
(4) The Attorney-General shall hold office during the pleasure of the President, and shall receive such remuneration as the President may determine.
## Conduct Of Government Business
77. Conduct of business of the Government of India.—(1) All executive action of the Government of India shall be expressed to be taken in the name of the President.
(2) Orders and other instruments made and executed in the name of the President shall be authenticated in such manner as may be specified in rules1 to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.
(3) The President shall make rules for the more convenient transaction of the business of the Government of India, and for the allocation among Ministers of the said business.
2(4) *
*
*
*
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78. Duties of Prime Minister as respects the furnishing of information to the President, etc.—It shall be the duty of the Prime Minister—
(a) to communicate to the President all decisions of the Council of Ministers relating to the administration of the affairs of the Union and proposals for legislation;
(b) to furnish such information relating to the administration of the affairs of the Union and proposals for legislation as the President may call for; and
(c) if the President so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.
## Chapter Ii.—Parliament General
**79. Constitution of Parliament.**—There shall be a Parliament for the Union which shall consist of the President and two Houses to be known respectively as the Council of States and the House of the People.
80. Composition of the Council of States.—(1) 1[2*** The Council of States] shall consist of—
(a) twelve members to be nominated by the President in accordance with the provisions of clause (3); and
(b) not more than two hundred and thirty-eight representatives of the States 3[and of the Union territories].
(2) The allocation of seats in the Council of States to be filled by representatives of the States 3[and of the Union territories] shall be in accordance with the provisions in that behalf contained in the Fourth Schedule.
(3) The members to be nominated by the President under sub-clause (a)
of clause (1) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely:—
Literature, science, art and social service.
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(4) The representatives of each State 1*** in the Council of States shall be elected by the elected members of the Legislative Assembly of the State in accordance with the system of proportional representation by means of the single transferable vote.
(5) The representatives of the 2[Union territories] in the Council of States shall be chosen in such manner as Parliament may by law prescribe.
3[**81. Composition of the House of the People**.—(1) 4[Subject to the provisions of article 331 5***], the House of the People shall consist of—
(a) not more than 6[five hundred and thirty members] chosen by direct election from territorial constituencies in the States, and
(b) not more than 7[twenty members] to represent the Union territories, chosen in such manner as Parliament may by law provide.
(2) For the purposes of sub-clause (a) of clause (1),—
(a) there shall be allotted to each State a number of seats in the House of the People in such manner that the ratio between that number and the population of the State is, so far as practicable, the same for all States; and
(b) each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it is, so far as practicable, the same throughout the State:
8[Provided that the provisions of sub-clause (a) of this clause shall not be applicable for the purpose of allotment of seats in the House of the People to any State so long as the population of that State does not exceed six millions.]
(3) In this article, the expression "population" means the population as
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4. Subs. by the Constitution (Thirty-fifth Amendment) Act, 1974, s. 4, for "subject to the
provisions of article 331" (w.e.f. 1-3-1975).
5. The words and figure "and paragraph 4 of the Tenth Schedule" omitted by the
Constitution (Thirty-sixth Amendment) Act, 1975, s. 5 (w.e.f. 26-4-1975).
6. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, for
"five hundred and twenty-five members" (w.e.f. 30-5-1987).
7. Subs. by the Constitution (Thirty-first Amendment) Act, 1973, s. 2, for "twenty-five
members" (w.e.f. 17-10-1973).
8. Ins. by s. 2, *ibid.* (w.e.f. 17-10-1973).
ascertained at the last preceding census of which the relevant figures have been published.
1[Provided that the reference in this clause to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 2[2026] have been published, 3[be construed,—
(i) for the purposes of sub-clause (a) of clause (2) and the proviso to that clause, as a reference to the 1971 census; and
(ii) for the purposes of sub-clause (b) of clause (2) as a reference to the 4[2001] census.]]
82. Readjustment after each census.—Upon the completion of each census, the allocation of seats in the House of the People to the States and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:
Provided that such readjustment shall not affect representation in the House of the People until the dissolution of the then existing House:
5[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the House may be held on the basis of the territorial constituencies existing before such readjustment:
Provided also that until the relevant figures for the first census taken after the year 6[2026] have been published, it shall not be necessary to
7[readjust—
(i) the allocation of seats in the House of the People to the States as
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(w.e.f. 22-6-2003).
5. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 16 (w.e.f. 3-1-1977). 6. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, s. 4, for "2000"
(w.e.f. 21-2-2002).
7. Subs. by s.4, *ibid*., for certain words (w.e.f. 21-2-2002).
readjusted on the basis of the 1971 census; and
(ii) the division of each State into territorial constituencies as may be readjusted on the basis of the 1[2001] census, under this article.]]
83. Duration of Houses of Parliament.—(1) The Council of States shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.
(2) The House of the People, unless sooner dissolved, shall continue for
2[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of 2[five years] shall operate as a dissolution of the House:
Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.
84. Qualification for membership of Parliament.—A person shall not be qualified to be chosen to fill a seat in Parliament unless he—
3[(a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]
(b) is, in the case of a seat in the Council of States, not less than thirty years of age and, in the case of a seat in the House of the People, not less than twenty-five years of age; and
(c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
1978, s. 13, for "six years" (w.e.f. 20-6-1979).
3. Subs. by the Constitution (Sixteenth Amendment) Act, 1963, s. 3, for cl.(a)
(w.e.f. 5-10-1963).
1[**85. Sessions of Parliament, prorogation and dissolution**.—(1) The President shall from time to time summon each House of Parliament to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.
(2) The President may from time to time—
(a) prorogue the Houses or either House; (b) dissolve the House of the People.]
86. Right of President to address and send messages to Houses.—(1)
The President may address either House of Parliament or both Houses assembled together, and for that purpose require the attendance of members.
(2) The President may send messages to either House of Parliament, whether with respect to a Bill then pending in Parliament or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.
87. Special address by the President.—(1) At the commencement of
2[the first session after each general election to the House of the People and at the commencement of the first session of each year] the President shall address both Houses of Parliament assembled together and inform Parliament of the causes of its summons.
(2) Provision shall be made by the rules regulating the procedure of either House for the allotment of time for discussion of the matters referred to in such address 3***.
## 88. Rights Of Ministers And Attorney-General As Respects Houses.—
Every Minister and the Attorney-General of India shall have the right to speak in, and otherwise to take part in the proceedings of, either House, any joint sitting of the Houses, and any committee of Parliament of which he may be named a member, but shall not by virtue of this article be entitled to vote.
3. The words "and for the precedence of such discussion over other business of the House"
omitted by s. 7, *ibid.* (w.e.f. 18-6-1951).
## (Part V.—The Union) Officers Of Parliament
89. The Chairman and Deputy Chairman of the Council of States.—(1)
The Vice- President of India shall be *ex officio* Chairman of the Council of States.
(2) The Council of States shall, as soon as may be, choose a member of the Council to be Deputy Chairman thereof and, so often as the office of Deputy Chairman becomes vacant, the Council shall choose another member to be Deputy Chairman thereof.
90. Vacation and resignation of, and removal from, the office of Deputy Chairman.—A member holding office as Deputy Chairman of the Council of States—
(a) shall vacate his office if he ceases to be a member of the Council; (b) may at any time, by writing under his hand addressed to the Chairman, resign his office; and
(c) may be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council:
Provided that no resolution for the purpose of clause *(c)* shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution.
91. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman.—(1) While the office of Chairman is vacant, or during any period when the Vice-President is acting as, or discharging the functions of, President, the duties of the office shall be performed by the Deputy Chairman, or, if the office of Deputy Chairman is also vacant, by such member of the Council of States as the President may appoint for the purpose.
(2) During the absence of the Chairman from any sitting of the Council of States the Deputy Chairman, or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.
92. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration.—(1) At any sitting of the Council of States, while any resolution for the removal of the Vice-President from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 91 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman, or, as the case may be, the Deputy Chairman, is absent.
(Part V.—The Union)
(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Council of States while any resolution for the removal of the Vice-President from his office is under consideration in the Council, but, notwithstanding anything in article 100, shall not be entitled to vote at all on such resolution or on any other matter during such proceedings.
93. The Speaker and Deputy Speaker of the House of the People.—
The House of the People shall, as soon as may be, choose two members of the House to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the House shall choose another member to be Speaker or Deputy Speaker, as the case may be.
94. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker.— A member holding office as Speaker or Deputy Speaker of the House of the People—
(a) shall vacate his office if he ceases to be a member of the House of the People;
(b) may at any time, by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and
(c) may be removed from his office by a resolution of the House of the People passed by a majority of all the then members of the House: Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution:
Provided further that, whenever the House of the People is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the House of the People after the dissolution.
95. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker.—(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the House of the People as the President may appoint for the purpose.
(2) During the absence of the Speaker from any sitting of the House of the People the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the House, or, if no such person is present, such other person as may be determined by the House, shall act as Speaker.
96. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration.—(1) At any sitting of the House of the People, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 95 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker, or, as the case may be, the Deputy Speaker, is absent.
(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the House of the People while any resolution for his removal from office is under consideration in the House and shall, notwithstanding anything in article 100, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
97. Salaries and allowances of the Chairman and Deputy Chairman and the Speaker and Deputy Speaker.—There shall be paid to the Chairman and the Deputy Chairman of the Council of States, and to the Speaker and the Deputy Speaker of the House of the People, such salaries and allowances as may be respectively fixed by Parliament by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule.
98. Secretariat of Parliament.—(1) Each House of Parliament shall have a separate secretarial staff:
Provided that nothing in this clause shall be construed as preventing the creation of posts common to both Houses of Parliament.
(2) Parliament may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of either House of Parliament.
(3) Until provision is made by Parliament under clause (2), the President may, after consultation with the Speaker of the House of the People or the Chairman of the Council of States, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House of the People or the Council of States, and any rules so made shall have effect subject to the provisions of any law made under the said clause.
## (Part V.—The Union) Conduct Of Business
99. Oath or affirmation by members.—Every member of either House of Parliament shall, before taking his seat, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
100. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum.—(1) Save as otherwise provided in this Constitution, all questions at any sitting of either House or joint sitting of the Houses shall be determined by a majority of votes of the members present and voting, other than the Speaker or person acting as Chairman or Speaker.
The Chairman or Speaker, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.
(2) Either House of Parliament shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in Parliament shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.
1[(3) Until Parliament by law otherwise provides, the quorum to constitute a meeting of either House of Parliament shall be one-tenth of the total number of members of the House.
(4) If at any time during a meeting of a House there is no quorum, it shall be the duty of the Chairman or Speaker, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.]
## Disqualifications Of Members
101. Vacation of seats.— (1) No person shall be a member of both Houses of Parliament and provision shall be made by Parliament by law for the vacation by a person who is chosen a member of both Houses of his seat in one House or the other.
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(2) No person shall be a member both of Parliament and of a House of the Legislature of a State 1***, and if a person is chosen a member both of Parliament and of a House of the Legislature of 2[a State], then, at the expiration of such period as may be specified in rules made by the President, that person's seat in Parliament shall become vacant, unless he has previously resigned his seat in the Legislature of the State.
(3) If a member of either House of Parliament—
(a) becomes subject to any of the disqualifications mentioned in
3[clause (1) or clause (2) of article 102], or
4[(b) resigns his seat by writing under his hand addressed to the Chairman or the Speaker, as the case may be, and his resignation is accepted by the Chairman or the Speaker, as the case may be,]
his seat shall thereupon become vacant:
5[Provided that in the case of any resignation referred to in sub-clause
(b), if from information received or otherwise and after making such inquiry as he thinks fit, the Chairman or the Speaker, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]
(4) If for a period of sixty days a member of either House of Parliament is without permission of the House absent from all meetings thereof, the House may declare his seat vacant:
Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.
India, Extraordinary, P. 678. article 102" (w.e.f. 1-3-1985).
102. Disqualifications for membership.—(1) A person shall be disqualified for being chosen as, and for being, a member of either House of Parliament—
1[(a) if he holds any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holder;]
(b) if he is of unsound mind and stands so declared by a competent court;
(c) if he is an undischarged insolvent; (d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;
(e) if he is so disqualified by or under any law made by Parliament.
2[*Explanation.—*For the purposes of this clause] a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State by reason only that he is a Minister either for the Union or for such State.
3[(2) A person shall be disqualified for being a member of either House of Parliament if he is so disqualified under the Tenth Schedule.]
## 4**[103. Decision On Questions As To Disqualifications Of Members**.—
(1) If any question arises as to whether a member of either House of Parliament has become subject to any of the disqualifications mentioned in clause (1) of article 102, the question shall be referred for the decision of the President and his decision shall be final.
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3. Ins. by s. 3, *ibid.* (w.e.f. 1-3-1985). 4. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 20, for art. 103
(w.e.f. 3-1-1977) and further subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 14, for art. 103 (w.e.f. 20-6-1979).
(2) Before giving any decision on any such question, the President shall obtain the opinion of the Election Commission and shall act according to such opinion.]
104. Penalty for sitting and voting before making oath or affirmation under article 99 or when not qualified or when disqualified.—If a person sits or votes as a member of either House of Parliament before he has complied with the requirements of article 99, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the Union.
Powers, Privileges and Immunities of Parliament and its Members
105. Powers, privileges, etc., of the Houses of Parliament and of the members and committees thereof.—(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of Parliament, there shall be freedom of speech in Parliament.
(2) No member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of either House of Parliament of any report, paper, votes or proceedings.
1[(3) In other respects, the powers, privileges and immunities of each House of Parliament, and of the members and the committees of each House, shall be such as may from time to time be defined by Parliament by law, and, until so defined, 2[shall be those of that House and of its members and committees immediately before the coming into force of section 15 of the Constitution (Forty-fourth Amendment) Act, 1978.]].
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words (w.e.f. 20-6-1979).
(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of Parliament or any committee thereof as they apply in relation to members of Parliament.
106. Salaries and allowances of members.—Members of either House of Parliament shall be entitled to receive such salaries and allowances as may from time to time be determined by Parliament by law and, until provision in that respect is so made, allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Constituent Assembly of the Dominion of India.
## Legislative Procedure
107. Provisions as to introduction and passing of Bills.—(1) Subject to the provisions of articles 109 and 117 with respect to Money Bills and other financial Bills, a Bill may originate in either House of Parliament.
(2) Subject to the provisions of articles 108 and 109, a Bill shall not be deemed to have been passed by the Houses of Parliament unless it has been agreed to by both Houses, either without amendment or with such amendments only as are agreed to by both Houses.
(3) A Bill pending in Parliament shall not lapse by reason of the prorogation of the Houses.
(4) A Bill pending in the Council of States which has not been passed by the House of the People shall not lapse on a dissolution of the House of the People.
(5) A Bill which is pending in the House of the People, or which having been passed by the House of the People is pending in the Council of States, shall, subject to the provisions of article 108, lapse on a dissolution of the House of the People.
108. Joint sitting of both Houses in certain cases.—(1) If after a Bill has been passed by one House and transmitted to the other House—
(a) the Bill is rejected by the other House; or (b) the Houses have finally disagreed as to the amendments to be made in the Bill; or
(c) more than six months elapse from the date of the reception of the Bill by the other House without the Bill being passed by it,
the President may, unless the Bill has elapsed by reason of a dissolution of the House of the People, notify to the Houses by message if they are sitting or by public notification if they are not sitting, his intention to summon them to meet in a joint sitting for the purpose of deliberating and voting on the Bill:
Provided that nothing in this clause shall apply to a Money Bill.
(2) In reckoning any such period of six months as is referred to in clause
(1), no account shall be taken of any period during which the House referred to in sub-clause (c) of that clause is prorogued or adjourned for more than four consecutive days.
(3) Where the President has under clause (1) notified his intention of summoning the Houses to meet in a joint sitting, neither House shall proceed further with the Bill, but the President may at any time after the date of his notification summon the Houses to meet in a joint sitting for the purpose specified in the notification and, if he does so, the Houses shall meet accordingly.
(4) If at the joint sitting of the two Houses the Bill, with such amendments, if any, as are agreed to in joint sitting, is passed by a majority of the total number of members of both Houses present and voting, it shall be deemed for the purposes of this Constitution to have been passed by both Houses:
Provided that at a joint sitting—
(a) if the Bill, having been passed by one House, has not been passed by the other House with amendments and returned to the House in which it originated, no amendment shall be proposed to the Bill other than such amendments (if any) as are made necessary by the delay in the passage of the Bill;
(b) if the Bill has been so passed and returned, only such amendments as aforesaid shall be proposed to the Bill and such other amendments as are relevant to the matters with respect to which the Houses have not agreed;
and the decision of the person presiding as to the amendments which are admissible under this clause shall be final.
(5) A joint sitting may be held under this article and a Bill passed thereat, notwithstanding that a dissolution of the House of the People has intervened since the President notified his intention to summon the Houses to meet therein.
## 109. Special Procedure In Respect Of Money Bills.—(1) A Money Bill
shall not be introduced in the Council of States.
(Part V.—The Union)
(2) After a Money Bill has been passed by the House of the People it shall be transmitted to the Council of States for its recommendations and the Council of States shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the House of the People with its recommendations and the House of the People may thereupon either accept or reject all or any of the recommendations of the Council of States.
(3) If the House of the People accepts any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Council of States and accepted by the House of the People.
(4) If the House of the People does not accept any of the recommendations of the Council of States, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the House of the People without any of the amendments recommended by the Council of States.
(5) If a Money Bill passed by the House of the People and transmitted to the Council of States for its recommendations is not returned to the House of the People within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the House of the People.
110. Definition of "Money Bills".—(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:—
(a) the imposition, abolition, remission, alteration or regulation of any tax;
(b) the regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
(c) the custody of the Consolidated Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) the appropriation of moneys out of the Consolidated Fund of India; (e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated Fund of India or the public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
(g) any matter incidental to any of the matters specified in subclauses (a) to (f). (2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final.
(4) There shall be endorsed on every Money Bill when it is transmitted to the Council of States under article 109, and when it is presented to the President for assent under article 111, the certificate of the Speaker of the House of the People signed by him that it is a Money Bill.
111. Assent to Bills.—When a Bill has been passed by the Houses of Parliament, it shall be presented to the President, and the President shall declare either that he assents to the Bill, or that he withholds assent therefrom:
Provided that the President may, as soon as possible after the presentation to him of a Bill for assent, return the Bill if it is not a Money Bill to the Houses with a message requesting that they will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message, and when a Bill is so returned, the Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the Houses with or without amendment and presented to the President for assent, the President shall not withhold assent therefrom.
## Procedure In Financial Matters
112. Annual financial statement.—(1) The President shall in respect of every financial year cause to be laid before both the Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year, in this Part referred to as the "annual financial statement''.
(2) The estimates of expenditure embodied in the annual financial statement shall show separately—
(a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and
(b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of India, and shall distinguish expenditure on revenue account from other expenditure.
(3) The following expenditure shall be expenditure charged on the Consolidated Fund of India—
(a) the emoluments and allowances of the President and other expenditure relating to his office;
(b) the salaries and allowances of the Chairman and the Deputy Chairman of the Council of States and the Speaker and the Deputy Speaker of the House of the People;
(c) debt charges for which the Government of India is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;
(d) (i) the salaries, allowances and pensions payable to or in respect of Judges of the Supreme Court;
(ii) the pensions payable to or in respect of Judges of the Federal Court;
(iii) the pensions payable to or in respect of Judges of any High Court which exercises jurisdiction in relation to any area included in the territory of India or which at any time before the commencement of this Constitution exercised jurisdiction in relation to any area included in
1[a Governor's Province of the Dominion of India];
(e) the salary, allowances and pension payable to or in respect of the Comptroller and Auditor-General of India;
(f) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
(g) any other expenditure declared by this Constitution or by Parliament by law to be so charged. 113. Procedure in Parliament with respect to estimates.—(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of India shall not be submitted to the vote of Parliament, but nothing in this clause shall be construed as preventing the discussion in either House of Parliament of any of those estimates.
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(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the House of the People, and the House of the People shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the recommendation of the President.
114. Appropriation Bills.—(1) As soon as may be after the grants under article 113 have been made by the House of the People, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of India of all moneys required to meet—
(a) the grants so made by the House of the People; and (b) the expenditure charged on the Consolidated Fund of India but not exceeding in any case the amount shown in the statement previously laid before Parliament. (2) No amendment shall be proposed to any such Bill in either House of Parliament which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of India, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of articles 115 and 116, no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law passed in accordance with the provisions of this article.
115. Supplementary, additional or excess grants.—(1) The President shall—
(a) if the amount authorised by any law made in accordance with the provisions of article 114 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or
(b) if any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before both the Houses of Parliament another statement showing the estimated amount of that expenditure or cause to be presented to the House of the People a demand for such excess, as the case may be.
(2) The provisions of articles 112, 113 and 114 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure or grant.
116. Votes
on
account,
votes
of
credit
and
exceptional
grants.—(1) Notwithstanding anything in the foregoing provisions of this Chapter, the House of the People shall have power—
(a) to make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 113 for the voting of such grant and the passing of the law in accordance with the provisions of article 114 in relation to that expenditure;
(b) to make a grant for meeting an unexpected demand upon the resources of India when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
(c) to make an exceptional grant which forms no part of the current service of any financial year, and Parliament shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of India for the purposes for which the said grants are made.
(2) The provisions of articles 113 and 114 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of India to meet such expenditure.
117. Special provisions as to financial Bills.—(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to (f) of clause (1) of article 110 shall not be introduced or moved except on the recommendation of the President and a Bill making such provision shall not be introduced in the Council of States:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of India shall not be passed by either House of Parliament unless the President has recommended to that House the consideration of the Bill.
## Procedure Generally
118. Rules of procedure.—(1) Each House of Parliament may make rules for regulating, subject to the provisions of this Constitution, its procedure
and the conduct of its business.
(2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature of the Dominion of India shall have effect in relation to Parliament subject to such modifications and adaptations as may be made therein by the Chairman of the Council of States or the Speaker of the House of the People, as the case may be.
(3) The President, after consultation with the Chairman of the Council of States and the Speaker of the House of the People, may make rules as to the procedure with respect to joint sittings of, and communications between, the two Houses.
(4) At a joint sitting of the two Houses the Speaker of the House of the People, or in his absence such person as may be determined by rules of procedure made under clause (3), shall preside.
119. Regulation by law of procedure in Parliament in relation to financial business.— Parliament may, for the purpose of the timely completion of financial business, regulate by law the procedure of, and the conduct of business in, each House of Parliament in relation to any financial matter or to any Bill for the appropriation of moneys out of the Consolidated Fund of India, and, if and so far as any provision of any law so made is inconsistent with any rule made by a House of Parliament under clause (1) of article 118 or with any rule or standing order having effect in relation to Parliament under clause (2) of that article, such provision shall prevail.
## ______________________________________________ (Part V.—The Union)
120. Language to be used in Parliament.—(1) Notwithstanding anything in Part XVII, but subject to the provisions of article 348, business in Parliament shall be transacted in Hindi or in English:
Provided that the Chairman of the Council of States or Speaker of the House of the People, or person acting as such, as the case may be, may permit any member who cannot adequately express himself in Hindi or in English to address the House in his mother-tongue.
(2) Unless Parliament by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words "or in English" were omitted therefrom.
121. Restriction on discussion in Parliament.—No discussion shall take place in Parliament with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties except upon a motion for presenting an address to the President praying for the removal of the Judge as hereinafter provided.
122. Courts not to inquire into proceedings of Parliament.—(1) The validity of any proceedings in Parliament shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of Parliament in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in Parliament shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.
## Chapter Iii.—Legislative Powers Of The President
123. Power of President to promulgate Ordinances during recess of Parliament.—(1) If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require.
(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of Parliament, but every such Ordinance—
(a) shall be laid before both Houses of Parliament and shall cease to operate at the expiration of six weeks from the reassembly of Parliament, or, if before the expiration of that period resolutions disapproving it are passed by both Houses, upon the passing of the second of those resolutions; and
(b) may be withdrawn at any time by the President.
Explanation.—Where the Houses of Parliament are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.
(3) If and so far as an Ordinance under this article makes any provision which Parliament would not under this Constitution be competent to enact, it shall be void.
1(4)* * * * *
## Chapter Iv.—The Union Judiciary
124. Establishment and constitution of Supreme Court.—(1) There shall be a Supreme Court of India consisting of a Chief Justice of India and, until Parliament by law prescribes a larger number, of not more than [seven] other Judges.
(2) Every Judge of the Supreme Court shall be appointed by the President by warrant under his hand and seal 2[on the recommendation of the National Judicial Appointments Commission referred to in article 124A] and shall hold office until he attains the age of sixty-five years:
3[*
*
* *
*]
4[Provided that]—
(a) a Judge may, by writing under his hand addressed to the President, resign his office;
(b) a Judge may be removed from his office in the manner provided in clause (4).
5[(2A) The age of a Judge of the Supreme Court shall be determined by such authority and in such manner as Parliament may by law provide.]
(3) A person shall not be qualified for appointment as a Judge of the
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1. Ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 2 (with retrospective effect) and
omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 16 (w.e.f. 20-6-1979).
Now "thirty-three" *vide* the Supreme Court (Number of Judges) Amendment Act, 2019 (37 of 2019),
s. 2 (w.e.f. 9-8-2019).
2. Subs. by the Constitution (Ninety-ninth Amendment) Act, 2014, s. 2, for "after consultation with
such of the Judges of the Supreme Court and of the High Court in the States as the President may deem necessary for the purpose" (w.e.f. 13-4-2015). This amendment has been struck down by the Supreme Court in the case of Supreme Court Advocates-on-Record Association and another Vs. Union of India in its judgment dated 16-10-2015, AIR 2016 SC 117.
3. The first proviso was omitted by s. 2, *ibid.* (w.e.f.13-4-2015).The proviso was as under:—
"Provided that in the case of appointment of a Judge other than the Chief Justice, the Chief
Justice of India shall always be consulted:". This amendment has been struck down by the Supreme Court in the case of Supreme Court Advocates-on-Record Association and another Vs. Union of India in its judgment dated 16-10-2015, AIR 2016 SC 117.
4. Subs. by s. 2, *ibid*. for "provided further that" (w.e.f.13-4-2015).This amendment has been struck
down by the Supreme Court in the Supreme Court Advocates-on-Record Association and another Vs Union of India judgment dated 16-10-2015, AIR 2016 SC 117.
5. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 2 (w.e.f. 5-10-1963).
Supreme Court unless he is a citizen of India and—
(a) has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or
(b) has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or
(c) is, in the opinion of the President, a distinguished jurist.
Explanation I.—In this clause "High Court'' means a High Court which exercises, or which at any time before the commencement of this Constitution exercised, jurisdiction in any part of the territory of India.
Explanation II.—In computing for the purpose of this clause the period during which a person has been an advocate, any period during which a person has held judicial office not inferior to that of a district judge after he became an advocate shall be included.
(4) A Judge of the Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.
(5) Parliament may by law regulate the procedure for the presentation of an address and for the investigation and proof of the misbehaviour or incapacity of a Judge under clause (4).
(6) Every person appointed to be a Judge of the Supreme Court shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
(7) No person who has held office as a Judge of the Supreme Court shall plead or act in any court or before any authority within the territory of India.
1[**124A. National Judicial Appointments Commission**.—(1) There shall be a Commission to be known as the National Judicial Appointments Commission consisting of the following, namely:—
(a) the Chief Justice of India, Chairperson, *ex officio*; (b) two other senior Judges of the Supreme Court next to the Chief Justice of India––Members, *ex officio*;
## ______________________________________________ (Part V.—The Union)
(c) the Union Minister in charge of Law and Justice––Member, ex officio;
(d) two eminent persons to be nominated by the committee consisting of the Prime Minister, the Chief Justice of India and the Leader of Opposition in the House of the People or where there is no such Leader of Opposition, then, the Leader of single largest Opposition Party in the House of the People––Members:
Provided that one of the eminent person shall be nominated from amongst the persons belonging to the Scheduled Castes, the Scheduled Tribes, Other Backward Classes, Minorities or Women:
Provided further that an eminent person shall be nominated for a period of three years and shall not be eligible for renomination. (2) No act or proceedings of the National Judicial Appointments Commission shall be questioned or be invalidated merely on the ground of the existence of any vacancy or defect in the constitution of the Commission.
124B. **Functions of Commission.**––It shall be the duty of the National Judicial Appointments Commission to—
(a) recommend persons for appointment as Chief Justice of India, Judges of the Supreme Court, Chief Justices of High Courts and other Judges of High Courts;
(b) recommend transfer of Chief Justices and other Judges of High Courts from one High Court to any other High Court; and
(c) ensure that the person recommended is of ability and integrity.
124C. Power of Parliament to make law.––Parliament may, by law, regulate the procedure for the appointment of Chief Justice of India and other Judges of the Supreme Court and Chief Justices and other Judges of High Courts and empower the Commission to lay down by regulations the procedure for the discharge of its functions, the manner of selection of persons for appointment and such other matters as may be considered necessary by it.]
125. Salaries, etc., of Judges.— 1[(1) There shall be paid to the Judges of the Supreme Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.]
(2) Every Judge shall be entitled to such privileges and allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such privileges, allowances and rights as are specified in the Second Schedule:
Provided that neither the privileges nor the allowances of a Judge nor his rights in respect of leave of absence or pension shall be varied to his disadvantage after his appointment.
## ______________________________________________ (Part V.—The Union)
126. Appointment of acting Chief Justice.—When the office of Chief Justice of India is vacant or when the Chief Justice is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such one of the other Judges of the Court as the President may appoint for the purpose.
127. Appointment of *ad hoc* **Judges.**—(1) If at any time there should not be a quorum of the Judges of the Supreme Court available to hold or continue any session of the Court, 1[the National Judicial Appointments Commission on a reference made to it by the Chief Justice of India, may with the previous consent of the President] and after consultation with the Chief Justice of the High Court concerned, request in writing the attendance at the sittings of the Court, as an *ad hoc* Judge, for such period as may be necessary, of a Judge of a High Court duly qualified for appointment as a Judge of the Supreme Court to be designated by the Chief Justice of India.
(2) It shall be the duty of the Judge who has been so designated, in priority to other duties of his office, to attend the sittings of the Supreme Court at the time and for the period for which his attendance is required, and while so attending he shall have all the jurisdiction, powers and privileges, and shall discharge the duties, of a Judge of the Supreme Court.
128. Attendance of retired Judges at sittings of the Supreme
Court.—Notwithstanding anything in this Chapter, 2[the National Judicial Appointments Commission] may at any time, with the previous consent of the President, request any person who has held the office of a Judge of the Supreme Court or of the Federal Court 3[or who has held the office of a Judge of a High Court and is duly qualified for appointment as a Judge of the Supreme Court] to sit and act as a Judge of the Supreme Court, and every such person so requested shall, while so sitting and acting, be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that Court:
Provided that nothing in this article shall be deemed to require any such person as aforesaid to sit and act as a Judge of that Court unless he consents so to do.
## ______________________________________________ 1. Subs. By The Constitution (Ninety-Ninth Amendment) Act, 2014, S. 4, For "The Chief
Justice of India may, with the previous consent of the President" (w.e.f. 13-4-2015). This amendment has been struck down by the Supreme Court in the case of Supreme Court Advocates-on-Record Association and another vs. Union of India in its judgment dated 16-10-2015, AIR 2016 SC 117.
2. Subs. by s. 5, *ibid.*, for "the Chief Justice of India" (w.e.f. 13-4-2015). This amendment
has been struck down by the Supreme Court in the case of Supreme Court Advocateson-Record Association and another Vs. Union of India in its judgment dated 16-10- 2015, AIR 2016 SC 117.
3. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s.3 (w.e.f. 5-10-1963).
129. Supreme Court to be a court of record.—The Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
130. Seat of Supreme Court.—The Supreme Court shall sit in Delhi or in such other place or places, as the Chief Justice of India may, with the approval of the President, from time to time, appoint.
131. Original jurisdiction of the Supreme Court.—Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute—
(a) between the Government of India and one or more States; or
(b) between the Government of India and any State or States on one side and one or more other States on the other; or
(c) between two or more States, if and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends:
1[Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, *sanad* or other similar instrument which, having been entered into or executed before the commencement of this Constitution, continues in operation after such commencement, or which provides that the said jurisdiction shall not extend to such a dispute.]
2[**131A**. Exclusive jurisdiction of the Supreme Court in regard to questions as to constitutional validity of Central laws.].—Omitted by the Constitution (Forty-third Amendment) *Act,* 1977, s. 4 (*w.e.f.* 13-4-1978).
132. Appellate jurisdiction of Supreme Court in appeals from High Courts in certain cases.—(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order of a High Court in the territory of India, whether in a civil, criminal or other proceeding, 3[if the High Court certifies under article 134A] that the case involves a substantial question of law as to the interpretation of this Constitution.
4(2)* * * * *
(3) Where such a certificate is given, 2*** any party in the case may
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1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 5, for the proviso
(w.e.f. 1-11-1956).
2. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 23 (w.e.f. 1-2-1977). 3. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 17, for "if the High
Court certifies" (w.e.f. 1-8-1979).
4. Cl. (2) omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 17, for "if
the High Court certifies" (w.e.f. 1-8-1979).
appeal to the Supreme Court on the ground that any such question as aforesaid has been wrongly decided 1***.
Explanation.—For the purposes of this article, the expression "final order" includes an order deciding an issue which, if decided in favour of the appellant, would be sufficient for the final disposal of the case.
133. Appellate jurisdiction of Supreme Court in appeals from High Courts in regard to civil matters.—2[(1) An appeal shall lie to the Supreme Court from any judgment, decree or final order in a civil proceeding of a High Court in the territory of India 3[if the High Court certifies under article
134A—]
(a) that the case involves a substantial question of law of general importance; and
(b) that in the opinion of the High Court the said question needs to be decided by the Supreme Court.] (2) Notwithstanding anything in article 132, any party appealing to the Supreme Court under clause (1) may urge as one of the grounds in such appeal that a substantial question of law as to the interpretation of this Constitution has been wrongly decided.
(3) Notwithstanding anything in this article, no appeal shall, unless Parliament by law otherwise provides, lie to the Supreme Court from the judgment, decree or final order of one Judge of a High Court.
134. Appellate jurisdiction of Supreme Court in regard to criminal matters.—(1) An appeal shall lie to the Supreme Court from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India if the High Court—
(a) has on appeal reversed an order of acquittal of an accused person and sentenced him to death; or
(b) has withdrawn for trial before itself any case from any court subordinate to its authority and has in such trial convicted the accused person and sentenced him to death; or
(c) 4[certifies under article 134A] that the case is a fit one for appeal to the Supreme Court: Provided that an appeal under sub-clause (c) shall lie subject to such provisions as may be made in that behalf under clause (1) of article 145 and to such conditions as the High Court may establish or require.
______________________________________________
1. Certain words omitted by s. 17, *ibid.* (w.e.f. 1-8-1979).
(w.e.f. 27-2-1973).
Court certifies.—" (w.e.f. 1-8-1979).
(2) Parliament may by law confer on the Supreme Court any further powers to entertain and hear appeals from any judgment, final order or sentence in a criminal proceeding of a High Court in the territory of India subject to such conditions and limitations as may be specified in such law.
1**[134A. Certificate for appeal to the Supreme Court.**—Every High Court, passing or making a judgment, decree, final order, or sentence, referred to in clause (1) of article 132 or clause (1) of article 133, or clause (1) of article 134,—
(a) may, if it deems fit so to do, on its own motion; and (b) shall, if an oral application is made, by or on behalf of the party aggrieved, immediately after the passing or making of such judgment, decree, final order or sentence, determine, as soon as may be after such passing or making, the question whether a certificate of the nature referred to in clause (1) of article 132, or clause (1) of article 133 or, as the case may be, sub-clause (c) of clause (1) of article 134, may be given in respect of that case.]
135. Jurisdiction and powers of the Federal Court under existing law to be exercisable by the Supreme Court.—Until Parliament by law otherwise provides, the Supreme Court shall also have jurisdiction and powers with respect to any matter to which the provisions of article 133 or article 134 do not apply if jurisdiction and powers in relation to that matter were exercisable by the Federal Court immediately before the commencement of this Constitution under any existing law.
136. Special leave to appeal by the Supreme Court.—(1)
Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces.
137. Review of judgments or orders by the Supreme Court.—Subject to the provisions of any law made by Parliament or any rules made under article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it.
138. Enlargement of the jurisdiction of the Supreme Court.—(1) The Supreme Court shall have such further jurisdiction and powers with respect to any of the matters in the Union List as Parliament may by law confer.
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(2) The Supreme Court shall have such further jurisdiction and powers with respect to any matter as the Government of India and the Government of any State may by special agreement confer, if Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court.
139. Conferment on the Supreme Court of powers to issue certain writs.—Parliament may by law confer on the Supreme Court power to issue directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, *quo warranto* and *certiorari,* or any of them, for any purposes other than those mentioned in clause (2) of article 32.
1[**139A. Transfer of certain cases**.—2[(1) Where cases involving the same or substantially the same questions of law are pending before the Supreme Court and one or more High Courts or before two or more High Courts and the Supreme Court is satisfied on its own motion or on an application made by the Attorney-General of India or by a party to any such case that such questions are substantial questions of general importance, the Supreme Court may withdraw the case or cases pending before the High Court or the High Courts and dispose of all the cases itself:
Provided that the Supreme Court may after determining the said questions of law return any case so withdrawn together with a copy of its judgment on such questions to the High Court from which the case has been withdrawn, and the High Court shall on receipt thereof, proceed to dispose of the case in conformity with such judgment.]
(2) The Supreme Court may, if it deems it expedient so to do for the ends of justice, transfer any case, appeal or other proceedings pending before any High Court to any other High Court.]
140. Ancillary powers of Supreme Court.—Parliament may by law make provision for conferring upon the Supreme Court such supplemental powers not inconsistent with any of the provisions of this Constitution as may appear to be necessary or desirable for the purpose of enabling the Court more effectively to exercise the jurisdiction conferred upon it by or under this Constitution.
141. Law declared by Supreme Court to be binding on all courts.—
The law declared by the Supreme Court shall be binding on all courts within the territory of India.
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1. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 24 (w.e.f. 1-2-1977).
142. Enforcement of decrees and orders of Supreme Court and orders as to discovery, etc.—(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order1 prescribe.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.
143. Power of President to consult Supreme Court.—(1) If at any time it appears to the President that a question of law or fact has arisen, or is likely to arise, which is of such a nature and of such public importance that it is expedient to obtain the opinion of the Supreme Court upon it, he may refer the question to that Court for consideration and the Court may, after such hearing as it thinks fit, report to the President its opinion thereon.
(2) The President may, notwithstanding anything in 2*** the proviso to article 131, refer a dispute of the kind mentioned in the 3[said proviso] to the Supreme Court for opinion and the Supreme Court shall, after such hearing as it thinks fit, report to the President its opinion thereon.
144. Civil and judicial authorities to act in aid of the Supreme Court.—All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court.
4[**144A.** [Special provisions as to disposal of questions relating to constitutional validity of laws.].—Omitted by the Constitution (Forty-third Amendment) *Act,* 1977, s. 5 (*w.e.f.* 13-4-1978).]
145. Rules of Court, etc.—(1) Subject to the provisions of any law made by Parliament, the Supreme Court may from time to time, with the approval of the President, make rules for regulating generally the practice and procedure of the Court including—
(a) rules as to the persons practising before the Court; (b) rules as to the procedure for hearing appeals and other matters pertaining to appeals including the time within which appeals to the Court are to be entered;
## ______________________________________________ (Part V.—The Union)
(c) rules as to the proceedings in the Court for the enforcement of any of the rights conferred by Part III;
1[(cc) rules as to the proceedings in the Court under 2[article
139A];]
(d) rules as to the entertainment of appeals under sub-clause (c) of clause (1) of article 134;
(e) rules as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review including the time within which applications to the Court for such review are to be entered;
(f) rules as to the costs of and incidental to any proceedings in the Court and as to the fees to be charged in respect of proceedings therein;
(g) rules as to the granting of bail; (h) rules as to stay of proceedings; (i) rules providing for the summary determination of any appeal which appears to the Court to be frivolous or vexatious or brought for the purpose of delay;
(j) rules as to the procedure for inquiries referred to in clause
(1) of article 317.
(2) Subject to the 3[provisions of 4*** clause (3)], rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts.
(3) 5[4***The minimum number] of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of this Constitution or for the purpose of hearing any reference under article 143 shall be five:
Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that
______________________________________________
of clause (3)" (w.e.f. 1-2-1977).
4. Certain words omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 6
(w.e.f. 13-4-1978).
5. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 26, for "The
minimum number" (w.e.f. 1-2-1977).
the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion.
(4) No judgment shall be delivered by the Supreme Court save in open Court, and no report shall be made under article 143 save in accordance with an opinion also delivered in open Court.
(5) No judgment and no such opinion shall be delivered by the Supreme Court save with the concurrence of a majority of the Judges present at the hearing of the case, but nothing in this clause shall be deemed to prevent a Judge who does not concur from delivering a dissenting judgment or opinion.
146. Officers and servants and the expenses of the Supreme Court.—
(1) Appointments of officers and servants of the Supreme Court shall be made by the Chief Justice of India or such other Judge or officer of the Court as he may direct:
Provided that the President may by rule require that in such cases as may be specified in the rule, no person not already attached to the Court shall be appointed to any office connected with the Court, save after consultation with the Union Public Service Commission.
(2) Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose:
Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the President.
(3) The administrative expenses of the Supreme Court, including all salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, shall be charged upon the Consolidated Fund of India, and any fees or other moneys taken by the Court shall form part of that Fund.
147. Interpretation.—In this Chapter and in Chapter V of Part VI, references to any substantial question of law as to the interpretation of this Constitution shall be construed as including references to any substantial
(Part V.—The Union)
question of law as to the interpretation of the Government of India Act, 1935
(including any enactment amending or supplementing that Act), or of any Order in Council or order made thereunder, or of the Indian Independence Act, 1947, or of any order made thereunder.
## Chapter V.—Comptroller And Auditor-General Of India
148. Comptroller and Auditor-General of India.—(1) There shall be a Comptroller and Auditor-General of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court.
(2) Every person appointed to be the Comptroller and Auditor-General of India shall, before he enters upon his office, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
(3) The salary and other conditions of service of the Comptroller and Auditor-General shall be such as may be determined by Parliament by law and, until they are so determined, shall be as specified in the Second Schedule:
Provided that neither the salary of a Comptroller and Auditor-General nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment.
(4) The Comptroller and Auditor-General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.
(5) Subject to the provisions of this Constitution and of any law made by Parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor-General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor-General.
(6) The administrative expenses of the office of the Comptroller and Auditor-General, including all salaries, allowances and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.
149. Duties and powers of the Comptroller and Auditor-General.—
The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of
any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.
1[**150. Form of accounts of the Union and of the States.**—The accounts of the Union and of the States shall be kept in such form as the President may, 2[on the advice of] the Comptroller and Auditor-General of India, prescribe.]
151. Audit reports.—(1) The reports of the Comptroller and Auditor-
General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.
(2) The reports of the Comptroller and Auditor-General of India relating to the accounts of a State shall be submitted to the Governor 3*** of the State, who shall cause them to be laid before the Legislature of the State.
## ______________________________________________ Part Vi The States 1*** Chapter I.—General
152. Definition.—In this Part, unless the context otherwise requires, the expression "State" 2[does not include the State of Jammu and Kashmir].
## Chapter Ii.—The Executive
The Governor
153. Governors of States.—There shall be a Governor for each State:
3[Provided that nothing in this article shall prevent the appointment of the same person as Governor for two or more States.]
154. Executive power of State.—(1) The executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution.
(2) Nothing in this article shall—
(a) be deemed to transfer to the Governor any functions conferred by any existing law on any other authority; or
(b) prevent Parliament or the Legislature of the State from conferring by law functions on any authority subordinate to the Governor. 155. Appointment of Governor.—The Governor of a State shall be appointed by the President by warrant under his hand and seal.
156. Term of office of Governor.—(1) The Governor shall hold office during the pleasure of the President.
(2) The Governor may, by writing under his hand addressed to the President, resign his office.
(3) Subject to the foregoing provisions of this article, a Governor shall hold office for a term of five years from the date on which he enters upon his office:
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(Part VI.—The States)
Provided that a Governor shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.
157. Qualifications for appointment as Governor.—No person shall be eligible for appointment as Governor unless he is a citizen of India and has completed the age of thirty-five years.
158. Conditions of Governor's office.—(1) The Governor shall not be a member of either House of Parliament or of a House of the Legislature of any State specified in the First Schedule, and if a member of either House of Parliament or of a House of the Legislature of any such State be appointed Governor, he shall be deemed to have vacated his seat in that House on the date on which he enters upon his office as Governor.
(2) The Governor shall not hold any other office of profit. (3) The Governor shall be entitled without payment of rent to the use of his official residences and shall be also entitled to such emoluments, allowances and privileges as may be determined by Parliament by law and, until provision in that behalf is so made, such emoluments, allowances and privileges as are specified in the Second Schedule.
1[(3A) Where the same person is appointed as Governor of two or more States, the emoluments and allowances payable to the Governor shall be allocated among the States in such proportion as the President may by order determine.]
(4) The emoluments and allowances of the Governor shall not be diminished during his term of office.
159. Oath or affirmation by the Governor.—Every Governor and every person discharging the functions of the Governor shall, before entering upon his office, make and subscribe in the presence of the Chief Justice of the High Court exercising jurisdiction in relation to the State, or, in his absence, the senior most Judge of that Court available, an oath or affirmation in the following form, that is to say—
"I, A. B., do swear in the name of God that I will faithfully execute the
solemnly affirm office of Governor (or discharge the functions of the Governor) of .........(*name of the State*) and will to the best of my ability preserve, protect and defend the Constitution and the law and that I will devote myself to the service and well-being of the people of ..……(*name of the State*).".
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## (Part Vi.—The States)
160. Discharge of the functions of the Governor in certain contingencies.—The President may make such provision as he thinks fit for the discharge of the functions of the Governor of a State in any contingency not provided for in this Chapter.
161. Power of Governor to grant pardons, etc., and to suspend, remit or commute sentences in certain cases.—The Governor of a State shall have the power to grant pardons, reprieves, respites or remissions of punishment or to suspend, remit or commute the sentence of any person convicted of any offence against any law relating to a matter to which the executive power of the State extends.
162. Extent of executive power of State.—Subject to the provisions of this Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature of the State has power to make laws:
Provided that in any matter with respect to which the Legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by this Constitution or by any law made by Parliament upon the Union or authorities thereof.
## Council Of Ministers
163. Council of Ministers to aid and advise Governor.—(1) There shall be a Council of Ministers with the Chief Minister at the head to aid and advise the Governor in the exercise of his functions, except in so far as he is by or under this Constitution required to exercise his functions or any of them in his discretion.
(2) If any question arises whether any matter is or is not a matter as respects which the Governor is by or under this Constitution required to act in his discretion, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in his discretion.
(3) The question whether any, and if so what, advice was tendered by Ministers to the Governor shall not be inquired into in any court.
164. Other provisions as to Ministers.—(1) The Chief Minister shall be appointed by the Governor and the other Ministers shall be appointed by the Governor on the advice of the Chief Minister, and the Ministers shall hold office during the pleasure of the Governor:
## (Part Vi.—The States)
Provided that in the States of 1[Chhattisgarh, Jharkhand], Madhya Pradesh and 2[Odisha] there shall be a Minister in charge of tribal welfare who may in addition be in charge of the welfare of the Scheduled Castes and backward classes or any other work.
3[(1A) The total number of Ministers, including the Chief Minister, in the Council of Ministers in a State shall not exceed fifteen per cent. of the total number of members of the Legislative Assembly of that State:
Provided that the number of Ministers, including the Chief Minister in a State shall not be less than twelve:
Provided further that where the total number of Ministers including the Chief Minister in the Council of Ministers in any State at the commencement of the Constitution (Ninety-first Amendment) Act, 2003 exceeds the said fifteen per cent. or the number specified in the first proviso, as the case may be, then the total number of Ministers in that State shall be brought in conformity with the provisions of this clause within six months from such date 4 as the President may by public notification appoint.
(1B) A member of the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council belonging to any political party who is disqualified for being a member of that House under paragraph 2 of the Tenth Schedule shall also be disqualified to be appointed as a Minister under clause (1) for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or where he contests any election to the Legislative Assembly of a State or either House of the Legislature of a State having Legislative Council, as the case may be, before the expiry of such period, till the date on which he is declared elected, whichever is earlier.]
(2) The Council of Ministers shall be collectively responsible to the Legislative Assembly of the State.
(3) Before a Minister enters upon his office, the Governor shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule.
______________________________________________
1. Subs. by the Constitution (Ninety-fourth Amendment) Act, 2006, s. 2, for "Bihar"
(w.e.f. 12-6-2006).
2. Subs. by the Orissa (Alteration of Name) Act, 2011 (15 of 2011), s. 4, for "Orissa"
(w.e.f. 1-11-2011).
3. Ins. by the Constitution (Ninety-first Amendment) Act, 2003, s. 3 (w.e.f. 1-1-2004). 4. 7-1-2004, *vide* notification number S.O. 21(E), dated 7-1-2004.
(Part VI.—The States)
(4) A Minister who for any period of six consecutive months is not a member of the Legislature of the State shall at the expiration of that period cease to be a Minister.
(5) The salaries and allowances of Ministers shall be such as the Legislature of the State may from time to time by law determine and, until the Legislature of the State so determines, shall be as specified in the Second Schedule.
## The Advocate-General For The State
165. Advocate-General for the State.—(1) The Governor of each State shall appoint a person who is qualified to be appointed a Judge of a High Court to be Advocate-General for the State.
(2) It shall be the duty of the Advocate-General to give advice to the Government of the State upon such legal matters, and to perform such other duties of a legal character, as may from time to time be referred or assigned to him by the Governor, and to discharge the functions conferred on him by or under this Constitution or any other law for the time being in force.
(3) The Advocate-General shall hold office during the pleasure of the Governor, and shall receive such remuneration as the Governor may determine.
## Conduct Of Government Business
166. Conduct of Business of the Government of a State.—(1) All executive action of the Government of a State shall be expressed to be taken in the name of the Governor.
(2) Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor.
(3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion.
1(4)* * * * *
## ______________________________________________ (Part Vi.—The States)
167. Duties of Chief Minister as respects the furnishing of information to Governor, etc.—It shall be the duty of the Chief Minister of each State—
(a) to communicate to the Governor of the State all decisions of the Council of Ministers relating to the administration of the affairs of the State and proposals for legislation;
(b) to furnish such information relating to the administration of the affairs of the State and proposals for legislation as the Governor may call for; and
(c) if the Governor so requires, to submit for the consideration of the Council of Ministers any matter on which a decision has been taken by a Minister but which has not been considered by the Council.
## Chapter Iii.—The State Legislature General
168. Constitution of Legislatures in States.—(1) For every State there shall be a Legislature which shall consist of the Governor, and—
(a) in the States of 1*** 2[Andhra Pradesh], Bihar, 3*** 4[Madhya Pradesh], 5*** 6[Maharashtra], 7[Karnataka], 8*** 9[10[Tamil Nadu, Telangana]] 11[and Uttar Pradesh], two Houses;
______________________________________________
2. Ins. by the Andhra Pradesh Legislative Council Act, 2005 (1 of 2006), s. 3
(w.e.f. 30-3-2007).
3. The word "Bombay" omitted by the Bombay Reorganisation Act, 1960 (11 of 1960)
s. 20 (w.e.f. 1-5-1960).
5. The words "Tamil Nadu," omitted by the Tamil Nadu Legislative Council (Abolition)
Act, 1986 (40 of 1986), s. 4 (w.e.f. 1-11-1986).
6. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 20 (w.e.f. 1-5-1960).
7. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 4, for
"Mysore" (w.e.f. 1-11-1973), which was inserted by the Constitution (Seventh Amendment) Act, 1956, s. 8(1) (w.e.f. 1-11-1956).
8. The word, "Punjab," omitted by the Punjab Legislative Council (Abolition) Act, 1969
(46 of 1969), s. 4 (w.e.f. 7-1-1970).
9. The words "Tamil Nadu" ins. by the Tamil Nadu Legislative Council Act, 2010 (16 of
2010), s. 3 (date not yet notified).
10. Subs. by the Andhra Pradesh Reorganisation Act, 2014 (6 of 2014), s. 96, for "Tamil
Nadu" (w.e.f. 2-6-2014).
11. Subs. by the West Bengal Legislative Council (Abolition) Act, 1969 (20 of 1969), s. 4
for "Uttar Pradesh and West Bengal" (w.e.f. 1-8-1969).
(b) in other States, one House.
(2) Where there are two Houses of the Legislature of a State, one shall be known as the Legislative Council and the other as the Legislative Assembly, and where there is only one House, it shall be known as the Legislative Assembly.
169. Abolition or creation of Legislative Councils in States.—(1)
Notwithstanding anything in article 168, Parliament may by law provide for the abolition of the Legislative Council of a State having such a Council or for the creation of such a Council in a State having no such Council, if the Legislative Assembly of the State passes a resolution to that effect by a majority of the total membership of the Assembly and by a majority of not less than two-thirds of the members of the Assembly present and voting.
(2) Any law referred to in clause (1) shall contain such provisions for the amendment of this Constitution as may be necessary to give effect to the provisions of the law and may also contain such supplemental, incidental and consequential provisions as Parliament may deem necessary.
(3) No such law as aforesaid shall be deemed to be an amendment of this Constitution for the purposes of article 368.
1[**170. Composition of the Legislative Assemblies.**—(1) Subject to the provisions of article 333, the Legislative Assembly of each State shall consist of not more than five hundred, and not less than sixty, members chosen by direct election from territorial constituencies in the State.
(2) For the purposes of clause (1), each State shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the State.
2[*Explanation.—*In this clause, the expression "population" means the population as ascertained at the last preceding census of which the relevant figures have been published:
Explanation (w.e.f. 3-1-1977).
## (Part Vi.—The States)
Provided that the reference in this *Explanation* to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 1[2026] have been published, be construed as a reference to the 2[2001] census.]
(3) Upon the completion of each census, the total number of seats in the Legislative Assembly of each State and the division of each State into territorial constituencies shall be readjusted by such authority and in such manner as Parliament may by law determine:
Provided that such readjustment shall not affect representation in the Legislative Assembly until the dissolution of the then existing Assembly:
3[Provided further that such readjustment shall take effect from such date as the President may, by order, specify and until such readjustment takes effect, any election to the Legislative Assembly may be held on the basis of the territorial constituencies existing before such readjustment:
Provided also that until the relevant figures for the first census taken after the year 1[2026] have been published, it shall not be necessary to
4[readjust—
(i) the total number of seats in the Legislative Assembly of each State as readjusted on the basis of the 1971 census; and
(ii) the division of such State into territorial constituencies as may be readjusted on the basis of the 2[2001] census, under this clause.]
171. Composition of the Legislative Councils.—(1) The total number of members in the Legislative Council of a State having such a Council shall not exceed 5[one-third] of the total number of members in the Legislative Assembly of that State:
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1. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, s. 5, for "2000"
(w.e.f. 21-2-2002).
2. Subs. by the Constitution (Eighty-seventh Amendment) Act, 2003, s. 4, for "1991"
(w.e.f. 22-6-2003). The figures "1991" were substituted for the original figures "1971" by the Constitution (Eighty fourth Amendment) Act, 2001, s. 5 (w.e.f. 21-2-2002).
3. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 29 (w.e.f. 3-1-1977). 4. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, s. 5, for certain
words (w.e.f. 21-2-2002).
5. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 10, for "one-fourth"
(w.e.f. 1-11-1956).
Provided that the total number of members in the Legislative Council of a State shall in no case be less than forty.
(2) Until Parliament by law otherwise provides, the composition of the Legislative Council of a State shall be as provided in clause (3).
(3) Of the total number of members of the Legislative Council of a State—
(a) as nearly as may be, one-third shall be elected by electorates consisting of members of municipalities, district boards and such other local authorities in the State as Parliament may by law specify;
(b) as nearly as may be, one-twelfth shall be elected by electorates consisting of persons residing in the State who have been for at least three years graduates of any university in the territory of India or have been for at least three years in possession of qualifications prescribed by or under any law made by Parliament as equivalent to that of a graduate of any such university;
(c) as nearly as may be, one-twelfth shall be elected by electorates consisting of persons who have been for at least three years engaged in teaching in such educational institutions within the State, not lower in standard than that of a secondary school, as may be prescribed by or under any law made by Parliament;
(d) as nearly as may be, one-third shall be elected by the members of the Legislative Assembly of the State from amongst persons who are not members of the Assembly;
(e) the remainder shall be nominated by the Governor in accordance with the provisions of clause (5). (4) The members to be elected under sub-clauses (a), (b) and (c) of clause (3) shall be chosen in such territorial constituencies as may be prescribed by or under any law made by Parliament, and the elections under the said sub-clauses and under sub-clause (d) of the said clause shall be held in accordance with the system of proportional representation by means of the single transferable vote.
(5) The members to be nominated by the Governor under sub-clause (e)
of clause (3) shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely:—
Literature, science, art, co-operative movement and social service.
172. Duration of State Legislatures.—(1) Every Legislative Assembly of every State, unless sooner dissolved, shall continue for 1[five years] from the date appointed for its first meeting and no longer and the expiration of the said period of 1[five years] shall operate as a dissolution of the Assembly:
Provided that the said period may, while a Proclamation of Emergency is in operation, be extended by Parliament by law for a period not exceeding one year at a time and not extending in any case beyond a period of six months after the Proclamation has ceased to operate.
(2) The Legislative Council of a State shall not be subject to dissolution, but as nearly as possible one-third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.
173. Qualification for membership of the State Legislature.—A
person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he—
2[(a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule;]
(b) is, in the case of a seat in the Legislative Assembly, not less than twenty-five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and
(c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
## ______________________________________________ (Part Vi.—The States)
1[174. Sessions of the State Legislature, prorogation and dissolution.—(1) The Governor shall from time to time summon the House or each House of the Legislature of the State to meet at such time and place as he thinks fit, but six months shall not intervene between its last sitting in one session and the date appointed for its first sitting in the next session.
(2) The Governor may from time to time—
(a) prorogue the House or either House; (b) dissolve the Legislative Assembly.]
175. Right of Governor to address and send messages to the House or Houses.—(1) The Governor may address the Legislative Assembly or, in the case of a State having a Legislative Council, either House of the Legislature of the State, or both Houses assembled together, and may for that purpose require the attendance of members.
(2) The Governor may send messages to the House or Houses of the Legislature of the State, whether with respect to a Bill then pending in the Legislature or otherwise, and a House to which any message is so sent shall with all convenient despatch consider any matter required by the message to be taken into consideration.
176. Special address by the Governor.—(1) At the commencement of
2[the first session after each general election to the Legislative Assembly and at the commencement of the first session of each year], the Governor shall address the Legislative Assembly or, in the case of a State having a Legislative Council, both Houses assembled together and inform the Legislature of the causes of its summons.
(2) Provision shall be made by the rules regulating the procedure of the House or either House for the allotment of time for discussion of the matters referred to in such address 3***.
177. Rights of Ministers and Advocate-General as respects the Houses.—Every Minister and the Advocate-General for a State shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly of the State or, in the case of a State having a Legislative Council, both Houses, and to speak in, and otherwise to take part in the proceedings of, any committee of the Legislature of which he may be named a member, but shall not, by virtue of this article, be entitled to vote.
(w.e.f. 18-6-1951).
2. Subs. by s. 9, *ibid.*, for "every session" (w.e.f. 18-6-1951).
3. The words "and for the precedence of such discussion over other business of the
House" omitted by s. 9, *ibid*. (w.e.f. 18-6-1951).
## (Part Vi.—The States) Officers Of The State Legislature
178. The Speaker and Deputy Speaker of the Legislative Assembly.—Every Legislative Assembly of a State shall, as soon as may be, choose two members of the Assembly to be respectively Speaker and Deputy Speaker thereof and, so often as the office of Speaker or Deputy Speaker becomes vacant, the Assembly shall choose another member to be Speaker or Deputy Speaker, as the case may be.
179. Vacation and resignation of, and removal from, the offices of Speaker and Deputy Speaker.—A member holding office as Speaker or Deputy Speaker of an Assembly—
(a) shall vacate his office if he ceases to be a member of the Assembly; (b) may at any time by writing under his hand addressed, if such member is the Speaker, to the Deputy Speaker, and if such member is the Deputy Speaker, to the Speaker, resign his office; and
(c) may be removed from his office by a resolution of the Assembly passed by a majority of all the then members of the Assembly: Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution:
Provided further that, whenever the Assembly is dissolved, the Speaker shall not vacate his office until immediately before the first meeting of the Assembly after the dissolution.
180. Power of the Deputy Speaker or other person to perform the duties of the office of, or to act as, Speaker.—(1) While the office of Speaker is vacant, the duties of the office shall be performed by the Deputy Speaker or, if the office of Deputy Speaker is also vacant, by such member of the Assembly as the Governor may appoint for the purpose.
(2) During the absence of the Speaker from any sitting of the Assembly the Deputy Speaker or, if he is also absent, such person as may be determined by the rules of procedure of the Assembly, or, if no such person is present, such other person as may be determined by the Assembly, shall act as Speaker.
181. The Speaker or the Deputy Speaker not to preside while a resolution for his removal from office is under consideration.—(1) At any sitting of the Legislative Assembly, while any resolution for the removal of the Speaker from his office is under consideration, the Speaker, or while any resolution for the removal of the Deputy Speaker from his office is under consideration, the Deputy Speaker, shall not, though he is present, preside, and the provisions of clause (2) of article 180 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Speaker or, as the case may be, the Deputy Speaker, is absent.
(Part VI.—The States)
(2) The Speaker shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Assembly while any resolution for his removal from office is under consideration in the Assembly and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
182. The Chairman and Deputy Chairman of the Legislative Council.—The Legislative Council of every State having such Council shall, as soon as may be, choose two members of the Council to be respectively Chairman and Deputy Chairman thereof and, so often as the office of Chairman or Deputy Chairman becomes vacant, the Council shall choose another member to be Chairman or Deputy Chairman, as the case may be.
183. Vacation and resignation of, and removal from, the offices of Chairman and Deputy Chairman.—A member holding office as Chairman or Deputy Chairman of a Legislative Council—
(a) shall vacate his office if he ceases to be a member of the Council; (b) may at any time by writing under his hand addressed, if such member is the Chairman, to the Deputy Chairman, and if such member is the Deputy Chairman, to the Chairman, resign his office; and
(c) may be removed from his office by a resolution of the Council passed by a majority of all the then members of the Council: Provided that no resolution for the purpose of clause (c) shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution.
184. Power of the Deputy Chairman or other person to perform the duties of the office of, or to act as, Chairman.—(1) While the office of Chairman is vacant, the duties of the office shall be performed by the Deputy Chairman or, if the office of Deputy Chairman is also vacant, by such member of the Council as the Governor may appoint for the purpose.
(2) During the absence of the Chairman from any sitting of the Council the Deputy Chairman or, if he is also absent, such person as may be determined by the rules of procedure of the Council, or, if no such person is present, such other person as may be determined by the Council, shall act as Chairman.
## (Part Vi.—The States)
185. The Chairman or the Deputy Chairman not to preside while a resolution for his removal from office is under consideration.—(1) At any sitting of the Legislative Council, while any resolution for the removal of the Chairman from his office is under consideration, the Chairman, or while any resolution for the removal of the Deputy Chairman from his office is under consideration, the Deputy Chairman, shall not, though he is present, preside, and the provisions of clause (2) of article 184 shall apply in relation to every such sitting as they apply in relation to a sitting from which the Chairman or, as the case may be, the Deputy Chairman is absent.
(2) The Chairman shall have the right to speak in, and otherwise to take part in the proceedings of, the Legislative Council while any resolution for his removal from office is under consideration in the Council and shall, notwithstanding anything in article 189, be entitled to vote only in the first instance on such resolution or on any other matter during such proceedings but not in the case of an equality of votes.
186. Salaries and allowances of the Speaker and Deputy Speaker and the Chairman and Deputy Chairman.—There shall be paid to the Speaker and the Deputy Speaker of the Legislative Assembly, and to the Chairman and the Deputy Chairman of the Legislative Council, such salaries and allowances as may be respectively fixed by the Legislature of the State by law and, until provision in that behalf is so made, such salaries and allowances as are specified in the Second Schedule.
187. Secretariat of State Legislature.—(1) The House or each House of the Legislature of a State shall have a separate secretarial staff:
Provided that nothing in this clause shall, in the case of the Legislature of a State having a Legislative Council, be construed as preventing the creation of posts common to both Houses of such Legislature.
(2) The Legislature of a State may by law regulate the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the House or Houses of the Legislature of the State.
(3) Until provision is made by the Legislature of the State under clause (2), the Governor may, after consultation with the Speaker of the Legislative Assembly or the Chairman of the Legislative Council, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the Assembly or the Council, and any rules so made shall have effect subject to the provisions of any law made under the said clause.
## (Part Vi.—The States) Conduct Of Business
188. Oath or affirmation by members.—Every member of the Legislative Assembly or the Legislative Council of a State shall, before taking his seat, make and subscribe before the Governor, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
189. Voting in Houses, power of Houses to act notwithstanding vacancies and quorum.—(1) Save as otherwise provided in this Constitution, all questions at any sitting of a House of the Legislature of a State shall be determined by a majority of votes of the members present and voting, other than the Speaker or Chairman, or person acting as such.
The Speaker or Chairman, or person acting as such, shall not vote in the first instance, but shall have and exercise a casting vote in the case of an equality of votes.
(2) A House of the Legislature of a State shall have power to act notwithstanding any vacancy in the membership thereof, and any proceedings in the Legislature of a State shall be valid notwithstanding that it is discovered subsequently that some person who was not entitled so to do sat or voted or otherwise took part in the proceedings.
1[(3) Until the Legislature of the State by law otherwise provides, the quorum to constitute a meeting of a House of the Legislature of a State shall be ten members or one-tenth of the total number of members of the House, whichever is greater.
(4) If at any time during a meeting of the Legislative Assembly or the Legislative Council of a State there is no quorum, it shall be the duty of the Speaker or Chairman, or person acting as such, either to adjourn the House or to suspend the meeting until there is a quorum.]
## Disqualifications Of Members
190. Vacation of seats.—(1) No person shall be a member of both Houses of the Legislature of a State and provision shall be made by the Legislature of the State by law for the vacation by a person who is chosen a member of both Houses of his seat in one house or the other.
______________________________________________
## (Part Vi.—The States)
(2) No person shall be a member of the Legislatures of two or more States specified in the First Schedule and if a person is chosen a member of the Legislatures of two or more such States, then, at the expiration of such period as may be specified in rules1 made by the President, that person's seat in the Legislatures of all such States shall become vacant, unless he has previously resigned his seat in the Legislatures of all but one of the States.
(3) If a member of a House of the Legislature of a State—
(a) becomes subject to any of the disqualifications mentioned in
2[clause (1) or clause (2) of article 191]; or
3[(b) resigns his seat by writing under his hand addressed to the speaker or the Chairman, as the case may be, and his resignation is accepted by the Speaker or the Chairman, as the case may be,]
his seat shall thereupon become vacant:
4[Provided that in the case of any resignation referred to in sub-clause (b), if from information received or otherwise and after making such inquiry as he thinks fit, the Speaker or the Chairman, as the case may be, is satisfied that such resignation is not voluntary or genuine, he shall not accept such resignation.]
(4) If for a period of sixty days a member of a House of the Legislature of a State is without permission of the House absent from all meetings thereof, the House may declare his seat vacant:
Provided that in computing the said period of sixty days no account shall be taken of any period during which the House is prorogued or is adjourned for more than four consecutive days.
191. Disqualifications for membership.—(1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State—
(Part VI.—The States)
1[(a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder;]
(b) if he is of unsound mind and stands so declared by a competent court;
(c) if he is an undischarged insolvent; (d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State;
(e) if he is so disqualified by or under any law made by Parliament.
2[*Explanation.*—For the purposes of this clause], a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State.
3[(2) A person shall be disqualified for being a member of the Legislative Assembly or Legislative Council of a State if he is so disqualified under the Tenth Schedule.]
## 4[**192. Decision On Questions As To Disqualifications Of Members**.—(1)
If any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of article 191, the question shall be referred for the decision of the Governor and his decision shall be final.
(2) Before giving any decision on any such question, the Governor shall obtain the opinion of the Election Commission and shall act according to such opinion.]
purposes of this article" (w.e.f. 1-3-1985).
3. Ins. by s. 5, *ibid.* (w.e.f. 1-3-1985). 4. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 33, for art. 192
(w.e.f. 3-1-1977) and further subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 25, for art. 192 (w.e.f. 20-6-1979).
## (Part Vi.—The States)
193. Penalty for sitting and voting before making oath or affirmation under article 188 or when not qualified or when disqualified.—If a person sits or votes as a member of the Legislative Assembly or the Legislative Council of a State before he has complied with the requirements of article 188, or when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament or the Legislature of the State, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the State.
Powers, Privileges and Immunities of State Legislatures and their Members
194. Powers, privileges, etc., of the Houses of Legislatures and of the members and committees thereof.—(1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of the Legislature, there shall be freedom of speech in the Legislature of every State.
(2) No member of the Legislature of a State shall be liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or proceedings.
1[(3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law, and, until so defined, 2[shall be those of that House and of its members and committees immediately before the coming into force of section 26 of the Constitution (Forty-fourth Amendment) Act, 1978].
______________________________________________
1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 34 to read as
follows. :
"(3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be those of that House, and of its members and Committees, at the commencement of section 34 of the Constitution (Forty-second Amendment) Act, 1976, and as may be evolved by such House of the House of the People, and of its members and committees where such House is the Legislative Assembly and in accordance with those of the Council of States, and of its members and committees where such House is the Legislative Council." (date not notified). This amendment was omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 45 (w.e.f. 19-6-1979)."
2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 26, for certain
words (w.e.f. 20-6-1979).
## (Part Vi.—The States)
(4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of the Legislature of a State or any committee thereof as they apply in relation to members of that Legislature.
195. Salaries and allowances of members.—Members of the Legislative Assembly and the Legislative Council of a State shall be entitled to receive such salaries and allowances as may from time to time be determined, by the Legislature of the State by law and, until provision in that respect is so made, salaries and allowances at such rates and upon such conditions as were immediately before the commencement of this Constitution applicable in the case of members of the Legislative Assembly of the corresponding Province.
## Legislative Procedure
196. Provisions as to introduction and passing of Bills.—(1) Subject to the provisions of articles 198 and 207 with respect to Money Bills and other financial Bills, a Bill may originate in either House of the Legislature of a State which has a Legislative Council.
(2) Subject to the provisions of articles 197 and 198, a Bill shall not be deemed to have been passed by the Houses of the Legislature of a State having a Legislative Council unless it has been agreed to by both Houses, either without amendment or with such amendments only as are agreed to by both Houses.
(3) A Bill pending in the Legislature of a State shall not lapse by reason of the prorogation of the House or Houses thereof.
(4) A Bill pending in the Legislative Council of a State which has not been passed by the Legislative Assembly shall not lapse on a dissolution of the Assembly.
(5) A Bill which is pending in the Legislative Assembly of a State, or which having been passed by the Legislative Assembly is pending in the Legislative Council, shall lapse on a dissolution of the Assembly.
197. Restriction on powers of Legislative Council as to Bills other than Money Bills.—(1) If after a Bill has been passed by the Legislative Assembly of a State having a Legislative Council and transmitted to the Legislative Council—
(a) the Bill is rejected by the Council; or (b) more than three months elapse from the date on which the Bill is laid before the Council without the Bill being passed by it; or
(Part VI.—The States)
(c) the Bill is passed by the Council with amendments to which the Legislative Assembly does not agree;
the Legislative Assembly may, subject to the rules regulating its procedure, pass the Bill again in the same or in any subsequent session with or without such amendments, if any, as have been made, suggested or agreed to by the Legislative Council and then transmit the Bill as so passed to the Legislative Council.
(2) If after a Bill has been so passed for the second time by the Legislative Assembly and transmitted to the Legislative Council—
(a) the Bill is rejected by the Council; or (b) more than one month elapses from the date on which the Bill is laid before the Council without the Bill being passed by it; or
(c) the Bill is passed by the Council with amendments to which the Legislative Assembly does not agree;
the Bill shall be deemed to have been passed by the Houses of the Legislature of the State in the form in which it was passed by the Legislative Assembly for the second time with such amendments, if any, as have been made or suggested by the Legislative Council and agreed to by the Legislative Assembly.
(3) Nothing in this article shall apply to a Money Bill. 198. Special procedure in respect of Money Bills.—(1) A Money Bill shall not be introduced in a Legislative Council.
(2) After a Money Bill has been passed by the Legislative Assembly of a State having a Legislative Council, it shall be transmitted to the Legislative Council for its recommendations, and the Legislative Council shall within a period of fourteen days from the date of its receipt of the Bill return the Bill to the Legislative Assembly with its recommendations, and the Legislative Assembly may thereupon either accept or reject all or any of the recommendations of the Legislative Council.
(3) If the Legislative Assembly accepts any of the recommendations of the Legislative Council, the Money Bill shall be deemed to have been passed by both Houses with the amendments recommended by the Legislative Council and accepted by the Legislative Assembly.
(4) If the Legislative Assembly does not accept any of the recommendations of the Legislative Council, the Money Bill shall be deemed to have been passed by both Houses in the form in which it was passed by the Legislative Assembly without any of the amendments recommended by the Legislative Council.
## (Part Vi.—The States)
(5) If a Money Bill passed by the Legislative Assembly and transmitted to the Legislative Council for its recommendations is not returned to the Legislative Assembly within the said period of fourteen days, it shall be deemed to have been passed by both Houses at the expiration of the said period in the form in which it was passed by the Legislative Assembly.
199. Definition of "Money Bills".—(1) For the purposes of this Chapter, a Bill shall be deemed to be a Money Bill if it contains only provisions dealing with all or any of the following matters, namely:—
(a) the imposition, abolition, remission, alteration or regulation of any tax; (b) the regulation of the borrowing of money or the giving of any guarantee by the State, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the State;
(c) the custody of the Consolidated Fund or the Contingency Fund of the State, the payment of moneys into or the withdrawal of moneys from any such Fund;
(d) the appropriation of moneys out of the Consolidated Fund of the State;
(e) the declaring of any expenditure to be expenditure charged on the Consolidated Fund of the State, or the increasing of the amount of any such expenditure;
(f) the receipt of money on account of the Consolidated Fund of the State or the public account of the State or the custody or issue of such money; or
(g) any matter incidental to any of the matters specified in
sub-clauses (a) to (f).
(2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) If any question arises whether a Bill introduced in the Legislature of a State which has a Legislative Council is a Money Bill or not, the decision of the Speaker of the Legislative Assembly of such State thereon shall be final.
(Part VI.—The States)
(4) There shall be endorsed on every Money Bill when it is transmitted to the Legislative Council under article 198, and when it is presented to the Governor for assent under article 200, the certificate of the Speaker of the Legislative Assembly signed by him that it is a Money Bill.
200. Assent to Bills.—When a Bill has been passed by the Legislative Assembly of a State or, in the case of a State having a Legislative Council, has been passed by both Houses of the Legislature of the State, it shall be presented to the Governor and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President:
Provided that the Governor may, as soon as possible after the presentation to him of the Bill for assent, return the Bill if it is not a Money Bill together with a message requesting that the House or Houses will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when a Bill is so returned, the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent, the Governor shall not withhold assent therefrom:
Provided further that the Governor shall not assent to, but shall reserve for the consideration of the President, any Bill which in the opinion of the Governor would, if it became law, so derogate from the powers of the High Court as to endanger the position which that Court is by this Constitution designed to fill.
201. Bills reserved for consideration.—When a Bill is reserved by a Governor for the consideration of the President, the President shall declare either that he assents to the Bill or that he withholds assent therefrom:
Provided that, where the Bill is not a Money Bill, the President may direct the Governor to return the Bill to the House or, as the case may be, the Houses of the Legislature of the State together with such a message as is mentioned in the first proviso to article 200 and, when a Bill is so returned, the House or Houses shall reconsider it accordingly within a period of six months from the date of receipt of such message and, if it is again passed by the House or Houses with or without amendment, it shall be presented again to the President for his consideration.
## Procedure In Financial Matters
202. Annual financial statement.—(1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this Part referred to as the "annual financial statement".
(2) The estimates of expenditure embodied in the annual financial statement shall show separately—
(a) the sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of the State; and
(b) the sums required to meet other expenditure proposed to be made from the Consolidated Fund of the State;
and shall distinguish expenditure on revenue account from other expenditure.
(3) The following expenditure shall be expenditure charged on the Consolidated Fund of each State—
(a) the emoluments and allowances of the Governor and other expenditure relating to his office;
(b) the salaries and allowances of the Speaker and the Deputy Speaker of the Legislative Assembly and, in the case of a State having a Legislative Council, also of the Chairman and the Deputy Chairman of the Legislative Council;
(c) debt charges for which the State is liable including interest, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;
(d) expenditure in respect of the salaries and allowances of Judges of any High Court;
(e) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal;
(f) any other expenditure declared by this Constitution, or by the Legislature of the State by law, to be so charged.
203. Procedure in Legislature with respect to estimates.—(1) So much of the estimates as relates to expenditure charged upon the Consolidated Fund of a State shall not be submitted to the vote of the Legislative Assembly, but nothing in this clause shall be construed as preventing the discussion in the Legislature of any of those estimates.
(Part VI.—The States)
(2) So much of the said estimates as relates to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly, and the Legislative Assembly shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein.
(3) No demand for a grant shall be made except on the recommendation of the Governor.
204. Appropriation Bills.—(1) As soon as may be after the grants under article 203 have been made by the Assembly, there shall be introduced a Bill to provide for the appropriation out of the Consolidated Fund of the State of all moneys required to meet—
(a) the grants so made by the Assembly; and (b) the expenditure charged on the Consolidated Fund of the State but not exceeding in any case the amount shown in the statement previously laid before the House or Houses.
(2) No amendment shall be proposed to any such Bill in the House or either House of the Legislature of the State which will have the effect of varying the amount or altering the destination of any grant so made or of varying the amount of any expenditure charged on the Consolidated Fund of the State, and the decision of the person presiding as to whether an amendment is inadmissible under this clause shall be final.
(3) Subject to the provisions of articles 205 and 206, no money shall be withdrawn from the Consolidated Fund of the State except under appropriation made by law passed in accordance with the provisions of this article.
205. Supplementary, additional or excess grants.—(1) The Governor shall—
(a) if the amount authorised by any law made in accordance with the provisions of article 204 to be expended for a particular service for the current financial year is found to be insufficient for the purposes of that year or when a need has arisen during the current financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, or
(b) if any money has been spent on any service during a financial year in excess of the amount granted for that service and for that year, cause to be laid before the House or the Houses of the Legislature of the State another statement showing the estimated amount of that expenditure or cause to be presented to the Legislative Assembly of the State a demand for such excess, as the case may be.
(2) The provisions of articles 202, 203 and 204 shall have effect in relation to any such statement and expenditure or demand and also to any law to be made authorising the appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or the grant in respect of such demand as they have effect in relation to the annual financial statement and the expenditure mentioned therein or to a demand for a grant and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure or grant.
## 206. Votes On Account, Votes Of Credit And Exceptional Grants.—(1)
Notwithstanding anything in the foregoing provisions of this Chapter, the Legislative Assembly of a State shall have power—
(a) to make any grant in advance in respect of the estimated expenditure for a part of any financial year pending the completion of the procedure prescribed in article 203 for the voting of such grant and the passing of the law in accordance with the provisions of article 204 in relation to that expenditure;
(b) to make a grant for meeting an unexpected demand upon the resources of the State when on account of the magnitude or the indefinite character of the service the demand cannot be stated with the details ordinarily given in an annual financial statement;
(c) to make an exceptional grant which forms no part of the current service of any financial year;
and the Legislature of the State shall have power to authorise by law the withdrawal of moneys from the Consolidated Fund of the State for the purposes for which the said grants are made.
(2) The provisions of articles 203 and 204 shall have effect in relation to the making of any grant under clause (1) and to any law to be made under that clause as they have effect in relation to the making of a grant with regard to any expenditure mentioned in the annual financial statement and the law to be made for the authorisation of appropriation of moneys out of the Consolidated Fund of the State to meet such expenditure.
## (Part Vi.—The States)
207. Special provisions as to financial Bills.—(1) A Bill or amendment making provision for any of the matters specified in sub-clauses (a) to *(f)* of clause (1) of article 199 shall not be introduced or moved except on the recommendation of the Governor, and a Bill making such provision shall not be introduced in a Legislative Council:
Provided that no recommendation shall be required under this clause for the moving of an amendment making provision for the reduction or abolition of any tax.
(2) A Bill or amendment shall not be deemed to make provision for any of the matters aforesaid by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(3) A Bill which, if enacted and brought into operation, would involve expenditure from the Consolidated Fund of a State shall not be passed by a House of the Legislature of the State unless the Governor has recommended to that House the consideration of the Bill.
## Procedure Generally
208. Rules of procedure.—(1) A House of the Legislature of a State may make rules for regulating, subject to the provisions of this Constitution, its procedure and the conduct of its business.
(2) Until rules are made under clause (1), the rules of procedure and standing orders in force immediately before the commencement of this Constitution with respect to the Legislature for the corresponding Province shall have effect in relation to the Legislature of the State subject to such modifications and adaptations as may be made therein by the Speaker of the Legislative Assembly, or the Chairman of the Legislative Council, as the case may be.
(3) In a State having a Legislative Council the Governor, after consultation with the Speaker of the Legislative Assembly and the Chairman of the Legislative Council, may make rules as to the procedure with respect to communications between the two Houses.
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## (Part Vi.—The States)
209. Regulation by law of procedure in the Legislature of the State in relation to financial business.—The Legislature of a State may, for the purpose of the timely completion of financial business, regulate by law the procedure of, and the conduct of business in, the House or Houses of the Legislature of the State in relation to any financial matter or to any Bill for the appropriation of moneys out of the Consolidated Fund of the State, and, if and so far as any provision of any law so made is inconsistent with any rule made by the House or either House of the Legislature of the State under clause (1) of article 208 or with any rule or standing order having effect in relation to the Legislature of the State under clause (2) of that article, such provision shall prevail.
210. Language to be used in the Legislature.—(1) Notwithstanding anything in Part XVII, but subject to the provisions of article 348, business in the Legislature of a State shall be transacted in the official language or languages of the State or in Hindi or in English:
Provided that the Speaker of the Legislative Assembly or Chairman of the Legislative Council, or person acting as such, as the case may be, may permit any member who cannot adequately express himself in any of the languages aforesaid to address the House in his mother-tongue.
(2) Unless the Legislature of the State by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words "or in English" were omitted therefrom:
1[Provided that in relation to the 2[Legislatures of the States of Himachal Pradesh, Manipur, Meghalaya and Tripura] this clause shall have effect as if for the words "fifteen years" occurring therein, the words "twenty-five years" were substituted:]
3[Provided further that in relation to the 4[Legislatures of the States of
5[Arunachal Pradesh, Goa and Mizoram]], this clause shall have effect as if for the words "fifteen years" occurring therein, the words "forty years" were substituted.]
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1. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 46 (w.e.f. 25-1-1971). 2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for
"Legislature of the State of Himachal Pradesh" (w.e.f. 21-1-1972).
3. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 39 (w.e.f. 20-2-1987). 4. Subs. by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 42, for "Legislature
of the State of Mizoram" (w.e.f. 20-2-1987).
5. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 63, for
"Arunachal Pradesh and Mizoram" (w.e.f. 30-5-1987).
211. Restriction on discussion in the Legislature.—No discussion shall take place in the Legislature of a State with respect to the conduct of any Judge of the Supreme Court or of a High Court in the discharge of his duties.
212. Courts not to inquire into proceedings of the Legislature.—(1)
The validity of any proceedings in the Legislature of a State shall not be called in question on the ground of any alleged irregularity of procedure.
(2) No officer or member of the Legislature of a State in whom powers are vested by or under this Constitution for regulating procedure or the conduct of business, or for maintaining order, in the Legislature shall be subject to the jurisdiction of any court in respect of the exercise by him of those powers.
## Chapter Iv.—Legislative Power Of The Governor
213. Power of Governor to promulgate Ordinances during recess of Legislature.—(1) If at any time, except when the Legislative Assembly of a State is in session, or where there is a Legislative Council in a State, except when both Houses of the Legislature are in session, the Governor is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require:
Provided that the Governor shall not, without instructions from the President, promulgate any such Ordinance if—
(a) a Bill containing the same provisions would under this Constitution have required the previous sanction of the President for the introduction thereof into the Legislature; or
(b) he would have deemed it necessary to reserve a Bill containing the same provisions for the consideration of the President; or
(c) an Act of the Legislature of the State containing the same provisions would under this Constitution have been invalid unless, having been reserved for the consideration of the President, it had received the assent of the President.
(2) An Ordinance promulgated under this article shall have the same force and effect as an Act of the Legislature of the State assented to by the Governor, but every such Ordinance—
(Part VI.—The States)
(a) shall be laid before the Legislative Assembly of the State, or where there is a Legislative Council in the State, before both the Houses, and shall cease to operate at the expiration of six weeks from the reassembly of the Legislature, or if before the expiration of that period a resolution disapproving it is passed by the Legislative Assembly and agreed to by the Legislative Council, if any, upon the passing of the resolution or, as the case may be, on the resolution being agreed to by the Council; and
(b) may be withdrawn at any time by the Governor.
Explanation.—Where the Houses of the Legislature of a State having a Legislative Council are summoned to reassemble on different dates, the period of six weeks shall be reckoned from the later of those dates for the purposes of this clause.
(3) If and so far as an Ordinance under this article makes any provision which would not be valid if enacted in an Act of the Legislature of the State assented to by the Governor, it shall be void:
Provided that, for the purposes of the provisions of this Constitution relating to the effect of an Act of the Legislature of a State which is repugnant to an Act of Parliament or an existing law with respect to a matter enumerated in the Concurrent List, an Ordinance promulgated under this article in pursuance of instructions from the President shall be deemed to be an Act of the Legislature of the State which has been reserved for the consideration of the President and assented to by him.
1(4)*
* * *
## Chapter V.—The High Courts In The States
214. High Courts for States.—2*** There shall be a High Court for each State.
3(2)* * * * 3(3)* * * *
215. High Courts to be courts of record.—Every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself.
## ______________________________________________ (Part Vi.—The States)
216. Constitution of High Courts.—Every High Court shall consist of a Chief Justice and such other Judges as the President may from time to time deem it necessary to appoint.
1*
* * * *
217. Appointment and conditions of the office of a Judge of a High Court.—(1) Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal 2[on the recommendation of the National Judicial Appointments Commission referred to in article 124A], and the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court, 3[shall hold office, in the case of an additional or acting Judge, as provided in article 224, and in any other case, until he attains the age of 4[sixty-two years:]]
Provided that—
(a) a Judge may, by writing under his hand addressed to the President, resign his office;
(b) a Judge may be removed from his office by the President in the manner provided in clause (4) of article 124 for the removal of a Judge of the Supreme Court;
(c) the office of a Judge shall be vacated by his being appointed by the President to be a Judge of the Supreme Court or by his being transferred by the President to any other High Court within the territory of India. (2) A person shall not be qualified for appointment as a Judge of a High Court unless he is a citizen of India and—
(a) has for at least ten years held a judicial office in the territory of India; or
consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court" (w.e.f. 13-4-2015). This amendment has been struck down by the Supreme Court in the case of Supreme Court Advocates-on-Record Association and Another Vs. Union of India in its judgment dated 16-10-2015, AIR 2016 SC 117.
3. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 12, for "shall hold office
until he attains the age of sixty years" (w.e.f. 1-11-1956).
4. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 4(a), for "sixty years"
(w.e.f. 5-10-1963).
(Part VI.—The States)
(b) has for at least ten years been an advocate of a High Court
1*** or of two or more such Courts in succession.2***
2(c)* * * * *
Explanation.—For the purposes of this clause—
3[(a) in computing the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been an advocate of a High Court or has held the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law;]
4[(aa)] in computing the period during which a person has been an advocate of a High Court, there shall be included any period during which the person 5[has held judicial office or the office of a member of a tribunal or any post, under the Union or a State, requiring special knowledge of law] after he became an advocate;
(b) in computing the period during which a person has held judicial office in the territory of India or been an advocate of a High Court, there shall be included any period before the commencement of this Constitution during which he has held judicial office in any area which was comprised before the fifteenth day of August, 1947, within India as defined by the Government of India Act, 1935, or has been an advocate of any High Court in any such area, as the case may be.
6[(3) If any question arises as to the age of a Judge of a High Court, the question shall be decided by the President after consultation with the Chief Justice of India and the decision of the President shall be final.]
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2. The word "or" and sub-clause (c) were ins. by the Constitution (Forty-second
Amendment) Act, 1976, s. 36 (w.e.f. 3-1-1977) and omitted by the Constitution
(Forty-fourth Amendment) Act, 1978, s. 28 (w.e.f. 20-6-1979).
3. Ins. by the Constitution (Forty-fourth Amendment) Act, 1978. s. 28 (w.e.f. 20-6-1979). 4. Cl. (a) re-lettered as cl. (aa) by the Constitution (Forty-fourth Amendment) Act, 1978,
s. 28 (w.e.f. 20-6-1979).
5. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 36, for "has held
judicial office" (w.e.f. 3-1-1977).
6. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 4(b), (with retrospective
effect).
218. Application of certain provisions relating to Supreme Court to High Courts.—The provisions of clauses (4) and (5) of article 124 shall apply in relation to a High Court as they apply in relation to the Supreme Court with the substitution of references to the High Court for references to the Supreme Court.
219. Oath or affirmation by Judges of High Courts.—Every person appointed to be a Judge of a High Court 1*** shall, before he enters upon his office, make and subscribe before the Governor of the State, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.
2[**220. Restriction on practice after being a permanent Judge**.—No person who, after the commencement of this Constitution, has held office as a permanent Judge of a High Court shall plead or act in any court or before any authority in India except the Supreme Court and the other High Courts.
Explanation.—In this article, the expression "High Court" does not include a High Court for a State specified in Part B of the First Schedule as it existed before the commencement3 of the Constitution (Seventh Amendment)
Act, 1956.]
221. Salaries, etc., of Judges.—4[(1) There shall be paid to the Judges of each High Court such salaries as may be determined by Parliament by law and, until provision in that behalf is so made, such salaries as are specified in the Second Schedule.]
(2) Every Judge shall be entitled to such allowances and to such rights in respect of leave of absence and pension as may from time to time be determined by or under law made by Parliament and, until so determined, to such allowances and rights as are specified in the Second Schedule:
Provided that neither the allowances of a Judge nor his rights in respect to leave of absence or pension shall be varied to his disadvantage after his appointment.
3. 1st November, 1956.
4. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 3, for clause (1)
(w.e.f. 1-4-1986).
## (Part Vi.—The States)
222. Transfer of a Judge from one High Court to another.—(1) The President may, 1[on the recommendation of the National Judicial Appointments Commission referred to in article 124A], transfer a Judge from one High Court to any other High Court 2***.
3[(2) When a Judge has been or is so transferred, he shall, during the period he serves, after the commencement of the Constitution (Fifteenth Amendment) Act, 1963, as a Judge of the other High Court, be entitled to receive in addition to his salary such compensatory allowance as may be determined by Parliament by law and, until so determined, such compensatory allowance as the President may by order fix.]
223. Appointment of acting Chief Justice.—When the office of Chief Justice of a High Court is vacant or when any such Chief Justice is, by reason of absence or otherwise, unable to perform the duties of his office, the duties of the office shall be performed by such one of the other Judges of the Court as the President may appoint for the purpose.
4[**224. Appointment of additional and acting Judges**.—(1) If by reason of any temporary increase in the business of a High Court or by reason of arrears of work therein, it appears to the President that the number of the Judges of that Court should be for the time being increased, 5[the President may, in consultation with the National Judicial Appointments Commission, appoint] duly qualified persons to be additional Judges of the Court for such period not exceeding two years as he may specify.
(2) When any Judge of a High Court other than the Chief Justice is by
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3. Ins. by the Constitution (Fifteenth Amendment) Act, 1963, s. 5 (w.e.f. 5-10-1963).
Original cl. (2) was omitted by the Constitution (Seventh Amendment) Act, 1956, s. 14 (w.e.f. 1-11-1956).
4. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 15 for art. 224
(w.e.f. 1-11-1956).
5. Subs. by the Constitution (Ninety-ninth Amendment) Act, 2014, s. 8, for "the
President may appoint" (w.e.f. 13-4-2015). This amendment has been struck down, by the Supreme Court in the case of Supreme Court Advocates-on-Record Association and Another *Vs. Union of India* in its judgment, dated 16-10-2015, AIR 2016 SC 117.
(Part VI.—The States)
reason of absence or for any other reason unable to perform the duties of his office or is appointed to act temporarily as Chief Justice, 1[the President may, in consultation with the National Judicial Appointments Commission, appoint] a duly qualified person to act as a Judge of that Court until the permanent Judge has resumed his duties.
(3) No person appointed as an additional or acting Judge of a High Court shall hold office after attaining the age of 2[sixty-two years].]
3[**224A. Appointment of retired Judges at sittings of High Courts**.—
Notwithstanding anything in this Chapter, 4[the National Judicial Appointments Commission on a reference made to it by the Chief Justice of a High Court for any State, may with the previous consent of the President], request any person who has held the office of a Judge of that Court or of any other High Court to sit and act as a Judge of the High Court for that State, and every such person so requested shall, while so sitting and acting, be entitled to such allowances as the President may by order determine and have all the jurisdiction, powers and privileges of, but shall not otherwise be deemed to be, a Judge of that High Court:
Provided that nothing in this article shall be deemed to require any such person as aforesaid to sit and act as a Judge of that High Court unless he consents so to do.]
225. Jurisdiction of existing High Courts.—Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution:
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Another Vs. Union of India in its judgment, dated 16-10-2015, AIR 2016 SC 117.
2 Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 6, for "sixty years"
(w.e.f. 5-10-1963).
3. Ins. by s. 7, *ibid*. (w.e.f. 5-10-1963). 4. Subs. by the Constitution (Ninety-ninth Amendment) Act, 2014, s. 9, for "the Chief
Justice of a High Court for any State may at any time, with the previous consent of the President" (w.e.f. 13-4-2015). This amendment has been struck down by the Supreme Court in the case of Supreme Court *Advocates-on-Record Association and Another Vs*. Union of India in its judgment dated 16-10-2015, AIR 2016 SC 117.
## (Part Vi.—The States)
1[Provided that any restriction to which the exercise of original jurisdiction by any of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the exercise of such jurisdiction.]
2[**226. Power of High Courts to issue certain writs.**—(1)
Notwithstanding anything in article 32 3***, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including
4[writs in the nature of *habeas corpus, mandamus,* prohibition, quo warranto and *certiorari,* or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.]
(2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories.
5[(3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without—
(a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and
______________________________________________
(w.e.f. 1-2-1977).
3. The words, figures and letters "but subject to the provisions of article 131A and article
226A" omitted by the Constitution (Forty-third Amendment) Act, 1977, s. 7 (w.e.f. 13-4-1978).
4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 30, for the portion
beginning with "writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them" and ending with "such illegality has resulted in substantial failure of justice." (w.e.f. 1-8-1979).
5. Subs. by s.30, *ibid.,* for cls. (3), (4), (5) and (6) (w.e.f. 1-8-1979).
(b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the said next day, stand vacated.]
1[(4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme Court by clause (2) of article 32.]
2[**226A**. Constitutional validity of Central laws not to be considered in proceedings under article 226.].—Omitted by the Constitution (Forty-third Amendment) *Act,* 1977, s. 8 (*w.e.f.* 13-4-1978).
227. Power of superintendence over all courts by the High Court.—
3[(1) Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction.]
(2) Without prejudice to the generality of the foregoing provision, the High Court may—
(a) call for returns from such courts; (b) make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and
(c) prescribe forms in which books, entries and accounts shall be kept by the officers of any such courts. (3) The High Court may also settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts and to attorneys, advocates and pleaders practising therein:
______________________________________________
2. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 39 (w.e.f. 1-2-1977).
## (Part Vi.—The States)
Provided that any rules made, forms prescribed or tables settled under clause (2) or clause (3) shall not be inconsistent with the provision of any law for the time being in force, and shall require the previous approval of the Governor.
(4) Nothing in this article shall be deemed to confer on a High Court powers of superintendence over any court or tribunal constituted by or under any law relating to the Armed Forces.
1(5)* * * *
228. Transfer of certain cases to High Court.—If the High Court is satisfied that a case pending in a court subordinate to it involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the case, 2[it shall withdraw the case and 3*** may—]
(a) either dispose of the case itself, or (b) determine the said question of law and return the case to the court from which the case has been so withdrawn together with a copy of its judgment on such question, and the said court shall on receipt thereof proceed to dispose of the case in conformity with such judgment.
4[**228A.** Special provisions as to disposal of questions relating to constitutional validity of State laws.].—Omitted by the Constitution (Fortythird Amendment) *Act,* 1977, s. 10 (w.e.f. 13-4-1978).
## 229. Officers And Servants And The Expenses Of High Courts.—(1)
Appointments of officers and servants of a High Court shall be made by the Chief Justice of the Court or such other Judge or officer of the Court as he may direct:
______________________________________________
Act, 1978, s. 31 (w.e.f. 20-6-1979).
2. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 41, for "it shall
withdraw the case and may—" (w.e.f. 1-2-1977).
3. The words, figures and letter, "subject to the provisions of article 131A," omitted by
the Constitution (Forty-third Amendment) Act, 1977, s. 9 (w.e.f. 13-4-1978).
4. Ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 42 (w.e.f. 1-2-1977).
## (Part Vi.—The States)
Provided that the Governor of the State 1*** may by rule require that in such cases as may be specified in the rule no person not already attached to the Court shall be appointed to any office connected with the Court save after consultation with the State Public Service Commission.
(2) Subject to the provisions of any law made by the Legislature of the State, the conditions of service of officers and servants of a High Court shall be such as may be prescribed by rules made by the Chief Justice of the Court or by some other Judge or officer of the Court authorised by the Chief Justice to make rules for the purpose:
Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the Governor of the State 1***.
(3) The administrative expenses of a High Court, including all salaries, allowances and pensions payable to or in respect of the officers and servants of the Court, shall be charged upon the Consolidated Fund of the State, and any fees or other moneys taken by the Court shall form part of that Fund.
## 2[230. Extension Of Jurisdiction Of High Courts To Union
territories.—(1) Parliament may by law extend the jurisdiction of a High Court to, or exclude the jurisdiction of a High Court from, any Union territory.
(2) Where the High Court of a State exercises jurisdiction in relation to a Union territory,—
(a) nothing in this Constitution shall be construed as empowering the Legislature of the State to increase, restrict or abolish that jurisdiction; and
(b) the reference in article 227 to the Governor shall, in relation to any rules, forms or tables for subordinate courts in that territory, be construed as a reference to the President. 231. Establishment of a common High Court for two or more States.—(1) Notwithstanding anything contained in the preceding provisions of this Chapter, Parliament may by law establish a common High Court for two or more States or for two or more States and a Union territory.
(2) In relation to any such High Court,—
(Part VI.—The States)
1(a)* *
*
* *
(b) the reference in article 227 to the Governor shall, in relation to any rules, forms or tables for subordinate courts, be construed as a reference to the Governor of the State in which the subordinate courts are situate; and
(c) the references in articles 219 and 229 to the State shall be construed as a reference to the State in which the High Court has its principal seat:
Provided that if such principal seat is in a Union territory, the references in articles 219 and 229 to the Governor, Public Service Commission, Legislature and Consolidated Fund of the State shall be construed respectively as references to the President, Union Public Service Commission, Parliament and Consolidated Fund of India.]
[**232.** Interpretation.—Articles 230, 231 and 232 subs. by articles 230
and 231 by the Constitution (Seventh Amendment) Act, 1956, s. 16
(w.e.f. 1-11-1956)].
## Chapter Vi.—Subordinate Courts
233. Appointment of district judges.—(1) Appointments of persons to be, and the posting and promotion of, district judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State.
(2) A person not already in the service of the Union or of the State shall only be eligible to be appointed a district judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment.
______________________________________________
Another Vs. Union of India reported AIR 2016 SC 117. Before amendment, subclause (a) was as under:—
"(a) the reference in article 217 to the Governor of the State shall be construed as
reference to the Governors of all the States in relation to which the High Court
exercises jurisdiction;".
## (Part Vi.—The States)
1[233A. Validation of appointments of, and judgments, etc.,
delivered by, certain district judges.—Notwithstanding any judgment, decree or order of any court,—
(a) (i) no appointment of any person already in the judicial service of a State or of any person who has been for not less than seven years an advocate or a pleader, to be a district judge in that State, and
(ii) no posting, promotion or transfer of any such person as a district judge, made at any time before the commencement of the Constitution (Twentieth Amendment) Act, 1966, otherwise than in accordance with the provisions of article 233 or article 235 shall be deemed to be illegal or void or ever to have become illegal or void by reason only of the fact that such appointment, posting, promotion or transfer was not made in accordance with the said provisions;
(b) no jurisdiction exercised, no judgment, decree, sentence or order passed or made, and no other act or proceeding done or taken, before the commencement of the Constitution (Twentieth Amendment) Act, 1966 by, or before, any person appointed, posted, promoted or transferred as a district judge in any State otherwise than in accordance with the provisions of article 233 or article 235 shall be deemed to be illegal or invalid or ever to have become illegal or invalid by reason only of the fact that such appointment, posting, promotion or transfer was not made in accordance with the said provisions.]
234. Recruitment of persons other than district judges to the judicial service.—Appointments of persons other than district judges to the judicial service of a State shall be made by the Governor of the State in accordance with rules made by him in that behalf after consultation with the State Public Service Commission and with the High Court exercising jurisdiction in relation to such State.
235. Control over subordinate courts.—The control over district courts and courts subordinate thereto including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district judge shall be vested in the High Court, but nothing in this article shall be construed as taking away from any such person any right of appeal which he may have under the law regulating the conditions of his service or as authorising the High Court to deal with him otherwise than in accordance with the conditions of his service prescribed under such law.
______________________________________________
(Part VI.—The States)
236. Interpretation.—In this Chapter—
(a) the expression "district judge" includes judge of a city civil court, additional district judge, joint district judge, assistant district judge, chief judge of a small cause court, chief presidency magistrate, additional chief presidency magistrate, sessions judge, additional sessions judge and assistant sessions Judge;
(b) the expression "judicial service" means a service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge.
237. Application of the provisions of this Chapter to certain class or classes of magistrates.—The Governor may by public notification direct that the foregoing provisions of this Chapter and any rules made thereunder shall with effect from such date as may be fixed by him in that behalf apply in relation to any class or classes of magistrates in the State as they apply in relation to persons appointed to the judicial service of the State subject to such exceptions and modifications as may be specified in the notification.
## Part Vii
[The States in Part B of the First Schedule].
______________________________________________
## Part Viii 1[The Union Territories]
2[**239. Administration of Union territories.—**(1) Save as otherwise provided by Parliament by law, every Union territory shall be administered by the President acting, to such extent as he thinks fit, through an administrator to be appointed by him with such designation as he may specify.
(2) Notwithstanding anything contained in Part VI, the President may appoint the Governor of a State as the administrator of an adjoining Union territory, and where a Governor is so appointed, he shall exercise his functions as such administrator independently of his Council of Ministers.]
3[239A. Creation of local Legislatures or Council of Ministers or both for certain Union territories.—(1) Parliament may by law create 4[for the Union territory of 5[Puducherry]]—
(a) a body, whether elected or partly nominated and partly elected, to function as a Legislature for the Union territory, or
(b) a Council of Ministers, or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.]
(w.e.f. 30-5-1987).
5. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006), s. 4, for
"Pondicherry" (w.e.f. 1-10-2006).
1[**239AA. Special provisions with respect to Delhi.—**(1) As from the date of commencement of the Constitution (Sixty-ninth Amendment) Act, 1991, the Union territory of Delhi shall be called the National Capital Territory of Delhi (hereafter in this Part referred to as the National Capital Territory) and the administrator thereof appointed under article 239 shall be designated as the Lieutenant Governor.
(2)(a) There shall be a Legislative Assembly for the National Capital Territory and the seats in such Assembly shall be filled by members chosen by direct election from territorial constituencies in the National Capital Territory.
(b) The total number of seats in the Legislative Assembly, the number of seats reserved for Scheduled Castes, the division of the National Capital Territory into territorial constituencies (including the basis for such division) and all other matters relating to the functioning of the Legislative Assembly shall be regulated by law made by Parliament.
(c) The provisions of articles 324 to 327 and 329 shall apply in relation to the National Capital Territory, the Legislative Assembly of the National Capital Territory and the members thereof as they apply, in relation to a State, the Legislative Assembly of a State and the members thereof respectively; and any reference in articles 326 and 329 to "appropriate Legislature" shall be deemed to be a reference to Parliament.
(3) (a) Subject to the provisions of this Constitution, the Legislative Assembly shall have power to make laws for the whole or any part of the National Capital Territory with respect to any of the matters enumerated in the State List or in the Concurrent List in so far as any such matter is applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2 and 18.
(b) Nothing in sub-clause (a) shall derogate from the powers of Parliament under this Constitution to make laws with respect to any matter for a Union territory or any part thereof.
______________________________________________
(c) If any provision of a law made by the Legislative Assembly with respect to any matter is repugnant to any provision of a law made by Parliament with respect to that matter, whether passed before or after the law made by the Legislative Assembly, or of an earlier law, other than a law made by the Legislative Assembly, then, in either case, the law made by Parliament, or, as the case may be, such earlier law, shall prevail and the law made by the Legislative Assembly shall, to the extent of the repugnancy, be void:
Provided that if any such law made by the Legislative Assembly has been reserved for the consideration of the President and has received his assent, such law shall prevail in the National Capital Territory:
Provided further that nothing in this sub-clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislative Assembly.
(4) There shall be a Council of Ministers consisting of not more than ten per cent. of the total number of members in the Legislative Assembly, with the Chief Minister at the head to aid and advise the Lieutenant Governor in the exercise of his functions in relation to matters with respect to which the Legislative Assembly has power to make laws, except in so far as he is, by or under any law, required to act in his discretion:
Provided that in the case of difference of opinion between the Lieutenant Governor and his Ministers on any matter, the Lieutenant Governor shall refer it to the President for decision and act according to the decision given thereon by the President and pending such decision it shall be competent for the Lieutenant Governor in any case where the matter, in his opinion, is so urgent that it is necessary for him to take immediate action, to take such action or to give such direction in the matter as he deems necessary.
(5) The Chief Minister shall be appointed by the President and other Ministers shall be appointed by the President on the advice of the Chief Minister and the Ministers shall hold office during the pleasure of the President.
(6) The Council of Ministers shall be collectively responsible to the Legislative Assembly.
1[(7) (a)] Parliament may, by law, make provisions for giving effect to, or supplementing the provisions contained in the foregoing clauses and for all matters incidental or consequential thereto.
2[(b) Any such law as is referred to in sub-clause (a) shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending, this Constitution.]
(8) The provisions of article 239B shall, so far as may be, apply in relation to the National Capital Territory, the Lieutenant Governor and the Legislative Assembly, as they apply in relation to the Union territory of
3[Puducherry], the administrator and its Legislature, respectively; and any reference in that article to "clause (1) of article 239A" shall be deemed to be a reference to this article or article 239AB, as the case may be.
239AB. Provision in case of failure of constitutional machinery.—If
the President, on receipt of a report from the Lieutenant Governor or otherwise, is satisfied—
(a) that a situation has arisen in which the administration of the National Capital Territory cannot be carried on in accordance with the provisions of article 239AA or of any law made in pursuance of that article; or
(b) that for the proper administration of the National Capital Territory it is necessary or expedient so to do, the President may by order suspend the operation of any provision of article 239AA or of all or any of the provisions of any law made in pursuance of that article for such period and subject to such conditions as may be specified in such law and make such incidental and consequential provisions as may appear to him to be necessary or expedient for administering the National Capital Territory in accordance with the provisions of article 239 and article 239AA.]
## ______________________________________________ (Part Viii.—The Union Territories)
1[239B. Power of administrator to promulgate Ordinances during recess of Legislature.—(1) If at any time, except when the Legislature of 2[the Union territory of 3[Puducherry]] is in session, the administrator thereof is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinances as the circumstances appear to him to require:
Provided that no such Ordinance shall be promulgated by the administrator except after obtaining instructions from the President in that behalf:
Provided further that whenever the said Legislature is dissolved, or its functioning remains suspended on account of any action taken under any such law as is referred to in clause (1) of article 239A, the administrator shall not promulgate any Ordinance during the period of such dissolution or suspension.
(2) An Ordinance promulgated under this article in pursuance of instructions from the President shall be deemed to be an Act of the Legislature of the Union territory which has been duly enacted after complying with the provisions in that behalf contained in any such law as is referred to in clause (1) of article 239A, but every such Ordinance—
(a) shall be laid before the Legislature of the Union territory and shall cease to operate at the expiration of six weeks from the reassembly of the Legislature or if, before the expiration of that period, a resolution disapproving it is passed by the Legislature, upon the passing of the resolution; and
(b) may be withdrawn at any time by the administrator after obtaining instructions from the President in that behalf. (3) If and so far as an Ordinance under this article makes any provision which would not be valid if enacted in an Act of the Legislature of the Union territory made after complying with the provisions in that behalf contained in any such law as is referred to in clause (1) of article 239A, it shall be void.]
4(4)*
* * *
______________________________________________
1. Ins. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 3 (w.e.f. 30-12-1971). 2. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987) s. 63, for "a Union
territory referred to in clause (1) article 239A" (w.e.f. 30-5-1987).
3. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006), s. 4, for
"Pondicherry" (w.e.f. 1-10-2006).
4. Clause (4) ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 4 (with
retrospective effect). This amendment was omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 32 (w.e.f. 20-6-1979).
##
1[240. Power of President to make regulations for certain Union territories.—(1) The President may make regulations for the peace, progress and good government of the Union territory of—
(a) the Andaman and Nicobar Islands;
2[(b) Lakshadweep;] 3[(c) Dadra and Nagar Haveli and Daman and Diu;]
4[(d) **** ;]
5[(e) 6[Puducherry ];] 7(f) * * *
8(g) * * *
9[Provided that when any body is created under article 239A to function as a Legislature for the Union territory of 6[Puducherry], the President shall not make any regulation for the peace, progress and good government of that Union territory with effect from the date appointed for the first meeting of the Legislature:]
______________________________________________
8-1962, *vide* s.7).
6. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006), s. 4 for
"Pondicherry" (w.e.f. 1-10-2006).
7. The entry (f) relating to Mizoram omitted by the State of Mizoram Act, 1986
(34 of 1986), s. 39 (w.e.f. 20-2-1987).
8. The entry (g) relating to Arunachal Pradesh omitted by the State of Arunachal Pradesh
Act, 1986 (69 of 1986), s. 42 (w.e.f. 20-2-1987).
9. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, s. 5 (w.e.f. 28-12-1962).
## (Part Viii.—The Union Territories)
1[Provided further that whenever the body functioning as a Legislature for the Union territory of 2[Puducherry] is dissolved, or the functioning of that body as such Legislature remains suspended on account of any action taken under any such law as is referred to in clause (1) of article 239A, the President may, during the period of such dissolution or suspension, make regulations for the peace, progress and good government of that Union territory.]
(2) Any regulation so made may repeal or amend any Act made by Parliament or 3[any other law], which is for the time being applicable to the Union territory and, when promulgated by the President, shall have the same force and effect as an Act of Parliament which applies to that territory.]
241. High Courts for Union territories—(1) Parliament may by law constitute a High Court for a 4[Union territory] or declare any court in any 5[such territory] to be a High Court for all or any of the purposes of this Constitution.
(2) The provisions of Chapter V of Part VI shall apply in relation to every High Court referred to in clause (1) as they apply in relation to a High Court referred to in article 214 subject to such modifications or exceptions as Parliament may by law provide.
6[(3) Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by or under this Constitution, every High Court exercising jurisdiction immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, in relation to any Union territory shall continue to exercise such jurisdiction in relation to that territory after such commencement.
(4) Nothing in this article derogates from the power of Parliament to extend or exclude the jurisdiction of a High Court for a State to, or from, any Union territory or part thereof.]
242. [*Coorg.*].—Omitted by the Constitution (Seventh Amendment) Act,
1956, s. 29 *and Sch.*(w.e.f. 1-11-1956).
______________________________________________
"Pondicherry" (w.e.f. 1-10-2006).
3. Subs. by the Constitution (Twenty-seventh Amendment) Act, 1971, s.4, for "any existing
law" (w.e.f. 15-2-1972).
4. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "State
specified in Part C of the First Schedule" (w.e.f. 1-11-1956).
5. Subs. by s. 29 and Sch., *ibid.,* for "such State" (w.e.f. 1-11-1956). 6. Subs. by s. 29 and Sch., *ibid*., for cls. (3) and (4) (w.e.f. 1-11-1956).
## 1[**Part Ix** The Panchayats
243. Definitions.—In this Part, unless the context otherwise requires,—
(a) "district" means a district in a State; (b) "Gram Sabha" means a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of Panchayat at the village level;
(c) "intermediate level" means a level between the village and district levels specified by the Governor of a State by public notification to be the intermediate level for the purposes of this Part;
(d) "Panchayat" means an institution (by whatever name called) of self-government constituted under article 243B, for the rural areas;
(e) "Panchayat area" means the territorial area of a Panchayat; (f) "Population" means the population as ascertained at the last preceding census of which the relevant figures have been published;
(g) "village" means a village specified by the Governor by public notification to be a village for the purposes of this Part and includes a group of villages so specified.
243A. Gram Sabha.—A Gram Sabha may exercise such powers and perform such functions at the village level as the Legislature of a State may, by law, provide.
243B. Constitution of Panchayats.—(1) There shall be constituted in every State, Panchayats at the village, intermediate and district levels in accordance with the provisions of this Part.
(2) Notwithstanding anything in clause (1), Panchayats at the intermediate level may not be constituted in a State having a population not exceeding twenty lakhs.
243C. Composition of Panchayats.—(1) Subject to the provisions of
## This Part, The Legislature Of A State May, By Law, Make Provisions With Respect To The Composition Of Panchayats: ______________________________________________ (Part Ix.—The Panchayats)
Provided that the ratio between the population of the territorial area of a Panchayat at any level and the number of seats in such Panchayat to be filled by election shall, so far as practicable, be the same throughout the State.
(2) All the seats in a Panchayat shall be filled by persons chosen by direct election from territorial constituencies in the Panchayat area and, for this purpose, each Panchayat area shall be divided into territorial constituencies in such manner that the ratio between the population of each constituency and the number of seats allotted to it shall, so far as practicable, be the same throughout the Panchayat area.
(3) The Legislature of a State may, by law, provide for the representation—
(a) of the Chairpersons of the Panchayats at the village level, in the Panchayats at the intermediate level or, in the case of a State not having Panchayats at the intermediate level, in the Panchayats at the district level;
(b) of the Chairpersons of the Panchayats at the intermediate level, in the Panchayats at the district level;
(c) of the members of the House of the People and the members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly a Panchayat area at a level other than the village level, in such Panchayat;
(d) of the members of the Council of States and the members of the Legislative Council of the State, where they are registered as electors within—
(i) a Panchayat area at the intermediate level, in Panchayat at the intermediate level;
(ii) a Panchayat area at the district level, in Panchayat at the district level.
(4) The Chairperson of a Panchayat and other members of a Panchayat whether or not chosen by direct election from territorial constituencies in the Panchayat area shall have the right to vote in the meetings of the Panchayats.
(5) The Chairperson of—
(a) a Panchayat at the village level shall be elected in such manner as the Legislature of a State may, by law, provide; and
(b) a Panchayat at the intermediate level or district level shall be elected by, and from amongst, the elected members thereof.
243D. Reservation of seats.—(1) Seats shall be reserved for—
(a) the Scheduled Castes; and (b) the Scheduled Tribes, in every Panchayat and the number of seats so reserved shall bear, as nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Panchayat as the population of the Scheduled Castes in that Panchayat area or of the Scheduled Tribes in that Panchayat area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Panchayat.
(2) Not less than one-third of the total number of seats reserved under clause (1) shall be reserved for women belonging to the Scheduled Castes or, as the case may be, the Scheduled Tribes.
(3) Not less than one-third (including the number of seats reserved for women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Panchayat shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Panchayat.
(4) The offices of the Chairpersons in the Panchayats at the village or any other level shall be reserved for the Scheduled Castes, the Scheduled Tribes and women in such manner as the Legislature of a State may, by law, provide:
Provided that the number of offices of Chairpersons reserved for the Scheduled Castes and the Scheduled Tribes in the Panchayats at each level in any State shall bear, as nearly as may be, the same proportion to the total number of such offices in the Panchayats at each level as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State bears to the total population of the State:
Provided further that not less than one-third of the total number of offices of Chairpersons in the Panchayats at each level shall be reserved for women:
Provided also that the number of offices reserved under this clause shall be allotted by rotation to different Panchayats at each level.
(5) The reservation of seats under clauses (1) and (2) and the reservation of offices of Chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.
(6) Nothing in this Part shall prevent the Legislature of a State from making any provision for reservation of seats in any Panchayat or offices of Chairpersons in the Panchayats at any level in favour of backward class of citizens.
243E. Duration of Panchayats, etc.—(1) Every Panchayat, unless sooner dissolved under any law for the time being in force, shall continue for five years from the date appointed for its first meeting and no longer.
(2) No amendment of any law for the time being in force shall have the effect of causing dissolution of a Panchayat at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1).
(3) An election to constitute a Panchayat shall be completed—
(a) before the expiry of its duration specified in clause (1); (b) before the expiration of a period of six months from the date of its dissolution: Provided that where the remainder of the period for which the dissolved Panchayat would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Panchayat for such period.
(4) A Panchayat constituted upon the dissolution of a Panchayat before the expiration of its duration shall continue only for the remainder of the period for which the dissolved Panchayat would have continued under clause (1) had it not been so dissolved.
243F. Disqualifications for membership.—(1) A person shall be disqualified for being chosen as, and for being, a member of a Panchayat—
(a) if he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned:
Provided that no person shall be disqualified on the ground that he is less than twenty-five years of age, if he has attained the age of twentyone years;
(b) if he is so disqualified by or under any law made by the Legislature of the State. (2) If any question arises as to whether a member of a Panchayat has become subject to any of the disqualifications mentioned in clause (1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.
## (Part Ix.—The Panchayats)
243G. Powers, authority and responsibilities of Panchayats.—
Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to—
(a) the preparation of plans for economic development and social justice; (b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule. 243H. Powers to impose taxes by, and Funds of, the Panchayats.—
The Legislature of a State may, by law,—
(a) authorise a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;
(b) assign to a Panchayat such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;
(c) provide for making such grants-in-aid to the Panchayats from the Consolidated Fund of the State; and
(d) provide for constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Panchayats and also for the withdrawal of such moneys therefrom, as may be specified in the law.
243-I. Constitution of Finance Commission to review financial position.—(1) The Governor of a State shall, as soon as may be within one year from the commencement of the Constitution (Seventy-third Amendment) Act, 1992, and thereafter at the expiration of every fifth year, constitute a Finance Commission to review the financial position of the Panchayats and to make recommendations to the Governor as to—
(a) the principles which should govern—
(i) the distribution between the State and the Panchayats of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Panchayats at all levels of their respective shares of such proceeds;
(Part IX.—The Panchayats)
(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Panchayats;
(iii) the grants-in-aid to the Panchayats from the Consolidated Fund of the State;
(b) the measures needed to improve the financial position of the Panchayats;
(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Panchayats.
(2) The Legislature of a State may, by law, provide for the composition of the Commission, the qualifications which shall be requisite for appointment as members thereof and the manner in which they shall be selected.
(3) The Commission shall determine their procedure and shall have such powers in the performance of their functions as the Legislature of the State may, by law, confer on them.
(4) The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.
243J. Audit of accounts of Panchayats.—The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Panchayats and the auditing of such accounts.
243K. Elections to the Panchayats.—(1) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Panchayats shall be vested in a State Election Commission consisting of a State Election Commissioner to be appointed by the Governor.
(2) Subject to the provisions of any law made by the Legislature of a State, the conditions of service and tenure of office of the State Election Commissioner shall be such as the Governor may by rule determine:
Provided that the State Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a Judge of a High Court and the conditions of service of the State Election Commissioner shall not be varied to his disadvantage after his appointment.
## (Part Ix.—The Panchayats)
(3) The Governor of a State shall, when so requested by the State Election Commission, make available to the State Election Commission such staff as may be necessary for the discharge of the functions conferred on the State Election Commission by clause (1).
(4) Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Panchayats.
243L. Application to Union territories.—The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under article 239 and references to the Legislature or the legislative Assembly of a State were references, in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification.
243M. Part not to apply to certain areas.—(1) Nothing in this Part shall apply to the Scheduled Areas referred to in clause (1), and the tribal areas referred to in clause (2), of article 244.
(2) Nothing in this Part shall apply to—
(a) the States of Nagaland, Meghalaya and Mizoram; (b) the hill areas in the State of Manipur for which District Councils exist under any law for the time being in force.
(3) Nothing in this Part—
(a) relating to Panchayats at the district level shall apply to the hill areas of the District of Darjeeling in the State of West Bengal for which Darjeeling Gorkha Hill Council exists under any law for the time being in force;
(b) shall be construed to affect the functions and powers of the Darjeeling Gorkha Hill Council constituted under such law.
## (Part Ix.—The Panchayats)
1[(3A) Nothing in article 243D, relating to reservation of seats for the Scheduled Castes, shall apply to the State of Arunachal Pradesh.]
(4) Notwithstanding anything in this Constitution,—
(a) the Legislature of a State referred to in sub-clause (a) of clause
(2) may, by law, extend this Part to that State, except the areas, if any, referred to in clause (1), if the Legislative Assembly of that State passes a resolution to that effect by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting;
(b) Parliament may, by law, extend the provisions of this Part to the Scheduled Areas and the tribal areas referred to in clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368. 243N.
Continuance of existing laws and Panchayats.—
Notwithstanding anything in this Part, any provision of any law relating to Panchayats in force in a State immediately before the commencement of the Constitution (Seventy-third Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier:
Provided that all the Panchayats existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State.
243-O. Bar to interference by courts in electoral matters.—
Notwithstanding anything in this Constitution,—
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243K, shall not be called in question in any court;
(b) no election to any Panchayat shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.
______________________________________________
1. Ins. by the Constitution (Eighty-third Amendment) Act, 2000, s. 2 (w.e.f. 8-9-2000).
## 1[Part Ixa The Municipalities
243P. Definitions.—In this Part, unless the context otherwise requires,—
(a) "Committee" means a Committee constituted under article 243S;
(b) "district" means a district in a State; (c) "Metropolitan area" means an area having a population of ten lakhs or more, comprised in one or more districts and consisting of two or more Municipalities or Panchayats or other contiguous areas, specified by the Governor by public notification to be a Metropolitan area for the purposes of this Part;
(d) "Municipal area" means the territorial area of a Municipality as is notified by the Governor;
(e) "Municipality" means an institution of self-government constituted under article 243Q;
(f) "Panchayat" means a Panchayat constituted under article 243B;
(g) "population" means the population as ascertained at the last preceding census of which the relevant figures have been published. 243Q. Constitution of Municipalities.—(1) There shall be constituted in every State,—
(a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to an urban area;
(b) a Municipal Council for a smaller urban area; and (c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part:
______________________________________________
(Part IXA.—The Municipalities)
Provided that a Municipality under this clause may not be constituted in
such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township.
(2) In this article, "a transitional area", "a smaller urban area" or "a larger urban area" means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in nonagricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part.
243R. Composition of Municipalities.—(1) Save as provided in clause
(2), all the seats in a Municipality shall be filled by persons chosen by direct election from the territorial constituencies in the Municipal area and for this purpose each Municipal area shall be divided into territorial constituencies to be known as wards.
(2) The Legislature of a State may, by law, provide—
(a) for the representation in a Municipality of—
(i) persons having special knowledge or experience in Municipal administration;
(ii) the members of the House of the People and the members of the Legislative Assembly of the State representing constituencies which comprise wholly or partly the Municipal area;
(iii) the members of the Council of States and the members of the Legislative Council of the State registered as electors within the Municipal area;
(iv) the Chairpersons of the Committees constituted under clause (5) of article 243S: Provided that the persons referred to in paragraph (i) shall not have the right to vote in the meetings of the Municipality;
(b) the manner of election of the Chairperson of a Municipality.
243S. Constitution and composition of Wards Committees, etc.—(1)
There shall be constituted Wards Committees, consisting of one or more wards, within the territorial area of a Municipality having a population of three lakhs or more.
(2) The Legislature of a State may, by law, make provision with respect to—
(a) the composition and the territorial area of a Wards Committee; (b) the manner in which the seats in a Wards Committee shall be filled. (3) A member of a Municipality representing a ward within the territorial area of the Wards Committee shall be a member of that Committee.
(4) Where a Wards Committee consists of—
(a) one ward, the member representing that ward in the Municipality;
or
(b) two or more wards, one of the members representing such wards in the Municipality elected by the members of the Wards Committee, shall be the Chairperson of that Committee.
(5) Nothing in this article shall be deemed to prevent the Legislature of a State from making any provision for the constitution of Committees in addition to the Wards Committees.
243T. Reservation of seats.—(1) Seats shall be reserved for the Scheduled Castes and the Scheduled Tribes in every Municipality and the number of seats so reserved shall bear, as nearly as may be, the same proportion to the total number of seats to be filled by direct election in that Municipality as the population of the Scheduled Castes in the Municipal area or of the Scheduled Tribes in the Municipal area bears to the total population of that area and such seats may be allotted by rotation to different constituencies in a Municipality.
(2) Not less than one-third of the total number of seats reserved under clause (1) shall be reserved for women belonging to the Scheduled Castes or, as the case may be, the Scheduled Tribes.
(Part IXA.—The Municipalities)
(3) Not less than one-third (including the number of seats reserved for women belonging to the Scheduled Castes and the Scheduled Tribes) of the total number of seats to be filled by direct election in every Municipality shall be reserved for women and such seats may be allotted by rotation to different constituencies in a Municipality.
(4) The offices of Chairpersons in the Municipalities shall be reserved for the Scheduled Castes, the Scheduled Tribes and women in such manner as the Legislature of a State may, by law, provide.
(5) The reservation of seats under clauses (1) and (2) and the reservation of offices of Chairpersons (other than the reservation for women) under clause (4) shall cease to have effect on the expiration of the period specified in article 334.
(6) Nothing in this Part shall prevent the Legislature of a State from making any provision for reservation of seats in any Municipality or offices of Chairpersons in the Municipalities in favour of backward class of citizens.
243U. Duration of Municipalities, etc.—(1) Every Municipality, unless sooner dissolved under any law for the time being in force, shall continue for five years from the date appointed for its first meeting and no longer:
Provided that a Municipality shall be given a reasonable opportunity of being heard before its dissolution.
(2) No amendment of any law for the time being in force shall have the effect of causing dissolution of a Municipality at any level, which is functioning immediately before such amendment, till the expiration of its duration specified in clause (1).
(3) An election to constitute a Municipality shall be completed,—
(a) before the expiry of its duration specified in clause (1); (b) before the expiration of a period of six months from the date of its dissolution: Provided that where the remainder of the period for which the dissolved Municipality would have continued is less than six months, it shall not be necessary to hold any election under this clause for constituting the Municipality for such period.
(4) A Municipality constituted upon the dissolution of a Municipality before the expiration of its duration shall continue only for the remainder of the period for which the dissolved Municipality would have continued under clause (1) had it not been so dissolved.
(Part IXA.—The Municipalities)
243V. Disqualifications for membership.—(1) A person shall be disqualified for being chosen as, and for being, a member of a Municipality—
(a) if he is so disqualified by or under any law for the time being in force for the purposes of elections to the Legislature of the State concerned:
Provided that no person shall be disqualified on the ground that he is less than twenty-five years of age, if he has attained the age of twenty-one years;
(b) if he is so disqualified by or under any law made by the Legislature of the State. (2) If any question arises as to whether a member of a Municipality has become subject to any of the disqualifications mentioned in clause (1), the question shall be referred for the decision of such authority and in such manner as the Legislature of a State may, by law, provide.
243W. Powers, authority and responsibilities of Municipalities, etc.—Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow—
(a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to—
(i) the preparation of plans for economic development and social justice;
(ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. 243X. Power to impose taxes by, and Funds of, the Municipalities.—
The Legislature of a State may, by law,—
(a) authorise a Municipality to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits;
(Part IXA.—The Municipalities)
(b) assign to a Municipality such taxes, duties, tolls and fees levied and collected by the State Government for such purposes and subject to such conditions and limits;
(c) provide for making such grants-in-aid to the Municipalities from the Consolidated Fund of the State; and
(d) provide for constitution of such Funds for crediting all moneys received, respectively, by or on behalf of the Municipalities and also for the withdrawal of such moneys therefrom, as may be specified in the law.
243Y. Finance Commission.—(1) The Finance Commission constituted under article 243-I shall also review the financial position of the Municipalities and make recommendations to the Governor as to—
(a) the principles which should govern—
(i) the distribution between the State and the Municipalities of the net proceeds of the taxes, duties, tolls and fees leviable by the State, which may be divided between them under this Part and the allocation between the Municipalities at all levels of their respective shares of such proceeds;
(ii) the determination of the taxes, duties, tolls and fees which may be assigned to, or appropriated by, the Municipalities;
(iii) the grants-in-aid to the Municipalities from the Consolidated Fund of the State; (b) the measures needed to improve the financial position of the Municipalities;
(c) any other matter referred to the Finance Commission by the Governor in the interests of sound finance of the Municipalities. (2) The Governor shall cause every recommendation made by the Commission under this article together with an explanatory memorandum as to the action taken thereon to be laid before the Legislature of the State.
243Z. Audit of accounts of Municipalities.—The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the Municipalities and the auditing of such accounts.
243ZA. Elections to the Municipalities.—(1) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the Municipalities shall be vested in the State Election Commission referred to in article 243K.
(2) Subject to the provisions of this Constitution, the Legislature of a State may, by law, make provision with respect to all matters relating to, or in connection with, elections to the Municipalities.
243ZB. Application to Union territories.—The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, have effect as if the references to the Governor of a State were references to the Administrator of the Union territory appointed under article 239 and references to the Legislature or the Legislative Assembly of a State were references in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by public notification, direct that the provisions of this Part shall apply to any Union territory or part thereof subject to such exceptions and modifications as he may specify in the notification.
243ZC. Part not to apply to certain areas.—(1) Nothing in this Part shall apply to the Scheduled Areas referred to in clause (1), and the tribal areas referred to in clause (2) of article 244.
(2) Nothing in this Part shall be construed to affect the functions and powers of the Darjeeling Gorkha Hill Council constituted under any law for the time being in force for the hill areas of the district of Darjeeling in the State of West Bengal.
(3) Notwithstanding anything in this Constitution, Parliament may, by law, extend the provisions of this Part to the Scheduled Areas and the tribal areas referred to in clause (1) subject to such exceptions and modifications as may be specified in such law, and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368.
243ZD. Committee for district planning.—(1) There shall be constituted in every State at the district level a District Planning Committee to consolidate the plans prepared by the Panchayats and the Municipalities in the district and to prepare a draft development plan for the district as a whole.
(2) The Legislature of a State may, by law, make provision with respect to—
(Part IXA.—The Municipalities)
(a) the composition of the District Planning Committees;
(b) the manner in which the seats in such Committees shall be filled:
Provided that not less than four-fifths of the total number of members of such Committee shall be elected by, and from amongst, the elected members of the Panchayat at the district level and of the Municipalities in the district in proportion to the ratio between the population of the rural areas and of the urban areas in the district;
(c) the functions relating to district planning which may be assigned to such Committees;
(d) the manner in which the Chairpersons of such Committees shall be chosen.
(3) Every District Planning Committee shall, in preparing the draft development plan,—
(a) have regard to—
(i) matters of common interest between the Panchayats and the Municipalities including spatial planning, sharing of water and other physical and natural resources, the integrated development of infrastructure and environmental conservation;
(ii) the extent and type of available resources whether financial or otherwise;
(b) consult such institutions and organisations as the Governor
may, by order, specify.
(4) The Chairperson of every District Planning Committee shall forward the development plan, as recommended by such Committee, to the Government of the State.
243ZE. Committee for Metropolitan planning.—(1) There shall be constituted in every Metropolitan area a Metropolitan Planning Committee to prepare a draft development plan for the Metropolitan area as a whole.
(2) The Legislature of a State may, by law, make provision with respect to—
(a) the composition of the Metropolitan Planning Committees; (b) the manner in which the seats in such Committees shall be filled:
## (Part Ixa.—The Municipalities)
Provided that not less than two-thirds of the members of such Committee shall be elected by, and from amongst, the elected members of the Municipalities and Chairpersons of the Panchayats in the Metropolitan area in proportion to the ratio between the population of the Municipalities and of the Panchayats in that area;
(c) the representation in such Committees of the Government of India and the Government of the State and of such organisations and institutions as may be deemed necessary for carrying out the functions assigned to such Committees;
(d) the functions relating to planning and coordination for the Metropolitan area which may be assigned to such Committees;
(e) the manner in which the Chairpersons of such Committees shall be chosen. (3) Every Metropolitan Planning Committee shall, in preparing the draft development plan,—
(a) have regard to—
(i) the plans prepared by the Municipalities and the Panchayats in the Metropolitan area;
(ii) matters of common interest between the Municipalities
and the Panchayats, including coordinated spatial planning of the
area, sharing of water and other physical and natural resources,
the integrated development of infrastructure and environmental
conservation;
(iii) the overall objectives and priorities set by the
Government of India and the Government of the State;
(iv) the extent and nature of investments likely to be made
in the Metropolitan area by agencies of the Government of India
and of the Government of the State and other available resources
whether financial or otherwise;
(b) consult such institutions and organisations as the Governor
may, by order, specify.
(4) The Chairperson of every Metropolitan Planning Committee shall
forward the development plan, as recommended by such Committee, to the Government of the State.
(Part IXA.—The Municipalities)
243ZF. Continuance of existing laws and Municipalities.—
Notwithstanding anything in this Part, any provision of any law relating to Municipalities in force in a State immediately before the commencement of the Constitution (Seventy-fourth Amendment) Act, 1992, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is earlier:
Provided that all the Municipalities existing immediately before such commencement shall continue till the expiration of their duration, unless sooner dissolved by a resolution passed to that effect by the Legislative Assembly of that State or, in the case of a State having a Legislative Council, by each House of the Legislature of that State.
243ZG. Bar to interference by courts in electoral matters.—
Notwithstanding anything in this Constitution,—
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 243ZA shall not be called in question in any court;
(b) no election to any Municipality shall be called in question except by an election petition presented to such authority and in such manner as is provided for by or under any law made by the Legislature of a State.]
## 1[Part Ixb The Co-Operative Societies
243ZH. Definitions.—In this Part, unless the context otherwise requires,—
(a) "authorised person" means a person referred to as such in article
243ZQ;
(b) "board" means the board of directors or the governing body of a co-operative society, by whatever name called, to which the direction and control of the management of the affairs of a society is entrusted to;
(c) "co-operative society" means a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;
(d) "multi-State co-operative society" means a society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such co-operatives;
(e) "office bearer" means a President, Vice-President, Chairperson, Vice-Chairperson, Secretary or Treasurer, of a co-operative society and includes any other person to be elected by the board of any co-operative society;
(f) "Registrar" means the Central Registrar appointed by the Central Government in relation to the multi-State co-operative societies and the Registrar for co-operative societies appointed by the State Government under the law made by the Legislature of a State in relation to co-operative societies;
(g) "State Act" means any law made by the Legislature of a State; (h) "State level co-operative society" means a co-operative society having its area of operation extending to the whole of a State and defined as such in any law made by the Legislature of a State.
243ZI. Incorporation of co-operative societies.—Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic
member-control, member-economic participation and autonomous functioning.
______________________________________________
## (Part Ixb.—Co-Operative Societies)
243ZJ. Number and term of members of board and its office bearers.—(1) The board shall consist of such number of directors as may be provided by the Legislature of a State, by law:
Provided that the maximum number of directors of a co-operative society shall not exceed twenty-one:
Provided further that the Legislature of a State shall, by law, provide for the reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on board of every co-operative society consisting of individuals as members and having members from such class of category of persons.
(2) The term of office of elected members of the board and its office bearers shall be five years from the date of election and the term of office bearers shall be conterminous with the term of the board:
Provided that the board may fill a casual vacancy on the board by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the board is less than half of its original term.
(3) The Legislature of a State shall, by law, make provisions for
co-option of persons to be members of the board having experience in the field of banking, management, finance or specialisation in any other field relating to the objects and activities undertaken by the co-operative society, as members of the board of such society:
Provided that the number of such co-opted members shall not exceed two in addition to twenty-one directors specified in the first proviso to clause (1):
Provided further that such co-opted members shall not have the right to vote in any election of the co-operative society in their capacity as such member or to be eligible to be elected as office bearers of the board:
Provided also that the functional directors of a co-operative society shall also be the members of the board and such members shall be excluded for the purpose of counting the total number of directors specified in the first proviso to clause (1).
## (Part Ixb.—Co-Operative Societies)
243ZK. Election of members of board.—(1) Notwithstanding anything contained in any law made by the Legislature of a State, the election of a board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the term of the office of members of the outgoing board.
(2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to a co-operative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law:
Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such elections.
## 243Zl. Supersession And Suspension Of Board And Interim
management.—(1) Notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months:
Provided that the board may be superseded or kept under suspension in a case—
(i) of its persistent default; or (ii) of negligence in the performance of its duties; or (iii) the board has committed any act prejudicial to the interests of the co-operative society or its members; or
(iv) there is stalemate in the constitution or functions of the board;
or
(v) the authority or body as provided by the Legislature of a State, by law, under clause (2) of article 243ZK, has failed to conduct elections in accordance with the provisions of the State Act:
Provided further that the board of any such co-operative society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government:
Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall also apply:
## (Part Ixb.—Co-Operative Societies)
Provided also that in case of a co-operative society, other than a
multi-State co-operative society, carrying on the business of banking, the provisions of this clause shall have the effect as if for the words "six months", the words "one year" had been substituted.
(2) In case of supersession of a board, the administrator appointed to manage the affairs of such co-operative society shall arrange for conduct of elections within the period specified in clause (1) and handover the management to the elected board.
(3) The Legislature of a State may, by law, make provisions for the conditions of service of the administrator.
243ZM. Audit of accounts of co-operative societies.—(1) The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial year.
(2) The Legislature of a State shall, by law, lay down the minimum qualifications and experience of auditors and auditing firms that shall be eligible for auditing accounts of the co-operative societies.
(3) Every co-operative society shall cause to be audited by an auditor or auditing firms referred to in clause (2) appointed by the general body of the co-operative society:
Provided that such auditors or auditing firms shall be appointed from a panel approved by a State Government or an authority authorised by the State Government in this behalf.
(4) The accounts of every co-operative society shall be audited within six months of the close of the financial year to which such accounts relate.
(5) The audit report of the accounts of an apex co-operative society, as may be defined by the State Act, shall be laid before the State Legislature in the manner, as may be provided by the State Legislature, by law.
243ZN. Convening of general body meetings.—The Legislature of a State may, by law, make provisions that the annual general body meeting of every co-operative society shall be convened within a period of six months of close of the financial year to transact the business as may be provided in such law.
## (Part Ixb.—Co-Operative Societies)
243ZO. Right of a member to get information.—(1) The Legislature of a State may, by law, provide for access to every member of a co-operative society to the books, information and accounts of the co-operative society kept in regular transaction of its business with such member.
(2) The Legislature of a State may, by law, make provisions to ensure the participation of members in the management of the co-operative society providing minimum requirement of attending meetings by the members and utilising the minimum level of services as may be provided in such law.
(3) The Legislature of a State may, by law, provide for co-operative education and training for its members.
243ZP. Returns.—Every co-operative society shall file returns, within six months of the close of every financial year, to the authority designated by the State Government including the following matters, namely:—
(a) annual report of its activities; (b) its audited statement of accounts;
(c) plan for surplus disposal as approved by the general body of the co-operative society;
(d) list of amendments to the bye-laws of the co-operative society, if any;
(e) declaration regarding date of holding of its general body meeting and conduct of elections when due; and
(f) any other information required by the Registrar in pursuance of any of the provisions of the State Act. 243ZQ. Offences and penalties.—(1) The Legislature of a State may, by law, make provisions for the offences relating to the co-operative societies and penalties for such offences.
(2) A law made by the Legislature of a State under clause (1) shall include the commission of the following act or omission as offences, namely:—
(a) a co-operative society or an officer or member thereof wilfully makes a false return or furnishes false information, or any person wilfully not furnishes any information required from him by a person authorised in this behalf under the provisions of the State Act;
## (Part Ixb.—Co-Operative Societies)
(b) any person wilfully or without any reasonable excuse disobeys any summons, requisition or lawful written order issued under the provisions of the State Act;
(c) any employer who, without sufficient cause, fails to pay to a
co-operative society amount deducted by him from its employee within a period of fourteen days from the date on which such deduction is made;
(d) any officer or custodian who wilfully fails to handover custody of books, accounts, documents, records, cash, security and other property belonging to a co-operative society of which he is an officer or custodian, to an authorised person; and
(e) whoever, before, during or after the election of members of the board or office bearers, adopts any corrupt practice. 243ZR. Application to multi-State co-operative societies.—The provisions of this Part shall apply to the multi-State co-operative societies subject to the modification that any reference to "Legislature of a State", "State Act" or "State Government" shall be construed as a reference to "Parliament", "Central Act" or "the Central Government" respectively.
243ZS. Application to Union territories.—The provisions of this Part shall apply to the Union territories and shall, in their application to a Union territory, having no Legislative Assembly as if the references to the Legislature of a State were a reference to the administrator thereof appointed under article 239 and, in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by notification in the Official Gazette, direct that the provisions of this Part shall not apply to any Union territory or part thereof as he may specify in the notification.
243ZT. Continuance of existing laws.— Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninetyseventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.]
## Part X The Scheduled And Tribal Areas
244. Administration of Scheduled Areas and Tribal Areas.—(1) The provisions of the Fifth Schedule shall apply to the administration and control of the Scheduled Areas and Scheduled Tribes in any State 1*** other than 2[the States of Assam, 3[, 4[Meghalaya, Tripura and Mizoram]]].
(2) The provisions of the Sixth Schedule shall apply to the administration of the tribal areas in 2[the States of Assam, 3[, 5[Meghalaya, Tripura and Mizoram]]].
6[244A. Formation of an autonomous State comprising certain tribal areas in Assam and creation of local Legislature or Council of Ministers or both therefor.—(1) Notwithstanding anything in this Constitution, Parliament may, by law, form within the State of Assam an autonomous State comprising
(whether wholly or in part) all or any of the tribal areas specified in 7[Part I] of the table appended to paragraph 20 of the Sixth Schedule and create therefor—
(a) a body, whether elected or partly nominated and partly elected, to function as a Legislature for the autonomous State, or
(b) a Council of Ministers, or both with such constitution, powers and functions, in each case, as may be specified in the law.
(2) Any such law as is referred to in clause (1) may, in particular,—
______________________________________________
1. The words and letters "specified in Part A or Part B of the First Schedule" omitted by
the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for
"the State of Assam" (w.e.f. 21-1-1972).
3. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 2, for "and
Meghalaya" (w.e.f. 1-4-1985).
4. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for "Meghalaya and
Tripura" (w.e.f. 20-2-1987).
5. Subs. by s. 39, *ibid.*, for "Meghalaya and Tripura and the Union territory of Mizoram".
(w.e.f. 20-2-1987).
6. Ins. by the Constitution (Twenty-second Amendment) Act, 1969, s. 2 (w.e.f. 25-9-1969). 7. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for
"Part A" (w.e.f. 21-1-1972).
## (Part X.—The Scheduled And Tribal Areas)
(a) specify the matters enumerated in the State List or the Concurrent List with respect to which the Legislature of the autonomous State shall have power to make laws for the whole or any part thereof, whether to the exclusion of the Legislature of the State of Assam or otherwise;
(b) define the matters with respect to which the executive power of the autonomous State shall extend;
(c) provide that any tax levied by the State of Assam shall be assigned to the autonomous State in so far as the proceeds thereof are attributable to the autonomous State;
(d) provide that any reference to a State in any article of this Constitution shall be construed as including a reference to the autonomous State; and
(e) make such supplemental, incidental and consequential provisions as may be deemed necessary. (3) An amendment of any such law as aforesaid in so far as such amendment relates to any of the matters specified in sub-clause (a) or sub-clause (b) of clause (2) shall have no effect unless the amendment is passed in each House of Parliament by not less than two-thirds of the members present and voting.
(4) Any such law as is referred to in this article shall not be deemed to be an amendment of this Constitution for the purposes of article 368 notwithstanding that it contains any provision which amends or has the effect of amending this Constitution.]
## Part Xi Relations Between The Union And The States Chapter I.—Legislative Relations Distribution Of Legislative Powers
245. Extent of laws made by Parliament and by the Legislatures of States.—(1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.
(2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.
246. Subject-matter of laws made by Parliament and by the Legislatures of States.—(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List").
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State 1*** also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List").
(3) Subject to clauses (1) and (2), the Legislature of any State 1*** has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List").
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included 2[in a State] notwithstanding that such matter is a matter enumerated in the State List.
3[246A. **Special provision with respect to goods and services tax**.—(1)
Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.
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2. Subs. by s. 29 and Sch., *ibid.*, for "in Part A or Part B of the First Schedule"
(w.e.f. 1-11-1956).
3. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 2
(w.e.f. 16-9-2016).
## (Part Xi.—Relations Between The Union And The States)
(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.
Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council.]
247. Power of Parliament to provide for the establishment of certain additional courts.—Notwithstanding anything in this Chapter, Parliament may by law provide for the establishment of any additional courts for the better administration of laws made by Parliament or of any existing laws with respect to a matter enumerated in the Union List.
248. Residuary powers of legislation.—(1) 1[Subject to article 246A, Parliament] has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
(2) Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.
249. Power of Parliament to legislate with respect to a matter in the State List in the national interest.—(1) Notwithstanding anything in the foregoing provisions of this Chapter, if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest that Parliament should make laws with respect to 2[goods and services tax provided under article
246A or] any matter enumerated in the State List specified in the resolution, it shall be lawful for Parliament to make laws for the whole or any part of the territory of India with respect to that matter while the resolution remains in force.
(2) A resolution passed under clause (1) shall remain in force for such period not exceeding one year as may be specified therein:
Provided that, if and so often as a resolution approving the continuance in force of any such resolution is passed in the manner provided in clause (1), such resolution shall continue in force for a further period of one year from the date on which under this clause it would otherwise have ceased to be in force.
(3) A law made by Parliament which Parliament would not but for the passing of a resolution under clause (1) have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the resolution has ceased to be in force, except as respects things done or omitted to be done before the expiration of the said period.
## ______________________________________________ (Part Xi.—Relations Between The Union And The States)
250. Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency is in operation.—(1) Notwithstanding anything in this Chapter, Parliament shall, while a Proclamation of Emergency is in operation, have power to make laws for the whole or any part of the territory of India with respect to 1[goods and services tax provided under article 246A or] any of the matters enumerated in the State List.
(2) A law made by Parliament which Parliament would not but for the issue of a Proclamation of Emergency have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of six months after the Proclamation has ceased to operate, except as respects things done or omitted to be done before the expiration of the said period.
251. Inconsistency between laws made by Parliament under articles
249 and 250 and laws made by the Legislatures of States.—Nothing in articles 249 and 250 shall restrict the power of the Legislature of a State to make any law which under this Constitution it has power to make, but if any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament has under either of the said articles power to make, the law made by Parliament, whether passed before or after the law made by the Legislature of the State, shall prevail, and the law made by the Legislature of the State shall to the extent of the repugnancy, but so long only as the law made by Parliament continues to have effect, be inoperative.
252. Power of Parliament to legislate for two or more States by consent and adoption of such legislation by any other State.—(1) If it appears to the Legislatures of two or more States to be desirable that any of the matters with respect to which Parliament has no power to make laws for the States except as provided in articles 249 and 250 should be regulated in such States by Parliament by law, and if resolutions to that effect are passed by all the Houses of the Legislatures of those States, it shall be lawful for Parliament to pass an act for regulating that matter accordingly, and any Act so passed shall apply to such States and to any other State by which it is adopted afterwards by resolution passed in that behalf by the House or, where there are two Houses, by each of the Houses of the Legislature of that State.
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## (Part Xi.—Relations Between The Union And The States)
(2) Any Act so passed by Parliament may be amended or repealed by an Act of Parliament passed or adopted in like manner but shall not, as respects any State to which it applies, be amended or repealed by an Act of the Legislature of that State.
253. Legislation for giving effect to international agreements.—
Notwithstanding anything in the foregoing provisions of this Chapter, Parliament has power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body.
254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States.—(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State 1*** with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
255. Requirements as to recommendations and previous sanctions to be regarded as matters of procedure only.—No Act of Parliament or of the Legislature of a State 1***, and no provision in any such Act, shall be invalid by reason only that some recommendation or previous sanction required by this Constitution was not given, if assent to that Act was given—
______________________________________________
(Part XI.—Relations between the Union and the States)
(a) where the recommendation required was that of the Governor, either by the Governor or by the President;
(b) where the recommendation required was that of the Rajpramukh, either by the Rajpramukh or by the President;
(c) where the recommendation or previous sanction required was that of the President, by the President.
## Chapter Ii.—Administrative Relations General
256. Obligation of States and the Union.—The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
257. Control of the Union over States in certain cases.—(1) The executive power of every State shall be so exercised as not to impede or prejudice the exercise of the executive power of the Union, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
(2) The executive power of the Union shall also extend to the giving of directions to a State as to the construction and maintenance of means of communication declared in the direction to be of national or military importance:
Provided that nothing in this clause shall be taken as restricting the power of Parliament to declare highways or waterways to be national highways or national waterways or the power of the Union with respect to the highways or waterways so declared or the power of the Union to construct and maintain means of communication as part of its functions with respect to naval, military and air force works.
(3) The executive power of the Union shall also extend to the giving of directions to a State as to the measures to be taken for the protection of the railways within the State.
(4) Where in carrying out any direction given to a State under clause (2)
as to the construction or maintenance of any means of communication or under clause (3) as to the measures to be taken for the protection of any railway, costs have been incurred in excess of those which would have been incurred in the discharge of the normal duties of the State if such direction had not been given, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of the extra costs so incurred by the State.
## (Part Xi.—Relations Between The Union And The States)
1[**257A.** [Assistance to States by deployment of armed forces or other forces of the Union.].—Omitted by the Constitution (Forty-fourth Amendment) *Act,* 1978, s. 33 (*w.e.f.* 20-6-1979).]
258. Power of the Union to confer powers, etc., on States in certain cases.—(1) Notwithstanding anything in this Constitution, the President may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends.
(2) A law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties, or authorise the conferring of powers and the imposition of duties, upon the State or officers and authorities thereof.
(3) Where by virtue of this article powers and duties have been conferred or imposed upon a State or officers or authorities thereof, there shall be paid by the Government of India to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of any extra costs of administration incurred by the State in connection with the exercise of those powers and duties.
2[**258A. Power of the States to entrust functions to the Union**.—
Notwithstanding anything in this Constitution, the Governor of a State may, with the consent of the Government of India, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the State extends.]
[**259.** Armed Forces in States in Part B of the First Schedule.].—
Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
260. Jurisdiction of the Union in relation to territories outside India.—The Government of India may by agreement with the Government of any territory not being part of the territory of India undertake any executive, legislative or judicial functions vested in the Government of such territory, but every such agreement shall be subject to, and governed by, any law relating to the exercise of foreign jurisdiction for the time being in force.
______________________________________________
## (Part Xi.—Relations Between The Union And The States)
261. Public acts, records and judicial proceedings.—(1) Full faith and credit shall be given throughout the territory of India to public acts, records and judicial proceedings of the Union and of every State.
(2) The manner in which and the conditions under which the acts, records and proceedings referred to in clause (1) shall be proved and the effect thereof determined shall be as provided by law made by Parliament.
(3) Final judgments or orders delivered or passed by civil courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law.
## Disputes Relating To Waters
262. Adjudication of disputes relating to waters of inter-State rivers or river valleys.—(1) Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter-State river or river valley.
(2) Notwithstanding anything in this Constitution, Parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause (1).
## Co-Ordination Between States
263. Provisions with respect to an inter-State Council.—If at any time it appears to the President that the public interests would be served by the establishment of a Council charged with the duty of—
(a) inquiring into and advising upon disputes which may have arisen between States;
(b) investigating and discussing subjects in which some or all of the States, or the Union and one or more of the States, have a common interest; or
(c) making recommendations upon any such subject and, in particular, recommendations for the better co-ordination of policy and action with respect to that subject,
it shall be lawful for the President by order to establish such a Council, and to define the nature of the duties to be performed by it and its organisation and procedure.
## Part Xii Finance, Property, Contracts And Suits Chapter I.—Finance General
1[264. **Interpretation**.—In this Part, "Finance Commission" means a Finance Commission constituted under article 280.]
265. Taxes not to be imposed save by authority of law.—No tax shall be levied or collected except by authority of law.
266. Consolidated Funds and public accounts of India and of the States.—(1) Subject to the provisions of article 267 and to the provisions of this Chapter with respect to the assignment of the whole or part of the net proceeds of certain taxes and duties to States, all revenues received by the Government of India, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled "the Consolidated Fund of India", and all revenues received by the Government of a State, all loans raised by that Government by the issue of treasury bills, loans or ways and means advances and all moneys received by that Government in repayment of loans shall form one consolidated fund to be entitled "the Consolidated Fund of the State".
(2) All other public moneys received by or on behalf of the Government of India or the Government of a State shall be credited to the public account of India or the public account of the State, as the case may be.
(3) No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State shall be appropriated except in accordance with law and for the purposes and in the manner provided in this Constitution.
267. Contingency Fund.—(1) Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled "the Contingency Fund of India" into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by Parliament by law under article 115 or article 116.
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## (Part Xii.—Finance, Property, Contracts And Suits)
(2) The Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled "the Contingency Fund of the State" into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the Governor 1*** of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by the Legislature of the State by law under article 205 or article 206.
## Distribution Of Revenues Between The Union And The States
268. Duties levied by the Union but collected and appropriated by the States.—(1) Such stamp duties 2*** as are mentioned in the Union List shall be levied by the Government of India but shall be collected—
(a) in the case where such duties are leviable within any 3[Union territory], by the Government of India, and
(b) in other cases, by the States within which such duties are respectively leviable.
(2) The proceeds in any financial year of any such duty leviable within any State shall not form part of the Consolidated Fund of India, but shall be assigned to that State.
4**268A**. [Service tax levied by Union and collected and appropriated by the Union and the States.].—Omitted by the Constitution (One Hundred and First Amendment) Act, 2016, s. 7 (w.e.f. 16-9-2016).
______________________________________________
2. The words "and such duties of excise on medicinal and toilet preparations"
omitted by the Constitution (One Hundred and First Amendment) Act, 2016, s. 6, (w.e.f. 16-9-2016).
3. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "State
Specified in Part C of the First Schedule" (w.e.f. 1-11-1956).
4. Ins. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 2 (date not
notified).
## (Part Xii.—Finance, Property, Contracts And Suits)
269. Taxes levied and collected by the Union but assigned to the States.—1[(1) Taxes on the sale or purchase of goods and taxes on the consignment of goods 2[except as provided in article 269A] shall be levied and collected by the Government of India but shall be assigned and shall be deemed to have been assigned to the States on or after the 1st day of April, 1996 in the manner provided in clause (2).
Explanation.—For the purposes of this clause,—
(a) the expression "taxes on the sale or purchase of goods" shall mean taxes on sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce;
(b) the expression "taxes on the consignment of goods" shall mean taxes on the consignment of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce.
(2) The net proceeds in any financial year of any such tax, except in so far as those proceeds represent proceeds attributable to Union territories, shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax is leviable in that year, and shall be distributed among those States in accordance with such principles of distribution as may be formulated by Parliament by law.]
3[(3) Parliament may by law formulate principles for determining when a
4[sale or purchase of, or consignment of goods] takes place in the course of inter-State trade or commerce.]
5[269A. Levy and collection of goods and services tax in course of inter-State trade or commerce.— (1) Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.
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(w.e.f. 9-6-2000).
2. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016 s. 8,
(w.e.f. 16-9-2016).
3. Ins. by the Constitution (Sixth Amendment) Act, 1956, s. 3 (w.e.f. 11-9-1956). 4. Subs. by the Constitution (Forty-sixth Amendment) Act, 1982. s. 2, for "sale or
purchase of goods" (w.e.f. 2-2-1983).
5. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 9
(w.e.f. 16-9-2016).
## (Part Xii.—Finance, Property, Contracts And Suits)
Explanation.—For the purposes of this clause, supply of goods, or of services, or both in the course of import into the territory of India shall be deemed to be supply of goods, or of services, or both in the course of inter- State trade or commerce.
(2) The amount apportioned to a State under clause (1) shall not form part of the Consolidated Fund of India.
(3) Where an amount collected as tax levied under clause (1) has been used for payment of the tax levied by a State under article 246A, such amount shall not form part of the Consolidated Fund of India.
(4) Where an amount collected as tax levied by a State under article
246A has been used for payment of the tax levied under clause (1), such amount shall not form part of the Consolidated Fund of the State.
(5) Parliament may, by law, formulate the principles for determining the place of supply, and when a supply of goods, or of services, or both takes place in the course of inter-State trade or commerce.]
1[270. Taxes levied and distributed between the Union and the States.—(1) All taxes and duties referred to in the Union List, except the duties and taxes referred to in 2[articles 268, 269 and 269A], respectively, surcharge on taxes and duties referred to in article 271 and any cess levied for specific purposes under any law made by Parliament shall be levied and collected by the Government of India and shall be distributed between the Union and the States in the manner provided in clause (2).
3[(1A) The tax collected by the Union under clause (1) of article 246A
shall also be distributed between the Union and the States in the manner provided in clause (2).
(1B) The tax levied and collected by the Union under clause (2) of article 246A and article 269A, which has been used for payment of the tax levied by the Union under clause (1) of article 246A, and the amount apportioned to the Union under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2).]
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1. Subs. by the Constitution (Eightieth Amendment) Act, 2000, s. 3, for art. 270
(w.e.f. 1-4-1996).
2. Subs. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 3, for "articles 268
and 269" (date not notified) and further subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 10, for "arts. 268, 268A and 269" (w.e.f. 16-9-2016).
3. Ins. by s. 10, *ibid.* (w.e.f. 16-9-2016).
## (Part Xii.—Finance, Property, Contracts And Suits)
(2) Such percentage, as may be prescribed, of the net proceeds of any such tax or duty in any financial year shall not form part of the Consolidated Fund of India, but shall be assigned to the States within which that tax or duty is leviable in that year, and shall be distributed among those States in such manner and from such time as may be prescribed in the manner provided in clause (3).
(3) In this article, "prescribed" means, -
(i) until a Finance Commission has been constituted, prescribed by the President by order, and
(ii) after a Finance Commission has been constituted, prescribed by the President by order after considering the recommendations of the Finance Commission.] 271. Surcharge on certain duties and taxes for purposes of the Union.—Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles 1[except the goods and services tax under article 246A,] by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India.
[**272.** Taxes which are levied and collected by the Union and may be distributed between the Union and the States.].*—Omitted by the Constitution* (Eightieth Amendment) *Act*, 2000*, s.* 4. (w.e.f. 9-6-2000).
273. Grants in lieu of export duty on jute and jute products.—(1)
There shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of the States of Assam, Bihar, 2[Odisha] and West Bengal, in lieu of assignment of any share of the net proceeds in each year of export duty on jute and jute products to those States, such sums as may be prescribed.
(2) The sums so prescribed shall continue to be charged on the Consolidated Fund of India so long as any export duty on jute or jute products continues to be levied by the Government of India or until the expiration of ten years from the commencement of this Constitution whichever is earlier.
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1. Ins. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 11
(w.e.f. 16-9-2016).
2. Subs. by the Orissa (Alteration of Name) Act, 2011 (15 of 2011), s. 5, for "Orissa"
(w.e.f. 1-11-2011).
## (Part Xii.—Finance, Property, Contracts And Suits)
(3) In this article, the expression "prescribed" has the same meaning as in article 270.
274. Prior recommendation of President required to Bills affecting taxation in which States are interested.—(1) No Bill or amendment which imposes or varies any tax or duty in which States are interested, or which varies the meaning of the expression "agricultural income" as defined for the purposes of the enactments relating to Indian income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter moneys are or may be distributable to States, or which imposes any such surcharge for the purposes of the Union as is mentioned in the foregoing provisions of this Chapter, shall be introduced or moved in either House of Parliament except on the recommendation of the President.
(2) In this article, the expression "tax or duty in which States are interested" means—
(a) a tax or duty the whole or part of the net proceeds whereof are assigned to any State; or
(b) a tax or duty by reference to the net proceeds whereof sums are for the time being payable out of the Consolidated Fund of India to any State.
275. Grants from the Union to certain States.—(1) Such sums as Parliament may by law provide shall be charged on the Consolidated Fund of India in each year as grants-in-aid of the revenues of such States as Parliament may determine to be in need of assistance, and different sums may be fixed for different States:
Provided that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of a State such capital and recurring sums as may be necessary to enable that State to meet the costs of such schemes of development as may be undertaken by the State with the approval of the Government of India for the purpose of promoting the welfare of the Scheduled Tribes in that State or raising the level of administration of the Scheduled Areas therein to that of the administration of the rest of the areas of that State:
Provided further that there shall be paid out of the Consolidated Fund of India as grants-in-aid of the revenues of the State of Assam sums, capital and recurring, equivalent to—
## (Part Xii.—Finance, Property, Contracts And Suits)
(a) the average excess of expenditure over the revenues during the two years immediately preceding the commencement of this Constitution in respect of the administration of the tribal areas specified in 1[Part I] of the table appended to paragraph 20 of the Sixth Schedule; and
(b) the costs of such schemes of development as may be undertaken by that State with the approval of the Government of India for the purpose of raising the level of administration of the said areas to that of the administration of the rest of the areas of that State.
2[(1A) On and from the formation of the autonomous State under article
244A,—
(i) any sums payable under clause (a) of the second proviso to clause (1) shall, if the autonomous State comprises all the tribal areas referred to therein, be paid to the autonomous State, and, if the autonomous State comprises only some of those tribal areas, be apportioned between the State of Assam and the autonomous State as the President may, by order, specify;
(ii) there shall be paid out of the Consolidated Fund of India as
grants-in-aid of the revenues of the autonomous State sums, capital and
recurring, equivalent to the costs of such schemes of development as
may be undertaken by the autonomous State with the approval of the
Government of India for the purpose of raising the level of
administration of that State to that of the administration of the rest of the
State of Assam.]
(2) Until provision is made by Parliament under clause (1), the powers
conferred on Parliament under that clause shall be exercisable by the President by order and any order made by the President under this clause shall have effect subject to any provision so made by Parliament:
Provided that after a Finance Commission has been constituted no order shall be made under this clause by the President except after considering the recommendations of the Finance Commission.
276. Taxes on professions, trades, callings and employments.—(1)
Notwithstanding anything in article 246, no law of the Legislature of a State relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority therein in respect of professions, trades, callings or employments shall be invalid on the ground that it relates to a tax on income.
## ______________________________________________ (Part Xii.—Finance, Property, Contracts And Suits)
(2) The total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed 1[two thousand and five hundred rupees] per annum.
2*
*
*
*
(3) The power of the Legislature of a State to make laws as aforesaid
with respect to taxes on professions, trades, callings and employments shall not be construed as limiting in any way the power of Parliament to make laws with respect to taxes on income accruing from or arising out of professions, trades, callings and employments.
277. Savings.—Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law.
278. [Agreement with States in Part B of the First Schedule with regard to certain financial matters.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 *and Sch.(*w.e.f. 1-11-1956).
279. Calculation of "net proceeds", etc.—(1) In the foregoing provisions of this Chapter, "net proceeds" means in relation to any tax or duty the proceeds thereof reduced by the cost of collection, and for the purposes of those provisions the net proceeds of any tax or duty, or of any part of any tax or duty, in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.
(2) Subject as aforesaid, and to any other express provision of this Chapter, a law made by Parliament or an order of the President may, in any case where under this Part the proceeds of any duty or tax are, or may be, assigned to any State, provide for the manner in which the proceeds are to be calculated, for the time from or at which and the manner in which any payments are to be made, for the making of adjustments between one financial year and another, and for any other incidental or ancillary matters.
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## (Part Xii.—Finance, Property, Contracts And Suits)
1[279A. Goods and Services Tax **Council.—**(1) The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a Council to be called the Goods and Services Tax Council.
(2) The Goods and Services Tax Council shall consist of the following members, namely:—
(a) the Union Finance Minister - Chairperson; (b) the Union Minister of State in charge of Revenue or
Finance - Member;
(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government - Members. (3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide.
(4) The Goods and Services Tax Council shall make recommendations to the Union and the States on—
(a) the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax;
(b) the goods and services that may be subjected to, or exempted from, the goods and services tax;
(c) model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply;
(d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
(e) the rates including floor rates with bands of goods and services tax ;
(f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
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## (Part Xii.—Finance, Property, Contracts And Suits)
(g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
(h) any other matter relating to the goods and services tax, as the Council may decide.
(5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
(6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services.
(7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
(8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
(9) Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:—
(a) the vote of the Central Government shall have a weightage of one-third of the total votes cast, and
(b) the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast,
in that meeting.
(10) No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of—
(a) any vacancy in, or any defect in, the constitution of the Council; or
(b) any defect in the appointment of a person as a Member of the Council; or
(c) any procedural irregularity of the Council not affecting the merits of the case. (11) The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute—
## (Part Xii.—Finance, Property, Contracts And Suits)
(a) between the Government of India and one or more States; or (b) between the Government of India and any State or States on one side and one or more other States on the other side; or
(c) between two or more States,
arising out of the recommendations of the Council or implementation thereof.]
280. Finance Commission.—(1) The President shall, within two years from the commencement of this Constitution and thereafter at the expiration of every fifth year or at such earlier time as the President considers necessary, by order constitute a Finance Commission which shall consist of a Chairman and four other members to be appointed by the President.
(2) Parliament may by law determine the qualifications which shall be requisite for appointment as members of the Commission and the manner in which they shall be selected.
(3) It shall be the duty of the Commission to make recommendations to the President as to—
(a) the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them under this Chapter and the allocation between the States of the respective shares of such proceeds;
(b) the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
1[(bb) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State;]
2[(c) the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Municipalities in the State on the basis of the recommendations made by the Finance Commission of the State;]
3[(d)] any other matter referred to the Commission by the President in the interests of sound finance. (4) The Commission shall determine their procedure and shall have such powers in the performance of their functions as Parliament may by law confer on them.
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## (Part Xii.—Finance, Property, Contracts And Suits)
281. Recommendations of the Finance Commission.—The President shall cause every recommendation made by the Finance Commission under the provisions of this Constitution together with an explanatory memorandum as to the action taken thereon to be laid before each House of Parliament.
## Miscellaneous Financial Provisions
282. Expenditure defrayable by the Union or a State out of its revenues.—The Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the Legislature of the State, as the case may be, may make laws.
283. Custody, etc., of Consolidated Funds, Contingency Funds and moneys credited to the public accounts.—(1) The custody of the Consolidated Fund of India and the Contingency Fund of India, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of India, their payment into the public account of India and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by Parliament, and, until provision in that behalf is so made, shall be regulated by rules made by the President.
(2) The custody of the Consolidated Fund of a State and the Contingency Fund of a State, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of the State, their payment into the public account of the State and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by the Legislature of the State, and, until provision in that behalf is so made, shall be regulated by rules made by the Governor 1*** of the State.
284. Custody of suitors' deposits and other moneys received by public servants and courts.—All moneys received by or deposited with—
(a) any officer employed in connection with the affairs of the
Union or of a State in his capacity as such, other than revenues or public moneys raised or received by the Government of India or the Government of the State, as the case may be, or
(b) any court within the territory of India to the credit of any
cause, matter, account or persons,
## ______________________________________________ (Part Xii.—Finance, Property, Contracts And Suits)
shall be paid into the public account of India or the public account of State, as the case may be.
285. Exemption of property of the Union from State taxation.—(1)
The property of the Union shall, save in so far as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.
(2) Nothing in clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.
286. Restrictions as to imposition of tax on the sale or purchase of goods.—(1) No law of a State shall impose, or authorise the imposition of, a tax on 1[the supply of goods or of services or both, where such supply takes
place]—
(a) outside the State; or
(b) in the course of the import of the 2[goods or services or both]
into, or export of the 2[goods or services or both] out of, the territory of
India.
3[* *
* *]
4[(2) Parliament may by law formulate principles for determining when a
5[supply of goods or of services or both] in any of the ways mentioned in
clause (1).
6[(3) *
*
* *]
**287. Exemption from taxes on electricity**.—Save in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the consumption or sale of electricity (whether produced by a Government or other persons) which is—
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1. Subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 13,
for "the sale or purchase of goods where such sale or purchase takes place" (w.e.f. 16-9-2016).
2. Subs. by s. 13 (i)(B), *ibid*., for "goods" (w.e.f. 16-9-2016). 3. *Explanation* to cl. (1) omitted by the Constitution (Sixth Amendment) Act, 1956, s. 4
(w.e.f. 11-9-1956).
4. Subs. by s.4, *ibid.,* for cls. (2) and (3) (w.e.f. 11-9-1956). 5. Subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 13(ii),
for "sale or purchase of goods takes place" (w.e.f. 16-9-2016).
6. Cl. (3) omitted by s. 13 (iii), *ibid*. (w.e.f. 16-9-2016).
## (Part Xii.—Finance, Property, Contracts And Suits)
(a) consumed by the Government of India, or sold to the Government of India for consumption by that Government; or
(b) consumed in the construction, maintenance or operation of any
railway by the Government of India or a railway company operating that
railway, or sold to that Government or any such railway company for
consumption in the construction, maintenance or operation of any
railway,
and any such law imposing, or authorising the imposition of, a tax on the sale of electricity shall secure that the price of electricity sold to the Government of India for consumption by that Government, or to any such railway company as aforesaid for consumption in the construction, maintenance or operation of any railway, shall be less by the amount of the tax than the price charged to other consumers of a substantial quantity of electricity.
288. Exemption from taxation by States in respect of water or electricity in certain cases.—(1) Save in so far as the President may by order otherwise provide, no law of a State in force immediately before the commencement of this Constitution shall impose, or authorise the imposition of, a tax in respect of any water or electricity stored, generated, consumed, distributed or sold by any authority established by any existing law or any law made by Parliament for regulating or developing any inter-State river or river-valley.
Explanation.—The expression "law of a State in force" in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas.
(2) The Legislature of a State may by law impose, or authorise the imposition of, any such tax as is mentioned in clause (1), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President, received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
289. Exemption of property and income of a State from Union taxation.—(1) The property and income of a State shall be exempt from Union taxation.
## (Part Xii.—Finance, Property, Contracts And Suits)
(2) Nothing in clause (1) shall prevent the Union from imposing, or authorising the imposition of, any tax to such extent, if any, as Parliament may by law provide in respect of a trade or business of any kind carried on by, or on behalf of, the Government of a State, or any operations connected therewith, or any property used or occupied for the purposes of such trade or business, or any income accruing or arising in connection therewith.
(3) Nothing in clause (2) shall apply to any trade or business, or to any class of trade or business, which Parliament may by law declare to be incidental to the ordinary functions of Government.
290. Adjustment in respect of certain expenses and pensions.—
Where under the provisions of this Constitution the expenses of any court or Commission, or the pension payable to or in respect of a person who has served before the commencement of this Constitution under the Crown in India or after such commencement in connection with the affairs of the Union or of a State, are charged on the Consolidated Fund of India or the Consolidated Fund of a State, then, if—
(a) in the case of a charge on the Consolidated Fund of India, the court or Commission serves any of the separate needs of a State, or the person has served wholly or in part in connection with the affairs of a State; or
(b) in the case of a charge on the Consolidated Fund of a State, the court or Commission serves any of the separate needs of the Union or another State, or the person has served wholly or in part in connection with the affairs of the Union or another State, there shall be charged on and paid out of the Consolidated Fund of the State or, as the case may be, the Consolidated Fund of India or the Consolidated Fund of the other State, such contribution in respect of the expenses or pension as may be agreed, or as may in default of agreement be determined by an arbitrator to be appointed by the Chief Justice of India.
1[**290A. Annual payment to certain Devaswom Funds.**—A sum of forty-six lakhs and fifty thousand rupees shall be charged on, and paid out of, the Consolidated Fund of the State of Kerala every year to the Travancore Devaswom Fund; and a sum of thirteen lakhs and fifty thousand rupees shall be charged on, and paid out of, the Consolidated Fund of the State of 2[Tamil Nadu] every year to the Devaswom Fund established in that State for the maintenance of Hindu temples and shrines in the territories transferred to that State on the 1st day of November, 1956, from the State of Travancore-Cochin.]
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## (Part Xii.—Finance, Property, Contracts And Suits)
291. [*Privy purse sums of Rulers.*].—Omitted by the Constitution
(Twenty-sixth Amendment) Act, *1971, s. 2 (w.e.f. 28-12-1971).*
## Chapter Ii.—Borrowing
292. Borrowing by the Government of India.—The executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India within such limits, if any, as may from time to time be fixed by Parliament by law and to the giving of guarantees within such limits, if any, as may be so fixed.
293. Borrowing by States.—(1) Subject to the provisions of this article, the executive power of a State extends to borrowing within the territory of India upon the security of the Consolidated Fund of the State within such limits, if any, as may from time to time be fixed by the Legislature of such State by law and to the giving of guarantees within such limits, if any, as may be so fixed.
(2) The Government of India may, subject to such conditions as may be laid down by or under any law made by Parliament, make loans to any State or, so long as any limits fixed under article 292 are not exceeded, give guarantees in respect of loans raised by any State, and any sums required for the purpose of making such loans shall be charged on the Consolidated Fund of India.
(3) A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India or by its predecessor Government, or in respect of which a guarantee has been given by the Government of India or by its predecessor Government.
(4) A consent under clause (3) may be granted subject to such conditions, if any, as the Government of India may think fit to impose.
## Chapter Iii.—Property, Contracts, Rights, Liabilities, Obligations And Suits
294. Succession to property, assets, rights, liabilities and obligations in certain cases.—As from the commencement of this Constitution—
(a) all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of the Dominion of India and all property and assets which immediately before such commencement were vested in His Majesty for the purposes of the Government of each Governor's Province shall vest respectively in the Union and the corresponding State, and
## (Part Xii.—Finance, Property, Contracts And Suits)
(b) all rights, liabilities and obligations of the Government of the Dominion of India and of the Government of each Governor's Province, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations respectively of the Government of India and the Government of each corresponding State, subject to any adjustment made or to be made by reason of the creation before the commencement of this Constitution of the Dominion of Pakistan or of the Provinces of West Bengal, East Bengal, West Punjab and East Punjab.
295. Succession to property, assets, rights, liabilities and obligations in other cases.—(1) As from the commencement of this Constitution—
(a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of the First Schedule shall vest in the Union, if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and
(b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State specified in Part B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations of the Government of India, if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Government of India relating to any of the matters enumerated in the Union List, subject to any agreement entered into in that behalf by the Government of India with the Government of that State.
(2) Subject as aforesaid, the Government of each State specified in Part B
of the First Schedule shall, as from the commencement of this Constitution, be the successor of the Government of the corresponding Indian State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any contract or otherwise, other than those referred to in clause (1).
296. Property accruing by escheat or lapse or as *bona vacantia.*—
Subject as hereinafter provided, any property in the territory of India which, if this Constitution had not come into operation, would have accrued to His Majesty or, as the case may be, to the Ruler of an Indian State by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a State, vest in such State, and shall, in any other case, vest in the Union:
## (Part Xii.—Finance, Property, Contracts And Suits)
Provided that any property which at the date when it would have so accrued to His Majesty or to the Ruler of an Indian State was in the possession or under the control of the Government of India or the Government of a State shall, according as the purposes for which it was then used or held were purposes of the Union or of a State, vest in the Union or in that State.
Explanation.—In this article, the expressions "Ruler" and "Indian State"
have the same meanings as in article 363.
1[297. Things of value within territorial waters or continental shelf and resources of the exclusive economic zone to vest in the Union.—(1) All lands, minerals and other things of value underlying the ocean within the territorial waters, or the continental shelf, or the exclusive economic zone, of India shall vest in the Union and be held for the purposes of the Union.
(2) All other resources of the exclusive economic zone of India shall also vest in the Union and be held for the purposes of the Union.
(3) The limits of the territorial waters, the continental shelf, the exclusive economic zone, and other maritime zones, of India shall be such as may be specified, from time to time, by or under any law made by Parliament.]
2[**298. Power to carry on trade, etc.**—The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose:
Provided that—
(a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and
(b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.]
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## (Part Xii.—Finance, Property, Contracts And Suits)
299. Contracts.—(1) All contracts made in the exercise of the executive power of the Union or of a State shall be expressed to be made by the President, or by the Governor 1*** of the State, as the case may be, and all such contracts and all assurances of property made in the exercise of that power shall be executed on behalf of the President or the Governor 1*** by such persons and in such manner as he may direct or authorise.
(2) Neither the President nor the Governor 2*** shall be personally liable in respect of any contract or assurance made or executed for the purposes of this Constitution, or for the purposes of any enactment relating to the Government of India heretofore in force, nor shall any person making or executing any such contract or assurance on behalf of any of them be personally liable in respect thereof.
300. Suits and proceedings.—(1) The Government of India may sue or be sued by the name of the Union of India and the Government of a State may sue or be sued by the name of the State and may, subject to any provisions which may be made by Act of Parliament or of the Legislature of such State enacted by virtue of powers conferred by this Constitution, sue or be sued in relation to their respective affairs in the like cases as the Dominion of India and the corresponding Provinces or the corresponding Indian States might have sued or been sued if this Constitution had not been enacted.
(2) If at the commencement of this Constitution—
(a) any legal proceedings are pending to which the Dominion of India is a party, the Union of India shall be deemed to be substituted for the Dominion in those proceedings; and
(b) any legal proceedings are pending to which a Province or an Indian State is a party, the corresponding State shall be deemed to be substituted for the Province or the Indian State in those proceedings.
## 3[Chapter Iv.—Right To Property
300A. Persons not to be deprived of property save by authority of
law.— No person shall be deprived of his property save by authority of law.]
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1. The words "or the Rajpramukh" omitted by the Constitution (Seventh Amendment)
## Part Xiii Trade, Commerce And Intercourse Within The Territory Of India
301. **Freedom of trade, commerce and intercourse.**—Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.
302. Power of Parliament to impose restrictions on trade, commerce and intercourse.—Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest.
303. Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce.—(1) Notwithstanding anything in article 302, neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination
between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.
(2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
304. Restrictions on trade, commerce and intercourse among States.—Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law—
(a) impose on goods imported from other States 1[or the Union territories] any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and
(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:
______________________________________________
(Part XIII.—Trade, Commerce and Intercourse within the Territory of India)
Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.
1[305. Saving of existing laws and laws providing for State monopolies.—Nothing in articles 301 and 303 shall affect the provisions of any existing law except in so far as the President may by order otherwise direct; and nothing in article 301 shall affect the operation of any law made before the commencement of the Constitution (Fourth Amendment) Act, 1955, in so far as it relates to, or prevent Parliament or the Legislature of a State from making any law relating to, any such matter as is referred to in sub-clause (ii) of clause (6) of article 19.]
306. [Power of certain States in Part B of the First Schedule to impose restrictions on trade and commerce.].—Omitted by the Constitution
(Seventh Amendment) *Act,* 1956, s. 29 and Sch.(w.e.f.1-11-1956).
307. Appointment of authority for carrying out the purposes of articles 301 to 304.—Parliament may by law appoint such authority as it considers appropriate for carrying out the purposes of articles 301, 302, 303 and 304, and confer on the authority so appointed such powers and such duties as it thinks necessary.
______________________________________________
## Part Xiv Services Under The Union And The States Chapter I.— Services
308. Interpretation.—In this Part, unless the context otherwise requires, the expression "State" 1[does not include the State of Jammu and Kashmir].
309. Recruitment and conditions of service of persons serving the
Union or a State.—Subject to the provisions of this Constitution, Acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State:
Provided that it shall be competent for the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union, and for the Governor 2*** of a State or such person as he may direct in the case of services and posts in connection with the affairs of the State, to make rules regulating the recruitment, and the conditions of service of persons appointed, to such services and posts until provision in that behalf is made by or under an Act of the appropriate Legislature under this article, and any rules so made shall have effect subject to the provisions of any such Act.
310. Tenure of office of persons serving the Union or a State.—(1)
Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an
all-India service or holds any post connected with defence or any civil post under the Union holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor 3*** of the State.
(2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor 2*** of the State, any contract under which a person, not being a member of a defence service or of an all-India service or of a civil service of the Union or a State, is appointed under this Constitution to hold such a post may, if the President or the Governor 4***, as the case may be, deems it
______________________________________________
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch., for "means
2. The words "or Rajpramukh" omitted by s.29 and Sch., *ibid* (w.e.f. 1-11-1956). 3. The words "or, as the case may be, the Rajpramukh" omitted by s.29 and Sch., *ibid. .*
(w.e.f. 1-11-1956).
4. The words "or the Rajpramukh" omitted by s.29 and Sch., *ibid.* (w.e.f. 1-11-1956).
(Part XIV.—Services under the Union and the States)
necessary in order to secure the services of a person having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post.
311. Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State.—(1) No person who is a member of a civil service of the Union or an all-India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
1[(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges 2***:
3[Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed:
Provided further that this clause shall not apply—]
(a) where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; or
(b) where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry; or
(c) where the President or the Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry. (3) If, in respect of any such person as aforesaid, a question arises whether it is reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.]
______________________________________________
1. Subs. by the Constitution (Fifteenth Amendment) Act, 1963, s. 10, for cls. (2) and (3)
2. Certain words omitted by the Constitution (Forty-second Amendment) Act, 1976, s. 44
(w.e.f. 3-1-1977).
## (Part Xiv.—Services Under The Union And The States)
312. All-India services.—(1) Notwithstanding anything in 1[Chapter VI
of Part VI or Part XI], if the Council of States has declared by resolution supported by not less than two-thirds of the members present and voting that it is necessary or expedient in the national interest so to do, Parliament may by law provide for the creation of one or more all India services 2[(including an all-India judicial service)] common to the Union and the States, and, subject to the other provisions of this Chapter, regulate the recruitment, and the conditions of service of persons appointed, to any such service.
(2) The services known at the commencement of this Constitution as the Indian Administrative Service and the Indian Police Service shall be deemed to be services created by Parliament under this article.
2[(3) The all-India judicial service referred to in clause (1) shall not include any post inferior to that of a district judge as defined in article 236.
(4) The law providing for the creation of the all-India judicial service aforesaid may contain such provisions for the amendment of Chapter VI of
Part VI as may be necessary for giving effect to the provisions of that law and no such law shall be deemed to be an amendment of this Constitution for the purposes of article 368.]
## 3[312A. Power Of Parliament To Vary Or Revoke Conditions Of Service
of officers of certain services.—(1) Parliament may by law—
(a) vary or revoke, whether prospectively or retrospectively, the conditions of services as respects remuneration, leave and pension and the rights as respects disciplinary matters of persons who, having been appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India before the commencement of this Constitution, continue on and after the commencement of the Constitution (Twenty-eighth Amendment) Act, 1972, to serve under the Government of India or of a State in any service or post;
## ______________________________________________ (Part Xiv.—Services Under The Union And The States)
(b) vary or revoke, whether prospectively or retrospectively, the conditions of service as respects pension of persons who, having been appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India before the commencement of this Constitution, retired or otherwise ceased to be in service at any time before the commencement of the Constitution (Twenty-eighth Amendment) Act, 1972:
Provided that in the case of any such person who is holding or has held the office of the Chief Justice or other Judge of the Supreme Court or a High Court, the Comptroller and Auditor-General of India, the Chairman or other member of the Union or a State Public Service Commission or the Chief Election Commissioner, nothing in sub-clause (a) or sub-clause (b) shall be construed as empowering Parliament to vary or revoke, after his appointment to such post, the conditions of his service to his disadvantage except in so far as such conditions of service are applicable to him by reason of his being a person appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India.
(2) Except to the extent provided for by Parliament by law under this article, nothing in this article shall affect the power of any Legislature or other authority under any other provision of this Constitution to regulate the conditions of service of persons referred to in clause (1).
(3) Neither the Supreme Court nor any other court shall have jurisdiction in—
(a) any dispute arising out of any provision of, or any endorsement on, any covenant, agreement or other similar instrument which was entered into or executed by any person referred to in
clause (1), or arising out of any letter issued to such person, in relation to his appointment to any civil service of the Crown in India or his continuance in service under the Government of the Dominion of India or a Province thereof;
(b) any dispute in respect of any right, liability or obligation under article 314 as originally enacted.
(4) The provisions of this article shall have effect notwithstanding anything in article 314 as originally enacted or in any other provision of this Constitution.]
## (Part Xiv.—Services Under The Union And The States)
313. Transitional provisions.—Until other provision is made in this behalf under this Constitution, all the laws in force immediately before the commencement of this Constitution and applicable to any public service or any post which continues to exist after the commencement of this Constitution, as an all-India service or as service or post under the Union or a State shall continue in force so far as consistent with the provisions of this Constitution.
314. [Provision for protection of existing officers of certain services.].—
Omitted by the Constitution (Twenty-eighth Amendment) Act, 1972, s. 3 (w.e.f. 29-8-1972).
## Chapter Ii.— Public Service Commissions
315. Public Service Commissions for the Union and for the States.—
(1) Subject to the provisions of this article, there shall be a Public Service Commission for the Union and a Public Service Commission for each State.
(2) Two or more States may agree that there shall be one Public Service Commission for that group of States, and if a resolution to that effect is passed by the House or, where there are two Houses, by each House of the Legislature of each of those States, Parliament may by law provide for the appointment of a Joint State Public Service Commission (referred to in this Chapter as Joint Commission) to serve the needs of those States.
(3) Any such law as aforesaid may contain such incidental and consequential provisions as may be necessary or desirable for giving effect to the purposes of the law.
(4) The Public Service Commission for the Union, if requested so to do by the Governor 1*** of a State, may, with the approval of the President, agree to serve all or any of the needs of the State.
(5) References in this Constitution to the Union Public Service Commission or a State Public Service Commission shall, unless the context otherwise requires, be construed as references to the Commission serving the needs of the Union or, as the case may be, the State as respects the particular matter in question.
316. Appointment and term of office of members.—(1) The Chairman and other members of a Public Service Commission shall be appointed, in the case of the Union Commission or a Joint Commission, by the President, and in the case of a State Commission, by the Governor of the State:
______________________________________________
## (Part Xiv.—Services Under The Union And The States)
Provided that as nearly as may be one-half of the members of every Public Service Commission shall be persons who at the dates of their respective appointments have held office for at least ten years either under the Government of India or under the Government of a State, and in computing the said period of ten years any period before the commencement of this Constitution during which a person has held office under the Crown in India or under the Government of an Indian State shall be included.
1[(1A) If the office of the Chairman of the Commission becomes vacant or if any such Chairman is by reason of absence or for any other reason unable to perform the duties of his office, those duties shall, until some person appointed under clause (1) to the vacant office has entered on the duties thereof or, as the case may be, until the Chairman has resumed his duties, be performed by such one of the other members of the Commission as the President, in the case of the Union Commission or a Joint Commission, and the Governor of the State in the case of a State Commission, may appoint for the purpose.]
(2) A member of a Public Service Commission shall hold office for a term of six years from the date on which he enters upon his office or until he attains, in the case of the Union Commission, the age of sixty-five years, and in the case of a State Commission or a Joint Commission, the age of 2[sixty-two years], whichever is earlier:
Provided that—
(a) a member of a Public Service Commission may, by writing under his hand addressed, in the case of the Union Commission or a Joint Commission, to the President, and in the case of a State Commission, to the Governor 3*** of the State, resign his office;
(b) a member of a Public Service Commission may be removed from his office in the manner provided in clause (1) or clause (3) of article 317. (3) A person who holds office as a member of a Public Service Commission shall, on the expiration of his term of office, be ineligible for
re-appointment to that office.
## ______________________________________________ (Part Xiv.—Services Under The Union And The States)
317. Removal and suspension of a member of a Public Service Commission.—(1) Subject to the provisions of clause (3), the Chairman or any other member of a Public Service Commission shall only be removed from his office by order of the President on the ground of misbehaviour after the Supreme Court, on reference being made to it by the President, has, on inquiry held in accordance with the procedure prescribed in that behalf under article 145, reported that the Chairman or such other member, as the case may be, ought on any such ground to be removed.
(2) The President, in the case of the Union Commission or a Joint Commission, and the Governor 1*** in the case of a State Commission, may suspend from office the Chairman or any other member of the Commission in
respect of whom a reference has been made to the Supreme Court under
clause (1) until the President has passed orders on receipt of the report of the Supreme Court on such reference.
(3) Notwithstanding anything in clause (1), the President may by order remove from office the Chairman or any other member of a Public Service Commission if the Chairman or such other member, as the case may be,—
(a) is adjudged an insolvent; or (b) engages during his term of office in any paid employment outside the duties of his office; or
(c) is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body. (4) If the Chairman or any other member of a Public Service Commission is or becomes in any way concerned or interested in any contract or agreement made by or on behalf of the Government of India or the Government of a State or participates in any way in the profit thereof or in any benefit or emolument arising therefrom otherwise than as a member and in common with the other members of an incorporated company, he shall, for the purposes of clause (1), be deemed to be guilty of misbehaviour.
318. Power to make regulations as to conditions of service of members and staff of the Commission.—In the case of the Union Commission or a Joint Commission, the President and, in the case of a State Commission, the Governor 1*** of the State may by regulations—
______________________________________________
(Part XIV.—Services under the Union and the States)
(a) determine the number of members of the Commission and their conditions of service; and
(b) make provision with respect to the number of members of the staff of the Commission and their conditions of service: Provided that the conditions of service of a member of a Public Service Commission shall not be varied to his disadvantage after his appointment.
## 319. Prohibition As To The Holding Of Offices By Members Of Commission On Ceasing To Be Such Members.—On Ceasing To Hold Office—
(a) the Chairman of the Union Public Service Commission shall be ineligible for further employment either under the Government of India or under the Government of a State;
(b) the Chairman of a State Public Service Commission shall be eligible for appointment as the Chairman or any other member of the Union Public Service Commission or as the Chairman of any other State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State;
(c) a member other than the Chairman of the Union Public Service Commission shall be eligible for appointment as the Chairman of the Union Public Service Commission or as the Chairman of a State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State;
(d) a member other than the Chairman of a State Public Service Commission shall be eligible for appointment as the Chairman or any other member of the Union Public Service Commission or as the Chairman of that or any other State Public Service Commission, but not for any other employment either under the Government of India or under the Government of a State. 320. Functions of Public Service Commissions.—(1) It shall be the duty of the Union and the State Public Service Commissions to conduct examinations for appointments to the services of the Union and the services of the State respectively.
(2) It shall also be the duty of the Union Public Service Commission, if requested by any two or more States so to do, to assist those States in framing and operating schemes of joint recruitment for any services for which candidates possessing special qualifications are required.
(3) The Union Public Service Commission or the State Public Service Commission, as the case may be, shall be consulted—
(Part XIV.—Services under the Union and the States)
(a) on all matters relating to methods of recruitment to civil services and for civil posts;
(b) on the principles to be followed in making appointments to civil services and posts and in making promotions and transfers from one service to another and on the suitability of candidates for such appointments, promotions or transfers;
(c) on all disciplinary matters affecting a person serving under the Government of India or the Government of a State in a civil capacity, including memorials or petitions relating to such matters;
(d) on any claim by or in respect of a person who is serving or has served under the Government of India or the Government of a State or under the Crown in India or under the Government of an Indian State, in a civil capacity, that any costs incurred by him in defending legal proceedings instituted against him in respect of acts done or purporting to be done in the execution of his duty should be paid out of the Consolidated Fund of India, or, as the case may be, out of the Consolidated Fund of the State;
(e) on any claim for the award of a pension in respect of injuries sustained by a person while serving under the Government of India or the Government of a State or under the Crown in India or under the Government of an Indian State, in a civil capacity, and any question as to the amount of any such award, and it shall be the duty of a Public Service Commission to advise on any matter so referred to them and on any other matter which the President, or, as the case may be, the Governor 1*** of the State, may refer to them:
Provided that the President as respects the all-India services and also as respects other services and posts in connection with the affairs of the Union, and the Governor 2***, as respects other services and posts in connection with the affairs of a State, may make regulations specifying the matters in which either generally, or in any particular class of case or in any particular circumstances, it shall not be necessary for a Public Service Commission to be consulted.
(4) Nothing in clause (3) shall require a Public Service Commission to be consulted as respects the manner in which any provision referred to in clause (4) of article 16 may be made or as respects the manner in which effect may be given to the provisions of article 335.
______________________________________________
(w.e.f. 1-11-1956).
## (Part Xiv.—Services Under The Union And The States)
(5) All regulations made under the proviso to clause (3) by the President or the Governor 1*** of a State shall be laid for not less than fourteen days before each House of Parliament or the House or each House of the Legislature of the State, as the case may be, as soon as possible after they are made, and shall be subject to such modifications, whether by way of repeal or amendment, as both Houses of Parliament or the House or both Houses of the Legislature of the State may make during the session in which they are so laid.
321. Power to extend functions of Public Service Commissions.—An Act made by Parliament or, as the case may be, the Legislature of a State may provide for the exercise of additional functions by the Union Public Service Commission or the State Public Service Commission as respects the services of the Union or the State and also as respects the services of any local authority or other body corporate constituted by law or of any public institution.
322. Expenses of Public Service Commissions.—The expenses of the Union or a State Public Service Commission, including any salaries, allowances and pensions payable to or in respect of the members or staff of the Commission, shall be charged on the Consolidated Fund of India or, as the case may be, the Consolidated Fund of the State.
323. Reports of Public Service Commissions.—(1) It shall be the duty of the Union Commission to present annually to the President a report as to the work done by the Commission and on receipt of such report the President shall cause a copy thereof together with a memorandum explaining, as respects the cases, if any, where the advice of the Commission was not accepted, the reasons for such non-acceptance to be laid before each House of Parliament.
(2) It shall be the duty of a State Commission to present annually to the Governor 1*** of the State a report as to the work done by the Commission, and it shall be the duty of a Joint Commission to present annually to the Governor 1*** of each of the States the needs of which are served by the Joint Commission a report as to the work done by the Commission in relation to that State, and in either case the Governor 2***, shall, on receipt of such report, cause a copy thereof together with a memorandum explaining, as respects the cases, if any, where the advice of the Commission was not accepted, the reasons for such non-acceptance to be laid before the Legislature of the State.
______________________________________________
1. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment)
Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
2. The words "or Rajpramukh, as the case may be" omitted by s. 29 and Sch. *ibid.*
(w.e.f. 1-11-1956).
## 1[**Part Xiva** Tribunals
323A. Administrative tribunals.—(1) Parliament may, by law, provide for the adjudication or trial by administrative tribunals of disputes and complaints with respect to recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India or of any corporation owned or controlled by the Government.
(2) A law made under clause (1) may—
(a) provide for the establishment of an administrative tribunal for the Union and a separate administrative tribunal for each State or for two or more States;
(b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals;
(c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court under article 136, with respect to the disputes or complaints referred to in clause (1);
(e) provide for the transfer to each such administrative tribunal of any cases pending before any court or other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) repeal or amend any order made by the President under clause (3)
of article 371D;
(g) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as Parliament may deem necessary for the effective functioning of, and for the speedy disposal of
______________________________________________
(Part XIVA.—Tribunals)
cases by, and the enforcement of the orders of, such tribunals.
(3) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
323B. Tribunals for other matters.—(1) The appropriate Legislature may, by law, provide for the adjudication or trial by tribunals of any disputes, complaints, or offences with respect to all or any of the matters specified in clause (2) with respect to which such Legislature has power to make laws.
(2) The matters referred to in clause (1) are the following, namely:—
(a) levy, assessment, collection and enforcement of any tax; (b) foreign exchange, import and export across customs frontiers; (c) industrial and labour disputes; (d) land reforms by way of acquisition by the State of any estate as defined in article 31A or of any rights therein or the extinguishment or modification of any such rights or by way of ceiling on agricultural land or in any other way;
(e) ceiling on urban property; (f) elections to either House of Parliament or the House or either House of the Legislature of a State, but excluding the matters referred to in article 329 and article 329A;
(g) production, procurement, supply and distribution of food-stuffs
(including edible oilseeds and oils) and such other goods as the President may, by public notification, declare to be essential goods for the purpose of this article and control of prices of such goods;
1[(h) rent, its regulation and control and tenancy issues including the right, title and interest of landlords and tenants;]
2[(i)] offences against laws with respect to any of the matters specified in sub-clauses (a) to 3[(h)] and fees in respect of any of those
matters;
1[(j)] any matter incidental to any of the matters specified in
sub-clauses (a) to 2[(i)].
(3) A law made under clause (1) may—
(a) provide for the establishment of a hierarchy of tribunals; (b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals;
(c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals;
(d) exclude the jurisdiction of all courts, except the jurisdiction of the Supreme Court under article 136, with respect to all or any of the matters falling within the jurisdiction of the said tribunals;
(e) provide for the transfer to each such tribunal of any cases pending before any court or any other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment;
(f) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as the appropriate Legislature may deem necessary for the effective functioning of, and for the speedy disposal of cases by, and the enforcement of the orders of, such tribunals. (4) The provisions of this article shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
Explanation.—In this article, "appropriate Legislature", in relation to any matter, means Parliament or, as the case may be, a State Legislature competent to make laws with respect to such matter in accordance with the provisions of Part XI.]
## ______________________________________________ Part Xv Elections
324. Superintendence, direction and control of elections to be vested in an Election Commission.—(1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice-President held under this Constitution 1*** shall be vested in a Commission (referred to in this Constitution as the Election Commission).
(2) The Election Commission shall consist of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix and the appointment of the Chief Election Commissioner and other Election Commissioners shall, subject to the provisions of any law made in that behalf by Parliament, be made by the President.
(3) When any other Election Commissioner is so appointed the Chief Election Commissioner shall act as the Chairman of the Election Commission.
(4) Before each general election to the House of the People and to the Legislative Assembly of each State, and before the first general election and thereafter before each biennial election to the Legislative Council of each State having such Council, the President may also appoint after consultation with the Election Commission such Regional Commissioners as he may consider necessary to assist the Election Commission in the performance of the functions conferred on the Commission by clause (1).
(5) Subject to the provisions of any law made by Parliament, the conditions of service and tenure of office of the Election Commissioners and the Regional Commissioners shall be such as the President may by rule determine:
Provided that the Chief Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a Judge of the Supreme Court and the conditions of service of the Chief Election Commissioner shall not be varied to his disadvantage after his appointment:
______________________________________________
## (Part Xv.—Elections)
Provided further that any other Election Commissioner or a Regional Commissioner shall not be removed from office except on the recommendation of the Chief Election Commissioner.
(6) The President, or the Governor 1*** of a State, shall, when so requested by the Election Commission, make available to the Election Commission or to a Regional Commissioner such staff as may be necessary for the discharge of the functions conferred on the Election Commission by clause (1).
325. No person to be ineligible for inclusion in, or to claim to be included in a special, electoral roll on grounds of religion, race, caste or sex.—There shall be one general electoral roll for every territorial constituency for election to either House of Parliament or to the House or either House of the Legislature of a State and no person shall be ineligible for inclusion in any such roll or claim to be included in any special electoral roll for any such constituency on grounds only of religion, race, caste, sex or any of them.
326. Elections to the House of the People and to the Legislative Assemblies of States to be on the basis of adult suffrage.—The elections to the House of the People and to the Legislative Assembly of every State shall be on the basis of adult suffrage; that is to say, every person who is a citizen of India and who is not less than 2[eighteen years] of age on such date as may be fixed in that behalf by or under any law made by the appropriate Legislature and is not otherwise disqualified under this Constitution or any law made by the appropriate Legislature on the ground of non-residence, unsoundness of mind, crime or corrupt or illegal practice, shall be entitled to be registered as a voter at any such election.
327. Power of Parliament to make provision with respect to elections to Legislatures.—Subject to the provisions of this Constitution, Parliament may from time to time by law make provision with respect to all matters relating to, or in connection with, elections to either House of Parliament or to the House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of constituencies and all other matters necessary for securing the due constitution of such House or Houses.
______________________________________________
1. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment)
Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
2. Subs. by the Constitution (Sixty-first Amendment) Act, 1988, s. 2, for "twenty-one
years" (w.e.f. 28-3-1989).
## (Part Xv.—Elections)
328. Power of Legislature of a State to make provision with respect to elections to such Legislature.—Subject to the provisions of this Constitution and in so far as provision in that behalf is not made by Parliament, the Legislature of a State may from time to time by law make provision with respect to all matters relating to, or in connection with, the elections to the House or either House of the Legislature of the State including the preparation of electoral rolls and all other matters necessary for securing the due constitution of such House or Houses.
329. Bar to interference by courts in electoral matters.—
1[Notwithstanding anything in this Constitution 2***—]
(a) the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies, made or purporting to be made under article 327 or article 328, shall not be called in question in any court;
(b) no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature.
3**329A.** [Special provision as to elections to Parliament in the case of Prime Minister and Speaker.].—Omitted by the Constitution (Forty-fourth Amendment) *Act, 1978, s.* 36 (*w.e.f.* 20-6-1979).
## ______________________________________________ Part Xvi Special Provisions Relating To Certain Classes 330. Reservation Of Seats For Scheduled Castes And Scheduled Tribes
in the House of the People.—(1) Seats shall be reserved in the House of the People for -
(a) the Scheduled Castes;
1[(b) the Scheduled Tribes except the Scheduled Tribes in the autonomous districts of Assam; and]
(c) the Scheduled Tribes in the autonomous districts of Assam.
(2) The number of seats reserved in any State 2[or Union territory] for the Scheduled Castes or the Scheduled Tribes under clause (1) shall bear, as nearly as may be, the same proportion to the total number of seats allotted to that State 2[or Union territory] in the House of the People as the population of the Scheduled Castes in the State 2[or Union territory] or of the Scheduled Tribes in the State 2[or Union territory] or part of the State 2[or Union territory], as the case may be, in respect of which seats are so reserved, bears to the total population of the State 2[or Union territory].
3[(3) Notwithstanding anything contained in clause (2), the number of seats reserved in the House of the People for the Scheduled Tribes in the autonomous districts of Assam shall bear to the total number of seats allotted to that State a proportion not less than the population of the Scheduled Tribes in the said autonomous districts bears to the total population of the State.]
4[*Explanation.—*In this article and in article 332, the expression
"population" means the population as ascertained at the last preceding census of which the relevant figures have been published:
Provided that the reference in this *Explanation* to the last preceding census of which the relevant figures have been published shall, until the relevant figures for the first census taken after the year 5[2026] have been published, be construed as a reference to the 6[2001] census.]
______________________________________________
## (Part Xvi.—Special Provisions Relating To Certain Classes)
331. Representation of the Anglo-Indian Community in the House of the People.—Notwithstanding anything in article 81, the President may, if he is of opinion that the Anglo-Indian community is not adequately represented in the House of the People, nominate not more than two members of that community to the House of the People.
332. Reservation of seats for Scheduled Castes and Scheduled Tribes in the Legislative Assemblies of the States.—(1) Seats shall be reserved for the Scheduled Castes and the Scheduled Tribes, 1[except the Scheduled Tribes in the autonomous districts of Assam], in the Legislative Assembly of every State 2***.
(2) Seats shall be reserved also for the autonomous districts in the Legislative Assembly of the State of Assam.
(3) The number of seats reserved for the Scheduled Castes or the Scheduled Tribes in the Legislative Assembly of any State under clause (1) shall bear, as nearly as may be, the same proportion to the total number of seats in the Assembly as the population of the Scheduled Castes in the State or of the Scheduled Tribes in the State or part of the State, as the case may be, in respect of which seats are so reserved, bears to the total population of the State.
3[(3A) Notwithstanding anything contained in clause (3), until the taking effect, under article 170, of the re-adjustment, on the basis of the first census after the year 4[2026], of the number of seats in the Legislative Assemblies of the States of Arunachal Pradesh, Meghalaya, Mizoram and Nagaland, the seats which shall be reserved for the Scheduled Tribes in the Legislative Assembly of any such State shall be,—
(a) if all the seats in the Legislative Assembly of such State in existence on the date of coming into force of the Constitution (Fiftyseventh Amendment) Act, 1987 (hereafter in this clause referred to as the existing Assembly) are held by members of the Scheduled Tribes, all the seats except one;
(b) in any other case, such number of seats as bears to the total number of seats, a proportion not less than the number (as on the said date) of members belonging to the Scheduled Tribes in the existing Assembly bears to the total number of seats in the existing Assembly.]
## ______________________________________________ (Part Xvi.—Special Provisions Relating To Certain Classes)
1[(3B) Notwithstanding anything contained in clause (3), until the
re-adjustment, under article 170, takes effect on the basis of the first census after the year 2[2026], of the number of seats in the Legislative Assembly of the State of Tripura, the seats which shall be reserved for the Scheduled Tribes in the Legislative Assembly shall be, such number of seats as bears to the total number of seats, a proportion not less than the number, as on the date of coming into force of the Constitution (Seventy-second Amendment) Act, 1992, of members belonging to the Scheduled Tribes in the Legislative Assembly in existence on the said date bears to the total number of seats in that Assembly.]
(4) The number of seats reserved for an autonomous district in the Legislative Assembly of the State of Assam shall bear to the total number of seats in that Assembly a proportion not less than the population of the district bears to the total population of the State.
(5) The constituencies for the seats reserved for any autonomous district of Assam shall not comprise any area outside that district 3***.
(6) No person who is not a member of a Scheduled Tribe of any autonomous district of the State of Assam shall be eligible for election to the Legislative Assembly of the State from any constituency of that district 3***:
4[Provided that for elections to the Legislative Assembly of the State of Assam, the representation of the Scheduled Tribes and non-Scheduled Tribes in the constituencies included in the Bodoland Territorial Areas District, so notified, and existing prior to the constitution of Bodoland Territorial Areas District, shall be maintained.]
333. Representation of the Anglo-Indian community in the Legislative Assemblies of the States.—Notwithstanding anything in article
170, the Governor 5*** of a State may, if he is of opinion that the Anglo-Indian community needs representation in the Legislative Assembly of the State and is not adequately represented therein, 6[nominate one member of that community to the Assembly].
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2. Subs. by the Constitution (Eighty-fourth Amendment) Act, 2001, s. 7, for "2000"
(w.e.f. 21-2-2002).
3. Certain words omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971),
s. 71 (w.e.f. 21-1-1972).
4. Ins. by the Constitution (Ninetieth Amendment) Act, 2003, s. 2 (w.e.f. 28-9-2003). 5. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment) Act, 1956,
s. 29 and Sch. (w.e.f. 1-11-1956).
6. Subs. by the Constitution (Twenty-third Amendment) Act, 1969, s. 4, for "nominate such
number of members of the community to the Assembly as he considers appropriate"
(w.e.f. 23-1-1970).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
334. 1[Reservation of seats and special representation to cease after certain period].—Notwithstanding anything in the foregoing provisions of this Part, the provisions of this Constitution relating to—
(a) the reservation of seats for the Scheduled Castes and the Scheduled Tribes in the House of the People and in the Legislative Assemblies of the States; and
(b) the representation of the Anglo-Indian community in the House of the People and in the Legislative Assemblies of the States by nomination, shall cease to have effect on the expiration of a period of 2[eighty years in respect of clause (a) and seventy years in respect of clause (b)] from the commencement of this Constitution:
Provided that nothing in this article shall affect any representation in the House of the People or in the Legislative Assembly of a State until the dissolution of the then existing House or Assembly, as the case may be.
335. Claims of Scheduled Castes and Scheduled Tribes to services and posts.—The claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State:
3[Provided that nothing in this article shall prevent in making of any provision in favour of the members of the Scheduled Castes and the Scheduled Tribes for relaxation in qualifying marks in any examination or lowering the standards of evaluation, for reservation in matters or promotion to any class or classes of services or posts in connection with the affairs of the Union or of a State.]
336. Special provision for Anglo-Indian community in certain services.—(1) During the first two years after the commencement of this Constitution, appointments of members of the Anglo-Indian community to posts in the railway, customs, postal and telegraph services of the Union shall be made on the same basis as immediately before the fifteenth day of August, 1947.
______________________________________________
2. Subs. by s. 2, *ibid.,* for "seventy years" (w.e.f. 25-1-2020). The words "seventy years"
subs. for "sixty years" by the Constitution (Ninety-fifth Amendment) Act, 2009, s.2 (w.e.f. 25-1-2010). The words "sixty years" subs. for "fifty years" by the Constitution (Seventy-ninth Amendment) Act, 1999, s. 2 (w.e.f. 25-1-2000). The words "fifty years" subs. for "forty years" by the Constitution (Sixty-second Amendment) Act, 1989, s. 2 (w.e.f. 20-12-1989). The words "forty years" subs. for "thirty years" by the Constitution (Forty-fifth Amendment) Act, 1980, s. 2 (w.e.f. 25-1-1980).
3. Ins. by the Constitution (Eighty-second Amendment) Act, 2000, s. 2 (w.e.f. 8-9-2000).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
During every succeeding period of two years, the number of posts reserved for the members of the said community in the said services shall, as nearly as possible, be less by ten per cent. than the numbers so reserved during the immediately preceding period of two years:
Provided that at the end of ten years from the commencement of this Constitution all such reservations shall cease.
(2) Nothing in clause (1) shall bar the appointment of members of the Anglo-Indian community to posts other than, or in addition to, those reserved for the community under that clause if such members are found qualified for appointment on merit as compared with the members of other communities.
337. Special provision with respect to educational grants for the benefit of Anglo-Indian community.—During the first three financial years after the commencement of this Constitution, the same grants, if any, shall be made by the Union and by each State 1*** for the benefit of the Anglo-Indian community in respect of education as were made in the financial year ending on the thirty-first day of March, 1948.
During every succeeding period of three years the grants may be less by ten per cent. than those for the immediately preceding period of three years:
Provided that at the end of ten years from the commencement of this Constitution such grants, to the extent to which they are a special concession to the Anglo-Indian community, shall cease:
Provided further that no educational institution shall be entitled to receive any grant under this article unless at least forty per cent. of the annual admissions therein are made available to members of communities other than the Anglo-Indian community.
338. 2[**National Commission for Scheduled Castes].**—3[4[(1) There shall be a Commission for the Scheduled Castes to be known as the National Commission for the Scheduled Castes.
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3. Subs. by the Constitution (Sixty-fifth Amendment) Act, 1990, s. 2, for cls. (1) and (2)
(w.e.f. 12-3-1992).
4. Subs. by the Constitution (Eighty-ninth Amendment) Act, 2003, s. 2, for cls. (1) and
(2) (w.e.f. 19-2-2004).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
(2) Subject to the provisions of any law made in this behalf by Parliament, the Commission shall consist of a Chairperson, Vice-Chairperson and three other Members and the conditions of service and tenure of office of the Chairperson, Vice-Chairperson and other Members so appointed shall be such as the President may by rule determine.]
(3) The Chairperson, Vice-Chairperson and other Members of the Commission shall be appointed by the President by warrant under his hand and seal.
(4) The Commission shall have the power to regulate its own procedure. (5) It shall be the duty of the Commission—
(a) to investigate and monitor all matters relating to the safeguards provided for the Scheduled Castes 1*** under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;
(b) to inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Castes 1***;
(c) to participate and advise on the planning process of
socio-economic development of the Scheduled Castes 1*** and to evaluate the progress of their development under the Union and any State;
(d) to present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards;
(e) to make in such reports recommendations as to the measures that should be taken by the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare and
socio-economic development of the Scheduled Castes 1***; and
(f) to discharge such other functions in relation to the protection, welfare and development and advancement of the Scheduled Castes 1***
as the President may, subject to the provisions of any law made by Parliament, by rule specify. (6) The President shall cause all such reports to be laid before each House of Parliament along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the Union and the reasons for the non-acceptance, if any, of any of such recommendations.
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## (Part Xvi.—Special Provisions Relating To Certain Classes)
(7) Where any such report, or any part thereof, relates to any matter with which any State Government is concerned, a copy of such report shall be forwarded to the Governor of the State who shall cause it to be laid before the Legislature of the State along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the State and the reasons for the non-acceptance, if any, of any of such recommendations.
(8) The Commission shall, while investigating any matter referred to in sub-clause (a) or inquiring into any complaint referred to in sub-clause (b) of clause (5), have all the powers of a civil court trying a suit and in particular in respect of the following matters, namely :—
(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;
(b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for the examination of witnesses and documents;
(f) any other matter which the President may, by rule, determine.
(9) The Union and every State Government shall consult the Commission on all major policy matters affecting Scheduled Castes 1***].
2[(10)] In this article, references to the Scheduled Castes 1*** shall be construed as including references 3*** to the Anglo-Indian community.
Amendment) Act, 2018, s. 2 (w.e.f. 15-8-2018).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
1[**338A. National Commission for Scheduled Tribes.—**(1) There shall be a Commission for the Scheduled Tribes to be known as the National Commission for the Scheduled Tribes.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Commission shall consist of a Chairperson, Vice-Chairperson and three other Members and the conditions of service and tenure of office of the Chairperson, Vice-Chairperson and other Members so appointed shall be such as the President may by rule determine.
(3) The Chairperson, Vice-Chairperson and other Members of the Commission shall be appointed by the President by warrant under his hand and seal.
(4) The Commission shall have the power to regulate its own procedure. (5) It shall be the duty of the Commission—
(a) to investigate and monitor all matters relating to the safeguards provided for the Scheduled Tribes under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;
(b) to inquire into specific complaints with respect to the deprivation of rights and safeguards of the Scheduled Tribes;
(c) to participate and advise on the planning process of socioeconomic development of the Scheduled Tribes and to evaluate the progress of their development under the Union and any State;
(d) to present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards;
(e) to make in such reports recommendations as to the
measures that should be taken by the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare and socio-economic development of the Scheduled Tribes; and
(f) to discharge such other functions in relation to the protection, welfare and development and advancement of the Scheduled Tribes as the President may, subject to the provisions of any law made by
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## (Part Xvi.—Special Provisions Relating To Certain Classes)
Parliament, by rule specify.
(6) The President shall cause all such reports to be laid before each House of Parliament along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the Union and the reasons for the non-acceptance, if any, of any such recommendations.
(7) Where any such report, or any part thereof, relates to any matter with which any State Government is concerned, a copy of such report shall be forwarded to the Governor of the State who shall cause it to be laid before the Legislature of the State along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the State and the reasons for the non-acceptance, if any, of any of such recommendations.
(8) The Commission shall, while investigating any matter referred to in sub-clause (a) or inquiring into any complaint referred to in sub-clause (b) of clause (5), have all the powers of a civil court trying a suit and in particular in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;
(b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; (d) requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for the examination of witnesses and documents;
(f) any other matter which the President may, by rule, determine.
(9) The Union and every State Government shall consult the Commission on all major policy matters affecting Scheduled Tribes.]
1[338B. **National Commission for Backward Classes.**—(1) There shall be a Commission for the socially and educationally backward classes to be known as the National Commission for Backward Classes.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Commission shall consist of a Chairperson, Vice-Chairperson and three other Members and the conditions of service and tenure of office of the Chairperson, Vice-Chairperson and other Members so appointed shall be such as the President may by rule determine.
(3) The Chairperson, Vice-Chairperson and other Members of the Commission shall be appointed by the President by warrant under his hand and
______________________________________________
## (Part Xvi.—Special Provisions Relating To Certain Classes)
seal.
(4) The Commission shall have the power to regulate its own procedure. (5) It shall be the duty of the Commission—
(a) to investigate and monitor all matters relating to the safeguards provided for the socially and educationally backward classes under this Constitution or under any other law for the time being in force or under any order of the Government and to evaluate the working of such safeguards;
(b) to inquire into specific complaints with respect to the deprivation of rights and safeguards of the socially and educationally backward classes;
(c) to participate and advise on the socio-economic development of the socially and educationally backward classes and to evaluate the progress of their development under the Union and any State;
(d) to present to the President, annually and at such other times as the Commission may deem fit, reports upon the working of those safeguards;
(e) to make in such reports the recommendations as to the measures that should be taken by the Union or any State for the effective implementation of those safeguards and other measures for the protection, welfare and socio-economic development of the socially and educationally backward classes; and
(f) to discharge such other functions in relation to the protection, welfare and development and advancement of the socially and educationally backward classes as the President may, subject to the provisions of any law made by Parliament, by rule specify. (6) The President shall cause all such reports to be laid before each House of Parliament along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the Union and the reasons for the non-acceptance, if any, of any such recommendations.
(7) Where any such report, or any part thereof, relates to any matter with which any State Government is concerned, a copy of such report shall be forwarded to the State Government which shall cause it to be laid before the Legislature of the State along with a memorandum explaining the action taken or proposed to be taken on the recommendations relating to the State and the reasons for the non-acceptance, it any, of any of such recommendations.
(8) The Commission shall, while investigating any matter referred to in sub-clause (a) or inquiring into any complaint referred to in sub-clause (b) of clause (5), have all the powers of a civil court trying a suit and in particular in
## (Part Xvi.—Special Provisions Relating To Certain Classes)
respect of the following matters, namely :—
(a) summoning and enforcing the attendance of any person from any part of India and examining him on oath;
(b) requiring the discovery and production of any document; (c) receiving evidence on affidavits;
(d) requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for the examination of witnesses and documents;
(f) any other matter which the President may by rule, determine.
(9) The Union and every State Government shall consult the Commission on all major policy matters affecting the socially and educationally backward classes:]
1[Provided that nothing in this clause shall apply for the purposes of clause (3) of article 342A.]
339. Control of the Union over the administration of Scheduled Areas and the welfare of Scheduled Tribes.—(1) The President may at any time and shall, at the expiration of ten years from the commencement of this Constitution by order appoint a Commission to report on the administration of the Scheduled Areas and the welfare of the Scheduled Tribes in the States 2***.
The order may define the composition, powers and procedure of the Commission and may contain such incidental or ancillary provisions as the President may consider necessary or desirable.
(2) The executive power of the Union shall extend to the giving of directions to 3[a State] as to the drawing up and execution of schemes specified in the direction to be essential for the welfare of the Scheduled Tribes in the State.
340. Appointment of a Commission to investigate the conditions of backward classes.—(1) The President may by order appoint a Commission consisting of such persons as he thinks fit to investigate the conditions of socially and educationally backward classes within the territory of India and the difficulties under which they labour and to make recommendations as to the steps that should be taken by the Union or any State to remove such difficulties and to improve their condition and as to the grants that should be made for the purpose by the Union or any State and the conditions subject to which such grants should be made, and the order appointing such Commission shall define
______________________________________________
1. Ins. by the Constitution (One Hundred and Fifth Amendment) Act, 2021, s. 2
(w.e.f. 15-9-2021).
2. The words and letters for "specified in Part A or Part B of the First Schedule" omitted by
the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
3. Subs. by s. 29 and Sch. *ibid.* for "any such State" (w.e.f. 1-11-1956).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
the procedure to be followed by the Commission.
(2) A Commission so appointed shall investigate the matters referred to them and present to the President a report setting out the facts as found by them and making such recommendations as they think proper.
(3) The President shall cause a copy of the report so presented together with a memorandum explaining the action taken thereon to be laid before each House of Parliament.
341. Scheduled Castes.—(1) The President 1[may with respect to any State 2[or Union territory], and where it is a State 3***, after consultation with the Governor 4*** thereof], by public notification5, specify the castes, races or tribes or parts of or groups within castes, races or tribes which shall for the purposes of this Constitution be deemed to be Scheduled Castes in relation to that State 2[or Union territory, as the case may be.]
(2) Parliament may by law include in or exclude from the list of Scheduled Castes specified in a notification issued under clause (1) any caste, race or tribe or part of or group within any caste, race or tribe, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.
consultation with the Governor or Rajpramukh of a State" (w.e.f. 18-6-1951).
2. Ins. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
(w.e.f. 1-11-1956).
3. The words and letters "specified in Part A or Part B of the First Schedule" omitted by
s. 29 and Sch,.*ibid.* (w.e.f. 1-11-1956).
4. The words "or Rajpramukh" omitted by s. 29 and Sch., *ibid.* (w.e.f. 1-11-1956). 5. See the Constitution (Scheduled Castes) Order, 1950 (C.O. 19), the Constitution
(Scheduled Castes) (Union Territories) Order, 1951 (C.O. 32), the Constitution (Jammu and Kashmir) Scheduled Castes Order, 1956 (C.O. 52), the Constitution (Dadra and Nagar Haveli) (Scheduled Castes) Order, 1962 (C.O. 64), the Constitution (Pondicherry) Scheduled Castes Order, 1964 (C.O. 68), the Constitution (Goa, Daman and Diu) Scheduled Castes Order, 1968 (C.O. 81) and the Constitution (Sikkim) Scheduled Castes Order, 1978 (C.O. 110).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
342. Scheduled Tribes.—(1) The President 1[may with respect to any State 2[or Union territory], and where it is a State 3***, after consultation with the Governor 3*** thereof], by public notification4, specify the tribes or tribal communities or parts of or groups within tribes or tribal communities which shall for the purposes of this Constitution be deemed to be Scheduled Tribes in relation to that State 2[or Union territory, as the case may be.]
(2) Parliament may by law include in or exclude from the list of Scheduled Tribes specified in a notification issued under clause (1) any tribe or tribal community or part of or group within any tribe or tribal community, but save as aforesaid a notification issued under the said clause shall not be varied by any subsequent notification.
5[**342A. Socially and educationally backward classes.**—(1) The President may with respect to any State or Union territory, and where it is a State, after consultation with the Governor thereof, by public notification, specify 6[the socially and educationally backward classes in the Central List which shall for the purposes of the Central Government] be deemed to be socially and educationally backward classes in relation to that State or Union territory, as the case may be.
(2) Parliament may by law include in or exclude from the Central List of socially and educationally backward classes specified in a notification issued under clause (1) any socially and educationally backward class, but save as aforesaid a notification issued under the said clause shall not be varied by any
______________________________________________
4. See the Constitution (Scheduled Tribes) Order, 1950 (C.O. 22), the Constitution
(Scheduled Tribes) (Union Territories) Order, 1951 (C.O. 33), the Constitution (Andaman and Nicobar Islands) (Scheduled Tribes) Order, 1959 (C.O. 58), Constitution (Dadra and Nagar Haveli) (Scheduled Tribes) Order, 1962 (C.O. 65), the Constitution (Scheduled Tribes) (Uttar Pradesh) Order, 1967 (C.O. 78), the Constitution (Goa, Daman and Diu) Scheduled Tribes Order, 1968 (C.O. 82), the Constitution (Nagaland) Scheduled Tribes Order, 1970 (C.O. 88) the Constitution
(Sikkim) Scheduled Tribes Order, 1978 (C.O. 111).
5. Art.342A ins. by the Constitution (One Hundred and Second Amendment) Act, 2018,
s. 4 (w.e.f. 15-8-2018).
6. Subs. by the Constitution (One Hundred and Fifth Amendment) Act, 2021, s. 3, for
"the socially and educationally backward classes which shall for the purposes of this Constitution" (w.e.f. 15-9-2021).
## (Part Xvi.—Special Provisions Relating To Certain Classes)
subsequent notification.]
1*[Explanation*.—For the purposes of clauses (1) and (2), the expression
"Central List" means the list of socially and educationally backward classes prepared and maintained by and for the Central Government.
(3) Notwithstanding any contained in clauses (1) and (2), every State or Union territory may, by law, prepare and maintain, for its own purposes, a list of socially and educationally backward classes, entries in which may be different from the Central List.]
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## Part Xvii Official Language Chapter I.—Language Of The Union
343. Official language of the Union.—(1) The official language of the Union shall be Hindi in Devanagari script.
The form of numerals to be used for the official purposes of the Union shall be the international form of Indian numerals.
(2) Notwithstanding anything in clause (1), for a period of fifteen years from the commencement of this Constitution, the English language shall continue to be used for all the official purposes of the Union for which it was being used immediately before such commencement:
Provided that the President may, during the said period, by order1
authorise the use of the Hindi language in addition to the English language and of the Devanagari form of numerals in addition to the international form of Indian numerals for any of the official purposes of the Union.
(3) Notwithstanding anything in this article, Parliament may by law provide for the use, after the said period of fifteen years, of—
(a) the English language, or (b) the Devanagari form of numerals, for such purposes as may be specified in the law.
344. Commission and Committee of Parliament on official language.—(1) The President shall, at the expiration of five years from the commencement of this Constitution and thereafter at the expiration of ten years from such commencement, by order constitute a Commission which shall consist of a Chairman and such other members representing the different languages specified in the Eighth Schedule as the President may appoint, and the order shall define the procedure to be followed by the Commission.
(2) It shall be the duty of the Commission to make recommendations to the President as to—
(a) the progressive use of the Hindi language for the official purposes of the Union;
(b) restrictions on the use of the English language for all or any of the official purposes of the Union;
(c) the language to be used for all or any of the purposes mentioned in article 348;
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1. See C.O. 41.
(Part XVII—LANGUAGE)
(d) the form of numerals to be used for any one or more specified purposes of the Union;
(e) any other matter referred to the Commission by the President as regards the official language of the Union and the language for communication between the Union and a State or between one State and another and their use. (3) In making their recommendations under clause (2), the Commission shall have due regard to the industrial, cultural and scientific advancement of India, and the just claims and the interests of persons belonging to the
non-Hindi speaking areas in regard to the public services.
(4) There shall be constituted a Committee consisting of thirty members, of whom twenty shall be members of the House of the People and ten shall be members of the Council of States to be elected respectively by the members of the House of the People and the members of the Council of States in accordance with the system of proportional representation by means of the single transferable vote.
(5) It shall be the duty of the Committee to examine the recommendations of the Commission constituted under clause (1) and to report to the President their opinion thereon.
(6) Notwithstanding anything in article 343, the President may, after consideration of the report referred to in clause (5), issue directions in accordance with the whole or any part of that report.
## Chapter Ii.—Regional Languages
345. Official language or languages of a State.—Subject to the provisions of articles 346 and 347, the Legislature of a State may by law adopt any one or more of the languages in use in the State or Hindi as the language or languages to be used for all or any of the official purposes of that State:
Provided that, until the Legislature of the State otherwise provides by law, the English language shall continue to be used for those official purposes within the State for which it was being used immediately before the commencement of this Constitution.
346. Official language for communication between one State and another or between a State and the Union.—The language for the time being authorised for use in the Union for official purposes shall be the official language for communication between one State and another State and between a State and the Union:
(Part XVII—LANGUAGE)
Provided that if two or more States agree that the Hindi language should be the official language for communication between such States, that language may be used for such communication.
347. Special provision relating to language spoken by a section of the population of a State.—On a demand being made in that behalf the President may, if he is satisfied that a substantial proportion of the population of a State desire the use of any language spoken by them to be recognised by that State, direct that such language shall also be officially recognised throughout that State or any part thereof for such purpose as he may specify.
## Chapter Iii.—Language Of The Supreme Court, High Courts, Etc.
348. Language to be used in the Supreme Court and in the High Courts and for Acts, Bills, etc.—(1) Notwithstanding anything in the foregoing provisions of this Part, until Parliament by law otherwise provides—
(a) all proceedings in the Supreme Court and in every High Court, (b) the authoritative texts—
(i) of all Bills to be introduced or amendments thereto to be moved in either House of Parliament or in the House or either House of the Legislature of a State,
(ii) of all Acts passed by Parliament or the Legislature of a State and of all Ordinances promulgated by the President or the Governor 1*** of a State, and
(iii) of all orders, rules, regulations and bye-laws issued under this Constitution or under any law made by Parliament or the Legislature of a State, shall be in the English language.
(2) Notwithstanding anything in sub-clause (a) of clause (1), the Governor 1*** of a State may, with the previous consent of the President, authorise the use of the Hindi language, or any other language used for any official purposes of the State, in proceedings in the High Court having its principal seat in that State:
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(Part XVII—LANGUAGE)
Provided that nothing in this clause shall apply to any judgment, decree or order passed or made by such High Court.
(3) Notwithstanding anything in sub-clause (b) of clause (1), where the Legislature of a State has prescribed any language other than the English language for use in Bills introduced in, or Acts passed by, the Legislature of the State or in Ordinances promulgated by the Governor 1*** of the State or in any order, rule, regulation or bye-law referred to in paragraph (iii) of that sub-clause, a translation of the same in the English language published under the authority of the Governor 1*** of the State in the Official Gazette of that State shall be deemed to be the authoritative text thereof in the English language under this article.
349. Special procedure for enactment of certain laws relating to language.—During the period of fifteen years from the commencement of this Constitution, no Bill or amendment making provision for the language to be used for any of the purposes mentioned in clause (1) of article 348 shall be introduced or moved in either House of Parliament without the previous sanction of the President, and the President shall not give his sanction to the introduction of any such Bill or the moving of any such amendment except after he has taken into consideration the recommendations of the Commission constituted under clause (1) of article 344 and the report of the Committee constituted under clause (4) of that article.
## Chapter Iv.—Special Directives
350. Language to be used in representations for redress of grievances.—Every person shall be entitled to submit a representation for the redress of any grievance to any officer or authority of the Union or a State in any of the languages used in the Union or in the State, as the case may be.
2[350A. Facilities for instruction in mother-tongue at primary stage.—It shall be the endeavour of every State and of every local authority within the State to provide adequate facilities for instruction in the mother-tongue at the primary stage of education to children belonging to linguistic minority groups; and the President may issue such directions to any State as he considers necessary or proper for securing the provision of such facilities.
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1. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment) Act,
(Part XVII—LANGUAGE)
350B. Special Officer for linguistic minorities.—(1) There shall be a Special Officer for linguistic minorities to be appointed by the President.
(2) It shall be the duty of the Special Officer to investigate all matters relating to the safeguards provided for linguistic minorities under this Constitution and report to the President upon those matters at such intervals as the President may direct, and the President shall cause all such reports to be laid before each House of Parliament, and sent to the Governments of the States concerned.]
351. Directive for development of the Hindi language.—It shall be the duty of the Union to promote the spread of the Hindi language, to develop it so that it may serve as a medium of expression for all the elements of the composite culture of India and to secure its enrichment by assimilating without interfering with its genius, the forms, style and expressions used in Hindustani and in the other languages of India specified in the Eighth Schedule, and by drawing, wherever necessary or desirable, for its vocabulary, primarily on Sanskrit and secondarily on other languages.
## Part Xviii Emergency Provisions
352. Proclamation of Emergency.—(1) If the President is satisfied that a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or 1[armed rebellion], he may, by Proclamation, make a declaration to that effect 2[in respect of the whole of India or of such part of the territory thereof as may be specified in the Proclamation.]
3[*Explanation.*—A Proclamation of Emergency declaring that the security of India or any part of the territory thereof is threatened by war or by external aggression or by armed rebellion may be made before the actual occurrence of war or of any such aggression or rebellion, if the President is satisfied that there is imminent danger thereof.]
4[(2) A Proclamation issued under clause (1) may be varied or revoked by a subsequent Proclamation.
(3) The President shall not issue a Proclamation under clause (1) or a Proclamation varying such Proclamation unless the decision of the Union Cabinet (that is to say, the Council consisting of the Prime Minister and other Ministers of Cabinet rank appointed under article 75) that such a Proclamation may be issued has been communicated to him in writing.
(4) Every Proclamation issued under this article shall be laid before each House of Parliament and shall, except where it is a Proclamation revoking a previous Proclamation, cease to operate at the expiration of one month unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
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## (Part Xviii.—Emergency Provisions)
Provided that if any such Proclamation (not being a Proclamation revoking a previous Proclamation) is issued at a time when the House of the People has been dissolved, or the dissolution of the House of the People takes place during the period of one month referred to in this clause, and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution, unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
(5) A Proclamation so approved shall, unless revoked, cease to operate on the expiration of a period of six months from the date of the passing of the second of the resolutions approving the Proclamation under clause (4):
Provided that if and so often as a resolution approving the continuance in force of such a Proclamation is passed by both Houses of Parliament the Proclamation shall, unless revoked, continue in force for a further period of six months from the date on which it would otherwise have ceased to operate under this clause:
Provided further that if the dissolution of the House of the People takes place during any such period of six months and a resolution approving the continuance in force of such Proclamation has been passed by the Council of States but no resolution with respect to the continuance in force of such Proclamation has been passed by the House of the People during the said period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days, a resolution approving the continuance in force of the Proclamation has been also passed by the House of the People.
(6) For the purposes of clauses (4) and (5), a resolution may be passed by either House of Parliament only by a majority of the total membership of that House and by a majority of not less than two-thirds of the Members of that House present and voting.
(7) Notwithstanding anything contained in the foregoing clauses, the President shall revoke a Proclamation issued under clause (1) or a Proclamation varying such Proclamation if the House of the People passes a resolution disapproving, or, as the case may be, disapproving the continuance in force of, such Proclamation.
(8) Where a notice in writing signed by not less than one-tenth of the total number of members of the House of the People has been given, of their intention to move a resolution for disapproving, or, as the case may be, for disapproving the continuance in force of, a Proclamation issued under
clause (1) or a Proclamation varying such Proclamation,—
(a) to the Speaker, if the House is in session; or (b) to the President, if the House is not in session, a special sitting of the House shall be held within fourteen days from the date on which such notice is received by the Speaker, or, as the case may be, by the President, for the purpose of considering such resolution.]
1[(9) The power conferred on the President by this article shall include the power to issue different Proclamations on different grounds, being war or external aggression or 2[armed rebellion] or imminent danger of war or external aggression or 2[armed rebellion], whether or not there is a Proclamation
already issued by the President under clause (1) and such Proclamation is in operation.
1* * * * * * * *]
353. Effect of Proclamation **of Emergency.**—While a Proclamation of Emergency is in operation, then—
(a) notwithstanding anything in this Constitution, the executive power of the Union shall extend to the giving of directions to any State as to the manner in which the executive power thereof is to be exercised;
(b) the power of Parliament to make laws with respect to any matter shall include power to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and authorities of the Union as respects that matter, notwithstanding that it is one which is not enumerated in the Union List:
omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 37 (w.e.f. 20-6- 1979).
1[Provided that where a Proclamation of Emergency is in operation only in any part of the territory of India,—
(i) the executive power of the Union to give directions under clause (a), and
(ii) the power of Parliament to make laws under clause (b), shall also extend to any State other than a State in which or in any part of which the Proclamation of Emergency is in operation if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
354. Application of provisions relating to distribution of revenues while a Proclamation of Emergency is in operation.—(1) The President may, while a Proclamation of Emergency is in operation, by order direct that all or any of the provisions of articles 268 to 279 shall for such period, not extending in any case beyond the expiration of the financial year in which such Proclamation ceases to operate, as may be specified in the order, have effect subject to such exceptions or modifications as he thinks fit.
(2) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
355. Duty of the Union to protect States against external aggression and internal disturbance.—It shall be the duty of the Union to protect every State against external aggression and internal disturbance and to ensure that the Government of every State is carried on in accordance with the provisions of this Constitution.
356. Provisions in case of failure of constitutional machinery in States.—(1) If the President, on receipt of a report from the Governor 2*** of a State or otherwise, is satisfied that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution, the President may by Proclamation—
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## (Part Xviii.—Emergency Provisions)
(a) assume to himself all or any of the functions of the Government of the State and all or any of the powers vested in or exercisable by the Governor 1*** or any body or authority in the State
other than the Legislature of the State;
(b) declare that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament;
(c) make such incidental and consequential provisions as appear to the President to be necessary or desirable for giving effect to the objects of the Proclamation, including provisions for suspending in whole or in part the operation of any provisions of this Constitution relating to any body or authority in the State: Provided that nothing in this clause shall authorise the President to assume to himself any of the powers vested in or exercisable by a High Court, or to suspend in whole or in part the operation of any provision of this Constitution relating to High Courts.
(2) Any such Proclamation may be revoked or varied by a subsequent Proclamation.
(3) Every Proclamation under this article shall be laid before each House of Parliament and shall, except where it is a Proclamation revoking a previous Proclamation, cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation (not being a Proclamation revoking a previous Proclamation) is issued at a time when the House of the People is dissolved or the dissolution of the House of the People takes place during the period of two months referred to in this clause, and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
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(4) A Proclamation so approved shall, unless revoked, cease to operate on the expiration of a period of 1[six months from the date of issue of the Proclamation]:
Provided that if and so often as a resolution approving the continuance in force of such a Proclamation is passed by both Houses of Parliament, the Proclamation shall, unless revoked, continue in force for a further period of
2[six months] from the date on which under this clause it would otherwise have ceased to operate, but no such Proclamation shall in any case remain in force for more than three years:
Provided further that if the dissolution of the House of the People takes place during any such period of 2[six months] and a resolution approving the continuance in force of such Proclamation has been passed by the Council of States, but no resolution with respect to the continuance in force of such Proclamation has been passed by the House of the People during the said period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the continuance in force of the Proclamation has been also passed by the House of the People:
3[Provided also that in the case of the Proclamation issued under
clause (1) on the 11th day of May, 1987 with respect to the State of Punjab, the reference in the first proviso to this clause to "three years" shall be construed as a reference to 4[five years].]
for "one year", respectively (w.e.f. 20-6-1979).
3. Ins. by the Constitution (Sixty-fourth Amendment) Act, 1990, s. 2 (w.e.f. 16-4-1990).
4. Subs. by the Constitution (Sixty-seventh Amendment) Act, 1990, s. 2 (w.e.f. 4-10-1990)
and further subs. by the Constitution (Sixty-eighth Amendment) Act, 1991, s. 2 (w.e.f.
12-3-1991).
## (Part Xviii.—Emergency Provisions)
1[(5) Notwithstanding anything contained in clause (4), a resolution with respect to the continuance in force of a Proclamation approved under clause (3)
for any period beyond the expiration of one year from the date of issue of such Proclamation shall not be passed by either House of Parliament unless—
(a) a Proclamation of Emergency is in operation, in the whole of India or, as the case may be, in the whole or any part of the State, at the time of the passing of such resolution, and
(b) the Election Commission certifies that the continuance in force
of the Proclamation approved under clause (3) during the period
specified in such resolution is necessary on account of difficulties in
holding general elections to the Legislative Assembly of the State
concerned:]
2[Provided that nothing in this clause shall apply to the Proclamation
issued under clause (1) on the 11th day of May, 1987 with respect to the State of Punjab.]
357. Exercise of legislative powers under Proclamation issued under article 356.—(1) Where by a Proclamation issued under clause (1) of article 356, it has been declared that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament, it shall be competent—
(a) for Parliament to confer on the President the power of the Legislature of the State to make laws, and to authorise the President to delegate, subject to such conditions as he may think fit to impose, the power so conferred to any other authority to be specified by him in that behalf;
(b) for Parliament, or for the President or other authority in whom such power to make laws is vested under sub-clause (a), to make laws conferring powers and imposing duties, or authorising the conferring of powers and the imposition of duties, upon the Union or officers and authorities thereof;
(c) for the President to authorise when the House of the People is not in session expenditure from the Consolidated Fund of the State pending the sanction of such expenditure by Parliament.
1978, s. 38, for cl. (5) (w.e.f. 20-6-1979).
2. Proviso omitted by the Constitution (Sixty-third Amendment) Act, 1989, s. 2 (w.e.f. 6-
1-1990) and subsequently ins. by the Constitution (Sixty-fourth Amendment) Act, 1990, s. 2 (w.e.f. 16-4-1990).
##
1[(2) Any law made in exercise of the power of the Legislature of the State by Parliament or the President or other authority referred to in sub-clause
(a) of clause (1) which Parliament or the President or such other authority would not, but for the issue of a Proclamation under article 356, have been competent to make shall, after the Proclamation has ceased to operate, continue in force until altered or repealed or amended by a competent Legislature or other authority.]
358. Suspension of provisions of article 19 during emergencies.—
2[(1)] 3[While a Proclamation of Emergency declaring that the security of India or any part of the territory thereof is threatened by war or by external aggression is in operation], nothing in article 19 shall restrict the power of the State as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect:
4[Provided that 5[where such Proclamation of Emergency] is in operation only in any part of the territory of India, any such law may be made, or any such executive action may be taken, under this article in relation to or in any State or Union territory in which or in any part of which the Proclamation of Emergency is not in operation, if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
6[(2) Nothing in clause (1) shall apply—
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3. Subs. by s. 39, *ibid*, for "While a Proclamation of Emergency is in operation"
(w.e.f. 20-6-1979).
4. Added by the Constitution (Forty-second Amendment) Act, 1976, s. 52 (w.e.f. 3-1-
1977).
5. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 39, for "where a
Proclamation of Emergency" (w.e.f. 20-6-1979).
6. Ins. by s. 39, *ibid*. (w.e.f. 20-6-1979).
(a) to any law which does not contain a recital to the effect that such law is in relation to the Proclamation of Emergency in operation when it is made; or
(b) to any executive action taken otherwise than under a law containing such a recital.]
359. Suspension of the enforcement of the rights conferred by Part III during emergencies.—(1) Where a Proclamation of Emergency is in operation, the President may by order declare that the right to move any court for the enforcement of such of 1[the rights conferred by Part III (except articles
20 and 21)] as may be mentioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order.
2[(1A) While an order made under clause (1) mentioning any of 1[the rights conferred by Part III (except articles 20 and 21)] is in operation, nothing in that Part conferring those rights shall restrict the power of the State as defined in the said Part to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the order aforesaid ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect:]
3[Provided that where a Proclamation of Emergency is in operation only in any part of the territory of India, any such law may be made, or any such executive action may be taken, under this article in relation to or in any State or Union territory in which or in any part of which the Proclamation of Emergency is not in operation, if and in so far as the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation.]
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conferred by Part III" (w.e.f. 20-6-1979).
2. Ins. by the Constitution (Thirty-eighth Amendment) Act, 1975, s. 7 (with retrospective
effect).
3. Added by the Constitution (Forty-second Amendment) Act, 1976, s. 53 (w.e.f. 3-1-1977).
1[(1B) Nothing in clause (1A) shall apply—
(a) to any law which does not contain a recital to the effect that such law is in relation to the Proclamation of Emergency in operation when it is made; or
(b) to any executive action taken otherwise than under a law containing such a recital.]
(2) An order made as aforesaid may extend to the whole or any part of the territory of India:
2[Provided that where a Proclamation of Emergency is in operation only in a part of the territory of India, any such order shall not extend to any other part of the territory of India unless the President, being satisfied that the security of India or any part of the territory thereof is threatened by activities in or in relation to the part of the territory of India in which the Proclamation of Emergency is in operation, considers such extension to be necessary.]
(3) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
3**359A.** [*Application of this Part to the State of Punjab.*].—Omitted by the Constitution (Sixty-third Amendment) *Act,* 1989, s. 3 (*w.e.f.* 6-1-1990).
360. Provisions as to financial emergency.—(1) If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect.
4[(2) A Proclamation issued under clause (1)—
(a) may be revoked or varied by a subsequent Proclamation; (b) shall be laid before each House of Parliament;
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and ceased to operate on the expiry of a period of two years from the commencement
of that Act, i.e. 30th day of March, 1988.
4. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 41, for cl. (2)
(w.e.f. 20-6-1979).
## (Part Xviii.—Emergency Provisions)
(c) shall cease to operate at the expiration of two months, unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:
Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in
sub-clause (c), and if a resolution approving the Proclamation has been passed by the Council of States, but no resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the Proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.]
(3) During the period any such Proclamation as is mentioned in clause (1) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose.
(4) Notwithstanding anything in this Constitution—
(a) any such direction may include—
(i) a provision requiring the reduction of salaries and allowances of all or any class of persons serving in connection with the affairs of a State;
(ii) a provision requiring all Money Bills or other Bills to which
the provisions of article 207 apply to be reserved for the
consideration of the President after they are passed by the Legislature
of the State;
(b) it shall be competent for the President during the period any
Proclamation issued under this article is in operation to issue directions
for the reduction of salaries and allowances of all or any class of persons
serving in connection with the affairs of the Union including the Judges
of the Supreme Court and the High Courts.
1[(5)
*
*
*
*
*]
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## Part Xix Miscellaneous 361. Protection Of President And Governors And Rajpramukhs.—(1)
The President, or the Governor or Rajpramukh of a State, shall not be answerable to any court for the exercise and performance of the powers and duties of his office or for any act done or purporting to be done by him in the exercise and performance of those powers and duties:
Provided that the conduct of the President may be brought under review by any court, tribunal or body appointed or designated by either House of Parliament for the investigation of a charge under article 61:
Provided further that nothing in this clause shall be construed as restricting the right of any person to bring appropriate proceedings against the Government of India or the Government of a State.
(2) No criminal proceedings whatsoever shall be instituted or continued against the President, or the Governor 1*** of a State, in any court during his term of office.
(3) No process for the arrest or imprisonment of the President, or the Governor 1*** of a State, shall issue from any court during his term of office.
(4) No civil proceedings in which relief is claimed against the President, or the Governor 1*** of a State, shall be instituted during his term of office in any court in respect of any act done or purporting to be done by him in his personal capacity, whether before or after he entered upon his office as President, or as Governor 1*** of such State, until the expiration of two months next after notice in writing has been delivered to the President or the Governor
1***, as the case may be, or left at his office stating the nature of the proceedings, the cause of action therefor, the name, description and place of residence of the party by whom such proceedings are to be instituted and the relief which he claims.
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1[361A. Protection of publication of proceedings of Parliament and State Legislatures.—(1) No person shall be liable to any proceedings, civil or criminal, in any court in respect of the publication in a newspaper of a substantially true report of any proceedings of either House of Parliament or the Legislative Assembly, or, as the case may be, either House of the Legislature, of a State, unless the publication is proved to have been made with malice:
Provided that nothing in this clause shall apply to the publication of any report of the proceedings of a secret sitting of either House of Parliament or the Legislative Assembly, or, as the case may be, either House of the Legislature, of a State.
(2) Clause (1) shall apply in relation to reports or matters broadcast by means of wireless telegraphy as part of any programme or service provided by means of a broadcasting station as it applies in relation to reports or matters published in a newspaper.
Explanation.—In this article, "newspaper" includes a news agency report containing material for publication in a newspaper.]
## 2[361B. Disqualification For Appointment On Remunerative Political
post.—A member of a House belonging to any political party who is disqualified for being a member of the House under paragraph 2 of the Tenth Schedule shall also be disqualified to hold any remunerative political post for duration of the period commencing from the date of his disqualification till the date on which the term of his office as such member would expire or till the date on which he contests an election to a House and is declared elected, whichever is earlier.
Explanation. - For the purposes of this article,—
(a) the expression "House" has the meaning assigned to it in clause (a) of paragraph 1 of the Tenth Schedule;
(b) the expression "remunerative political post" means any office—
(i) under the Government of India or the Government of a State where the salary or remuneration for such office is paid
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1. Art. 361A ins. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 42
(Part XIX.—MISCELLANEOUS)
out of the public revenue of the Government of India or the Government of the State, as the case may be; or
(ii) under a body, whether incorporated or not, which is wholly or partially owned by the Government of India or the Government of State, and the salary or remuneration for such office is paid by such body,
except where such salary or remuneration paid is compensatory in nature.]
362. [*Rights and privileges of Rulers of Indian States.*].—Omitted by the Constitution (Twenty-sixth Amendment) Act, 1971, s. 2 (w.e.f. 28-12-1971).
363. Bar to interference by courts in disputes arising out of certain treaties, agreements, etc.—(1) Notwithstanding anything in this Constitution but subject to the provisions of article 143, neither the Supreme Court nor any other court shall have jurisdiction in any dispute arising out of any provision of a treaty, agreement, covenant, engagement, *sanad* or other similar instrument which was entered into or executed before the commencement of this Constitution by any Ruler of an Indian State and to which the Government of the Dominion of India or any of its predecessor Governments was a party and which has or has been continued in operation after such commencement, or in any dispute in respect of any right accruing under or any liability or obligation arising out of any of the provisions of this Constitution relating to any such treaty, agreement, covenant, engagement, *sanad* or other similar instrument.
(2) In this article—
(a) "Indian State" means any territory recognised before the commencement of this Constitution by His Majesty or the Government of the Dominion of India as being such a State; and
(b) "Ruler" includes the Prince, Chief or other person recognised before such commencement by His Majesty or the Government of the Dominion of India as the Ruler of any Indian State.
1[363A. Recognition granted to Rulers of Indian States to cease and privy purses to be abolished.—Notwithstanding anything in this Constitution or in any law for the time being in force—
(a) the Prince, Chief or other person who, at any time before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was recognised by the President as the Ruler of an Indian State or any person who, at any time before such commencement, was recognised by the President as the successor of such ruler shall, on and
______________________________________________
from such commencement, cease to be recognised as such Ruler or the successor of such Ruler;
(b) on and from the commencement of the Constitution (Twentysixth Amendment) Act, 1971, privy purse is abolished and all rights, liabilities and obligations in respect of *privy purse* are extinguished and accordingly the Ruler or, as the case may be, the successor of such Ruler, referred to in clause (a) or any other person shall not be paid any sum as *privy purse*.]
364. Special provisions as to major ports and aerodromes.—(1)
Notwithstanding anything in this Constitution, the President may by public notification direct that as from such date as may be specified in the notification—
(a) any law made by Parliament or by the Legislature of a State shall not apply to any major port or aerodrome or shall apply thereto subject to such exceptions or modifications as may be specified in the notification, or
(b) any existing law shall cease to have effect in any major port or aerodrome except as respects things done or omitted to be done before the said date, or shall in its application to such port or aerodrome have effect subject to such exceptions or modifications as may be specified in the notification.
(2) In this article—
(a) "major port" means a port declared to be a major port by or under any law made by Parliament or any existing law and includes all areas for the time being included within the limits of such port;
(b) "aerodrome" means aerodrome as defined for the purposes of the enactments relating to airways, aircraft and air navigation.
365. Effect of failure to comply with, or to give effect to, directions given by the Union.—Where any State has failed to comply with, or to give effect to, any directions given in the exercise of the executive power of the Union under any of the provisions of this Constitution, it shall be lawful for the President to hold that a situation has arisen in which the Government of the State cannot be carried on in accordance with the provisions of this Constitution.
366. Definitions.—In this Constitution, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say—
## (Part Xix.—Miscellaneous)
(1) "agricultural income" means agricultural income as defined for the purposes of the enactments relating to Indian income-tax;
(2) "an Anglo-Indian" means a person whose father or any of whose other male progenitors in the male line is or was of European descent but who is domiciled within the territory of India and is or was born within such territory of parents habitually resident therein and not established there for temporary purposes only;
(3) "article" means an article of this Constitution; (4) "borrow" includes the raising of money by the grant of annuities, and "loan" shall be construed accordingly;
1[(4A)* *
* *]
(5) "clause" means a clause of the article in which the expression occurs;
(6) "corporation tax" means any tax on income, so far as that tax is payable by companies and is a tax in the case of which the following conditions are fulfilled:—
(a) that it is not chargeable in respect of agricultural income;
(b) that no deduction in respect of the tax paid by companies is, by any enactments which may apply to the tax, authorised to be made from dividends payable by the companies to individuals;
(c) that no provision exists for taking the tax so paid into account in computing for the purposes of Indian income-tax the total income of individuals receiving such dividends, or in computing the Indian income-tax payable by, or refundable to, such individuals;
(7) "corresponding Province", "corresponding Indian State" or
"corresponding State" means in cases of doubt such Province, Indian State or State as may be determined by the President to be the corresponding Province, the corresponding Indian State or the
______________________________________________
1. Cl. (4A) was ins. by the Constitution (Forty-second Amendment) Act, 1976, s. 54
corresponding State, as the case may be, for the particular purpose in question;
(8) "debt" includes any liability in respect of any obligation to repay capital sums by way of annuities and any liability under any guarantee, and "debt charges" shall be construed accordingly;
(9) "estate duty" means a duty to be assessed on or by reference to the principal value, ascertained in accordance with such rules as may be prescribed by or under laws made by Parliament or the Legislature of a State relating to the duty, of all property passing upon death or deemed, under the provisions of the said laws, so to pass;
(10) "existing law" means any law, Ordinance, order, bye-law, rule or regulation passed or made before the commencement of this Constitution by any Legislature, authority or person having power to make such a law, Ordinance, order, bye-law, rule or regulation;
(11) "Federal Court" means the Federal Court constituted under the Government of India Act, 1935;
(12) "goods" includes all materials, commodities, and articles;
1[(12A) "goods and services tax" means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption] ;
(13) "guarantee" includes any obligation undertaken before the commencement of this Constitution to make payments in the event of the profits of an undertaking falling short of a specified amount;
(14) "High Court" means any Court which is deemed for the purposes of this Constitution to be a High Court for any State and includes—
(a) any Court in the territory of India constituted or reconstituted under this Constitution as a High Court, and
(b) any other Court in the territory of India which may be declared by Parliament by law to be a High Court for all or any of the purposes of this Constitution;
______________________________________________
## (Part Xix.—Miscellaneous)
(15) "Indian State" means any territory which the Government of the Dominion of India recognised as such a State;
(16) "Part" means a Part of this Constitution; (17) "pension" means a pension, whether contributory or not, of any kind whatsoever payable to or in respect of any person, and includes retired pay so payable; a gratuity so payable and any sum or sums so payable by way of the return, with or without interest thereon or any other addition thereto, of subscriptions to a provident fund;
(18) "Proclamation of Emergency" means a Proclamation issued under clause (1) of article 352;
(19) "public notification" means a notification in the Gazette of India, or, as the case may be, the Official Gazette of a State;
(20) "railway" does not include—
(a) a tramway wholly within a municipal area, or (b) any other line of communication wholly situate in one State and declared by Parliament by law not to be a railway;
1[(21)*
*
*
*]
2[(22) "Ruler" means the Prince, Chief or other person who, at any time before the commencement of the Constitution (Twenty-sixth Amendment) Act, 1971, was recognised by the President as the Ruler of an Indian State or any person who, at any time before such commencement, was recognised by the President as the successor of such Ruler;]
(23) "Schedule" means a Schedule to this Constitution; (24) "Scheduled Castes" means such castes, races or tribes or parts of or groups within such castes, races or tribes as are deemed under article 341 to be Scheduled Castes for the purposes of this Constitution;
(25) "Scheduled Tribes" means such tribes or tribal communities or parts of or groups within such tribes or tribal communities as are
______________________________________________
1. Cl. (21) omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.
(w.e.f. 1-11-1956).
2. Subs. by the Constitution (Twenty-sixth Amendment) Act, 1971, s. 4
(w.e.f. 28-12-1971).
deemed under article 342 to be Scheduled Tribes for the purposes of this Constitution;
(26) "securities" includes stock;
1* * * 2[(26A) "Services" means anything other than goods;
(26B) "State" with reference to articles 246A, 268, 269, 269A and article 279A includes a Union territory with Legislature] ;
3[(26C) "socially and educationally backward classes" means such backward classes as are so deemed under article 342A for the purposes of the Central Government or the State or Union territory, as the case may be] ;
(27) "sub-clause" means a sub-clause of the clause in which the expression occurs;
(28) "taxation" includes the imposition of any tax or impost, whether general or local or special, and "tax" shall be construed accordingly;
(29) "tax on income" includes a tax in the nature of an excess profits tax;
4[(29A) "tax on the sale or purchase of goods" includes—
(a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;
(b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments;
(d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
______________________________________________
9-2016).
3. Cl. (26C) was ins. by the Constitution (One Hundred and Second Amendment) Act, 2018,
s.5 (w.e.f. 14-8-2018) and subsequently subs. by the Constitution (One Hundred and Fifth Amendment) Act, 2021, s. 4 (w.e.f. 15-9-2021).
4. Cl.(29A) ins. by the Constitution (Forty-sixth Amendment) Act, 1982, s. 4 (w.e.f. 2-2-1983).
(Part XIX.—MISCELLANEOUS)
(e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;]
1[(30) "Union territory" means any Union territory specified in the First Schedule and includes any other territory comprised within the territory of India but not specified in that Schedule.] 367. Interpretation.—(1) Unless the context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India.
(2) Any reference in this Constitution to Acts or laws of, or made by, Parliament, or to Acts or laws of, or made by, the Legislature of a State 2***, shall be construed as including a reference to an Ordinance made by the President or, to an Ordinance made by a Governor 3***, as the case may be.
(3) For the purposes of this Constitution "foreign State" means any State other than India:
Provided that, subject to the provisions of any law made by Parliament, the President may by order4 declare any State not to be a foreign State for such purposes as may be specified in the order.
5[(4) * * * *]
______________________________________________
1. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. for cl. (30)
(w.e.f. 1-11-1956).
2. The words and letters "specified in Part A or Part B of the First Schedule" omitted by
s. 29 and Sch., *ibid.* (w.e.f. 1-11-1956).
3. The words "or Rajpramukh" omitted by s. 29 and Sch.,*ibid*. (w.e.f. 1-11-1956).
4. See the Constitution (Declaration as to Foreign States) Order, 1950 (C.O. 2). 5. Added by the Constitution (Application to Jammu and Kashmir) Order, 2019
(C.O. 272)(w.e.f.5-8-2019). For the text of this C.O., see Appendix II.
## Part Xx Amendment Of The Constitution
368.
1[Power of Parliament to amend the Constitution and procedure therefor].— 2[(1) Notwithstanding anything in this Constitution, Parliament may in exercise of its constituent power amend by way of addition, variation or repeal any provision of this Constitution in accordance with the procedure laid down in this article.]
3[(2)] An amendment of this Constitution may be initiated only by the introduction of a Bill for the purpose in either House of Parliament, and when the Bill is passed in each House by a majority of the total membership of that House and by a majority of not less than two-thirds of the members of that House present and voting, 4[it shall be presented to the President who shall give his assent to the Bill and thereupon] the Constitution shall stand amended in accordance with the terms of the Bill:
Provided that if such amendment seeks to make any change in—
(a) article 54, article 55, article 73, 5[ article 162, article 241 or article
279A]; or
(b) Chapter IV of Part V, Chapter V of Part VI, or Chapter I of Part XI; or (c) any of the Lists in the Seventh Schedule; or (d) the representation of States in Parliament; or (e) the provisions of this article,
the amendment shall also require to be ratified by the Legislatures of not less than one-half of the States 1*** by resolutions to that effect passed by those Legislatures before the Bill making provision for such amendment is presented to the President for assent.
2[(3) Nothing in article 13 shall apply to any amendment made under this article.]
3[(4) No amendment of this Constitution (including the provisions of Part III) made or purporting to have been made under this article [whether before or after the commencement of section 55 of the Constitution (Forty-second Amendment) Act, 1976] shall be called in question in any court on any ground.
(5) For the removal of doubts, it is hereby declared that there shall be no limitation whatever on the constituent power of Parliament to amend by way of addition, variation or repeal the provisions of this Constitution under this article.]
## ______________________________________________ Part Xxi 1[Temporary, Transitional And Special Provisions]
369. Temporary power to Parliament to make laws with respect to certain matters in the State List as if they were matters in the Concurrent List.—Notwithstanding anything in this Constitution, Parliament shall, during a period of five years from the commencement of this Constitution, have power to make laws with respect to the following matters as if they were enumerated in the Concurrent List, namely:—
(a) trade and commerce within a State in, and the production, supply and distribution of, cotton and woollen textiles, raw cotton (including ginned cotton and unginned cotton or *kapas*), cotton seed, paper (including newsprint), food-stuffs (including edible oilseeds and oil), cattle fodder (including oil-cakes and other concentrates), coal
(including coke and derivatives of coal), iron, steel and mica;
(b) offences against laws with respect to any of the matters mentioned in clause (a), jurisdiction and powers of all courts except the Supreme Court with respect to any of those matters, and fees in respect of any of those matters but not including fees taken in any court, but any law made by Parliament, which Parliament would not but for the provisions of this article have been competent to make, shall, to the extent of the incompetency, cease to have effect on the expiration of the said period, except as respects things done or omitted to be done before the expiration thereof.
______________________________________________
1[370. Temporary provisions with respect to the State of Jammu and Kashmir.—(1) Notwithstanding anything in this Constitution,—
(a) the provisions of article 238 shall not apply in relation to the State of
Jammu and Kashmir;
(b) the power of Parliament to make laws for the said State shall be limited to—
(i) those matters in the Union List and the Concurrent List which, in consultation with the Government of the State, are declared by the President to correspond to matters specified in the Instrument of Accession governing the accession of the State to the Dominion of India as the matters with respect to which the Dominion Legislature may make laws for that State; and
## ______________________________________________ 1. In Exercise Of The Powers Conferred By Clause (3) Of Article 370 Read With Clause (1) Of
article 370 of the Constitution of India, the President, on the recommendation of
Parliament, is pleased to declare that, as from the 6th August, 2019 all clauses of said
article 370 shall cease to be operative except the following which shall read as under, namely:—
"370. All provisions of this Constitution, as amended from time to time,
without any modifications or exceptions, shall apply to the State of Jammu and
Kashmir notwithstanding anything contrary contained in article 152 or article 308 or any other article of this Constitution or any other provision of the Constitution of Jammu and Kashmir or any law, document, judgment, ordinance, order, by-law, rule, regulation, notification, custom or usage having the force of law in the territory of India, or any other instrument, treaty or agreement as envisaged under article 363 or otherwise.".
[See Appendix III (C.O.273)].
* In exercise of the powers conferred by clause (3) of the Constitution of India, the
President, on the recommendation of the Constituent Assembly of the State of Jammu and Kashmir, declared that, as from the 17th day of November, 1952, the said art. 370 shall be operative with the modification that for the *Explanation* in cl. (1) thereof, the
following *Explanation* is substituted, namely:—
"Explanation.– For the purposes of this article, the Government of the State
means the person for the time being recognised by the President on the recommendation of the Legislative Assembly of the State as the *Sadar-I Riyasat of Jammu and Kashmir, acting on the advice of the Council of Ministers of the State for the time being in office.".
(C.O. 44, dated the 15th November, 1952).
*Now "Governor".
(Part XXI.—Temporary, Transitional and Special Provisions)
(ii) such other matters in the said Lists as, with the concurrence of the Government of the State, the President may by order specify.
Explanation.—For the purposes of this article, the Government of the State means the person for the time being recognised by the President as the Maharaja of Jammu and Kashmir acting on the advice of the Council of Ministers for the time being in office under the Maharaja's Proclamation dated the fifth day of March, 1948;
(c) the provisions of article 1 and of this article shall apply in relation to that State;
(d) such of the other provisions of this Constitution shall apply in relation to that State subject to such exceptions and modifications as the President may by order specify:
Provided that no such order which relates to the matters specified in the Instrument of Accession of the State referred to in paragraph (i) of
sub-clause (b) shall be issued except in consultation with the Government of the State:
Provided further that no such order which relates to matters other than those referred to in the last preceding proviso shall be issued except with the concurrence of that Government.
(2) If the concurrence of the Government of the State referred to in paragraph (ii) of sub-clause (b) of clause (1) or in the second proviso to sub-clause (d) of that clause be given before the Constituent Assembly for the purpose of framing the Constitution of the State is convened, it shall be placed before such Assembly for such decision as it may take thereon.
(3) Notwithstanding anything in the foregoing provisions of this article, the President may, by public notification, declare that this article shall cease to be operative or shall be operative only with such exceptions and modifications and from such date as he may specify:
Provided that the recommendation of the Constituent Assembly of the State referred to in clause (2) shall be necessary before the President issues such a notification.
______________________________________________
See the Constitution (Application to Jammu and Kashmir) Order, 2019 (C.O. 272) in
1[**371. Special provision with respect to the States of** 2***
Maharashtra and Gujarat.—3[(1)* * * *
*]
(2) Notwithstanding anything in this Constitution, the President may by order made with respect to 4[the State of Maharashtra or Gujarat], provide for any special responsibility of the Governor for—
(a) the establishment of separate development boards for Vidarbha, Marathwada, 5[and the rest of Maharashtra or, as the case may be], Saurashtra, Kutch and the rest of Gujarat with the provision that a report on the working of each of these boards will be placed each year before the State Legislative Assembly;
(b) the equitable allocation of funds for developmental expenditure over the said areas, subject to the requirements of the State as a whole; and
(c) an equitable arrangement providing adequate facilities for technical education and vocational training, and adequate opportunities for employment in services under the control of the State Government, in respect of all the said areas, subject to the requirements of the State as a whole.]
6[**371A. Special provision with respect to the State of Nagaland.—**(1)
Notwithstanding anything in this Constitution,—
(a) no Act of Parliament in respect of—
(i) religious or social practices of the Nagas, (ii) Naga customary law and procedure, (iii) administration of civil and criminal justice involving decisions according to Naga customary law,
(iv) ownership and transfer of land and its resources, shall apply to the State of Nagaland unless the Legislative Assembly of Nagaland by a resolution so decides;
Act, 1973, s. 2 (w.e.f. 1-7-1974).
3. Cl. (1) omitted by s. 2, *ibid.* (w.e.f. 1-7-1974). 4. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 85, for "the State of
Bombay" (w.e.f. 1-5-1960).
5. Subs. by s. 85, *ibid.,* for "the rest of Maharashtra" (w.e.f. 1-5-1960).
6. Art. 371A ins. by the Constitution (Thirteenth Amendment) Act, 1962, s. 2 (w.e.f. 1-12-1963).
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(b) the Governor of Nagaland shall have special responsibility with respect to law and order in the State of Nagaland for so long as in his opinion internal disturbances occurring in the Naga Hills-Tuensang Area immediately before the formation of that State continue therein or in any part thereof and in the discharge of his functions in relation thereto the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken:
Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this sub-clause required to act in the exercise of his individual judgment, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgment:
Provided further that if the President on receipt of a report from the Governor or otherwise is satisfied that it is no longer necessary for the Governor to have special responsibility with respect to law and order in the State of Nagaland, he may by order direct that the Governor shall cease to have such responsibility with effect from such date as may be specified in the order;
(c) in making his recommendation with respect to any demand for a grant, the Governor of Nagaland shall ensure that any money provided by the Government of India out of the Consolidated Fund of India for any specific service or purpose is included in the demand for a grant relating to that service or purpose and not in any other demand;
(d) as from such date as the Governor of Nagaland may by public notification in this behalf specify, there shall be established a regional council for the Tuensang district consisting of thirty-five members and the Governor shall in his discretion make rules providing for—
(i) the composition of the regional council and the manner in which the members of the regional council shall be chosen:
Provided that the Deputy Commissioner of the Tuensang district shall be the Chairman *ex officio* of the regional council and the Vice-Chairman of the regional council shall be elected by the members thereof from amongst themselves;
(ii) the qualifications for being chosen as, and for being, members of the regional council;
(iii) the term of office of, and the salaries and allowances, if any, to be paid to members of, the regional council;
(Part XXI.—Temporary, Transitional and Special Provisions)
(iv) the procedure and conduct of business of the regional council;
(v) the appointment of officers and staff of the regional council and their conditions of services; and
(vi) any other matter in respect of which it is necessary to make rules for the constitution and proper functioning of the regional council.
(2) Notwithstanding anything in this Constitution, for a period of ten years from the date of the formation of the State of Nagaland or for such further period as the Governor may, on the recommendation of the regional council, by public notification specify in this behalf,—
(a) the administration of the Tuensang district shall be carried on by the Governor;
(b) where any money is provided by the Government of India to the Government of Nagaland to meet the requirements of the State of Nagaland as a whole, the Governor shall in his discretion arrange for an equitable allocation of that money between the Tuensang district and the rest of the State;
(c) no Act of the Legislature of Nagaland shall apply to Tuensang district unless the Governor, on the recommendation of the regional council, by public notification so directs and the Governor in giving such direction with respect to any such Act may direct that the Act shall in its application to the Tuensang district or any part thereof have effect subject to such exceptions or modifications as the Governor may specify on the recommendation of the regional council:
Provided that any direction given under this sub-clause may be given so as to have retrospective effect;
(d) the Governor may make regulations for the peace, progress and good government of the Tuensang district and any regulations so made may repeal or amend with retrospective effect, if necessary, any Act of Parliament or any other law which is for the time being applicable to that district;
(e) (i) one of the members representing the Tuensang district in the Legislative Assembly of Nagaland shall be appointed Minister for Tuensang affairs by the Governor on the advice of the Chief Minister and the Chief Minister in tendering his advice shall act on the recommendation of the majority of the members as aforesaid1;
______________________________________________
1. Paragraph 2 of the Constitution (Removal of Difficulties) Order No. X provides
(w.e.f. 1-12-1963) that article 371A of the Constitution of India shall have effect as if the following proviso were added to paragraph (i) of sub-clause (e) of clause (2)
thereof, namely:—
"Provided that the Governor may, on the advice of the Chief Minister, appoint any person as Minister for Tuensang affairs to act as such until such time as persons are chosen in accordance with law to fill the seats allocated to the Tuensang district, in the Legislative Assembly of Nagaland.".
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(ii) the Minister for Tuensang affairs shall deal with, and have direct access to the Governor on, all matters relating to the Tuensang district but he shall keep the Chief Minister informed about the same;
(f) notwithstanding anything in the foregoing provisions of this clause, the final decision on all matters relating to the Tuensang district shall be made by the Governor in his discretion;
(g) in articles 54 and 55 and clause (4) of article 80, references to the elected members of the Legislative Assembly of a State or to each such member shall include references to the members or member of the Legislative Assembly of Nagaland elected by the regional council established under this article;
(h) in article 170—
(i) clause (1) shall, in relation to the Legislative Assembly of Nagaland, have effect as if for the word "sixty", the word "fortysix" had been substituted;
(ii) in the said clause, the reference to direct election from territorial constituencies in the State shall include election by the members of the regional council established under this article;
(iii) in clauses (2) and (3), references to territorial constituencies shall mean references to territorial constituencies in the Kohima and Mokokchung districts.
(3) If any difficulty arises in giving effect to any of the foregoing provisions of this article, the President may by order do anything (including any adaptation or modification of any other article) which appears to him to be necessary for the purpose of removing that difficulty:
Provided that no such order shall be made after the expiration of three years from the date of the formation of the State of Nagaland.
Explanation..—In this article, the Kohima, Mokokchung and Tuensang districts shall have the same meanings as in the State of Nagaland Act, 1962.]
1[371B. **Special provision with respect to the State of Assam.**—
Notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Assam, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
members of that Assembly elected from the tribal areas specified in 1[Part I] of the table appended to paragraph 20 of the Sixth Schedule and such number of other members of that Assembly as may be specified in the order and for the modifications to be made in the rules of procedure of that Assembly for the constitution and proper functioning of such committee.]
2[**371C. Special provision with respect to the State of Manipur.—**(1)
Notwithstanding anything in this Constitution, the President may, by order made with respect to the State of Manipur, provide for the constitution and functions of a committee of the Legislative Assembly of the State consisting of members of that Assembly elected from the Hill Areas of that State, for the modifications to be made in the rules of business of the Government and in the rules of procedure of the Legislative Assembly of the State and for any special responsibility of the Governor in order to secure the proper functioning of such committee.
(2) The Governor shall annually, or whenever so required by the President, make a report to the President regarding the administration of the Hill Areas in the State of Manipur and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.
Explanation.—In this article, the expression "Hill Areas" means such areas as the President may, by order, declare to be Hill areas.]
3[371D. Special provisions with respect to 4[the State of Andhra Pradesh or the State of Telangana].—5[(1) The President may by order made with respect to the State of Andhra Pradesh or the State of Telangana, provide, having regard to the requirement of each State, for equitable opportunities and facilities for the people belonging to different parts of such State, in the matter of public employment and in the matter of education, and different provisions may be made for various parts of the States.]
(2) An order made under clause (1) may, in particular,—
2. Art. 371C ins. by the Constitution (Twenty-seventh Amendment) Act, 1971, s. 5 (w.e.f.
15-2-1972).
3. Arts. 371D and 371E ins. by the Constitution (Thirty-second Amendment) Act, 1973,
s. 3 (w.e.f. 1-7-1974).
4. Subs. by the Andhra Pradesh Reorganisation Act, 2014 (6 of 2014), s. 97, for "the
State of Andhra Pradesh" (w.e.f. 2-6-2014).
5. Subs. by s. 97, *ibid*. for cl. (1) (w.e.f. 2-6-2014).
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised;
(b) specify any part or parts of the State which shall be regarded as the local area—
(i) for direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government;
(ii) for direct recruitment to posts in any cadre under any local authority within the State; and
(iii) for the purposes of admission to any University within the State or to any other educational institution which is subject to the control of the State Government;
(c) specify the extent to which, the manner in which and the conditions subject to which, preference or reservation shall be given or made—
(i) in the matter of direct recruitment to posts in any such cadre referred to in sub-clause (b) as may be specified in this behalf in the order;
(ii) in the matter of admission to any such University or other educational institution referred to in sub-clause (b) as may be specified in this behalf in the order, to or in favour of candidates who have resided or studied for any period specified in the order in the local area in respect of such cadre, University or other educational institution, as the case may be. (3) The President may, by order, provide for the constitution of an Administrative Tribunal for 1[the State of Andhra Pradesh and for the State of Telangana] to exercise such jurisdiction, powers and authority [including any jurisdiction, power and authority which immediately before the commencement of the Constitution (Thirty-second Amendment) Act, 1973, was exercisable by any court (other than the Supreme Court) or by any tribunal or other authority] as may be specified in the order with respect to the following matters, namely:—
______________________________________________
1. Subs. by the Andhra Pradesh Reorganisation Act, 2014 (6 of 2014), s. 97, for "the
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(a) appointment, allotment or promotion to such class or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order;
(b) seniority of persons appointed, allotted or promoted to such class or classes of posts in any civil service of the State, or to such class or classes of civil posts under the State, or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order;
(c) such other conditions of service of persons appointed, allotted or promoted to such class or classes of posts in any civil service of the State or to such class or classes of civil posts under the State or to such class or classes of posts under the control of any local authority within the State, as may be specified in the order. (4) An order made under clause (3) may—
(a) authorise the Administrative Tribunal to receive representations for the redress of grievances relating to any matter within its jurisdiction as the President may specify in the order and to make such orders thereon as the Administrative Tribunal deems fit;
(b) contain such provisions with respect to the powers and authorities and procedure of the Administrative Tribunal (including provisions with respect to the powers of the Administrative Tribunal to punish for contempt of itself) as the President may deem necessary;
(c) provide for the transfer to the Administrative Tribunal of such classes of proceedings, being proceedings relating to matters within its jurisdiction and pending before any court (other than the Supreme Court) or tribunal or other authority immediately before the commencement of such order, as may be specified in the order;
(d) contain such supplemental, incidental and consequential provisions (including provisions as to fees and as to limitation, evidence or for the application of any law for the time being in force subject to any exceptions or modifications) as the President may deem necessary.
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(5) The Order of the Administrative Tribunal finally disposing of any case shall become effective upon its confirmation by the State Government or on the expiry of three months from the date on which the order is made, whichever is earlier:
Provided that the State Government may, by special order made in writing and for reasons to be specified therein, modify or annul any order of the Administrative Tribunal before it becomes effective and in such a case, the order of the Administrative Tribunal shall have effect only in such modified form or be of no effect, as the case may be.
(6) Every special order made by the State Government under the proviso to clause (5) shall be laid, as soon as may be after it is made, before both Houses of the State Legislature.
(7) The High Court for the State shall not have any powers of superintendence over the Administrative Tribunal and no court (other than the Supreme Court) or tribunal shall exercise any jurisdiction, power or authority in respect of any matter subject to the jurisdiction, power or authority of, or in relation to, the Administrative Tribunal.
(8) If the President is satisfied that the continued existence of the Administrative Tribunal is not necessary, the President may by order abolish the Administrative Tribunal and make such provisions in such order as he may deem fit for the transfer and disposal of cases pending before the Tribunal immediately before such abolition.
(9) Notwithstanding any judgment, decree or order of any court, tribunal or other authority,—
(a) no appointment, posting, promotion or transfer of any person—
(i) made before the 1st day of November, 1956, to any post under the Government of, or any local authority within, the State of Hyderabad as it existed before that date; or
(ii) made before the commencement of the Constitution
(Thirty-second Amendment) Act, 1973, to any post under the Government of, or any local or other authority within, the State of Andhra Pradesh; and
(b) no action taken or thing done by or before any person referred to in sub-clause (a),
______________________________________________
*In P. Sambamurthy and Others Vs. State of Andhra Pradesh and Others* (1987)
shall be deemed to be illegal or void or ever to have become illegal or void merely on the ground that the appointment, posting, promotion or transfer of such person was not made in accordance with any law, then in force, providing for any requirement as to residence within the State of Hyderabad or, as the case may be, within any part of the State of Andhra Pradesh, in respect of such appointment, posting, promotion or transfer.
(10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force.
371E. Establishment of Central University in Andhra Pradesh.—
Parliament may by law provide for the establishment of a University in the State of Andhra Pradesh.]
1[371F. Special provisions with respect to the State of Sikkim.—
Notwithstanding anything in this Constitution,—
(a) the Legislative Assembly of the State of Sikkim shall consist of not less than thirty members;
(b) as from the date of commencement of the Constitution (Thirtysixth Amendment) Act, 1975 (hereafter in this article referred to as the appointed day)—
(i) the Assembly for Sikkim formed as a result of the elections held in Sikkim in April, 1974 with thirty-two members elected in the said elections (hereinafter referred to as the sitting members) shall be deemed to be the Legislative Assembly of the State of Sikkim duly constituted under this Constitution;
(ii) the sitting members shall be deemed to be the members of the Legislative Assembly of the State of Sikkim duly elected under this Constitution; and
(iii) the said Legislative Assembly of the State of Sikkim shall exercise the powers and perform the functions of the Legislative Assembly of a State under this Constitution;
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(c) in the case of the Assembly deemed to be the Legislative Assembly of the State of Sikkim under clause (b), the references to the period of 1[five years], in clause (1) of article 172 shall be construed as references to a period of 2[four years] and the said period of 2[four years]
shall be deemed to commence from the appointed day;
(d) until other provisions are made by Parliament by law, there shall be allotted to the State of Sikkim one seat in the House of the People and the State of Sikkim shall form one parliamentary constituency to be called the parliamentary constituency for Sikkim;
(e) the representative of the State of Sikkim in the House of the People in existence on the appointed day shall be elected by the members of the Legislative Assembly of the State of Sikkim;
(f) Parliament may, for the purpose of protecting the rights and interests of the different sections of the population of Sikkim make provision for the number of seats in the Legislative Assembly of the State of Sikkim which may be filled by candidates belonging to such sections and for the delimitation of the assembly constituencies from which candidates belonging to such sections alone may stand for election to the Legislative Assembly of the State of Sikkim;
(g) the Governor of Sikkim shall have special responsibility for peace and for an equitable arrangement for ensuring the social and economic advancement of different sections of the population of Sikkim and in the discharge of his special responsibility under this clause, the Governor of Sikkim shall, subject to such directions as the President may, from time to time, deem fit to issue, act in his discretion;
(h) all property and assets (whether within or outside the territories comprised in the State of Sikkim) which immediately before the appointed day were vested in the Government of Sikkim or in any other authority or in any person for the purposes of the Government of Sikkim shall, as from the appointed day, vest in the Government of the State of Sikkim;
______________________________________________
(w.e.f. 3-1-1977) and further subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 43, for "six years" (w.e.f. 6-9-1979).
2. Subs. by s. 56, *ibid.*, for "four years" (w.e.f. 3-1-1977) and further subs. by s. 43, *ibid.*,
for "five years", respectively (w.e.f. 6-9-1979).
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(i) the High Court functioning as such immediately before the appointed day in the territories comprised in the State of Sikkim shall, on and from the appointed day, be deemed to be the High Court for the State of Sikkim;
(j) all courts of civil, criminal and revenue jurisdiction, all authorities and all officers, judicial, executive and ministerial, throughout the territory of the State of Sikkim shall continue on and from the appointed day to exercise their respective functions subject to the provisions of this Constitution;
(k) all laws in force immediately before the appointed day in the territories comprised in the State of Sikkim or any part thereof shall continue to be in force therein until amended or repealed by a competent Legislature or other competent authority;
(l) for the purpose of facilitating the application of any such law as is referred to in clause (k) in relation to the administration of the State of Sikkim and for the purpose of bringing the provisions of any such law into accord with the provisions of this Constitution, the President may, within two years from the appointed day, by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon, every such law shall have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law;
(m) neither the Supreme Court nor any other court shall have jurisdiction in respect of any dispute or other matter arising out of any treaty, agreement, engagement or other similar instrument relating to Sikkim which was entered into or executed before the appointed day and to which the Government of India or any of its predecessor Governments was a party, but nothing in this clause shall be construed to derogate from the provisions of article 143;
(n) the President may, by public notification, extend with such restrictions or modifications as he thinks fit to the State of Sikkim any enactment which is in force in a State in India at the date of the notification;
(o) if any difficulty arises in giving effect to any of the foregoing provisions of this article, the President may, by order, do anything
(including any adaptation or modification of any other article) which appears to him to be necessary for the purpose of removing that difficulty:
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
Provided that no such order shall be made after the expiry of two years from the appointed day;
(p) all things done and all actions taken in or in relation to the State of Sikkim or the territories comprised therein during the period commencing on the appointed day and ending immediately before the date on which the Constitution (Thirty-sixth Amendment) Act, 1975, receives the assent of the President shall, in so far as they are in conformity with the provisions of this Constitution as amended by the Constitution (Thirty-sixth Amendment) Act, 1975, be deemed for all purposes to have been validly done or taken under this Constitution as so amended.]
1[371G. Special provision with respect to the State of Mizoram.—
Notwithstanding anything in this Constitution,—
(a) no Act of Parliament in respect of—
(i) religious or social practices of the Mizos, (ii) Mizo customary law and procedure, (iii) administration of civil and criminal justice involving decisions according to Mizo customary law,
(iv) ownership and transfer of land, shall apply to the State of Mizoram unless the Legislative Assembly of the State of Mizoram by a resolution so decides:
Provided that nothing in this clause shall apply to any Central Act in force in the Union territory of Mizoram immediately before the commencement of the Constitution (Fifty-third Amendment) Act, 1986;
(b) the Legislative Assembly of the State of Mizoram shall consist of not less than forty members.]
2[371H. Special provision with respect to the State of Arunachal Pradesh.—Notwithstanding anything in this Constitution,—
(a) the Governor of Arunachal Pradesh shall have special responsibility with respect to law and order in the State of Arunachal Pradesh and in the discharge of his functions in relation thereto, the Governor shall, after consulting the Council of Ministers, exercise his individual judgment as to the action to be taken:
## ______________________________________________ (Part Xxi.—Temporary, Transitional And Special Provisions)
Provided that if any question arises whether any matter is or is not a matter as respects which the Governor is under this clause required to act in the exercise of his individual judgment, the decision of the Governor in his discretion shall be final, and the validity of anything done by the Governor shall not be called in question on the ground that he ought or ought not to have acted in the exercise of his individual judgment:
Provided further that if the President on receipt of a report from the Governor or otherwise is satisfied that it is no longer necessary for the Governor to have special responsibility with respect to law and order in the State of Arunachal Pradesh, he may by order direct that the Governor shall cease to have such responsibility with effect from such date as may be specified in the order;
(b) the Legislative Assembly of the State of Arunachal Pradesh shall consist of not less than thirty members.]
1[371-I. Special provision with respect to the State of Goa.—
Notwithstanding anything in this Constitution, the Legislative Assembly of the State of Goa shall consist of not less than thirty members.]
2[**371J. Special provisions with respect to the State of Karnataka.—**
(1) The President may, by order made with respect to the State of Karnataka, provide for any special responsibility of the Governor for—
(a) establishment of a separate development board for Hyderabad-
Karnataka region with the provision that a report on the working of the board will be placed each year before the State Legislative Assembly;
(b) equitable allocation of funds for developmental expenditure over the said region, subject to the requirements of the State as a whole; and
(c) equitable opportunities and facilities for the people belonging to the said region, in matters of public employment, education and vocational training, subject to the requirements of the State as a whole. (2) An order made under sub- clause (c) of clause (1) may provide for—
(a) reservation of a proportion of seats educational and vocational training institutions in the Hyderabad-Karnataka region for students who belong to that region by birth or by domicile; and
______________________________________________
1. Art.37-I ins. by the Constitution (Fifty-sixth Amendment) Act, 1987, s. 2
## (Part Xxi.—Temporary, Transitional And Special Provisions)
(b) identification of posts or classes of posts under the State Government and in any body or organisation under the control of the State Government in the Hyderabad-Karnataka region and reservation of a proportion of such posts for persons who belong to that region by birth or by domicile and for appointment thereto by direct recruitment or by promotion or in any other manner as may be specified in the order.] 372. Continuance in force of existing laws and their adaptation.—(1)
Notwithstanding the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.
(2) For the purpose of bringing the provisions of any law in force in the territory of India into accord with the provisions of this Constitution, the President may by order make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law.
(3) Nothing in clause (2) shall be deemed—
(a) to empower the President to make any adaptation or modification of any law after the expiration of 1[three years] from the commencement of this Constitution; or
(b) to prevent any competent Legislature or other competent authority from repealing or amending any law adapted or modified by the President under the said clause.
______________________________________________
India, Extraordinary, Part II, Section 3, p. 287, notification No. S.R.O. 1140B, dated the 2nd July, 1952, Gazette of India, Extraordinary, Part II, Section 3, p. 616/1, and the Adaptation of the Travancore-Cochin Land Acquisition Laws Order, 1952, dated the 20th November, 1952, Gazette of India, Extraordinary, Part II, Section 3, p. 923.
1. Subs. by the Constitution (First Amendment) Act, 1951, s. 12 for "two years"
(w.e.f. 18-6-1951).
(Part XXI.—Temporary, Transitional and Special Provisions)
Explanation I.—The expression "law in force" in this article shall include a law passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that it or parts of it may not be then in operation either at all or in particular areas.
Explanation II.—Any law passed or made by a Legislature or other competent authority in the territory of India which immediately before the commencement of this Constitution had extra-territorial effect as well as effect in the territory of India shall, subject to any such adaptations and modifications as aforesaid, continue to have such extra-territorial effect.
Explanation III.—Nothing in this article shall be construed as continuing any temporary law in force beyond the date fixed for its expiration or the date on which it would have expired if this Constitution had not come into force.
Explanation IV.—An Ordinance promulgated by the Governor of a Province under section 88 of the Government of India Act, 1935, and in force immediately before the commencement of this Constitution shall, unless withdrawn by the Governor of the corresponding State earlier, cease to operate at the expiration of six weeks from the first meeting after such commencement of the Legislative Assembly of that State functioning under clause (1) of article 382, and nothing in this article shall be construed as continuing any such Ordinance in force beyond the said period.
1[**372A. Power of the President to adapt laws.**—(1) For the purposes of bringing the provisions of any law in force in India or in any part thereof, immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, into accord with the provisions of this Constitution as amended by that Act, the President may by order made before the first day of November, 1957, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law.
(2) Nothing in clause (1) shall be deemed to prevent a competent Legislature or other competent authority from repealing or amending any law adapted or modified by the President under the said clause.]
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
373. Power of President to make order in respect of persons under preventive detention in certain cases.—Until provision is made by Parliament under clause (7) of article 22, or until the expiration of one year from the commencement of this Constitution, whichever is earlier, the said article shall have effect as if for any reference to Parliament in clauses (4) and (7) thereof there were substituted a reference to the President and for any reference to any law made by Parliament in those clauses there were substituted a reference to an order made by the President.
374. Provisions as to Judges of the Federal Court and proceedings pending in the Federal Court or before His Majesty in Council.—(1) The Judges of the Federal Court holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the Supreme Court and shall thereupon be entitled to such salaries and allowances and to such rights in respect of leave of absence and pension as are provided for under article 125 in respect of the Judges of the Supreme Court.
(2) All suits, appeals and proceedings, civil or criminal, pending in the Federal Court at the commencement of this Constitution shall stand removed to the Supreme Court, and the Supreme Court shall have jurisdiction to hear and determine the same, and the judgments and orders of the Federal Court delivered or made before the commencement of this Constitution shall have the same force and effect as if they had been delivered or made by the Supreme Court.
(3) Nothing in this Constitution shall operate to invalidate the exercise of jurisdiction by His Majesty in Council to dispose of appeals and petitions from, or in respect of, any judgment, decree or order of any court within the territory of India in so far as the exercise of such jurisdiction is authorised by law, and any order of His Majesty in Council made on any such appeal or petition after the commencement of this Constitution shall for all purposes have effect as if it were an order or decree made by the Supreme Court in the exercise of the jurisdiction conferred on such Court by this Constitution.
(4) On and from the commencement of this Constitution the jurisdiction of the authority functioning as the Privy Council in a State specified in Part B of the First Schedule to entertain and dispose of appeals and petitions from or in respect of any judgment, decree or order of any court within that State shall cease, and all appeals and other proceedings pending before the said authority at such commencement shall be transferred to, and disposed of by, the Supreme Court.
(5) Further provision may be made by Parliament by law to give effect to the provisions of this article.
## (Part Xxi.—Temporary, Transitional And Special Provisions)
375. Courts, authorities and officers to continue to function subject to the provisions of the Constitution.—All courts of civil, criminal and revenue jurisdiction, all authorities and all officers, judicial, executive and ministerial, throughout the territory of India, shall continue to exercise their respective functions subject to the provisions of this Constitution.
376. Provisions as to Judges of High Courts.—(1) Notwithstanding anything in clause (2) of article 217, the Judges of a High Court in any Province holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the High Court in the corresponding State, and shall thereupon be entitled to such salaries and allowances and to such rights in respect of leave of absence and pension as are provided for under article 221 in respect of the Judges of such High Court. 1[Any such Judge shall, notwithstanding that he is not a citizen of India, be eligible for appointment as Chief Justice of such High Court, or as Chief Justice or other Judge of any other High Court.]
(2) The Judges of a High Court in any Indian State corresponding to any State specified in Part B of the First Schedule holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the Judges of the High Court in the State so specified and shall, notwithstanding anything in clauses (1) and (2) of article 217 but subject to the proviso to clause (1) of that article, continue to hold office until the expiration of such period as the President may by order determine.
(3) In this article, the expression "Judge" does not include an acting Judge or an additional Judge.
377. Provisions as to Comptroller and Auditor-General of India.—The Auditor-General of India holding office immediately before the commencement of this Constitution shall, unless he has elected otherwise, become on such commencement the Comptroller and Auditor-General of India and shall thereupon be entitled to such salaries and to such rights in respect of leave of absence and pension as are provided for under clause (3) of article 148 in respect of the Comptroller and Auditor-General of India and be entitled to continue to hold office until the expiration of his term of office as determined under the provisions which were applicable to him immediately before such commencement.
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
378. Provisions as to Public Service Commissions.—(1) The members of the Public Service Commission for the Dominion of India holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the members of the Public Service Commission for the Union and shall, notwithstanding anything in clauses (1) and (2) of article 316 but subject to the proviso to clause (2) of that article, continue to hold office until the expiration of their term of office as determined under the rules which were applicable immediately before such commencement to such members.
(2) The Members of a Public Service Commission of a Province or of a Public Service Commission serving the needs of a group of Provinces holding office immediately before the commencement of this Constitution shall, unless they have elected otherwise, become on such commencement the members of the Public Service Commission for the corresponding State or the members of the Joint State Public Service Commission serving the needs of the corresponding States, as the case may be, and shall, notwithstanding anything in clauses (1) and (2) of article 316 but subject to the proviso to clause (2) of that article, continue to hold office until the expiration of their term of office as determined under the rules which were applicable immediately before such commencement to such members.
1[378A. Special provision as to duration of Andhra Pradesh Legislative Assembly.—Notwithstanding anything contained in article 172, the Legislative Assembly of the State of Andhra Pradesh as constituted under the provisions of sections 28 and 29 of the States Reorganisation Act, 1956, shall, unless sooner dissolved, continue for a period of five years from the date referred to in the said section 29 and no longer and the expiration of the said period shall operate as a dissolution of that Legislative Assembly.]
379. [Provisions as to provisional Parliament and the Speaker and Deputy Speaker thereof.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
380. [Provision as to President.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
381. [Council of Ministers of the President.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
382. [Provisions as to provisional Legislatures for States in Part A of the First Schedule.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
383. [Provision as to Governors of Provinces.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
______________________________________________
## (Part Xxi.—Temporary, Transitional And Special Provisions)
384. [Council of Ministers of the Governors.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
385. [Provision as to provisional Legislatures in States in Part B of the First Schedule.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
386. [Council of Ministers for States in Part B of the First Schedule.].—
Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
387. [Special provision as to determination of population for the purposes of certain elections.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
388. [Provisions as to the filling of casual vacancies in the provisional Parliament and provisional Legislatures of the States.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
389. [Provision as to Bills pending in the Dominion Legislatures and in the Legislatures of Provinces and Indian States.] Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
390. [Money received or raised or expenditure incurred between the commencement of the Constitution and the 31st day of March, 1950.—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11- 1956).
391. [Power of the President to amend the First and Fourth Schedules in certain contingencies.].—Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
392. Power of the President to remove difficulties.—(1) The President may, for the purpose of removing any difficulties, particularly in relation to the transition from the provisions of the Government of India Act, 1935, to the provisions of this Constitution, by order direct that this Constitution shall, during such period as may be specified in the order, have effect subject to such adaptations, whether by way of modification, addition or omission, as he may deem to be necessary or expedient:
Provided that no such order shall be made after the first meeting of Parliament duly constituted under Chapter II of Part V.
(2) Every order made under clause (1) shall be laid before Parliament.
(3) The powers conferred on the President by this article, by article 324, by clause (3) of article 367 and by article 391 shall, before the commencement of this Constitution, be exercisable by the Governor-General of the Dominion of India.
## Short Title, Commencement, 1[Authoritative Text In Hindi] And Repeals
393. Short title.—This Constitution may be called the Constitution of India.
394. Commencement.—This article and articles 5, 6, 7, 8, 9, 60, 324,
366, 367, 379, 380, 388, 391, 392 and 393 shall come into force at once, and the remaining provisions of this Constitution shall come into force on the twenty-sixth day of January, 1950, which day is referred to in this Constitution as the commencement of this Constitution.
2[**394A. Authoritative text in the Hindi language.**—(1) The President shall cause to be published under his authority,—
(a) the translation of this Constitution in the Hindi language, signed by the members of the Constituent Assembly, with such modifications as may be necessary to bring it in conformity with the language, style and terminology adopted in the authoritative texts of Central Acts in the Hindi language, and incorporating therein all the amendments of this Constitution made before such publication; and
(b) the translation in the Hindi language of every amendment of this Constitution made in the English language.
(2) The translation of this Constitution and of every amendment thereof published under clause (1) shall be construed to have the same meaning as the original thereof and if any difficulty arises in so construing any part of such translation, the President shall cause the same to be revised suitably.
(3) The translation of this Constitution and of every amendment thereof published under this article shall be deemed to be, for all purposes, the authoritative text thereof in the Hindi language.]
395. Repeals.—The Indian Independence Act, 1947, and the Government of India Act, 1935, together with all enactments amending or supplementing the latter Act, but not including the Abolition of Privy Council Jurisdiction Act, 1949, are hereby repealed.
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## 1[**First Schedule** [Articles 1 And 4] I. The States
| Name | Territories |
|----------------------------------------------------------------|----------------|
| 1. | Andhra |
| Pradesh | |
| 2 | |
| [The territories specified in sub-section ( | 1 |
| the Andhra State Act, 1953, sub-section ( | 1 |
| the States Reorganisation Act, 1956, the First Schedule to | |
| the Andhra Pradesh and Madras (Alteration of Boundaries) | |
| Act, 1959, and the Schedule to the Andhra Pradesh and | |
| Mysore (Transfer of Territory) Act, 1968, but excluding | |
| the territories specified in the Second Schedule to the | |
| Andhra Pradesh and Madras (Alteration of Boundaries) | |
| Act, 1959 | |
| ] | |
| | |
| 3 | |
| [and the territories specified in section 3 of | |
| the Andhra Pradesh Reorganisation Act, 2014 | ] |
| 2. Assam | The |
| commencement of this Constitution were comprised in the | |
| Province of Assam, the Khasi States and the Assam Tribal | |
| Areas, but excluding the territories specified in the | |
| Schedule to the Assam (Alteration of Boundaries) Act, | |
| 1951 | |
| 4 | |
| [and the territories specified in sub-section ( | 1 |
| section 3 of the State of Nagaland Act, 1962] | |
| 5 | |
| [and the | |
| territories specified in sections 5, 6 and 7 of the North- | |
| Eastern Areas (Reorganisation) Act, 1971] | |
| 6 | |
| [and the | |
| territories referred to in Part I of the Second Schedule to | |
| the Constitution (One Hundredth Amendment) Act, | |
| 2015, notwithstanding anything contained in clause ( | a |
| of section 3 of the Constitution (Ninth Amendment) | |
| Act, 1960, so far as it relates to the territories referred to | |
| in Part I of the Second Schedule to the Constitution | |
| (One Hundredth Amendment) Act, 2015.] | |
4. Added by the State of Nagaland Act, 1962 (27 of 1962), s. 4 (w.e.f. 1-12-1963). 5. Added by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972). 6. Added by the Constitution (One Hundredth Amendment) Act, 2015, s. 3 (w.e.f. 31-7-2015). For
the text of the Act, see Appendix I.
## (First Schedule)
Name
Territories
3. Bihar
1[The
territories
which
immediately before the
commencement of this Constitution were either
comprised in the Province of Bihar or were being administered as if they formed part of that Province and the territories specified in clause (a) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968, but excluding the territories specified in sub-section (1) of section 3 of the Bihar and West Bengal (Transfer of Territories) Act,
1956, and the territories specified in clause (b) of
sub-section (1) of section 3 of the first mentioned Act
2[and the territories specified in section 3 of the Bihar
Reorganisation Act, 2000].]
3[4. Gujarat
The territories referred to in sub-section (1) of section 3 of
the Bombay Reorganisation Act, 1960.]
5. Kerala
The territories specified in sub-section (1) of section 5
of the States Reorganisation Act, 1956.
6.
Madhya
Pradesh
The territories specified in sub-section (1) of section 9 of
the States Reorganisation Act, 1956 4[and the First
Schedule to the Rajasthan and Madhya Pradesh (Transfer
of Territories) Act, 1959], 5[but excluding the territories
specified in section 3 of the Madhya Pradesh Reorganisation Act, 2000.]
## ______________________________________________ 1. Subs. By The Bihar And Uttar Pradesh (Alteration Of Boundaries) Act, 1968
(24 of 1968), s. 4, for the former entry (w.e.f. 10-6-1970).
2. Added by the Bihar Reorganisation Act, 2000 (30 of 2000), s. 5 (w.e.f. 15-11-
2000).
3. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960). 4. Ins. by the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959
(47 of 1959), s. 4 (w.e.f. 1-10-1959).
5. Added by the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), s. 5
(w.e.f. 1-11-2000).
## (First Schedule)
Name
Territories
The
territories
which
immediately
before
the
1[7. Tamil Nadu]
commencement
of
this
Constitution
were
either
comprised in the Province of Madras or were being administered as if they formed part of that Province and the territories specified in section 4 of the States
Reorganisation Act, 1956, 2[and the Second Schedule to
the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959], but excluding the territories specified in sub-section (1) of section 3 and sub-section
(1) of section 4 of the Andhra State Act, 1953 and 3[the
territories specified in clause (b) of sub-section (1) of section 5, section 6 and clause (d) of sub-section (1) of section 7 of the States Reorganisation Act, 1956 and the territories specified in the First Schedule to the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959.]
4[8. Maharashtra
The territories specified in sub-section (1) of section 8 of the States Reorganisation Act, 1956, but excluding the territories referred to in sub-section (1) of section 3 of the Bombay Reorganisation Act, 1960.]
5[6[9.] Karnataka]
The territories specified in sub-section (1) of section 7
of the States Reorganisation Act, 1956 7[but excluding
the territory specified in the Schedule to the Andhra Pradesh and Mysore (Transfer of Territory) Act, 1968.]
______________________________________________
1. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 5,
for "7. Madras" (w.e.f. 14-1-1969).
2. Ins. by the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959
(56 of 1959), s. 6 (w.e.f. 1-4-1960).
3. Subs. by s. 6, *ibid.,* for certain words (w.e.f. 1-4-1960).
4. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960). 5. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 5, for
"9. Mysore" (w.e.f. 1-11-1973).
6. Entries 8 to 14 renumbered as entries 9 to 15 by the Bombay Reorganisation Act,
1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960).
7. Ins. by the Andhra Pradesh and Mysore (Transfer of Territory) Act, 1968
(36 of 1968), s. 4 (w.e.f. 1-10-1968).
## (First Schedule)
Name
Territories
1[10.] 2[Odisha]
The
territories
which
immediately
before
the
commencement of this Constitution were either comprised
in the Province of Orissa or were being administered as if they formed part of that Province.
1[11.] Punjab
The territories specified in section 11 of the States
Reorganisation Act, 1956 3[and the territories referred
to in Part II of the First Schedule to the Acquired
Territories (Merger) Act, 1960] 4[but excluding the
territories referred to in Part II of the First Schedule to
the Constitution (Ninth Amendment) Act, 1960] 5[and
the territories specified in sub-section (1) of section 3,
section 4 and sub-section (1) of section 5 of the Punjab Reorganisation Act, 1966.]
1[12.] Rajasthan
The territories specified in section 10 of the States
Reorganisation Act, 1956 6[but excluding the territories
specified in the First Schedule to the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959].
## ______________________________________________ 1. Entries 8 To 14 Renumbered As Entries 9 To 15 By The Bombay Reorganisation Act,
1960 (11 of 1960), s. 4 (w.e.f. 1-5-1960).
2. Subs. by the Orissa (Alteration of Name) Act, 2011 (15 of 2011), s. 6, for "Orissa"
(w.e.f. 1-11-2011).
3. Ins. by the Acquired Territories (Merger) Act, 1960 (64 of 1960), s. 4
(w.e.f. 17-1-1961).
4. Added by the Constitution (Ninth Amendment) Act, 1960, s. 3 (w.e.f. 17-1-1961).
5. Added by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 7 (w.e.f. 1-11-
1966).
6. Ins. by the Rajasthan and Madhya Pradesh (Transfer of Territories) Act, 1959 (47 of
1959), s. 4 (w.e.f. 1-10-1959).
## (First Schedule)
Name
Territories
1[13.]
Uttar
Pradesh
2[The territories which immediately before the
commencement of this Constitution were either comprised in the Province known as the United
Provinces or were being administered as if they formed part of that Province, the territories specified in clause (b) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968, and the territories specified in clause (b) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979, but excluding the territories specified in clause (a) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries)
Act, 1968, 3[and the territories specified in section 3 of
the Uttar Pradesh Reorganisation Act, 2000] and the territories specified in clause (a) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979.]
1[14.]
West
Bengal
The
territories
which
immediately
before
the
commencement of this Constitution were either
comprised in the Province of West Bengal or were being administered as if they formed part of that Province and the territory of Chandernagore as defined in clause (c) of section 2 of the Chandernagore (Merger) Act, 1954 and also the territories specified in sub-section (1) of section 3 of the Bihar and West
Bengal (Transfer of Territories) Act, 1956 4[and also the
territories referred to in Part III of the First Schedule but excluding the territories referred to in Part III of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015, notwithstanding anything contained in clause (c) of section 3 of the Constitution (Ninth Amendment) Act, 1960, so far as it relates to the territories referred to in Part III of the First Schedule and the territories referred to in Part III of the Second Schedule
to
the
Constitution
(One
Hundredth
Amendment) Act, 2015.]
## ______________________________________________ (First Schedule)
Name
Territories
1[2[**
* * *]]
3[4[15.] Nagaland
The territories specified in sub-section (1) of section 3
of the State of Nagaland Act, 1962.]
3[5[16.]
Haryana
6[The territories specified in sub-section (1) of section 3
of the Punjab Reorganisation Act, 1966 and the territories specified in clause (a) of sub-section (1) of section 4 of the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979, but excluding the territories specified in clause (v) of sub-section (1) of section 4 of that Act.]] The
territories
which
immediately
before
the
3[7[17.]
Himachal
Pradesh
commencement of this Constitution were being administered as if they were Chief Commissioners' Provinces under the names of Himachal Pradesh and Bilaspur and the territories specified in sub-section (1)
of section 5 of the Punjab Reorganisation Act, 1966.]
3[8[18.] Manipur
The
territory
which
immediately
before
the
commencement
of
this
Constitution
was
being
administered as if it were a Chief Commissioner's
Province under the name of Manipur.]
1. **Entry 15 relating to Jammu and Kashmir deleted by the Jammu and Kashmir
Reorganisation Act, 2019 (34 of 2019), s. 6 (w.e.f. 31-10-2019).
2. Entries 8 to 14 renumbered as 9 to 15 by the Bombay Reorganisation Act, 1960
(11 of 1960), s. 4 (w.e.f. 1-5-1960).
3. Entries 16 to 29 renumbered as entries 15 to 28 by the Jammu and Kashmir
Reorganisation Act, 2019 (34 of 2019), s. 6 (w.e.f. 31-10-2019).
4 Ins. by the State of Nagaland Act, 1962 (27 of 1962), s. 4 (w.e.f. 1-12-1963). 5. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 7 (w.e.f. 1-11-1966)
and the entry therein subsequently amended by the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979 (31 of 1979), s. 5 (w.e.f. 15-9-1983).
6. Subs. by the Haryana and Uttar Pradesh (Alteration of Boundaries) Act, 1979
(31 of 1979), s. 5, for the entry against "17. Haryana" (w.e.f. 15-9-1983).
7. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 4 (w.e.f. 25-1-1971). 8. Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9
(w.e.f. 21-1-1972).
## (First Schedule)
Name
Territories
1[19.]
Tripura
The
territory
which
immediately
before
the
commencement
of
this
Constitution
was
being
administered as if it were a Chief Commissioner's
Province under the name of Tripura 2[and the territories
referred to in Part II of the First Schedule to the Constitution (One Hundredth Amendment) Act, 2015, notwithstanding anything contained in clause (d) of section 3 of the Constitution (Ninth Amendment) Act, 1960, so far as it relates to the territories referred to in Part II of the First Schedule to the Constitution (One Hundredth Amendment) Act, 2015.]
1[20.] Meghalaya
The territories specified in section 5 of the North-Eastern
Areas (Reorganisation) Act, 1971] 2[and the territories referred to
in Part I of the First Schedule but excluding the territories referred to in Part II of the Second Schedule to the Constitution
(One Hundredth Amendment) Act, 2015.]
1[3[21.] Sikkim
The territories which immediately before the commencement of
the Constitution (Thirty-sixth Amendment) Act, 1975, were comprised in Sikkim.]
1[4[22.] Mizoram
The territories specified in section 6 of the North-Eastern Areas (Reorganisation) Act, 1971.]
1[5[23.] Arunachal
Pradesh
The territories specified in section 7 of the North-Eastern Areas (Reorganisation) Act, 1971.]
1[6[24.] Goa
The territories specified in section 3 of the Goa, Daman and Diu Reorganisation Act, 1987.]
## ______________________________________________ 1. Entries 16 To 29 Renumbered As Entries 15 To 28 By The Jammu And Kashmir
Reorganisation Act, 2019 (34 of 2019), s. 6 (w.e.f. 31-10-2019).
2. Added by the Constitution (One Hundredth Amendment) Act, 2015, s. 3
(w.e.f. 31-7-2015). For the text of the Act, see Appendix I.
3. Ins. by the Constitution (Thirty-sixth Amendment) Act, 1975, s. 2 (w.e.f. 26-4-1975). 4. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 4 (w.e.f. 20-2-1987). 5. Ins. by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 4 (w.e.f. 20-2-1987). 6. Ins. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 5
(w.e.f. 30-5-1987).
Name
Territories
1[2[25.] Chhattisgarh
The territories specified in section 3 of the Madhya Pradesh Reorganisation Act, 2000.]
1[3[26.] 4[Uttarakhand]
The territories specified in section 3 of the Uttar Pradesh Reorganisation Act, 2000.]
1[5[27.] Jharkhand
The territories specified in section 3 of the Bihar Reorganisation Act, 2000.]
1[6[28.] Telangana
The territories specified in section 3 of the Andhra
Pradesh Reorganisation Act, 2014.]
## Ii. The Union Territories
| | | | | | Name | Extent |
|--------------------------------------------------------|-----------|-----------|--------------------------|-------------|---------|-----------|
| 1. Delhi | The | territory | which | immediately | before | the |
| commencement of this Constitution was comprised in the | | | | | | |
| Chief Commissioner's Province of Delhi. | | | | | | |
| 7 | | | | | | |
| [* | * | * | * *] | | | |
| 8 | | | | | | |
| [2.] | | | | | | |
| The Andaman | | | | | | |
| The | territory | which | immediately | before | the | |
| and Nicobar | | | | | | |
| Islands | | | | | | |
| | | | | | | |
| commencement of this Constitution was comprised in | | | | | | |
| the Chief Commissioner's Province of the | | | | | | |
| Andaman and Nicobar Islands. | | | | | | |
______________________________________________
1. Entries 16 to 29 renumbered as entries 15 to 28 by the Jammu and Kashmir
Reorganisation Act, 2019 (34 of 2019), s. 6 (w.e.f. 31-10-2019).
2. Added by the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), s. 5
(w.e.f. 1-11-2000).
3. Ins. by the Uttar Pradesh Reorganisation Act, 2000 (29 of 2000), s. 5 (w.e.f. 9-11-2000). 4. Subs. by the Uttaranchal (Alteration of Name) Act, 2006 (52 of 2006), s. 4, for the
word "Uttaranchal" (w.e.f. 1-1-2007).
5. Added by the Bihar Reorganisation Act, 2000 (30 of 2000), s. 5 (w.e.f. 15-11-
2000).
6. Ins. by the Andhra Pradesh Reorganisation Act, 2014 (6 of 2014) , s. 10 (w.e.f. 2-6-2014). 7. Entry 2 relating to Himachal Pradesh omitted and entries 3 to 10 renumbered as
entries 2 to 9 respectively by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 4 (w.e.f. 25-1-1971) and subsequently entries relating to Manipur and Tripura (i.e. entries 2 and 3) omitted by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971) s. 9 (w.e.f. 21-1-1972).
8. Entries 4 to 9 renumbered as entries 2 to 7 by the North-Eastern Areas
(Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972).
## (First Schedule)
Name
Territories
1[3.] 2[Lakshadweep]
The territory specified in section 6 of the States
Reorganisation Act, 1956.
3[1[4.] Dadra and
Nagar Haveli and Daman and Diu
The territory which immediately before the eleventh day of August, 1961 was comprised in Free Dadra and Nagar Haveli and the territories specified in section 4 of the Goa, Daman and Diu Reorganisation Act, 1987.]
4[1[*] 3[
* * * *]
5[1[6.] 6[Puducherry]
The territories which immediately before the sixteenth day of August, 1962, were comprised in the French Establishments in India known as Pondicherry, Karikal, Mahe and Yanam.]
7[1[7.] Chandigarh
The territories specified in section 4 of the Punjab
Reorganisation Act, 1966.]
______________________________________________
1. Entries 4 to 9 renumbered as entries 2 to 7 (respectively) by the North-Eastern
Areas (Reorganisation) Act, 1971 (81 of 1971), s. 9 (w.e.f. 21-1-1972).
2. Subs. by the Laccadive, Minicoy and Amindivi Islands (Alteration of Name) Act,
1973 (34 of 1973), s. 5, for "The Laccadive, Minicoy and Amindivi Islands" (w.e.f. 1-11-1973).
3. Entry 4 relating to Dadra and Nagar Haveli was ins. by the Constitution (Tenth
Amendment ) Act, 1961, s. 2 (w.e.f. 11-8-1961) and subsequently subs. by the Dadra and Nagar Haveli and Daman and Diu (Merger of Union territories) Act, 2019 (44 of 2019), s. 5, for entries 4 and 5 (w.e.f. 26-1-2020).
4. Subs. by the Goa, Daman and Diu (Reorganisation) Act, 1987 (18 of 1987), s. 5, for
entry 5 (w.e.f. 30-5-1987).
5. Ins. by the Constitution (Fourteenth Amendment) Act, 1962, s. 3 (with retrospective
effect).
6. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006), s. 5 for
"Pondicherry" (w.e.f. 1-10-2006).
7. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 7 (w.e.f. 1-11-1966).
Name
Territories
1[*
*
*
* *]
1[*
*
*
* *]
2[8. Jammu and
Kashmir
The territories specified in section 4 of the Jammu and Kashmir Reorganisation Act, 2019.
9. Ladakh
The territories specified in section 3 of the Jammu
and Kashmir Reorganisation Act, 2019.]
## ______________________________________________ 1. Entry 8 Relating To Mizoram Omitted And Entry 9 Relating To Arunachal Pradesh
renumbered as entry 8 by the State of Mizoram Act, 1986 (34 of 1986), s. 4
2. Ins. by the Jammu and Kashmir Reorganisation Act, 2019 (34 of 2019), s. 6
(w.e.f. 31-10-2019).
[Articles 59(3), 65(3), 75(6), 97, 125, 148(3), 158(3), 164 (5), 186 and 221]
## Part A Provisions As To The President And The Governors Of States 1***
1. There shall be paid to the President and to the Governors of the States
1*** the following emoluments per mensem, that is to say:—
The President
…… 10,000 rupees.
The Governor of a State ……
5,500 rupees.
2. There shall also be paid to the President and to the Governors of the States 2*** such allowances as were payable respectively to the Governor-
General of the Dominion of India and to the Governors of the corresponding Provinces immediately before the commencement of this Constitution.
3. The President and the Governors of 3[the States] throughout their respective terms of office shall be entitled to the same privileges to which the Governor- General and the Governors of the corresponding Provinces were respectively entitled immediately before the commencement of this Constitution.
4. While the Vice-President or any other person is discharging the functions of, or is acting as, President, or any person is discharging the functions of the Governor, he shall be entitled to the same emoluments, allowances and privileges as the President or the Governor whose functions he discharges or for whom he acts, as the case may be.
4* * *
* *
______________________________________________
Now five lakh rupees, *vide* the Finance Act, 2018 (13 of 2018), s. 137.
(w.e.f. 1-1-2016).
Now three lakh fifty thousand rupees, by s. 161, *ibid.* (w.e.f. 1-1-2016).
2. The words "so specified" omitted by the Constitution (Seventh Amendment) Act,
1956, s. 29 and Sch. (w.e.f. 1-11-1956).
3. Subs. by s. 29 and Sch., *ibid.*, for "such states" (w.e.f. 1-11-1956).
4. Part B omitted by s. 29 and Sch., *ibid*. (w.e.f. 1-11-1956).
## Part C Provisions As To The Speaker And The Deputy Speaker Of The House
OF THE PEOPLE AND THE CHAIRMAN AND THE DEPUTY CHAIRMAN
OF THE COUNCIL OF STATES AND THE SPEAKER AND THE
DEPUTY SPEAKER OF THE LEGISLATIVE ASSEMBLY 1***
AND THE CHAIRMAN AND THE DEPUTY CHAIRMAN
OF THE LEGISLATIVE COUNCIL OF 2[A STATE]
7. There shall be paid to the Speaker of the House of the People and the Chairman of the Council of States such salaries and allowances as were payable to the Speaker of the Constituent Assembly of the Dominion of India immediately before the commencement of this Constitution, and there shall be paid to the Deputy Speaker of the House of the People and to the Deputy Chairman of the Council of States such salaries and allowances as were payable to the Deputy Speaker of the Constituent Assembly of the Dominion of India immediately before such commencement.
8. There shall be paid to the Speaker and the Deputy Speaker of the Legislative Assembly 3*** and to the Chairman and the Deputy Chairman of the Legislative Council of 4[a State] such salaries and allowances as were payable respectively to the Speaker and the Deputy Speaker of the Legislative Assembly and the President and the Deputy President of the Legislative Council of the corresponding Province immediately before the commencement of this Constitution and, where the corresponding Province had no Legislative Council immediately before such commencement, there shall be paid to the Chairman and the Deputy Chairman of the Legislative Council of the State such salaries and allowances as the Governor of the State may determine.
## Part D
______________________________________________
Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch.(w.e.f. 1-11-1956).
2. Subs. by s. 29 and Sch., *ibid.*, for "any such State." (w.e.f. 1-11-1956).
3. The words and letter "of a State specified in Part A of the First Schedule" omitted by
s. 29 and Sch., *ibid.* (w.e.f. 1-11-1956).
4. Subs. by s. 29 and Sch., *ibid.*, for "such State" (w.e.f. 1-11-1956).
## Provisions As To The Judges Of The Supreme Court And Of The High Courts 1***
9. (1) There shall be paid to the Judges of the Supreme Court, in respect of time spent on actual service, salary at the following rates per mensem, that is to say:—
| The Chief Justice .. | |
|-------------------------------|------|
| 2 | |
| [10,000 rupees.]. | |
| | |
| | |
| Any other Judge .. | |
| 3 | |
| [9,000 rupees.]. | |
| | |
| | |
Provided that if a Judge of the Supreme Court at the time of his appointment is in receipt of a pension (other than a disability or wound pension) in respect of any previous service under the Government of India or any of its predecessor Governments or under the Government of a State or any of its predecessor Governments, his salary in respect of service in the Supreme Court 4[shall be reduced—
(a) by the amount of that pension, and (b) if he has, before such appointment, received in lieu of a portion of the pension due to him in respect of such previous service the commuted value thereof, by the amount of that portion of the pension, and
(c) if he has, before such appointment, received a retirement gratuity in respect of such previous service, by the pension equivalent of that gratuity.]
(2) Every Judge of the Supreme Court shall be entitled without payment of rent to the use of an official residence.
(3) Nothing in sub-paragraph (2) of this paragraph shall apply to a Judge who, immediately before the commencement of this Constitution,—
(a) was holding office as the Chief Justice of the Federal Court and has become on such commencement the Chief Justice of the Supreme
______________________________________________
Now two lakh eighty thousand rupees, *vide* the High Court and Supreme Court Judges
(Salaries and Conditions of Service) Amendment Act, 2018 (10 of 2018), s. 6 (w.e.f. 1-1-2016).
3. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 4, for "4,000 rupees"
(w.e.f. 1-4-1986).
Now two lakh fifty thousand rupees, *vide* the High Court and Supreme Court Judges
(Salaries and Conditions of Service) Amendment Act, 2018 (10 of 2018), s. 6 (w.e.f. 1-1-2016).
4. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 25(b), for "shall be
reduced by the amount of that pension" (w.e.f. 1-11-1956).
Court under clause (1) of article 374, or
(b) was holding office as any other Judge of the Federal Court and has on such commencement become a Judge (other than the Chief Justice) of the Supreme Court under the said clause, during the period he holds office as such Chief Justice or other Judge, and every Judge who so becomes the Chief Justice or other Judge of the Supreme Court shall, in respect of time spent on actual service as such Chief Justice or other Judge, as the case may be, be entitled to receive in addition to the salary specified in sub-paragraph (1) of this paragraph as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing immediately before such commencement.
(4) Every Judge of the Supreme Court shall receive such reasonable allowances to reimburse him for expenses incurred in travelling on duty within the territory of India and shall be afforded such reasonable facilities in connection with travelling as the President may from time to time prescribe.
(5) The rights in respect of leave of absence (including leave allowances)
and pension of the Judges of the Supreme Court shall be governed by the provisions which, immediately before the commencement of this Constitution, were applicable to the Judges of the Federal Court.
10. (1) 1[There shall be paid to the Judges of High Courts, in respect of time spent on actual service, salary at the following rates per mensem, that is to say,—
The Chief Justice ..
2[9,000 rupees]
Any other Judge ..
3[8,000 rupees]:
Provided that if a Judge of a High Court at the time of his appointment is in receipt of a pension (other than a disability or wound pension) in respect of any
______________________________________________
(w.e.f. 1-4-1986).
Now two lakh fifty thousand rupees, *vide* the High Court and Supreme Court Judges
(Salaries and Conditions of Service) Amendment Act, 2018 (10 of 2018), s. 2 (w.e.f. 1-1-2016).
3. Subs. by the Constitution (Fifty-fourth Amendment) Act, 1986, s. 4, for "3,500 rupees"
(w.e.f. 1-4-1986).
Now two lakh twenty-five thousand rupees, *vide* the High Court and Supreme Court
Judges (Salaries and Conditions of Service) Amendment Act, 2018 (10 of 2018), s. 2 (w.e.f. 1-1-2016).
## (Second Schedule)
previous service under the Government of India or any of its predecessor Governments or under the Government of a State or any of its predecessor Governments, his salary in respect of service in the High Court shall be reduced—
(a) by the amount of that pension, and
(b) if he has, before such appointment, received in lieu of a portion of the pension due to him in respect of such previous service the commuted value thereof, by the amount of that portion of the pension, and
(c) if he has, before such appointment, received a retirement gratuity in respect of such previous service, by the pension equivalent of that gratuity.] (2) Every person who immediately before the commencement of this Constitution—
(a) was holding office as the Chief Justice of a High Court in any Province and has on such commencement become the Chief Justice of the High Court in the corresponding State under clause (1) of article 376, or
(b) was holding office as any other Judge of a High Court in any Province and has on such commencement become a Judge (other than the Chief Justice) of the High Court in the corresponding State under the said clause, shall, if he was immediately before such commencement drawing a salary at a rate higher than that specified in sub-paragraph (1) of this paragraph, be entitled to receive in respect of time spent on actual service as such Chief Justice or other Judge, as the case may be, in addition to the salary specified in the said sub-paragraph as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing immediately before such commencement.
1[(3) Any person who, immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956, was holding office as the Chief Justice of the High Court of a State specified in Part B of the First Schedule and has on such commencement become the Chief Justice of the High Court of a State specified in the said Schedule as amended by the said Act, shall, if he was immediately before such commencement drawing any amount as allowance in addition to his salary, be entitled to receive in respect of time spent on actual service as such Chief Justice, the same amount as allowance in addition to the salary specified in sub-paragraph (1) of this paragraph.].
11. In this Part, unless the context otherwise requires,—
(a) the expression "Chief Justice" includes an acting Chief Justice,
______________________________________________
and a "Judge" includes an *ad hoc* Judge;
(b) "actual service" includes—
(i) time spent by a Judge on duty as a Judge or in the performance of such other functions as he may at the request of the President undertake to discharge;
(ii) vacations, excluding any time during which the Judge is absent on leave; and
(iii) joining time on transfer from a High Court to the Supreme Court or from one High Court to another.
## Part E Provisions As To The Comptroller And Auditor-General Of India
12. (1) There shall be paid to the Comptroller and Auditor-General of India a salary at the rate of *four thousand rupees per mensem.
(2) The person who was holding office immediately before the commencement of this Constitution as Auditor-General of India and has become on such commencement the Comptroller and Auditor-General of India under article 377 shall in addition to the salary specified in sub-paragraph (1) of this paragraph be entitled to receive as special pay an amount equivalent to the difference between the salary so specified and the salary which he was drawing as Auditor-General of India immediately before such commencement.
(3) The rights in respect of leave of absence and pension and the other conditions of service of the Comptroller and Auditor-General of India shall be governed or shall continue to be governed, as the case may be, by the provisions which were applicable to the Auditor-General of India immediately before the commencement of this Constitution and all references in those provisions to the Governor-General shall be construed as references to the President.
______________________________________________
[Articles 75(4), 99, 124(6), 148(2), 164(3), 188 and 219]
## Forms Of Oaths Or Affirmations I
Form of oath of office for a Minister for the Union:—
"I, A. B., do swear in the name of God that I will bear true faith
solemnly affirm
and allegiance to the Constitution of India as by law established, 1[that I
will uphold the sovereignty and integrity of India,] that I will faithfully and conscientiously discharge my duties as a Minister for the Union and that I will do right to all manner of people in accordance with the Constitution and the law, without fear or favour, affection or ill-will."
## Ii
Form of oath of secrecy for a Minister for the Union:—
"I, A.B., do swear in the name of God that I will not directly or
solemnly affirm indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as a Minister for the Union except as may be required for the due discharge of my duties as such Minister."
## 2[Iii A
Form of oath or affirmation to be made by a candidate for election to Parliament:—
______________________________________________
"I, A.B., having been nominated as a candidate to fill a seat in the
Council of States (or the House of the People) do swear in the name of God
solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established and that I will uphold the sovereignty and integrity of India."
## B
Form of oath or affirmation to be made by a member of Parliament:—
"I, A.B., having been elected (or nominated) a member of the Council of States (or the House of the People) do swear in the name of God
solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India and that I will faithfully discharge the duty upon which I am about to enter."]
## Iv
Form of oath or affirmation to be made by the Judges of the Supreme Court and the Comptroller and Auditor-General of India:—
"I, A.B., having been appointed Chief Justice (or a Judge) of the Supreme Court of India (or Comptroller and Auditor-General of India) do swear in the name of God that I will bear true faith and
solemnly affirm faith and allegiance to the Constitution of India as by law established,
1[that I will uphold the sovereignty and integrity of India,] that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws."
______________________________________________
## V
Form of oath of office for a Minister for a State:—
"I, A.B., do swear in the name of God that I will bear true faith
solemnly affirm and allegiance to the Constitution of India as by law established, 1[that I
will uphold the sovereignty and integrity of India,] that I will faithfully and conscientiously discharge my duties as a Minister for the State of ..........and that I will do right to all manner of people in accordance with the Constitution and the law without fear or favour, affection or ill-will."
## Vi
Form of oath of secrecy for a Minister for a State:—
"I, A.B., do swear in the name of God that I will not directly or
solemnly affirm indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as a Minister for the State of ....................except as may be required for the due discharge of my duties as such Minister."
## 2[Vii A
Form of oath or affirmation to be made by a candidate for election to the Legislature of a State:—
"I, A.B., having been nominated as a candidate to fill
a seat in the Legislative Assembly (or Legislative Council), do swear in the name of God that I will bear true faith and
solemnly affirm allegiance to the Constitution of India as by law established and that I
will uphold the sovereignty and integrity of India."
______________________________________________
1. Ins. by the Constitution (Sixteenth Amendment) Act, 1963, s. 5 (w.e.f. 5-10-1963).
## B
Form of oath or affirmation to be made by a member of the Legislature of a State:—
"I, A.B., having been elected (or nominated) a member of the Legislative Assembly (or Legislative Council), do swear in the name of God that
solemnly affirm I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India and that I will faithfully discharge the duty upon which I am about to enter."]
## Viii
Form of oath or affirmation to be made by the Judges of a High Court:—
"I, A.B., having been appointed Chief Justice (or a Judge) of the High Court at (or of) ……….….. do swear in the name of God that I will bear
solemnly affirm true faith and allegiance to the Constitution of India as by law established, 1[that I will uphold the sovereignty and integrity of India,] that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws."
______________________________________________
## 1[Fourth Schedule [Articles 4(1) And 80(2)] Allocation Of Seats In The Council Of States
To each State or Union territory specified in the first column of the following table, there shall be allotted the number of seats specified in the second column thereof opposite to that State or that Union territory, as the case may be:
## Table
| 1. | Andhra Pradesh |
|---------|-------------------|
| 2 | |
| [11] | |
| 3 | |
| [2. | Telangana |
| 4 | |
| [3.] | Assam 7 |
| 4 | |
| [4.] | Bihar |
| 5 | |
| [16] | |
| 6 | |
| [ | |
| 4 | |
| [5.] | Jharkhand |
| 7 | |
| [ | |
| 8 | |
| [ | |
| 4 | |
| [6.] | Goa 1]] |
| 9 | |
| [ | |
| 8 | |
| [ | |
| 4 | |
| [7.] | Gujarat 11]] |
| 10 | |
| [ | |
| 8 | |
| [ | |
| 4 | |
| [8.] | Haryana 5]] |
| 8 | |
| [ | |
| 4 | |
| [9.] | Kerala 9 |
| | |
| | |
______________________________________________
(b)(w.e.f. 30-5-1987).
8. Entries 4 to 29 renumbered as entries 5 to 30 by the Bihar Reorganisation Act, 2000
(30 of 2000), s. 7 (w.e.f. 15-11-2000).
9. Subs. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 6, for entry "4" (w.e.f.
1-5-1960).
10. Ins. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 9 (w.e.f. 1-11-1966).
(Fourth Schedule)
1[2[10.]]
Madhya Pradesh ...........................................................
3[11]
4[1[2[11.]
Chhattisgarh ................................................................ 5]]
5[1[2[12.]
Tamil Nadu ................................................................6[18]]
7[1[2[13.]
Maharashtra ................................................................19]]
8[1[2[14.]
Karnataka ................................................................
12]]
1[2[15.]
9[Odisha] ................................................................
10]
1[2[16.]
Punjab ...........................................................................
10[7]
1[2[17.]
Rajasthan ................................................................
10]
1[2[18.]
Uttar Pradesh ................................................................
11[31]
12[1[2[19.]
13[Uttarakhand] ...............................................................3]]
1[2[20.]
West Bengal ................................................................ 16]
14[1[2[**
* * * ................................................................*]
15[16[1[2[21.]
Nagaland ................................................................
1]]
______________________________________________
1. Entries 4 to 29 renumbered as entries 5 to 30 by the Bihar Reorganisation Act, 2000
(30 of 2000), s. 7 (w.e.f. 15-11-2000).
2. Entries 2 to 30 renumbered as entries 3 to 31 respectively by the Andhra Pradesh
Reorganisation Act, 2014, s. 12 (w.e.f. 2-6-2014).
3. Subs. by the Madhya Pradesh Reorganisation Act, 2000 (28 of 2000), s. 7, for "16"
(w.e.f. 1-11-2000).
4. Ins. by s. 7, *ibid*. (w.e.f. 1-11-2000). 5. Subs. by the Madras State (Alteration of Name) Act, 1968 (53 of 1968), s. 5, for "8.
Madras" (renumbered as *11) (w.e.f. 14-1-1969).
6. Subs. by the Andhra Pradesh and Madras (Alteration of Boundaries) Act, 1959 (56 of
1959), s. 8, for "17" (w.e.f. 1-4-1960).
7. Ins. by the Bombay Reorganisation Act, 1960 (11 of 1960), s. 6 (w.e.f. 1-5-1960). 8. Subs. by the Mysore State (Alteration of Name) Act, 1973 (31 of 1973), s. 5, for "10.
Mysore" (w.e.f. 1-11-1973).
9. Subs. by the Orissa (Alteration of Name) Act, 2011 (15 of 2011), s. 7 for "Orissa"
(w.e.f. 1-11-2011).
10. Subs. by the Punjab Reorganisation Act, 1966 (31 of 1966), s. 9 for "11"
(w.e.f. 1-11-1966).
11. Subs. by the Uttar Pradesh Reorganisation Act, 2000 (29 of 2000), s. 7 for "34"
(w.e.f. 9-11-2000).
12. Ins. by s. 7, *ibid.* (w.e.f. 9-11-2000). 13. Subs. by the Uttaranchal (Alteration of Name) Act, 2006 (52 of 2006), s. 5 for
"Uttaranchal" (w.e.f. 1-1-2007).
14. ** Entry 21 relating to Jammu and Kashmir deleted by the Jammu and Kashmir
Reorganisation Act, 2019 (34 of 2019), s. 8 (w.e.f. 31-10-2019).
15. Entries 22 to 31 re-numbered as entries 21 to 30, respectively by the Jammu and
Kashmir Reorganisation Act, 2019 (34 of 2019), s. 8 (w.e.f. 31-10-2019).
16. Ins. by the State of Nagaland Act, 1962 (27 of 1962), s. 6 (w.e.f. 1-12-1963).
(Fourth Schedule)
Himachal Pradesh ..........................................................3]]]
1[2[3[4[22.]
.]
3[2[4[23.]
Manipur .........................................................................1]
3[2[4[24.]
Tripura ...........................................................................1]]
3[2[4[25.]
Meghalaya ................................................................
1]]
5[3[2[4[26.]
Sikkim ............................................................................1]]
6[3[2[4[27.]
Mizoram ................................................................
1]]
7[3[2[4[28.]
Arunachal Pradesh .........................................................1]]
3[2[4[29.]
Delhi ..............................................................................3]
3[2[4[30.]
8[Puducherry] ................................................................1]]
9[3[2[4[31.
Jammu and Kashmir .......................................................4]
Total
10[233]
##
______________________________________________
1. Ins. by the State of Himachal Pradesh Act, 1970 (53 of 1970), s. 5 (w.e.f. 25-1-1971). 2. Entries 4 to 29 renumbered as entries 5 to 30 by the Bihar Reorganisation Act, 2000 (30 of 2000), s. 7 (w.e.f. 15-11-2000). 3. Entries 2 to 30 renumbered as entries 3 to 31 respectively by the Andhra Pradesh
Reorganisation Act, 2014 (6 of 2014), s. 12 (w.e.f. 2-6-2014).
4. Entries 22 to 31 renumbered as entries 21 to 30 respectively by the Jammu and
Kashmir Reorganisation Act, 2019 (34 of 2019), s. 8 (w.e.f. 31-10-2019).
5. Ins. by the Constitution (Thirty-sixth Amenement) Act, 1975, s. 4 (w.e.f. 26-4-1975). 6. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 5 (w.e.f. 20-2-1987). 7. Ins. by the State of Arunachal Pradesh Act, 1986 (69 of 1986), s. 5 (w.e.f. 20-2-1987).
1987).
8. Subs. by the Pondicherry (Alteration of Name) Act, 2006 (44 of 2006) s. 4, for
"Pondicherry" (w.e.f. 1-10-2006).
9. Ins. by the Jammu and Kashmir Reorganisation Act, 2019 (34 of 2019), s. 8
(w.e.f. 31-10-2019).
10. Subs. by the Goa, Daman and Diu Reorganisation Act, 1987 (18 of 1987), s. 6, for
"232" (w.e.f. 30-5-1987).
# Fifth Schedule [Article 244(1)] Provisions As To The Administration And Control Of Scheduled Areas And Scheduled Tribes
## Part A General
1. **Interpretation**.—In this Schedule, unless the context otherwise requires, the expression "State" 1*** does not include the 2[States of Assam 3[, 4[Meghalaya, Tripura and Mizoram.]]]
2. Executive power of a State in Scheduled Areas.—Subject to the provisions of this Schedule, the executive power of a State extends to the Scheduled Areas therein.
3. Report by the Governor 5*** to the President regarding the administration of Scheduled Areas.—The Governor 5*** of each State having Scheduled Areas therein shall annually, or whenever so required by the President, make a report to the President regarding the administration of the Scheduled Areas in that State and the executive power of the Union shall extend to the giving of directions to the State as to the administration of the said areas.
## Part B Administration And Control Of Scheduled Areas And Scheduled Tribes
4. Tribes Advisory Council.—(1) There shall be established in each State having Scheduled Areas therein and, if the President so directs, also in any State having Scheduled Tribes but not Scheduled Areas therein, a Tribes Advisory Council consisting of not more than twenty members of whom, as nearly as may be, three-fourths shall be the representatives of the Scheduled Tribes in the Legislative Assembly of the State:
______________________________________________
1. The words and letters "means a State specified in Part A or Part B of the First
Schedule but" omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. (w.e.f. 1-11-1956).
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71, for
"State of Assam" (w.e.f. 21-1-1972).
3. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 3, for "and
Meghalaya" (w.e.f. 1-4-1985).
4. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for "Meghalaya and
Tripura" (w.e.f. 20-2-1987).
5. The words "or Rajpramukh" omitted by the Constitution (Seventh Amendment) Act,
1956, s. 29 and Sch. (w.e.f. 1-11-1956).
Provided that if the number of representatives of the Scheduled Tribes in the Legislative Assembly of the State is less than the number of seats in the Tribes Advisory Council to be filled by such representatives, the remaining seats shall be filled by other members of those tribes.
(2) It shall be the duty of the Tribes Advisory Council to advise on such matters pertaining to the welfare and advancement of the Scheduled Tribes in the State as may be referred to them by the Governor 1***.
(3) The Governor 2*** may make rules prescribing or regulating, as the case may be,—
(a) the number of members of the Council, the mode of their appointment and the appointment of the Chairman of the Council and of the officers and servants thereof;
(b) the conduct of its meetings and its procedure in general; and (c) all other incidental matters.
5. Law applicable to Scheduled Areas.—(1) Notwithstanding anything in this Constitution, the Governor 1*** may by public notification direct that any particular Act of Parliament or of the Legislature of the State shall not apply to a Scheduled Area or any part thereof in the State or shall apply to a Scheduled Area or any part thereof in the State subject to such exceptions and modifications as he may specify in the notification and any direction given under this sub-paragraph may be given so as to have retrospective effect.
(2) The Governor may make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area.
In particular and without prejudice to the generality of the foregoing power, such regulations may—
(a) prohibit or restrict the transfer of land by or among members of the Scheduled Tribes in such area;
(b) regulate the allotment of land to members of the Scheduled Tribes in such area;
## ______________________________________________ (Fifth Schedule)
(c) regulate the carrying on of business as money-lender by persons who lend money to members of the Scheduled Tribes in such area.
(3) In making any such regulation as is referred to in sub-paragraph (2)
of this paragraph, the Governor 1*** may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to the area in question.
(4) All regulations made under this paragraph shall be submitted forthwith to the President and, until assented to by him, shall have no effect.
(5) No regulation shall be made under this paragraph unless the Governor 1** making the regulation has, in the case where there is a Tribes Advisory Council for the State, consulted such Council.
## Part C Scheduled Areas
6. Scheduled Areas.—(1) In this Constitution, the expression
"Scheduled Areas" means such areas as the President may by order
declare to be Scheduled Areas.
(2) The President may at any time by order—
(a) direct that the whole or any specified part of a Scheduled Area shall cease to be a Scheduled Area or a part of such an area;
2[(aa) increase the area of any Scheduled Area in a State after consultation with the Governor of that State;]
(b) alter, but only by way of rectification of boundaries, any Scheduled Area;
______________________________________________
Scheduled Areas (Cessor) Order, 1955 (C.O. 50).
2. Ins. by the Fifth Schedule to the Constitution (Amendment) Act, 1976 (101 of 1976),
s. 2 (w.e.f. 7-9-1976).
(c) on any alteration of the boundaries of a State or on the admission into the Union or the establishment of a new State, declare any territory not previously included in any State to be, or to form part of, a Scheduled Area;
1[(d) rescind, in relation to any State or States, any order or orders made under this paragraph, and in consultation with the Governor of the State concerned, make fresh orders redefining the areas which are to be Scheduled Areas;]
and any such order may contain such incidental and consequential provisions as appear to the President to be necessary and proper, but save as aforesaid, the order made under sub-paragraph (1) of this paragraph shall not be varied by any subsequent order.
## Part D Amendment Of The Schedule
7. Amendment of the Schedule.—(1) Parliament may from time to time by law amend by way of addition, variation or repeal any of the provisions of this Schedule and, when the Schedule is so amended, any reference to this Schedule in this Constitution shall be construed as a reference to such Schedule as so amended.
(2) No such law as is mentioned in sub-paragraph (1) of this paragraph shall be deemed to be an amendment of this Constitution for the purposes of article 368.
______________________________________________
## Sixth Schedule
# [Articles 244(2) And 275(1)] Provisions As To The Administration Of Tribal Areas In 1[The States Of
Assam, Meghalaya, Tripura and Mizoram]
21. **Autonomous districts and autonomous regions.**—(1) Subject to the provisions of this paragraph, the tribal areas in each item of 3[4[Parts I, II
and IIA] and in Part III] of the table appended to paragraph 20 of this Schedule shall be an autonomous district.
(2) If there are different Scheduled Tribes in an autonomous district, the Governor may, by public notification, divide the area or areas inhabited by them into autonomous regions.
(3) The Governor may, by public notification,—
(a) include any area in 3[any of the Parts] of the said table, (b) exclude any area from 3[any of the Parts] of the said table,
(c) create a new autonomous district,
(d) increase the area of any autonomous district, (e) diminish the area of any autonomous district, (f) unite two or more autonomous districts or parts thereof so as to form one autonomous district,
5[(ff) alter the name of any autonomous district],
(g) define the boundaries of any autonomous district:
______________________________________________
1. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for certain words
(w.e.f. 20-2-1987).
2. Paragraph 1 has been amended in its application to the State of Assam by the Sixth
Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), s. 2, so as to insert the following proviso after sub-paragraph (2), namely :—
"Provided that nothing in this sub-paragraph shall apply to the Bodoland Territorial Areas District" (w.e.f. 7-9-2003).
3. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for "Part A" (w.e.f. 21-1-1972).
4. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4, for "Part I and
II" (w.e.f. 1-4-1985).
5. Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), s. 74 and
Fourth Sch. (w.e.f. 2-4-1970).
Provided that no order shall be made by the Governor under clauses (c),
(d), (e) and (f) of this sub-paragraph except after consideration of the report of a Commission appointed under sub-paragraph (1) of paragraph 14 of this Schedule:
1[Provided further that any order made by the Governor under this sub-paragraph may contain such incidental and consequential provisions (including any amendment of paragraph 20 and of any item in any of the Parts of the said Table) as appear to the Governor to be necessary for giving effect to the provisions of the order.]
## 22. **Constitution Of District Councils And Regional Councils.**—
3[(1) There shall be a District Council for each autonomous district
consisting of not more than thirty members, of whom not more than four persons shall be nominated by the Governor and the rest shall be elected on the basis of adult suffrage.]
## ______________________________________________ 1. Ins. By The North-Eastern Areas (Reorganisation) Act, 1971 (81 Of 1971), S. 71(I) And
Eighth Sch. (w.e.f. 21-1-1972).
2. Paragraph 2 has been amended in its application to the State of Assam by the Sixth
Schedule to the Constitution (Amendment) Act, 2003(44 of 2003), s. 2, so as to insert the following proviso after sub-paragraph (1), namely: -
"Provided that the Bodoland Territorial Council shall consist of not more than
forty-six members of whom forty shall be elected on the basis of adult suffrage, of whom thirty shall be reserved for the Scheduled Tribes, five for non-tribal communities, five open for all communities and the remaining six shall be nominated by the Governor having same rights and privileges as other members, including voting rights, from amongst the un-represented communities of the Bodoland Territorial Areas District, of which at least two shall be women:"
Paragraph 2 has been amended in its application to the State of Assam by the Sixth
Schedule to the Constitution (Amendment) Act, 1995(42 of 1995), s.2, so as to insert the following proviso in sub-paragraph (3), namely :—
"Provided that the District Council constituted for the North Cachar Hills
District shall be called as the North Cachar Hills Autonomous Council and the District Council constituted for the Karbi Anglong District shall be called as the Karbi Anglong Autonomous Council."
Paragraph 2 has been amended in its application to the State of Assam by the Sixth
Schedule to the Constitution (Amendment) Act, 2003(44 of 2003), s. 2, so as to insert the following proviso after the existing proviso in sub-paragraph (3), namely:—
"Provided further that the District Council constituted for the Bodoland
Territorial Areas District shall be called the Bodoland Territorial Council."
3. Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), s. 74 and
Fourth Sch., for sub-paraghaph (1) (w.e.f. 2-4-1970).
(2) There shall be a separate Regional Council for each area constituted an autonomous region under sub-paragraph (2) of paragraph 1 of this Schedule.
(3) Each District Council and each Regional Council shall be a body corporate by the name respectively of "the District Council of (name of district)" and "the Regional Council of (*name of region*)", shall have perpetual succession and a common seal and shall by the said name sue and be sued.
(4) Subject to the provisions of this Schedule, the administration of an autonomous district shall, in so far as it is not vested under this Schedule in any Regional Council within such district, be vested in the District Council for such district and the administration of an autonomous region shall be vested in the Regional Council for such region.
(5) In an autonomous district with Regional Councils, the District Council shall have only such powers with respect to the areas under the authority of the Regional Council as may be delegated to it by the Regional Council in addition to the powers conferred on it by this Schedule with respect to such areas.
(6) The Governor shall make rules for the first constitution of District Councils and Regional Councils in consultation with the existing tribal Councils or other representative tribal organisations within the autonomous districts or regions concerned, and such rules shall provide for—
(a) the composition of the District Councils and Regional Councils and the allocation of seats therein;
(b) the delimitation of territorial constituencies for the purpose of elections to those Councils;
(c) the qualifications for voting at such elections and the preparation of electoral rolls therefor;
(d) the qualifications for being elected at such elections as members of such Councils;
(e) the term of office of members of 1[Regional Councils];
______________________________________________
(f) any other matter relating to or connected with elections or nominations to such Councils;
(g) the procedure and the conduct of business 1[(including the power to act notwithstanding any vacancy)] in the District and Regional Councils;
(h) the appointment of officers and staff of the District and Regional Councils.
1[(6A) The elected members of the District Council shall hold office for a term of five years from the date appointed for the first meeting of the Council after the general elections to the Council, unless the District Council is sooner dissolved under paragraph 16 and a nominated member shall hold office at the pleasure of the Governor:
Provided that the said period of five years may, while a Proclamation of Emergency is in operation or if circumstances exist which, in the opinion of the Governor, render the holding of elections impracticable, be extended by the Governor for a period not exceeding one year at a time and in any case where a Proclamation of Emergency is in operation not extending beyond a period of six months after the Proclamation has ceased to operate:
Provided further that a member elected to fill a casual vacancy shall hold office only for the remainder of the term of office of the member whom he replaces.]
(7) The District or the Regional Council may after its first constitution make rules 1[with the approval of the Governor] with regard to the matters specified in sub-paragraph (6) of this paragraph and may also make rules 1[with like approval] regulating—
(a) the formation of subordinate local Councils or Boards and their procedure and the conduct of their business; and
(b) generally all matters relating to the transaction of business pertaining to the administration of the district or region, as the case may be:
______________________________________________
Provided that until rules are made by the District or the Regional Council under this sub-paragraph the rules made by the Governor under sub-paragraph (6) of this paragraph shall have effect in respect of elections to, the officers and staff of, and the procedure and the conduct of business in, each such Council.
## 1* * * * 23. Powers Of The District Councils And Regional Councils To Make Laws.—(1) The Regional Council For An Autonomous Region In ______________________________________________ 1. Second Proviso Omitted By S. 74 And Fourth Sch. Of The Assam Reorganisation (Meghalaya)
Act, 1969 (55 of 1969) (w.e.f. 2-4-1970).
2. Paragraph 3 has been amended in its application to the State of Assam by the Sixth Schedule to the
Constitution (Amendment) Act, 2003 (44 of 2003), s. 2, so as to substitute sub-paragraph (3) as
under (w.e.f. 7-9-2003),—
"(3) Save as otherwise provided in sub-paragraph (2) of paragraph 3A or sub-paragraph
(2) of paragraph 3B, all laws made under this paragraph or sub-paragraph (1) of paragraph 3A or sub-paragraph (1) of paragraph 3B shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect." .
After paragraph 3, the following paragraph has been inserted in its application to the State of
Assam by the Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), s. 2 (w.e.f. 12-9-1995), namely: -
"3A. Additional powers of the North Cachar Hills Autonomous Council and the
Karbi Anglong Autonomous Council to make laws.—(1) Without prejudice to the provisions of paragraph 3, the North Cachar Hills Autonomous Council and the Karbi Anglong Autonomous Council within their respective districts, shall have power to make laws with respect to—
(a) industries, subject to the provisions of entries 7 and 52 of List I of the Seventh
Schedule;
(b) communications, that is to say, roads, bridges, ferries and other means of
communication not specified in List I of the Seventh Schedule; municipal tramways, ropeways, inland waterways and traffic thereon subject to the provisions of List I and List III of the Seventh Schedule with regard to such waterways; vehicles other than mechanically propelled vehicles;
(c) preservation, protection and improvement of stock and prevention of animal
diseases; veterinary training and practice; cattle pounds;
(d) primary and secondary education; (e) agriculture, including agricultural education and research, protection against pests
and prevention of plant diseases;
(f) fisheries;
## (Foot-Note Continue),—
(g) water, that is to say, water supplies, irrigation and canals, drainage and
embankments, water storage and water power subject to the provisions of entry 56 of List I of the Seventh Schedule;
(h) social security and social insurance; employment and unemployment; (i) flood control schemes for protection of villages, paddy fields, markets, towns, etc.
(not of technical nature);
(j) theatre and dramatic performances, cinemas subject to the provisions of entry 60 of
List I of the Seventh Schedule; sports, entertainments and amusements;
(k) public health and sanitation, hospitals and dispensaries; (l) minor irrigation; (m) trade and commerce in, and the production supply and distribution of, food stuffs,
cattle fodder, raw cotton and raw jute;
(n) libraries, museums and other similar institutions controlled or financed by the State;
ancient and historical monuments and records other than those declared by or under any law made by Parliament to be of national importance; and
(o) alienation of land.
(2) All laws made by the North Cachar Hills Autonomous Council and the Karbi Anglong Autonomous Council under paragraph 3 or under this paragraph shall, in so far as they relate to matters specified in List III of the Seventh Schedule, be submitted forthwith to the Governor who shall reserve the same for the consideration of the President.
(3) When a law is reserved for the consideration of the President, the President shall declare either that he assents to the said law or that he withholds assent therefrom:
Provided that the President may direct the Governor to return the law to the North Cachar Hills Autonomous Council or the Karbi Anglong Autonomous Council, as the case may be, together with a message requesting that the said Council will reconsider the law or any specified provisions thereof and, in particular, will, consider the desirability of introducing any such amendments as he may recommend in his message and, when the law is so returned, the said Council shall consider the law accordingly within a period of six months from the date of receipt of such message and, if the law is again passed by the said Council with or without amendment it shall be presented again to the President for his consideration.".
After paragraph 3A, the following paragraph has been inserted in its application to the State of Assam by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), s. 2 (w.e.f. 7-9-2003), namely:—
"3B. **Additional powers of the Bodoland Territorial Council to make laws.**—(1)
Without prejudice to the provisions of paragraph 3, the Bodoland Territorial Council within its areas shall have power to make laws with respect to :—
(i) agriculture, including agricultural education and research, protection against
pests and prevention of plant diseases; (ii) animal husbandry and veterinary, that is to say, preservation, protection and improvement of stock and prevention of animal diseases, veterinary training and practice, cattle pounds; (iii) co-operation; (iv) cultural affairs; (v) education, that is to say, primary education, higher secondary including vocational training, adult education, college education (general); (vi) fisheries; (vii) flood control for protection
##
(Foot-note continue),—
of village, paddy fields, markets and towns (not of technical nature); (viii) Food and civil supply; (ix) forests (other than reserved forests); (x) handloom and textile; (xi) health and family welfare, (xii) intoxicating liquors, opium and derivatives, subject to the provisions of entry 84 of List I of the Seventh Schedule; (xiii) irrigation; (xiv) labour and employment; (xv) land and revenue; (xvi) library services (financed and controlled by the State Government); (xvii) lotteries (subject to the provisions of entry 40 of List I of the Seventh Schedule), theatres, dramatic performances and cinemas (subject to the provisions of entry 60 of List I of the Seventh Schedule); (xviii) markets and fairs; (xix) municipal corporation, improvement trust, district boards and other local authorities; (xx) museum and archaeology institutions controlled or financed by the State, ancient and historical monuments and records other than those declared by or under any law made by Parliament to be of national importance; (xxi) panchayat and rural development; (xxii) planning and development; (xxiii) printing and stationery; (xxiv) public health engineering; (xxv) public works department; (xxvi) publicity and public relations; (xxvii) registration of births and deaths; (xxviii) relief and rehabilitation; (xxix) sericulture; (xxx) small, cottage and rural industry subject to the provisions of entries 7 and 52 of List I of the Seventh Schedule; (xxxi) social Welfare; (xxxii) soil conservation; (xxxiii) sports and youth welfare; (xxxiv) statistics; (xxxv) tourism; (xxxvi) transport (roads, bridges, ferries and other means of communications not specified in List I of the Seventh Schedule, municipal tramways, ropeways, inland waterways and traffic thereon subject to the provision of List I and List III of the Seventh Schedule with regard to such waterways, vehicles other than mechanically propelled vehicles); (xxxvii) tribal research institute controlled and financed by the State Government; (xxxviii) urban development—town and country planning; (xxxix) weights and measures subject to the provisions of entry 50 of List I of the Seventh Schedule; and (xl) Welfare of plain tribes and backward classes:
Provided that nothing in such laws shall— (a) extinguish or modify the existing rights and privileges of any citizen in respect of his land at the date of commencement of this Act; and
(b) disallow and citizen from acquiring land either by way of inheritance, allotment, settlement or by any other way of transfer if such citizen is otherwise eligible for such acquisition of land within the Bodoland Territorial Areas District.
(2) All laws made under paragraph 3 or under this paragraph shall in so far as they relate to matters specified in List III of the Seventh Schedule, be submitted forthwith to the Governor who shall reserve the same for the consideration of the President.
(3) When a law is reserved for the consideration of the President, the President shall declare
either that he assents to the said law or that he withholds assent therefrom:
Provided that the President may direct the Governor to return the law to the Bodoland Territorial Council, together with the message requesting that the said Council will reconsider the law or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when the law is so returned, the said Council shall consider the law accordingly within a period of six months from the date of receipt of such message and, if the law is again passed by the said Council with or without amendments it shall be presented again to the President for his consideration.".
respect of all areas within such region and the District Council for an autonomous district in respect of all areas within the district except those which are under the authority of Regional Councils, if any, within the district shall have power to make laws with respect to—
(a) the allotment, occupation or use, or the setting apart, of land, other than any land which is a reserved forest for the purposes of agriculture or grazing or for residential or other non-agricultural purposes or for any other purpose likely to promote the interests of the inhabitants of any village or town:
Provided that nothing in such laws shall prevent the compulsory acquisition of any land, whether occupied or unoccupied, for public purposes 1[by the Government of the State concerned] in accordance with the law for the time being in force authorising such acquisition;
(b) the management of any forest not being a reserved forest; (c) the use of any canal or water-course for the purpose of agriculture;
(d) the regulation of the practice of *jhum* or other forms of shifting cultivation;
(e) the establishment of village or town committees or councils and their powers;
(f) any other matter relating to village or town administration, including village or town police and public health and sanitation;
(g) the appointment or succession of Chiefs or Headmen; (h) the inheritance of property;
2[(i) marriage and divorce;]
(j) social customs.
(2) In this paragraph, a "reserved forest" means any area which is a reserved forest under the Assam Forest Regulation, 1891, or under any other law for the time being in force in the area in question.
(3) All laws made under this paragraph shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.
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Fourth Sch., for cl. (i) (w.e.f. 2-4-1970).
14. Administration of justice in autonomous districts and autonomous regions.—(1) The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of areas within the district other than those which are under the authority of the Regional Councils, if any, within the district may constitute village councils or courts for the trial of suits and cases between the parties all of whom belong to Scheduled Tribes within such areas, other than suits and cases to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply, to the exclusion of any court in the State, and may appoint suitable persons to be members of such village councils or presiding officers of such courts, and may also appoint such officers as may be necessary for the administration of the laws made under paragraph 3 of this Schedule.
(2) Notwithstanding anything in this Constitution, the Regional Council for an autonomous region or any court constituted in that behalf by the Regional Council or, if in respect of any area within an autonomous district there is no Regional Council, the District Council for such district, or any court constituted in that behalf by the District Council, shall exercise the powers of a court of appeal in respect of all suits and cases triable by a village council or court constituted under sub-paragraph (1) of this paragraph within such region or area, as the case may be, other than those to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply, and no other court except the High Court and the Supreme Court shall have jurisdiction over such suits or cases.
(3) The High Court 2*** shall have and exercise such jurisdiction over the suits and cases to which the provisions of sub-paragraph (2) of this paragraph apply as the Governor may from time to time by order specify.
(4) A Regional Council or District Council, as the case may be, may with the previous approval of the Governor make rules regulating -
so as to insert the following sub-paragraph after sub-paragraph (5), namely:—
"(6) Nothing in this paragraph shall apply to the Bodoland Territorial Council constituted under the proviso to sub-paragraph (3) of paragraph 2 of this Schedule." .
2. The words "of Assam" omitted by the North-Eastern Areas (Reorganisation) Act, 1971
(81 of 1971), s. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
(a) the constitution of village councils and courts and the powers to be exercised by them under this paragraph;
(b) the procedure to be followed by village councils or courts in the trial of suits and cases under sub-paragraph (1) of this paragraph;
(c) the procedure to be followed by the Regional or District Council or any court constituted by such Council in appeals and other proceedings under sub-paragraph (2) of this paragraph;
(d) the enforcement of decisions and orders of such councils and courts;
(e) all other ancillary matters for the carrying out of the provisions of sub-paragraphs (1) and (2) of this paragraph.
1[(5) On and from such date as the President may, 2[after consulting the Government of the State concerned], by notification appoint in this behalf, this paragraph shall have effect in relation to such autonomous district or region as may be specified in the notification, as if—
(i) in sub-paragraph (1), for the words "between the parties all of whom belong to Scheduled Tribes within such areas, other than suits and cases to which the provisions of sub-paragraph (1) of paragraph 5 of this Schedule apply,", the words "not being suits and cases of the nature referred to in sub-paragraph (1) of paragraph (5) of this Schedule, which the Governor may specify in this behalf," had been substituted;
(ii) sub-paragraphs (2) and (3) had been omitted; (iii) in sub-paragraph (4)—
(a) for the words "A Regional Council or District Council, as the case may be, may with the previous approval of the Governor make rules regulating", the words "the Governor may make rules regulating" had been substituted; and
(b) for clause (a), the following clause had been substituted, namely:—
"(a) the constitution of village councils and courts, the powers to be exercised by them under this paragraph
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2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for certain words (w.e.f. 21-1-1972).
and the courts to which appeals from the decisions of village councils and courts shall lie;";
(c) for clause (c), the following clause had been substituted, namely:—
"(c) the transfer of appeals and other proceedings pending before the Regional or District Council or any court constituted by such Council immediately before the date appointed by the President under sub-paragraph (5);"; and
(d) in clause (e), for the words, brackets and figures
"sub-paragraphs (1) and (2)", the word, brackets and figure "sub-paragraph (1)" had been substituted.]
5. Conferment of powers under the Code of Civil Procedure,
1908, and the Code of Criminal Procedure, 18981, on the Regional and District Councils and on certain courts and officers for the trial of certain suits, cases and offences.—(1) The Governor may, for the trial of suits or cases arising out of any law in force in any autonomous district or region being a law specified in that behalf by the Governor, or for the trial of offences punishable with death, transportation for life, or imprisonment for a term of not less than five years under the Indian Penal Code or under any other law for the time being applicable to such district or region, confer on the District Council or the Regional Council having authority over such district or region or on courts constituted by such District Council or on any officer appointed in that behalf by the Governor, such powers under the Code of Civil Procedure, 1908, or, as the case may be, the Code of Criminal Procedure, 18981, as he deems appropriate, and thereupon the said Council, court or officer shall try the suits, cases or offences in exercise of the powers so conferred.
(2) The Governor may withdraw or modify any of the powers conferred on a District Council, Regional Council, court or officer under sub-paragraph (1) of this paragraph.
(3) Save as expressly provided in this paragraph, the Code of Civil Procedure, 1908, and the Code of Criminal Procedure, 18981, shall not apply to the trial of any suits, cases or offences in an autonomous district or in any autonomous region to which the provisions of this paragraph apply.
1[(4) On and from the date appointed by the President under subparagraph (5) of paragraph 4 in relation to any autonomous district or autonomous region, nothing contained in this paragraph shall, in its application to that district or region, be deemed to authorise the Governor to confer on the District Council or Regional Council or on courts constituted by the District Council any of the powers referred to in sub-paragraph (1) of this paragraph.]
2[6. Powers of the District Council to establish primary schools, etc.— (1) The District Council for an autonomous district may establish, construct, or manage primary schools, dispensaries, markets, 3[cattle pounds], ferries, fisheries, roads, road transport and waterways in the district and may, with the previous approval of the Governor, make regulations for the regulation and control thereof and, in particular, may prescribe the language and the manner in which primary education shall be imparted in the primary schools in the district.
(2) The Governor may, with the consent of any District Council, entrust either conditionally or unconditionally to that Council or to its officers functions in relation to agriculture, animal husbandry, community projects, co-operative societies, social welfare, village planning or any other matter to which the executive power of the State 4*** extends.
7. **District and Regional Funds**.—(1) There shall be constituted for each autonomous district, a District Fund and for each autonomous region, a Regional Fund to which shall be credited all moneys received respectively by the District Council for that district and the Regional Council for that region in the course of the administration of such district or region, as the case may be, in accordance with the provisions of this Constitution.
______________________________________________
ponds" (w.e.f. 20-12-1974).
4. The words "of Assam or Meghalaya, as the case may be," omitted by the North-
Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i) and Eighth Sch. (w.e.f. 21-1-1972).
1[(2) The Governor may make rules for the management of the District Fund, or, as the case may be, the Regional Fund and for the procedure to be followed in respect of payment of money into the said Fund, the withdrawal of moneys therefrom, the custody of moneys therein and any other matter connected with or ancillary to the matters aforesaid.
(3) The accounts of the District Council or, as the case may be, the Regional Council shall be kept in such form as the Comptroller and Auditor-General of India may, with the approval of the President, prescribe.
(4) The Comptroller and Auditor-General shall cause the accounts of the District and Regional Councils to be audited in such manner as he may think fit, and the reports of the Comptroller and Auditor-General relating to such accounts shall be submitted to the Governor who shall cause them to be laid before the Council.]
8. Powers to assess and collect land revenue and to impose taxes.—(1) The Regional Council for an autonomous region in respect of all lands within such region and the District Council for an autonomous district in respect of all lands within the district except those which are in the areas under the authority of Regional Councils, if any, within the district, shall have the power to assess and collect revenue in respect of such lands in accordance with the principles for the time being followed 2[by the Government of the State in assessing lands for the purpose of land revenue in the State generally.]
(2) The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous district in respect of all areas in the district except those which are under the authority of Regional Councils, if any, within the district, shall have power to levy and collect taxes on lands and buildings, and tolls on persons resident within such areas.
(3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within such district, that is to say -
(a) taxes on professions, trades, callings and employments;
(b) taxes on animals, vehicles and boats;
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1. Subs. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), s. 74 and
Fourth Sch., for sub-paragraph (2) (w.e.f. 2-4-1970).
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for certain words (w.e.f. 21-1-1972).
(c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; 1***
(d) taxes for the maintenance of schools, dispensaries or roads;
2[and]
3[(e) taxes on entertainment and amusements.]
(4) A Regional Council or District Council, as the case may be, may make regulations to provide for the levy and collection of any of the taxes specified in sub-paragraphs (2) and (3) of this paragraph 4[and every such regulation shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect].
59. Licences or leases for the purpose of prospecting for, or extraction of, minerals.—(1) Such share of the royalties accruing each year from licences or leases for the purpose of prospecting for, or the extraction of, minerals granted by 6[the Government of the State] in respect of any area within an autonomous district as may be agreed upon between 6[the Government of the State] and the District Council of such district shall be made over to that District Council.
(2) If any dispute arises as to the share of such royalties to be made over to a District Council, it shall be referred to the Governor for determination and the amount determined by the Governor in his discretion shall be deemed to be the amount payable under sub-paragraph (1) of this paragraph to the District Council and the decision of the Governor shall be final.
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5. Paragraph 9 has been amended in its application to the States of Tripura and
Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), s. 2 (w.e.f. 16-12-1988), so as to insert the following sub-paragraph after
sub-paragraph (2), namely:—
"(3) The Governor may, by order, direct that the share of royalties to be made
over to a District Council under this paragraph shall be made over to that Council within a period of one year from the date of any agreement under sub-paragraph (1) or, as the case may be, of any determination under sub-paragraph (2).".
6. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for "the Government of Assam" (w.e.f. 21-1-1972).
## 110. Power Of District Council To Make Regulations For The Control
of money-lending and trading by non-tribals.—(1) The District Council of an autonomous district may make regulations for the regulation and control of money-lending or trading within the district by persons other than Scheduled Tribes resident in the district.
(2) In particular and without prejudice to the generality of the foregoing power, such regulations may—
(a) prescribe that no one except the holder of a licence issued in that behalf shall carry on the business of money-lending;
(b) prescribe the maximum rate of interest which may be charged or be recovered by a money-lender;
(c) provide for the maintenance of accounts by money-lenders and for the inspection of such accounts by officers appointed in that behalf by the District Council;
(d) prescribe that no person who is not a member of the Scheduled Tribes resident in the district shall carry on wholesale or retail business in any commodity except under a licence issued in that behalf by the District Council :
(a) in the heading, the words "by non-tribals" shall be omitted; (b) in sub-paragraph (1), the words "other than Scheduled Tribes" shall be omitted;
(c) in sub-paragraph (2), for clause (d), the following clause shall be substituted, namely:—
"(d) prescribe that no person resident in the district shall carry on any trade, whether wholesale or retail, except under a licence issued in that behalf by the District Council:".
the following sub-paragraph after sub-paragraph (3), namely:—
"(4) Nothing in this paragraph shall apply to the Bodoland Territorial Council constituted
under the proviso to sub-paragraph (3) of paragraph 2 of this Schedule.".
## (Sixth Schedule)
Provided that no regulations may be made under this paragraph unless they are passed by a majority of not less than three-fourths of the total membership of the District Council:
Provided further that it shall not be competent under any such regulations to refuse the grant of a licence to a money-lender or a trader who has been carrying on business within the district since before the time of the making of such regulations.
(3) All regulations made under this paragraph shall be submitted forthwith to the Governor and, until assented to by him, shall have no effect.
11. Publication of laws, rules and regulations made under the Schedule.—All laws, rules and regulations made under this Schedule by a District Council or a Regional Council shall be published forthwith in the Official Gazette of the State and shall on such publication have the force of law.
112.
2[Application of Acts of Parliament and of the Legislature of the State of Assam to autonomous districts and autonomous regions in the State of Assam].— (1) Notwithstanding anything in this Constitution, -
2. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i) and Eighth
Sch., for the heading (w.e.f. 21-1-1972).
(a) no Act of the 1[Legislature of the State of Assam] in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the 1[Legislature of the State of Assam]
prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region 2[in that State] unless in either case the District Council for such district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act may direct that the Act shall in its application to such district or region or any part thereof have effect subject to such exceptions or modifications as it thinks fit;
(b) the Governor may, by public notification, direct that any Act of Parliament or of the 1[Legislature of the State of Assam] to which the provisions of clause (a) of this sub-paragraph do not apply shall not apply to an autonomous district or an autonomous region
2[in that State], or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification. (2) Any direction given under sub-paragraph (1) of this paragraph may be given so as to have retrospective effect.
## 3[12A. Application Of Acts Of Parliament And Of The Legislature Of
the State of Meghalaya to autonomous districts and autonomous regions in the State of Meghalaya.—Notwithstanding anything in this Constitution,—
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## (Sixth Schedule)
(a) if any provision of a law made by a District or Regional Council in the State of Meghalaya with respect to any matter specified in sub-paragraph (1) of paragraph 3 of this Schedule or if any provision of any regulation made by a District Council or a Regional Council in that State under paragraph 8 or paragraph 10 of this Schedule, is repugnant to any provision of a law made by the Legislature of the State of Meghalaya with respect to that matter, then, the law or regulation made by the District Council or, as the case may be, the Regional Council whether made before or after the law made by the Legislature of the State of Meghalaya, shall, to the extent of repugnancy, be void and the law made by the Legislature of the State of Meghalaya shall prevail;
(b) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Meghalaya, or shall apply to such district or region or any part thereof subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
1[12AA. Application of Acts of Parliament and of the Legislature of the State of Tripura to the autonomous districts and autonomous regions in the State of Tripura.—Notwithstanding anything in this Constitution,—
(a) no Act of the Legislature of the State of Tripura in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the Legislature of the State of Tripura prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to the autonomous district or an autonomous region in that State unless, in either case, the District Council for that district or having jurisdiction over such region by public notification so directs, and the District Council in giving such direction with respect to any Act may direct that the Act shall, in its application to that district or such region or any part thereof have effect subject to such exceptions or modifications as it thinks fit;
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1. Paragraph 12AA ins. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4
(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Tripura to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to the autonomous district or an autonomous region in that State, or shall apply to that district or such region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification;
(c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to the autonomous district or an autonomous region in the State of Tripura, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
1[12B. Application of Acts of Parliament and of the Legislature of the State of Mizoram to autonomous districts and autonomous regions in the State of Mizoram.—Notwithstanding anything in this Constitution,—
(a) no Act of the Legislature of the State of Mizoram in respect of any of the matters specified in paragraph 3 of this Schedule as matters with respect to which a District Council or a Regional Council may make laws, and no Act of the Legislature of the State of Mizoram prohibiting or restricting the consumption of any non-distilled alcoholic liquor shall apply to any autonomous district or autonomous region in that State unless, in either case, the District Council for such district or having jurisdiction over such region, by public notification, so directs, and the District Council, in giving such direction with respect to any Act, may direct that the Act shall, in its application to such district or region or any part thereof, have effect subject to such exceptions or modifications as it thinks fit;
(b) the Governor may, by public notification, direct that any Act of the Legislature of the State of Mizoram to which the provisions of clause (a) of this sub-paragraph do not apply, shall not apply to an autonomous district or an autonomous region in that State, or shall apply to such district or region, or any part thereof, subject to such exceptions or modifications, as he may specify in the notification;
(c) the President may, with respect to any Act of Parliament, by notification, direct that it shall not apply to an autonomous district or an autonomous region in the State of Mizoram, or shall apply to such district or region or any part thereof, subject to such exceptions or modifications as he may specify in the notification and any such direction may be given so as to have retrospective effect.]
13. Estimated receipts and expenditure pertaining to autonomous districts to be shown separately in the annual financial statement.—The estimated receipts and expenditure pertaining to an autonomous district which are to be credited to, or is to be made from, the Consolidated Fund of the State 1*** shall be first placed before the District Council for discussion and then after such discussion be shown separately in the annual financial statement of the State to be laid before the Legislature of the State under article 202.
214. Appointment of Commission to inquire into and report on the administration of autonomous districts and autonomous regions.— (1) The Governor may at any time appoint a Commission to examine and report on any matter specified by him relating to the administration of the autonomous districts and autonomous regions in the State, including matters specified in clauses (c), (d), (e) and (f) of sub-paragraph (3) of paragraph 1 of this Schedule, or may appoint a Commission to inquire into and report from time to time on the administration of autonomous districts and autonomous regions in the State generally and in particular on—
(a) the provision of educational and medical facilities and communications in such districts and regions;
(b) the need for any new or special legislation in respect of such districts and regions; and
(c) the administration of the laws, rules and regulations made by the District and Regional Councils;
and define the procedure to be followed by such Commission.
Sixth Schedule to the Constitution (Amendment) Act, 1995 (42 of 1995), s. 2
(w.e.f.12.9.1995) as under:—
'in paragraph 14, in sub-paragraph (2), the words "with the recommendations
of the Governor with respect thereto" shall be omitted.'.
(2) The report of every such Commission with the recommendations of the Governor with respect thereto shall be laid before the Legislature of the State by the Minister concerned together with an explanatory memorandum regarding the action proposed to be taken thereon by 1[the Government of the State.]
(3) In allocating the business of the Government of the State among his Ministers the Governor may place one of his Ministers specially in charge of the welfare of the autonomous districts and autonomous regions in the State.
215. Annulment or suspension of acts and resolutions of District and Regional Councils.—(1) If at any time the Governor is satisfied that an act or resolution of a District or a Regional Council is likely to endanger the safety of India 3[or is likely to be prejudicial to public order], he may annul or suspend such act or resolution and take such steps as he may consider necessary (including the suspension of the Council and the assumption to himself of all or any of the powers vested in or exercisable by the Council) to prevent the commission or continuance of such act, or the giving of effect to such resolution.
(2) Any order made by the Governor under sub-paragraph (1) of this paragraph together with the reasons therefor shall be laid before the Legislature of the State as soon as possible and the order shall, unless revoked by the Legislature of the State, continue in force for a period of twelve months from the date on which it was so made:
Provided that if and so often as a resolution approving the continuance in force of such order is passed by the Legislature of the State, the order shall unless cancelled by the Governor continue in force for a further period of twelve months from the date on which under this paragraph it would otherwise have ceased to operate.
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1. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for "the Government of Assam" (w.e.f. 21-1-1972).
2. Paragraph 15 has been amended in its application to the States of Tripura and
Mizoram by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67
of 1988), s. 2 (w.e.f. 16-12-1988), as under,—
'In paragraph 15, in sub-paragraph (2),-
(a)
in the opening paragraph, for the words "by the Legislature of the State", the words "by him" shall be substituted;
(b) the proviso shall be omitted.'.
3. Ins. by the Assam Reorganisation (Meghalaya) Act, 1969 (55 of 1969), s. 74 and
Fourth Sch. (w.e.f. 2-4-1970).
116. **Dissolution of a District or a Regional Council.**— 2[(1)] The Governor may on the recommendation of a Commission appointed under paragraph 14 of this Schedule by public notification order the dissolution of a District or a Regional Council, and—
(a) direct that a fresh general election shall be held immediately for the reconstitution of the Council, or
(b) subject to the previous approval of the Legislature of the State assume the administration of the area under the authority of such Council himself or place the administration of such area under the Commission appointed under the said paragraph or any other body considered suitable by him for a period not exceeding twelve months: Provided that when an order under clause (a) of this paragraph has been made, the Governor may take the action referred to in clause (b) of this paragraph with regard to the administration of the area in question pending the reconstitution of the Council on fresh general election:
Provided further that no action shall be taken under clause (b) of this paragraph without giving the District or the Regional Council, as the case may be, an opportunity of placing its views before the Legislature of the State.
'(a) in sub-paragraph (1), the words "subject to the previous approval of the
Legislature of the State" occurring in clause (b), and the second proviso shall be omitted;
(b) for sub-paragraph (3), the following sub-paragraph shall be substituted,
namely:—
"(3) Every order made under sub-paragraph (1) or sub-paragraph (2) of this paragraph, along with the reasons therefor shall be laid before the Legislature of the State.".'.
2. Paragraph 16 renumbered as sub-paragraph (1) thereof by the Assam
Reorganisation (Meghalaya) Act, 1969 (55 of 1969), s. 74 and Fourth Sch. (w.e.f. 2-4-1970).
1[(2) If at any time the Governor is satisfied that a situation has arisen in which the administration of an autonomous district or region cannot be carried on in accordance with the provisions of this Schedule, he may, by public notification, assume to himself all or any of the functions or powers vested in or exercisable by the District Council or, as the case may be, the Regional Council and declare that such functions or powers shall be exercisable by such person or authority as he may specify in this behalf, for a period not exceeding six months:
Provided that the Governor may by a further order or orders extend the
operation of the initial order by a period not exceeding six months on each occasion.
(3) Every order made under sub-paragraph (2) of this paragraph with the reasons therefor shall be laid before the Legislature of the State and shall cease to operate at the expiration of thirty days from the date on which the State Legislature first sits after the issue of the order, unless, before the expiry of that period it has been approved by that State Legislature.]
217. Exclusion of areas from autonomous districts in forming constituencies in such districts.—For the purposes of elections to 3[the Legislative Assembly of Assam or Meghalaya] 4[or Tripura] 5[or Mizoram], the Governor may by order declare that any area within an autonomous district 6[in the State of Assam or Meghalaya 4[or Tripura] 5[or Mizoram], as the case may be,] shall not form part of any constituency to fill a seat or seats in the Assembly reserved for any such district but shall form part of a constituency to fill a seat or seats in the Assembly not so reserved to be specified in the order.
7[18.*
*
*
* *]
______________________________________________
2. Paragraph 17 has been amended in its application to the State of Assam by the
Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of 2003), s. 2 (w.e.f. 7-9-2003), so as to insert the following proviso, namely:—
"Provided that nothing in this paragraph shall apply to the Bodoland Territorial
Areas District.".
3. Subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for "the Legislative Assembly of Assam" (w.e.f. 21-1-1972).
4. Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4 (w.e.f. 1-4-1985). 5. Ins. by the State of Mizoram Act, 1986 (34 of 1986), s. 39 (w.e.f. 20-2-1987). 6. Ins. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of 1971), s. 71(i)
and Eighth Sch., for "the Legislative Assembly of Assam" (w.e.f. 21-1-1972).
7. Paragraph 18 omitted by s. 71(i) and Eighth Sch., *ibid.* (w.e.f. 21-1-1972).
119. **Transitional provisions.**—(1) As soon as possible after the commencement of this Constitution the Governor shall take steps for the constitution of a District Council for each autonomous district in the State under this Schedule and, until a District Council is so constituted for an autonomous district, the administration of such district shall be vested in the Governor and the following provisions shall apply to the administration of the areas within such district instead of the foregoing provisions of this Schedule, namely:—
(a) no Act of Parliament or of the Legislature of the State shall apply to any such area unless the Governor by public notification so directs; and the Governor in giving such a direction with respect to any Act may direct that the Act shall, in its application to the area or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit;
(b) the Governor may make regulations for the peace and good government of any such area and any regulations so made may repeal or amend any Act of Parliament or of the Legislature of the State or any existing law which is for the time being applicable to such area.
(2) Any direction given by the Governor under clause (a) of
sub-paragraph (1) of this paragraph may be given so as to have retrospective effect.
(3), namely :—
'(4) As soon as possible after the commencement of this Act an Interim Executive Council for Bodoland Territorial Areas District in Assam shall be formed by the Governor from amongst leaders of the Bodo movement, including the signatories to the Memorandum of Settlement, and shall provide adequate representation to the non-tribal communities in that area:
Provided that Interim Council shall be for a period of six months during which endeavour to hold the election to the Council shall be made.
Explanation.—For the purposes of this sub-paragraph, the expression
"Memorandum of Settlement" means the Memorandum signed on the 10th day of February, 2003 between Government of India, Government of Assam and Bodo Liberation Tigers.'.
(3) All regulations made under clause (b) of sub-paragraph (1) of this paragraph shall be submitted forthwith to the President and, until assented to by him, shall have no effect.
1[20. **Tribal areas.**—(1) The areas specified in Parts I, II 2[, IIA] and III of the table below shall respectively be the tribal areas within the State of Assam, the State of Meghalaya 2[, the State of Tripura] and the 3[State] of Mizoram.
(2) 4[Any reference in Part I, Part II or Part III of the table below] to any district shall be construed as a reference to the territories comprised within the autonomous district of that name existing immediately before the day appointed under clause (b) of section 2 of the North-Eastern Areas (Reorganisation) Act, 1971:
Provided that for the purposes of clauses (e) and (f) of sub-paragraph
(1) of paragraph 3, paragraph 4, paragraph 5, paragraph 6, sub-paragraph
(2), clauses (a), (b) and (d) of sub-paragraph (3) and sub-paragraph (4) of paragraph 8 and clause (d) of sub-paragraph (2) of paragraph 10 of this Schedule, no part of the area comprised within the municipality of Shillong shall be deemed to be within the 5[Khasi Hills District].
2[(3) The reference in Part IIA in the table below to the "Tripura Tribal Areas District" shall be construed as a reference to the territory comprising the tribal areas specified in the First Schedule to the Tripura Tribal Areas Autonomous District Council Act, 1979.]
______________________________________________
1. Paragraph 20 subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of
1971), s. 71(i) and Eighth Sch., for paragraph 20 (w.e.f. 21-1-1972).
2. Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4 (w.e.f. 1-4-1985). 3. Subs. by the State of Mizoram Act, 1986 (34 of 1986), s. 39, for "Union territory"
(w.e.f. 20-2-1987).
4. Subs. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4, for "Any
reference in the table below" (w.e.f. 1-4-1985).
5. Subs. by the Government of Meghalaya Notification No. DCA 31/72/11, dated the
14th June, 1973, Gazette of Meghalaya, Pt. VA, dated 23-6-1973, p. 200.
PART I
1. The North Cachar Hills District.
2. 1[The Karbi Anglong District.]
2[3. The Bodoland Territorial Areas District.]
PART II
3[1. Khasi Hills District.
2. Jaintia Hills District.] 3. The Garo Hills District.
4[PART **IIA]**
Tripura Tribal Areas District]
Part III
5*
* *
6[1. The Chakma District. 7[2. The Mara District.
3. The Lai District.]]
8[20A.
Dissolution of the Mizo District Council.—(1)
Notwithstanding anything in this Schedule, the District Council of the Mizo District existing immediately before the prescribed date (hereinafter referred to as the Mizo District Council) shall stand dissolved and cease to exist.
##
______________________________________________
1. Subs. by the Government of Assam Notification No. TAD/R/115/74/47, dated
14-10-1976 for "The Mikir Hills District".
2. Ins. by the Sixth Schedule to the Constitution (Amendment) Act, 2003 (44 of
2003), s. 2 (w.e.f. 7-9-2003).
3. Subs. by the Government of Meghalaya Notification No. DCA 31/72/11, dated the
14th June, 1973, Gazette of Meghalaya, Pt. VA, dated 23-6-1973, p. 200.
4. Ins. by the Constitution (Forty-ninth Amendment) Act, 1984, s. 4 (w.e.f. 1-4-1985).
5. The words "The Mizo District." omitted by the Government of Union Territories
(Amendment) Act, 1971 (83 of 1971), s. 13 (w.e.f. 16-2-1972).
6. Ins. by the Mizoram District Councils (Miscellaneous Provisions) Order, 1972,
published in the Mizoram Gazette, 1972, dated the 5th May, 1972, Vol. I, Pt. II, p.17 (w.e.f. 29-4-1972).
7. Subs. by the Sixth Schedule to the Constitution (Amendment) Act, 1988
(67 of 1988), s. 2, for serial numbers 2 and 3 and the entries relating thereto (w.e.f. 16-12-1988).
8. Paragraph 20A subs. by the North-Eastern Areas (Reorganisation) Act, 1971 (81 of
1971), s.14, for paragraph 20 and further subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), s. 13, for paragraph 20A (w.e.f. 16-
2-1972).
## (Sixth Schedule)
(2) The Administrator of the Union territory of Mizoram may, by one or more orders, provide for all or any of the following matters, namely:—
(a) the transfer, in whole or in part, of the assets, rights and liabilities of the Mizo District Council (including the rights and liabilities under any contract made by it) to the Union or to any other authority;
(b) the substitution of the Union or any other authority for the Mizo District Council, or the addition of the Union or any other authority, as a party to any legal proceedings to which the Mizo District Council is a party;
(c) the transfer or re-employment of any employees of the Mizo District Council to or by the Union or any other authority, the terms and conditions of service applicable to such employees after such transfer or re-employment;
(d) the continuance of any laws, made by the Mizo District Council and in force immediately before its dissolution, subject to such adaptations and modifications, whether by way of repeal or amendment, as the Administrator may make in this behalf, until such laws are altered, repealed or amended by a competent Legislature or other competent authority;
(e) such incidental, consequential and supplementary matters as the Administrator considers necessary.
Explanation.—In this paragraph and in paragraph 20B of this Schedule, the expression "prescribed date" means the date on which the Legislative Assembly of the Union territory of Mizoram is duly constituted under and in accordance with the provisions of the Government of Union Territories Act, 1963.]
1[*20B. Autonomous regions in the Union territory of Mizoram to be autonomous districts and transitory provisions consequent thereto.—(1) Notwithstanding anything in this Schedule,—
(a) every autonomous region existing immediately before the prescribed date in the Union territory of Mizoram shall, on and from that date, be an autonomous district in that Union territory (hereafter referred to as the corresponding new district) and the Administrator thereof may, by one or more orders, direct that such consequential
______________________________________________
1.Subs. by the Government of Union Territories (Amendment) Act, 1971 (83 of 1971), s. 13, for paragraph 20A (w.e.f. 16-2-1972).
* After paragraph 20B, the following paragraph has been inserted in its application to the State of Assam by the Sixth Schedule to the Constitution of India (Amendment) Act,1995 (42 of 1995), s.2 (w.e.f. 12-2-1995), namely:- "20BA. Exercise of discretionary powers by the Governor in the discharge of his functions.—The Governor in the discharge of his functions under sub-paragraphs (2) and (3) of paragraph 1, sub-paragraphs (1), (6), sub-paragraph (6A) excluding the first proviso and sub-paragraph (7) of paragraph 2, sub-paragraph (3) of paragraph 3, sub-paragraph (4) of paragraph 4, paragraph 5, sub-paragraph (1) of paragraph 6, subparagraph (2) of paragraph 7, sub-paragraph (4) of paragraph 8, sub-paragraph (3) of paragraph 9, sub-paragraph (3) of paragraph 10, sub-paragraph (1) of paragraph 14, sub-paragraph (1) of paragraph 15 and sub-paragraphs (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers and the North Cachar Hills Autonomous Council or the Karbi Anglong Autonomous Council, as the case may be, take such action as he considers necessary in his discretion.". * After paragraph 20B, the following paragraph has been inserted in its application to the State of Tripura and Mizoram, by the Sixth Schedule to the Constitution (Amendment) Act, 1988 (67 of 1988), s.2 (16-12-1988), namely:-
"20BB. Exercise of discretionary powers by the Governor in the discharge of his functions.—The Governor, in the discharge of his functions under subparagraphs (2) and (3) of paragraph 1, sub-paragraphs (1) and (7) of paragraph 2, subparagraph (3) of paragraph 3, sub-paragraph (4) of paragraph 4, paragraph 5, subparagraph (1) of paragraph 6, sub-paragraph (2) of paragraph 7, sub-paragraph (3) of paragraph 9, sub-paragraph (1) of paragraph 14, sub-paragraph (1) of paragraph 15 and sub-paragraphs (1) and (2) of paragraph 16 of this Schedule, shall, after consulting the Council of Ministers, and if he thinks it necessary, the District Council or the Regional Council concerned, take such action as he considers necessary in his discretion.".
amendments as are necessary to give effect to the provisions of this clause shall be made in paragraph 20 of this Schedule (including Part III of the table appended to that paragraph) and thereupon the said paragraph and the said Part III shall be deemed to have been amended accordingly;
(b) every Regional Council of an autonomous region in the Union territory of Mizoram existing immediately before the prescribed date (hereafter referred to as the existing Regional Council) shall, on and from that date and until a District Council is duly constituted for the corresponding new district, be deemed to be the District Council of that district (hereafter referred to as the corresponding new District Council).
(2) Every member whether elected or nominated of an existing Regional Council shall be deemed to have been elected or, as the case may be, nominated to the corresponding new District Council and shall hold office until a District Council is duly constituted for the corresponding new district under this Schedule.
(3) Until rules are made under sub-paragraph (7) of paragraph 2 and subparagraph (4) of paragraph 4 of this Schedule by the corresponding new District Council, the rules made under the said provisions by the existing Regional Council and in force immediately before the prescribed date shall have effect in relation to the corresponding new District Council subject to such adaptations and modifications as may be made therein by the Administrator of the Union territory of Mizoram.
(4) The Administrator of the Union territory of Mizoram may, by one or more orders, provide for all or any of the following matters, namely:—
(a) the transfer in whole or in part of the assets, rights and liabilities of the existing Regional Council (including the rights and liabilities under any contract made by it) to the corresponding new District Council;
(b) the substitution of the corresponding new District Council for the existing Regional Council as a party to the legal proceedings to which the existing Regional Council is a party;
(c) the transfer or re-employment of any employees of the existing Regional Council to or by the corresponding new District Council, the terms and conditions of service applicable to such employees after such transfer or re-employment;
(d) the continuance of any laws made by the existing Regional Council and in force immediately before the prescribed date, subject to such adaptations and modifications, whether by way of repeal or amendment, as the Administrator may make in this behalf until such laws are altered, repealed or amended by a competent Legislature or other competent authority;
(e) such incidental, consequential and supplementary matters as the Administrator considers necessary.
1[20C. **Interpretation**.—Subject to any provision made in this behalf, the provisions of this Schedule shall, in their application to the Union territory of Mizoram, have effect—
(1) as if references to the Governor and Government of the State were references to the Administrator of the Union territory appointed under article 239, references to State (except in the expression "Government of the State") were references to the Union territory of Mizoram and references to the State Legislature were references to the Legislative Assembly of the Union territory of Mizoram;
(2) as if—
(a) in sub-paragraph (5) of paragraph 4, the provision for consultation with the Government of the State concerned had been omitted;
(b) in sub-paragraph (2) of paragraph 6, for the words "to which the executive power of the State extends", the words "with respect to which the Legislative Assembly of the Union territory of Mizoram has power to make laws" had been substituted;
(c) in paragraph 13, the words and figures "under article
202" had been omitted.]
21. **Amendment of the Schedule**.—(1) Parliament may from time to time by law amend by way of addition, variation or repeal any of the provisions of this Schedule and, when the Schedule is so amended, any reference to this Schedule in this Constitution shall be construed as a reference to such Schedule as so amended.
(2) No such law as is mentioned in sub-paragraph (1) of this paragraph shall be deemed to be an amendment of this Constitution for the purposes of article 368.
______________________________________________
## Seventh Schedule (Article 246) List I—Union List
1. Defence of India and every part thereof including preparation for defence and all such acts as may be conducive in times of war to its prosecution and after its termination to effective demobilisation.
2. Naval, military and air forces; any other armed forces of the Union.
1[2A. Deployment of any armed force of the Union or any other force subject to the control of the Union or any contingent or unit thereof in any State in aid of the civil power; powers, jurisdiction, privileges and liabilities of the members of such forces while on such deployment.]
3. Delimitation of cantonment areas, local self-government in such areas, the constitution and powers within such areas of cantonment authorities and the regulation of house accommodation (including the control of rents) in such areas.
4. Naval, military and air force works.
5. Arms, firearms, ammunition and explosives.
6. Atomic energy and mineral resources necessary for its production.
7. Industries declared by Parliament by law to be necessary for the
purpose of defence or for the prosecution of war.
8. Central Bureau of Intelligence and Investigation. 9. Preventive detention for reasons connected with Defence, Foreign Affairs, or the security of India; persons subjected to such detention.
10. Foreign affairs; all matters which bring the Union into relation with any foreign country.
11. Diplomatic, consular and trade representation. 12. United Nations Organisation. 13. Participation in international conferences, associations and other bodies and implementing of decisions made thereat.
14. Entering into treaties and agreements with foreign countries and implementing of treaties, agreements and conventions with foreign countries.
______________________________________________
15. War and peace.
16. Foreign jurisdiction. 17. Citizenship, naturalisation and aliens.
18. Extradition.
19. Admission into, and emigration and expulsion from, India; passports
and visas.
20. Pilgrimages to places outside India. 21. Piracies and crimes committed on the high seas or in the air; offences against the law of nations committed on land or the high seas or in the air.
22. Railways. 23. Highways declared by or under law made by Parliament to be national highways.
24. Shipping and navigation on inland waterways, declared by Parliament by law to be national waterways, as regards mechanically propelled vessels; the rule of the road on such waterways.
25. Maritime shipping and navigation, including shipping and navigation on tidal waters; provision of education and training for the mercantile marine and regulation of such education and training provided by States and other agencies.
26. Lighthouses, including lightships, beacons and other provision for the safety of shipping and aircraft.
27. Ports declared by or under law made by Parliament or existing law to be major ports, including their delimitation, and the constitution and powers of port authorities therein.
28. Port quarantine, including hospitals connected therewith; seamen's and marine hospitals.
29. Airways; aircraft and air navigation; provision of aerodromes;
regulation and organisation of air traffic and of aerodromes; provision for aeronautical education and training and regulation of such education and training provided by States and other agencies.
30. Carriage of passengers and goods by railway, sea or air, or by national waterways in mechanically propelled vessels.
31. Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication.
32. Property of the Union and the revenue therefrom, but as regards property situated in a State 1*** subject to legislation by the State, save in so far as Parliament by law otherwise provides.
2[33*
*
*
* *]
34. Courts of wards for the estates of Rulers of Indian States.
35. Public debt of the Union.
36. Currency, coinage and legal tender; foreign exchange.
37. Foreign loans.
38. Reserve Bank of India.
39. Post Office Savings Bank.
40. Lotteries organised by the Government of India or the Government of
a State.
41. Trade and commerce with foreign countries; import and export across customs frontiers; definition of customs frontiers.
42. Inter-State trade and commerce. 43. Incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations, but not including co-operative societies.
44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities.
45. Banking. 46. Bills of exchange, cheques, promissory notes and other like instruments.
47. Insurance. 48. Stock exchanges and futures markets. 49. Patents, inventions and designs; copyright; trade-marks and merchandise marks.
50. Establishment of standards of weight and measure.
51. Establishment of standards of quality for goods to be exported out of India or transported from one State to another.
52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.
53. Regulation and development of oilfields and mineral oil resources;
petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable.
54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
55. Regulation of labour and safety in mines and oilfields. 56. Regulation and development of inter-State rivers and river valleys to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.
57. Fishing and fisheries beyond territorial waters.
58. Manufacture, supply and distribution of salt by Union agencies;
regulation and control of manufacture, supply and distribution of salt by other agencies.
59. Cultivation, manufacture, and sale for export, of opium. 60. Sanctioning of cinematograph films for exhibition. 61. Industrial disputes concerning Union employees. 62. The institutions known at the commencement of this Constitution as the National Library, the Indian Museum, the Imperial War Museum, the Victoria Memorial and the Indian War Memorial, and any other like institution financed by the Government of India wholly or in part and declared by Parliament by law to be an institution of national importance.
63. The institutions known at the commencement of this Constitution as the Benares Hindu University, the Aligarh Muslim University and the 1[Delhi University; the University established in pursuance of article 371E;] any other institution declared by Parliament by law to be an institution of national importance.
______________________________________________
64. Institutions for scientific or technical education financed by the Government of India wholly or in part and declared by Parliament by law to be institutions of national importance.
65. Union agencies and institutions for—
(a) professional, vocational or technical training, including the training of police officers; or
(b) the promotion of special studies or research; or (c) scientific or technical assistance in the investigation or detection of crime.
66. Co-ordination and determination of standards in institutions for higher education or research and scientific and technical institutions.
67. Ancient and historical monuments and records, and archaeological sites and remains, 1[declared by or under law made by Parliament] to be of national importance.
68. The Survey of India, the Geological, Botanical, Zoological and Anthropological Surveys of India; Meteorological organisations.
69. Census.
70. Union Public Service; All-India Services; Union Public Service Commission.
71. Union pensions, that is to say, pensions payable by the Government of India or out of the Consolidated Fund of India.
72. Elections to Parliament, to the Legislatures of States and to the offices of President and Vice-President; the Election Commission.
73. Salaries and allowances of members of Parliament, the Chairman and Deputy Chairman of the Council of States and the Speaker and Deputy Speaker of the House of the People.
74. Powers, privileges and immunities of each House of Parliament and of the members and the Committees of each House; enforcement of attendance of persons for giving evidence or producing documents before committees of Parliament or commissions appointed by Parliament.
75. Emoluments, allowances, privileges, and rights in respect of leave of absence, of the President and Governors; salaries and allowances of the Ministers for the Union; the salaries, allowances, and rights in respect of leave of absence and other conditions of service of the Comptroller and Auditor- General of India.
______________________________________________
76. Audit of the accounts of the Union and of the States. 77. Constitution, organisation, jurisdiction and powers of the Supreme Court (including contempt of such Court), and the fees taken therein; persons entitled to practise before the Supreme Court.
78. Constitution and organisation 1[(including vacations)] of the High Courts except provisions as to officers and servants of High Courts; persons entitled to practise before the High Courts.
2[79. Extension of the jurisdiction of a High Court to, and exclusion of the jurisdiction of a High Court from, any Union territory.]
80. Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the Government of the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas outside that State.
81. Inter-State migration; inter-State quarantine.
82. Taxes on income other than agricultural income. 83. Duties of customs including export duties.
3[84. Duties of excise on the following goods manufactured or produced in India, namely:—
(a) petroleum crude; (b) high speed diesel; (c) motor spirit (commonly known as petrol); (d) natural gas; (e) aviation turbine fuel; and (f) tobacco and tobacco products.]
85. Corporation tax.
effect).
2. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 29 and Sch. for entry 79
(w.e.f. 1-11-1956).
3. Subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 17(a)(i)
for entry 84 (w.e.f. 16-9-2016).
86. Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies.
87. Estate duty in respect of property other than agricultural land. 88. Duties in respect of succession to property other than agricultural land.
89. Terminal taxes on goods or passengers, carried by railway, sea or air;
taxes on railway fares and freights.
90. Taxes other than stamp duties on transactions in stock exchanges and futures markets.
91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.
1[92. * * * * * *] 2[92A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter-State trade or commerce.]
3[92B. Taxes on the consignments of goods (whether the consignment is to the person making it or to any other person), where such consignment takes place in the course of inter-State trade or commerce.]
4[92C. * * * * * *]
93. Offences against laws with respect to any of the matters in this List. 94. Inquires, surveys and statistics for the purpose of any of the matters in this List.
95. Jurisdiction and powers of all courts, except the Supreme Court, with
respect to any of the matters in this List; admiralty jurisdiction.
96. Fees in respect of any of the matters in this List, but not including fees
taken in any court.
97. Any other matter not enumerated in List II or List III including any tax
not mentioned in either of those Lists.
______________________________________________
1. Entry 92 omitted by the Constitution (One Hundred and First Amendment) Act, 2016,
s. 17(a)(ii) (w.e.f. 16-9-2016).
2. Ins. by the Constitution (Sixth Amendment) Act, 1956, s. 2 (w.e.f. 11-9-1956). 3. Ins.by the Constitution (Forty-sixth Amendment) Act, 1982, s. 5 (w.e.f. 2-2-1983). 4. Entry 92C was ins. by the Constitution (Eighty-eighth Amendment) Act, 2003, s. 4
(date not notified) and omitted by the Constitution (One Hundred and First
Amendment) Act, 2016, s. 17(a)(ii) (w.e.f. 16-9-2016).
## List Ii—State List
1. Public order (but not including 1[the use of any naval, military or air force or any other armed force of the Union or of any other force subject to the control of the Union or of any contingent or unit thereof] in aid of the civil power).
2[2. Police (including railway and village police) subject to the provisions of entry 2A of List I.]
3. 3*** Officers and servants of the High Court; procedure in rent and revenue courts; fees taken in all courts except the Supreme Court.
4. Prisons, reformatories, Borstal institutions and other institutions of a like nature, and persons detained therein; arrangements with other States for the use of prisons and other institutions.
5. Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, districts boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.
6. Public health and sanitation; hospitals and dispensaries. 7. Pilgrimages, other than pilgrimages to places outside India. 8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.
9. Relief of the disabled and unemployable.
10. Burials and burial grounds; cremations and cremation grounds.
4[11*
*
* *
*]
12. Libraries, museums and other similar institutions controlled or
financed by the State; ancient and historical monuments and records other than those 5[declared by or under law made by Parliament] to be of national importance.
3. Certain words omitted by s. 57, *ibid.* (w.e.f. 3-1-1977).
4. Entry 11 omitted by s. 57, *ibid*. (w.e.f. 3-1-1977). 5. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 27, for "declared by
Parliament by law" (w.e.f. 1-11-1956).
13. Communications, that is to say, roads, bridges, ferries, and other means of communication not specified in List I; municipal tramways;
ropeways; inland waterways and traffic thereon subject to the provisions of List I and List III with regard to such waterways; vehicles other than mechanically propelled vehicles.
14. Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases.
15. Preservation, protection and improvement of stock and prevention of animal diseases; veterinary training and practice.
16. Pounds and the prevention of cattle trespass. 17. Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I.
18. Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.
1[19*
* * * *
20*
* * * *]
21. Fisheries. 22. Courts of wards subject to the provisions of entry 34 of List I;
encumbered and attached estates.
23. Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.
24. Industries subject to the provisions of 2[entries 7 and 52] of List I.
25. Gas and gas-works. 26. Trade and commerce within the State subject to the provisions of entry
33 of List III.
2. Subs. by the Constitution (Seventh Amendment) Act, 1956, s. 28 for "entry 52"
(w.e.f. 1-11-1956).
##
27. Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
28. Markets and fairs.
1[29* * * * *]
30. Money-lending and money-lenders; relief of agricultural indebtedness.
31. Inns and inn-keepers.
32. Incorporation, regulation and winding up of corporations, other than
those specified in List I, and universities; unincorporated trading, literary, scientific, religious and other societies and associations; co-operative societies.
33. Theatres and dramatic performances; cinemas subject to the provisions of entry 60 of List I; sports, entertainments and amusements.
34. Betting and gambling.
35. Works, lands and buildings vested in or in the possession of the State.
2[36* * * * *]
37. Elections to the Legislature of the State subject to the provisions of
any law made by Parliament.
38. Salaries and allowances of members of the Legislature of the State, of the Speaker and Deputy Speaker of the Legislative Assembly and, if there is a Legislative Council, of the Chairman and Deputy Chairman thereof.
39. Powers, privileges and immunities of the Legislative Assembly and of the members and the committees thereof, and, if there is a Legislative Council, of that Council and of the members and the committees thereof; enforcement of attendance of persons for giving evidence or producing documents before committees of the Legislature of the State.
40. Salaries and allowances of Ministers for the State. 41. State public services; State Public Service Commission. 42. State pensions, that is to say, pensions payable by the State or out of
the Consolidated Fund of the State.
43. Public debt of the State. 44. Treasure trove.
45. Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues.
46. Taxes on agricultural income.
47. Duties in respect of succession to agricultural land.
48. Estate duty in respect of agricultural land.
49. Taxes on lands and buildings.
50. Taxes on mineral rights subject to any limitations imposed by
Parliament by law relating to mineral development.
51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India:—
(a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry.
1[52. * * * * * *]
53. Taxes on the consumption or sale of electricity.
2[54. Taxes on the sale of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce of such goods.]
3[55. * * * * * *]
56. Taxes on goods and passengers carried by road or on inland waterways.
## ______________________________________________ 1. Entry 52 Omitted By The Constitution (One Hundred And First Amendment) Act, 2016,
s. 17(b)(i) (w.e.f. 16-9-2016).
2. Subs. by the Constitution (Sixth Amendment) Act, 1956, s. 2 (w.e.f. 11-9-1956) and
further subs. by the Constitution (One Hundred and First Amendment) Act, 2016, s. 17(b)(ii) (w.e.f. 16-9-2016).
3. Entry 55 omitted by the Constitution (One Hundred and First Amendment) Act, 2016,
s. 17(b)(iii) (w.e.f. 16-9-2016).
57. Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of List III.
58. Taxes on animals and boats.
59. Tolls.
60. Taxes on professions, trades, callings and employments.
61. Capitation taxes.
1[62. Taxes on entertainments and amusements to the extent levied and
collected by a Panchayat or a Municipality or a Regional Council or a District Council.]
63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.
64. Offences against laws with respect to any of the matters in this List. 65. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
66. Fees in respect of any of the matters in this List, but not including fees taken in any court.
## List Iii—Concurrent List
1. Criminal law, including all matters included in the Indian Penal Code at the commencement of this Constitution but excluding offences against laws with respect to any of the matters specified in List I or List II and excluding the use of naval, military or air forces or any other armed forces of the Union in aid of the civil power.
2. Criminal procedure, including all matters included in the Code of Criminal Procedure at the commencement of this Constitution.
3. Preventive detention for reasons connected with the security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community; persons subjected to such detention.
4. Removal from one State to another State of prisoners, accused persons and persons subjected to preventive detention for reasons specified in entry 3 of this List.
______________________________________________
5. Marriage and divorce; infants and minors; adoption; wills, intestacy and succession; joint family and partition; all matters in respect of which parties in judicial proceedings were immediately before the commencement of this Constitution subject to their personal law.
6. Transfer of property other than agricultural land; registration of deeds and documents.
7. Contracts, including partnership, agency, contracts of carriage, and other special forms of contracts, but not including contracts relating to agricultural land.
8. Actionable wrongs.
9. Bankruptcy and insolvency.
10. Trust and Trustees.
11. Administrators-general and official trustees.
1[11A. Administration of Justice; constitution and organisation of all
courts, except the Supreme Court and the High Courts.]
12. Evidence and oaths; recognition of laws, public acts and records, and judicial proceedings.
13. Civil procedure, including all matters included in the Code of Civil Procedure at the commencement of this Constitution, limitation and arbitration.
14. Contempt of court, but not including contempt of the Supreme Court. 15. Vagrancy; nomadic and migratory tribes. 16. Lunacy and mental deficiency, including places for the reception or treatment of lunatics and mental deficients.
17. Prevention of cruelty to animals.
1[17A. Forests.
17B. Protection of wild animals and birds.]
18. Adulteration of foodstuffs and other goods.
19. Drugs and poisons, subject to the provisions of entry 59 of List I with
respect to opium.
20. Economic and social planning.
1[20A. Population control and family planning.]
______________________________________________
21. Commercial and industrial monopolies, combines and trusts.
22. Trade unions; industrial and labour disputes. 23. Social security and social insurance; employment and unemployment. 24. Welfare of labour including conditions of work, provident funds,
employers' liability, workmen's compensation, invalidity and old age pensions and maternity benefits.
1[25. Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labour.]
26. Legal, medical and other professions. 27. Relief and rehabilitation of persons displaced from their original place of residence by reason of the setting up of the Dominions of India and Pakistan.
28. Charities and charitable institutions, charitable and religious
endowments and religious institutions.
29. Prevention of the extension from one State to another of infectious or contagious diseases or pests affecting men, animals or plants.
30. Vital statistics including registration of births and deaths.
31. Ports other than those declared by or under law made by Parliament or existing law to be major ports.
32. Shipping and navigation on inland waterways as regards mechanically propelled vessels, and the rule of the road on such waterways, and the carriage of passengers and goods on inland waterways subject to the provisions of List I with respect to national waterways.
2[33. Trade and commerce in, and the production, supply and distribution of,—
(a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and oils; (c) cattle fodder, including oilcakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and
(w.e.f. 22-2-1955).
(e) raw jute.]
1[33A. Weights and measures except establishment of standards.]
34. Price control. 35. Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied.
36. Factories
37. Boilers.
38. Electricity.
39. Newspapers, books and printing presses.
40. Archaeological sites and remains other than those 2[declared by or
under law made by Parliament] to be of national importance.
41. Custody, management and disposal of property (including agricultural land) declared by law to be evacuee property.
3[42. Acquisition and requisitioning of property.]
43. Recovery in a State of claims in respect of taxes and other public demands, including arrears of land-revenue and sums recoverable as such arrears, arising outside that State.
44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.
45. Inquiries and statistics for the purposes of any of the matters specified in List II or List III.
46. Jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters in this List.
47. Fees in respect of any of the matters in this List, but not including fees taken in any court.
1. Assamese.
2. Bengali.
1[3. Bodo.
4. Dogri.]
2[5.] Gujarati.
3[6.] Hindi. 3[7.] Kannada. 3[8.] Kashmiri.
4[3[9.] Konkani.] 1[10. Maithili.] 5[11.] Malayalam.
4[6[12.] Manipuri.] 6[13.] Marathi.
4[6[14.] Nepali.] 6[15.] 7[Odia]. 6[16.] Punjabi. 6[17.] Sanskrit.
2. Entry 3 renumbered as entry 5 by s. 2, *ibid.* (w.e.f. 7-1-2004). 3. Entries 4 to 7 renumbered as entries 6 to 9 by s. 2, *ibid.* (w.e.f. 7-1-2004). 4. Ins. by the Constitution (Seventy-first Amendment) Act, 1992, s.2 (w.e.f. 31-8-1992). 5. Entry 8 renumbered as entry 11 by the Constitution (Ninety-second Amendment) Act,
2003, s. 2 (w.e.f. 7-1-2004).
6. Entries 9 to 14 renumbered as entries 12 to 17 by s. 2, *ibid.* (w.e.f. 7-1-2004).
(w.e.f. 23-9-2011).
1[18. Santhali.] 2[3[19.] Sindhi.]
4[20.] Tamil.
4[21.] Telugu.
4[22.] Urdu.
## ______________________________________________ 1[Ninth Schedule (Article 31B)
1. The Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950). 2. The Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay Act
LXVII of 1948).
3. The Bombay Maleki Tenure Abolition Act, 1949 (Bombay Act LXI of 1949). 4. The Bombay Taluqdari Tenure Abolition Act, 1949 (Bombay Act LXII
of 1949).
5. The Panch Mahals Mehwassi Tenure Abolition Act, 1949 (Bombay Act
LXIII of 1949).
6. The Bombay Khoti Abolition Act, 1950 (Bombay Act VI of 1950). 7. The Bombay Paragana and Kulkarni Watan Abolition Act, 1950
(Bombay Act LX of 1950).
8. The Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals,
Alienated Lands) Act, 1950 (Madhya Pradesh Act I of 1951).
9. The Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948
(Madras Act XXVI of 1948).
10. The Madras Estates (Abolition and Conversion into Ryotwari)
Amendment Act, 1950 (Madras Act I of 1950).
11. The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950
(Uttar Pradesh Act I of 1951).
12. The Hyderabad (Abolition of Jagirs) Regulation, 1358F (No. LXIX of
1358, Fasli).
13. The Hyderabad Jagirs (Commutation) Regulation, 1359F (No. XXV of
1359, Fasli).]
2[14. The Bihar Displaced Persons Rehabilitation (Acquisition of Land)
Act, 1950 (Bihar Act XXXVIII of 1950).
15. The United Provinces Land Acquisition (Rehabilitation of Refugees)
Act, 1948 (U.P. Act XXVI of 1948).
16. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948
(Act LX of 1948).
17. Sections 52A to 52G of the Insurance Act, 1938 (Act IV of 1938), as inserted by section 42 of the Insurance (Amendment) Act, 1950 (Act XLVII of 1950).
18. The Railway Companies (Emergency Provisions) Act, 1951 (Act LI of 1951).
19. Chapter III-A of the Industries (Development and Regulation) Act,
1951 (Act LXV of 1951), as inserted by section 13 of the Industries
(Development and Regulation) Amendment Act, 1953 (Act XXVI of 1953).
20. The West Bengal Land Development and Planning Act, 1948 (West Bengal Act XXI of 1948), as amended by West Bengal Act XXIX of 1951.]
1[21. The Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961
(Andhra Pradesh Act X of 1961).
22. The Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands
(Validation) Act, 1961 (Andhra Pradesh Act XXI of 1961).
23. The Andhra Pradesh (Telangana Area) Ijara and Kowli Land Cancellation of Irregular Pattas and Abolition of Concessional Assessment Act, 1961 (Andhra Pradesh Act XXXVI of 1961).
24. The Assam State Acquisition of Lands belonging to Religious or Charitable Institution of Public Nature Act, 1959 (Assam Act IX of 1961).
25. The Bihar Land Reforms (Amendment) Act, 1953 (Bihar Act XX of
1954).
26. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act, 1961 (Bihar Act XII of 1962), except section 28 of this Act.
27. The Bombay Taluqdari Tenure Abolition (Amendment) Act, 1954
(Bombay Act I of 1955).
28. The Bombay Taluqdari Tenure Abolition (Amendment) Act, 1957
(Bombay Act XVIII of 1958).
29. The Bombay Inams (Kutch Area) Abolition Act, 1958 (Bombay Act XCVIII of 1958).
30. The Bombay Tenancy and Agricultural Lands (Gujarat Amendment)
Act, 1960 (Gujarat Act XVI of 1960).
31. The Gujarat Agricultural Lands Ceiling Act, 1960 (Gujarat Act XXVI
of 1961).
32. The Sagbara and Mehwassi Estates (Proprietary Rights Abolition, etc.)
Regulation, 1962 (Gujarat Regulation I of 1962).
______________________________________________
1. Entries 21 to 64 and Explanation added by the Constitution (Seventeenth Amendment)
33. The Gujarat Surviving Alienations Abolition Act, 1963 (Gujarat Act XXXIII of 1963), except in so far as this Act relates to an alienation referred to in sub-clause (d) of clause (3) of section 2 thereof.
34. The Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961
(Maharashtra Act XXVII of 1961).
35. The Hyderabad Tenancy and Agricultural Lands (Re-enactment, Validation and Further Amendment) Act, 1961 (Maharashtra Act XLV of 1961).
36. The Hyderabad Tenancy and Agricultural Lands Act, 1950 (Hyderabad Act XXI of 1950).
37. The Jenmikaram Payment (Abolition) Act, 1960 (Kerala Act III of 1961). 38. The Kerala Land Tax Act, 1961 (Kerala Act XIII of 1961). 39. The Kerala Land Reforms Act, 1963 (Kerala Act I of 1964). 40. The Madhya Pradesh Land Revenue Code, 1959 (Madhya Pradesh Act XX of 1959).
41. The Madhya Pradesh Ceiling on Agricultural Holdings Act, 1960
(Madhya Pradesh Act XX of 1960).
42. The Madras Cultivating Tenants Protection Act, 1955 (Madras Act XXV of 1955).
43. The Madras Cultivating Tenants (Payment of Fair Rent) Act, 1956
(Madras Act XXIV of 1956).
44. The Madras Occupants of Kudiyiruppu (Protection from Eviction) Act,
1961 (Madras Act XXXVIII of 1961).
45. The Madras Public Trusts (Regulation of Administration of Agricultural Lands) Act, 1961 (Madras Act LVII of 1961).
46. The Madras Land Reforms (Fixation of Ceiling on Land) Act, 1961
(Madras Act LVIII of 1961).
47. The Mysore Tenancy Act, 1952 (Mysore Act XIII of 1952). 48. The Coorg Tenants Act, 1957 (Mysore Act XIV of 1957). 49. The Mysore Village Offices Abolition Act, 1961 (Mysore Act XIV of 1961). 50. The Hyderabad Tenancy and Agricultural Lands (Validation) Act, 1961
(Mysore Act XXXVI of 1961).
51. The Mysore Land Reforms Act, 1961 (Mysore Act X of 1962).
52. The Orissa Land Reforms Act, 1960 (Orissa Act XVI of 1960).
53. The Orissa Merged Territories (Village Offices Abolition) Act, 1963
(Orissa Act X of 1963).
54. The Punjab Security of Land Tenures Act, 1953 (Punjab Act X of 1953).
55. The Rajasthan Tenancy Act, 1955 (Rajasthan Act III of 1955). 56. The Rajasthan Zamindari and Biswedari Abolition Act, 1959
(Rajasthan Act VIII of 1959).
57. The Kumaun and Uttarakhand Zamindari Abolition and Land Reforms Act, 1960 (Uttar Pradesh Act XVII of 1960).
58. The Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960
(Uttar Pradesh Act I of 1961).
59. The West Bengal Estates Acquisition Act, 1953 (West Bengal Act I of
1954).
60. The West Bengal Land Reforms Act, 1955 (West Bengal Act X of
1956).
61. The Delhi Land Reforms Act, 1954 (Delhi Act VIII of 1954). 62. The Delhi Land Holdings (Ceiling) Act, 1960 (Central Act 24 of 1960). 63. The Manipur Land Revenue and Land Reforms Act, 1960 (Central Act
33 of 1960).
64. The Tripura Land Revenue and Land Reforms Act, 1960 (Central Act
43 of 1960).
1[65. The Kerala Land Reforms (Amendment) Act, 1969 (Kerala Act 35 of
1969).
66. The Kerala Land Reforms (Amendment) Act, 1971 (Kerala Act 25 of
1971).]
2[67. The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 (Andhra Pradesh Act 1 of 1973).
68. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1972 (Bihar Act I of 1973).
(w.e.f. 7-9-1974).
69. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1973 (Bihar Act IX of 1973).
70. The Bihar Land Reforms (Amendment) Act, 1972 (Bihar Act V of
1972).
71. The Gujarat Agricultural Lands Ceiling (Amendment) Act, 1972
(Gujarat Act 2 of 1974).
72. The Haryana Ceiling on Land Holdings Act, 1972 (Haryana Act 26 of 1972). 73. The Himachal Pradesh Ceiling on Land Holdings Act, 1972 (Himachal Pradesh Act 19 of 1973).
74. The Kerala Land Reforms (Amendment) Act, 1972 (Kerala Act 17 of 1972). 75. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment)
Act, 1972 (Madhya Pradesh Act 12 of 1974).
76. The Madhya Pradesh Ceiling on Agricultural Holdings (Second Amendment) Act, 1972 (Madhya Pradesh Act 13 of 1974).
77. The Mysore Land Reforms (Amendment) Act, 1973 (Karnataka Act 1
of 1974).
78. The Punjab Land Reforms Act, 1972 (Punjab Act 10 of 1973). 79. The Rajasthan Imposition of Ceiling on Agricultural Holdings Act,
1973 (Rajasthan Act 11 of 1973).
80. The Gudalur Janmam Estates (Abolition and Conversion into Ryotwari)
Act, 1969 (Tamil Nadu Act 24 of 1969).
81. The West Bengal Land Reforms (Amendment) Act, 1972 (West Bengal Act XII of 1972).
82. The West Bengal Estates Acquisition (Amendment) Act, 1964 (West Bengal Act XXII of 1964).
83. The West Bengal Estates Acquisition (Second Amendment) Act, 1973
(West Bengal Act XXXIII of 1973).
84. The Bombay Tenancy and Agricultural Lands (Gujarat Amendment)
Act, 1972 (Gujarat Act 5 of 1973).
85. The Orissa Land Reforms (Amendment) Act, 1974 (Orissa Act 9 of
1974).
86. The Tripura Land Revenue and Land Reforms (Second Amendment)
Act,1974 (Tripura Act 7 of 1974).]
1[287*
* *
* *]
88. The Industries (Development and Regulation) Act, 1951 (Central Act
65 of 1951).
89. The Requisitioning and Acquisition of Immovable Property Act, 1952
(Central Act 30 of 1952).
90. The Mines and Minerals (Regulation and Development) Act, 1957
(Central Act 67 of 1957).
91. The Monopolies and Restrictive Trade Practices Act, 1969 (Central Act 54 of 1969).
2[92* * * *
*]
93. The Coking Coal Mines (Emergency Provisions) Act, 1971 (Central Act 64 of 1971).
94. The Coking Coal Mines (Nationalisation) Act, 1972 (Central Act 36 of
1972).
95. The General Insurance Business (Nationalisation) Act, 1972 (Central Act 57 of 1972).
96. The Indian Copper Corporation (Acquisition of Undertaking) Act, 1972
(Central Act 58 of 1972).
97. The Sick Textile Undertakings (Taking Over of Management) Act,
1972 (Central Act 72 of 1972).
98. The Coal Mines (Taking Over of Management) Act, 1973 (Central Act
15 of 1973).
99. The Coal Mines (Nationalisation) Act, 1973 (Central Act 26 of 1973).
100. The Foreign Exchange Regulation Act, 1973 (Central Act 46 of
1973).
101. The Alcock Ashdown Company Limited (Acquisition of Undertakings) Act, 1973 (Central Act 56 of 1973).
______________________________________________
1. Entries 87 to 124 ins. by the Constitution (Thirty-ninth Amendment) Act, 1975, s. 5
(w.e.f. 10-8-1975).
2. Entries 87 and 92 omitted by the Constitution (Forty-fourth Amendment) Act, 1978,
s. 44 (w.e.f. 20-6-1979).
102. The Coal Mines (Conservation and Development) Act, 1974 (Central Act 28 of 1974).
103. The Additional Emoluments (Compulsory Deposit) Act, 1974 (Central Act 37 of 1974).
104. The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (Central Act 52 of 1974).
105. The Sick Textile Undertakings (Nationalisation) Act, 1974 (Central Act 57 of 1974).
106. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1964 (Maharashtra Act XVI of 1965).
107. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1965 (Maharashtra Act XXXII of 1965).
108. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1968 (Maharashtra Act XVI of 1968).
109. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Second Amendment) Act, 1968 (Maharashtra Act XXXIII of 1968).
110. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1969 (Maharashtra Act XXXVII of 1969).
111. The Maharashtra Agricultural Lands (Ceiling on Holdings) (Second Amendment) Act, 1969 (Maharashtra Act XXXVIII of 1969).
112. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1970 (Maharashtra Act XXVII of 1970).
113. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1972 (Maharashtra Act XIII of 1972).
114. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1973 (Maharashtra Act L of 1973).
115. The Orissa Land Reforms (Amendment) Act, 1965 (Orissa Act 13 of
1965).
116. The Orissa Land Reforms (Amendment) Act, 1966 (Orissa Act 8 of
1967).
117. The Orissa Land Reforms (Amendment) Act, 1967 (Orissa Act 13 of
1967).
118. The Orissa Land Reforms (Amendment) Act, 1969 (Orissa Act 13 of
1969).
119. The Orissa Land Reforms (Amendment) Act, 1970 (Orissa Act 18 of
1970).
120. The Uttar Pradesh Imposition of Ceiling on Land Holdings
(Amendment) Act, 1972 (Uttar Pradesh Act 18 of 1973).
121. The Uttar Pradesh Imposition of Ceiling on Land Holdings
(Amendment) Act, 1974 (Uttar Pradesh Act 2 of 1975).
122. The Tripura Land Revenue and Land Reforms (Third Amendment)
Act, 1975 (Tripura Act 3 of 1975).
123.The Dadra and Nagar Haveli Land Reforms Regulation, 1971 (3 of 1971). 124. The Dadra and Nagar Haveli Land Reforms (Amendment)
Regulation, 1973 (5 of 1973).]
1[125. Section 66A and Chapter IVA of the Motor Vehicles Act, 1939
(Central Act 4 of 1939).
126. The Essential Commodities Act, 1955 (Central Act 10 of 1955). 127. The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (Central Act 13 of 1976).
128. The Bonded Labour System (Abolition) Act, 1976 (Central Act 19 of
1976).
129. The Conservation of Foreign Exchange and Prevention of Smuggling Activities (Amendment) Act, 1976 (Central Act 20 of 1976).
## 2130* * * * * 131. The Levy Sugar Price Equalisation Fund Act, 1976 (Central Act 31 Of
1976).
132. The Urban Land (Ceiling and Regulation) Act, 1976 (Central Act 33
of 1976).
______________________________________________
1. Entries 125 to 188 ins. by the Constitution (Fortieth Amendment) Act, 1976, s. 3
(w.e.f. 27-5-1976).
*See* now the relevant provisions of the Motor Vehicles Act, 1988 (59 of 1988).
2. Entry 130 omitted by the Constitution (Forty-fourth Amendment) Act, 1978, s. 44
(w.e.f. 20-6-1979).
133. The Departmentalisation of Union Accounts (Transfer of Personnel)
Act, 1976 (Central Act 59 of 1976).
134. The Assam Fixation of Ceiling on Land Holdings Act, 1956 (Assam Act I of 1957).
135. The Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act,
1958 (Bombay Act XCIX of 1958).
136. The Gujarat Private Forests (Acquisition) Act, 1972 (Gujarat Act 14
of 1973).
137. The Haryana Ceiling on Land Holdings (Amendment) Act, 1976
(Haryana Act 17 of 1976).
138. The Himachal Pradesh Tenancy and Land Reforms Act, 1972
(Himachal Pradesh Act 8 of 1974).
139. The Himachal Pradesh Village Common Lands Vesting and Utilisation Act, 1974 (Himachal Pradesh Act 18 of 1974).
140. The Karnataka Land Reforms (Second Amendment and Miscellaneous Provisions) Act, 1974 (Karnataka Act 31 of 1974).
141. The Karnataka Land Reforms (Second Amendment) Act, 1976
(Karnataka Act 27 of 1976).
142. The Kerala Prevention of Eviction Act, 1966 (Kerala Act 12 of 1966). 143. The Thiruppuvaram Payment (Abolition) Act, 1969 (Kerala Act 19 of 1969). 144. The Sreepadam Lands Enfranchisement Act, 1969 (Kerala Act 20 of
1969).
145. The Sree Pandaravaka Lands (Vesting and Enfranchisement) Act,
1971 (Kerala Act 20 of 1971).
146. The Kerala Private Forests (Vesting and Assignment) Act, 1971
(Kerala Act 26 of 1971).
147. The Kerala Agricultural Workers Act, 1974 (Kerala Act 18 of 1974). 148. The Kerala Cashew Factories (Acquisition) Act, 1974 (Kerala Act 29
of 1974).
149. The Kerala Chitties Act, 1975 (Kerala Act 23 of 1975). 150. The Kerala Scheduled Tribes (Restriction on Transfer of Lands and Restoration of Alienated Lands) Act, 1975 (Kerala Act 31 of 1975).
## (Ninth Schedule)
151. The Kerala Land Reforms (Amendment) Act, 1976 (Kerala Act 15 of
1976).
152. The Kanam Tenancy Abolition Act, 1976 (Kerala Act 16 of 1976).
153. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment)
Act, 1974 (Madhya Pradesh Act 20 of 1974).
154. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment)
Act, 1975 (Madhya Pradesh Act 2 of 1976).
155. The West Khandesh Mehwassi Estates (Proprietary Rights Abolition, etc.) Regulation, 1961 (Maharashtra Regulation 1 of 1962).
156. The Maharashtra Restoration of Lands to Scheduled Tribes Act, 1974
(Maharashtra Act XIV of 1975).
157. The Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Act, 1972 (Maharashtra Act XXI of 1975).
158. The Maharashtra Private Forest (Acquisition) Act, 1975 (Maharashtra Act XXIX of 1975).
159. The Maharashtra Agricultural Lands (Lowering of Ceiling on Holdings) and (Amendment) Amendment Act, 1975 (Maharashtra Act XLVII of 1975).
160. The Maharashtra Agricultural Lands (Ceiling on Holdings)
(Amendment) Act, 1975 (Maharashtra Act II of 1976).
161. The Orissa Estates Abolition Act, 1951 (Orissa Act I of 1952). 162. The Rajasthan Colonisation Act, 1954 (Rajasthan Act XXVII of 1954). 163. The Rajasthan Land Reforms and Acquisition of Landowners' Estates Act, 1963 (Rajasthan Act 11 of 1964).
164. The Rajasthan Imposition of Ceiling on Agricultural Holdings
(Amendment) Act, 1976 (Rajasthan Act 8 of 1976).
165. The Rajasthan Tenancy (Amendment) Act, 1976 (Rajasthan Act 12 of
1976).
166. The Tamil Nadu Land Reforms (Reduction of Ceiling on Land) Act,
1970 (Tamil Nadu Act 17 of 1970).
167. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1971 (Tamil Nadu Act 41 of 1971).
168. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1972 (Tamil Nadu Act 10 of 1972).
169. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1972 (Tamil Nadu Act 20 of 1972).
170. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Third Amendment Act, 1972 (Tamil Nadu Act 37 of 1972).
171. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Fourth Amendment Act, 1972 (Tamil Nadu Act 39 of 1972).
172. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Sixth Amendment Act, 1972 (Tamil Nadu Act 7 of 1974).
173. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Fifth Amendment Act, 1972 (Tamil Nadu Act 10 of 1974).
174. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1974 (Tamil Nadu Act 15 of 1974).
175. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Third Amendment Act, 1974 (Tamil Nadu Act 30 of 1974).
176. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1974 (Tamil Nadu Act 32 of 1974).
177. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1975 (Tamil Nadu Act 11 of 1975).
178. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1975 (Tamil Nadu Act 21 of 1975).
179. Amendments made to the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (Uttar Pradesh Act I of 1951) by the Uttar Pradesh Land Laws (Amendment) Act, 1971 (Uttar Pradesh Act 21 of 1971) and the Uttar Pradesh Land Laws (Amendment) Act, 1974 (Uttar Pradesh Act 34 of 1974).
180. The Uttar Pradesh Imposition of Ceiling on Land Holdings
(Amendment) Act, 1976 (Uttar Pradesh Act 20 of 1976).
181. The West Bengal Land Reforms (Second Amendment) Act, 1972
(West Bengal Act XXVIII of 1972).
182. The West Bengal Restoration of Alienated Land Act, 1973 (West
Bengal Act XXIII of 1973).
183. The West Bengal Land Reforms (Amendment) Act, 1974 (West Bengal Act XXXIII of 1974).
184. The West Bengal Land Reforms (Amendment) Act, 1975 (West Bengal Act XXIII of 1975).
185. The West Bengal Land Reforms (Amendment) Act, 1976 (West Bengal Act XII of 1976).
186. The Delhi Land Holdings (Ceiling) Amendment Act, 1976 (Central Act 15 of 1976).
187. The Goa, Daman and Diu Mundkars (Protection from Eviction) Act,
1975 (Goa, Daman and Diu Act 1 of 1976).
188. The Pondicherry Land Reforms (Fixation of Ceiling on Land) Act,
1973 (Pondicherry Act 9 of 1974).]
1[189. The Assam (Temporarily Settled Areas) Tenancy Act, 1971 (Assam Act XXIII of 1971).
190. The Assam (Temporarily Settled Areas) Tenancy (Amendment) Act,
1974 (Assam Act XVIII of 1974).
191. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Amending Act, 1974 (Bihar Act 13 of 1975).
192. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1976 (Bihar Act 22 of 1976).
193. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1978 (Bihar Act VII of 1978).
194. The Land Acquisition (Bihar Amendment) Act, 1979 (Bihar Act 2 of
1980).
195. The Haryana Ceiling on Land Holdings (Amendment) Act, 1977
(Haryana Act 14 of 1977).
196. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1978 (Tamil Nadu Act 25 of 1978).
197. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1979 (Tamil Nadu Act 11 of 1979).
______________________________________________
1. Entries 189 to 202 were ins. by the Constitution (Forty-seventh Amendment)
Act, 1984, s. 2 (w.e.f. 26-8-1984).
## (Ninth Schedule)
198. The Uttar Pradesh Zamindari Abolition Laws (Amendment) Act, 1978
(Uttar Pradesh Act 15 of 1978).
199. The West Bengal Restoration of Alienated Land (Amendment) Act,
1978 (West Bengal Act XXIV of 1978).
200. The West Bengal Restoration of Alienated Land (Amendment) Act,
1980 (West Bengal Act LVI of 1980).
201. The Goa, Daman and Diu Agricultural Tenancy Act, 1964 (Goa, Daman and Diu Act 7 of 1964).
202. The Goa, Daman and Diu Agricultural Tenancy (Fifth Amendment)
Act, 1976 (Goa, Daman and Diu Act 17 of 1976).]
1[203. The Andhra Pradesh Scheduled Areas Land Transfer Regulation,
1959 (Andhra Pradesh Regulation 1 of 1959).
204. The Andhra Pradesh Scheduled Areas Laws (Extension and Amendment) Regulation, 1963 (Andhra Pradesh Regulation 2 of 1963).
205. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment)
Regulation, 1970 (Andhra Pradesh Regulation 1 of 1970).
206. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment)
Regulation, 1971 (Andhra Pradesh Regulation 1 of 1971).
207. The Andhra Pradesh Scheduled Areas Land Transfer (Amendment)
Regulation, 1978 (Andhra Pradesh Regulation 1 of 1978).
208. The Bihar Tenancy Act, 1885 (Bihar Act 8 of 1885). 209. The Chota Nagpur Tenancy Act, 1908 (Bengal Act 6 of 1908)
(Chapter VIII—sections 46, 47, 48, 48A and 49; Chapter X—sections 71, 71A and 71B; and Chapter XVIII—sections 240, 241 and 242).
210. The Santhal Parganas Tenancy (Supplementary Provisions) Act, 1949
(Bihar Act 14 of 1949) except section 53.
211. The Bihar Scheduled Areas Regulation, 1969 (Bihar Regulation 1 of 1969). 212. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1982 (Bihar Act 55 of 1982).
______________________________________________
1. Entries 203 to 257 were ins. by the Constitution (Sixty-sixth Amendment) Act, 1990,
## (Ninth Schedule)
213. The Gujarat Devasthan Inams Abolition Act, 1969 (Gujarat Act 16 of
1969).
214. The Gujarat Tenancy Laws (Amendment) Act, 1976 (Gujarat Act 37
of 1976).
215. The Gujarat Agricultural Lands Ceiling (Amendment) Act, 1976
(President's Act 43 of 1976).
216. The Gujarat Devasthan Inams Abolition (Amendment) Act, 1977
(Gujarat Act 27 of 1977).
217. The Gujarat Tenancy Laws (Amendment) Act, 1977 (Gujarat Act 30
of 1977).
218. The Bombay Land Revenue (Gujarat Second Amendment) Act, 1980
(Gujarat Act 37 of 1980).
219. The Bombay Land Revenue Code and Land Tenure Abolition Laws
(Gujarat Amendment) Act, 1982 (Gujarat Act 8 of 1982).
220. The Himachal Pradesh Transfer of Land (Regulation) Act, 1968
(Himachal Pradesh Act 15 of 1969).
221. The Himachal Pradesh Transfer of Land (Regulation) (Amendment)
Act, 1986 (Himachal Pradesh Act 16 of 1986).
222. The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (Karnataka Act 2 of 1979).
223. The Kerala Land Reforms (Amendment) Act, 1978 (Kerala Act 13 of 1978). 224. The Kerala Land Reforms (Amendment) Act, 1981 (Kerala Act 19 of
1981).
225. The Madhya Pradesh Land Revenue Code (Third Amendment) Act,
1976 (Madhya Pradesh Act 61 of 1976).
226. The Madhya Pradesh Land Revenue Code (Amendment) Act, 1980
(Madhya Pradesh Act 15 of 1980).
227. The Madhya Pradesh Akrishik Jot Uchchatam Seema Adhiniyam,
1981 (Madhya Pradesh Act 11 of 1981).
228. The Madhya Pradesh Ceiling on Agricultural Holdings (Second Amendment) Act, 1976 (Madhya Pradesh Act 1 of 1984).
229. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment)
Act, 1984 (Madhya Pradesh Act 14 of 1984).
## (Ninth Schedule)
230. The Madhya Pradesh Ceiling on Agricultural Holdings (Amendment)
Act, 1989 (Madhya Pradesh Act 8 of 1989).
231. The Maharashtra Land Revenue Code, 1966 (Maharashtra Act 41 of
1966), sections 36, 36A and 36B.
232. The Maharashtra Land Revenue Code and the Maharashtra Restoration of Lands to Scheduled Tribes (Second Amendment) Act, 1976 (Maharashtra Act 30 of 1977).
233. The Maharashtra Abolition of Subsisting Proprietary Rights to Mines and Minerals in certain Lands Act, 1985 (Maharashtra Act 16 of 1985).
234. The Orissa Scheduled Areas Transfer of Immovable Property (by Scheduled Tribes) Regulation, 1956 (Orissa Regulation 2 of 1956).
235. The Orissa Land Reforms (Second Amendment) Act, 1975 (Orissa Act 29 of 1976).
236. The Orissa Land Reforms (Amendment) Act, 1976 (Orissa Act 30 of 1976). 237. The Orissa Land Reforms (Second Amendment) Act, 1976 (Orissa Act 44 of 1976).
238. The Rajasthan Colonisation (Amendment) Act, 1984 (Rajasthan Act
12 of 1984).
239. The Rajasthan Tenancy (Amendment) Act, 1984 (Rajasthan Act 13 of
1984).
240. The Rajasthan Tenancy (Amendment) Act, 1987 (Rajasthan Act 21 of
1987).
241. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1979 (Tamil Nadu Act 8 of 1980).
242. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1980 (Tamil Nadu Act 21 of 1980).
243. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1981 (Tamil Nadu Act 59 of 1981).
244. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1983 (Tamil Nadu Act 2 of 1984).
245. The Uttar Pradesh Land Laws (Amendment) Act, 1982 (Uttar Pradesh Act 20 of 1982).
246. The West Bengal Land Reforms (Amendment) Act, 1965 (West Bengal Act 18 of 1965).
247. The West Bengal Land Reforms (Amendment) Act, 1966 (West Bengal Act 11 of 1966).
248. The West Bengal Land Reforms (Second Amendment) Act, 1969
(West Bengal Act 23 of 1969).
249. The West Bengal Estate Acquisition (Amendment) Act, 1977 (West Bengal Act 36 of 1977).
250. The West Bengal Land Holding Revenue Act, 1979 (West Bengal Act
44 of 1979).
251. The West Bengal Land Reforms (Amendment) Act, 1980 (West Bengal Act 41 of 1980).
252. The West Bengal Land Holding Revenue (Amendment) Act, 1981
(West Bengal Act 33 of 1981).
253. The Calcutta Thikka Tenancy (Acquisition and Regulation) Act, 1981
(West Bengal Act 37 of 1981).
254. The West Bengal Land Holding Revenue (Amendment) Act, 1982
(West Bengal Act 23 of 1982).
255. The Calcutta Thikka Tenancy (Acquisition and Regulation)
(Amendment) Act, 1984 (West Bengal Act 41 of 1984).
256. The Mahe Land Reforms Act, 1968 (Pondicherry Act 1 of 1968). 257. The Mahe Land Reforms (Amendment) Act, 1980 (Pondicherry Act 1
of 1981).]
1[257A. The Tamil Nadu Backward Classes, Scheduled Castes and Scheduled Tribes (Reservation of Seats in Educational Institutions and of appointments or posts in the Services under the State) Act, 1993 (Tamil Nadu Act 45 of 1994).]
______________________________________________
## (Ninth Schedule)
1[258. The Bihar Privileged Persons Homestead Tenancy Act, 1947 (Bihar Act 4 of 1948).
259. The Bihar Consolidation of Holdings and Prevention of Fragmentation Act, 1956 (Bihar Act 22 of 1956).
260. The Bihar Consolidation of Holdings and Prevention of Fragmentation
(Amendment) Act, 1970 (Bihar Act 7 of 1970).
261. The Bihar Privileged Persons Homestead Tenancy (Amendment) Act,
1970 (Bihar Act 9 of 1970).
262. The Bihar Consolidation of Holdings and Prevention of Fragmentation
(Amendment) Act, 1973 (Bihar Act 27 of 1975).
263. The Bihar Consolidation of Holdings and Prevention of Fragmentation
(Amendment) Act, 1981 (Bihar Act 35 of 1982).
264. The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Act, 1987 (Bihar Act 21 of 1987).
265. The Bihar Privileged Persons Homestead Tenancy (Amendment) Act,
1989 (Bihar Act 11 of 1989).
266. The Bihar Land Reforms (Amendment) Act, 1989 (Bihar Act 11 of 1990). 267. The Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) (Amendment) Act, 1984 (Karnataka Act 3 of 1984).
268. The Kerala Land Reforms (Amendment) Act, 1989 (Kerala Act 16 of 1989). 269. The Kerala Land Reforms (Second Amendment) Act, 1989 (Kerala Act 2 of 1990).
270. The Orissa Land Reforms (Amendment) Act, 1989 (Orissa Act 9 of
1990).
271. The Rajasthan Tenancy (Amendment) Act, 1979 (Rajasthan Act 16 of 1979). 272. The Rajasthan Colonisation (Amendment) Act, 1987 (Rajasthan Act 2
of 1987).
273. The Rajasthan Colonisation (Amendment) Act, 1989 (Rajasthan Act
12 of 1989).
______________________________________________
## (Ninth Schedule)
274. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1983 (Tamil Nadu Act 3 of 1984).
275. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act, 1986 (Tamil Nadu Act 57 of 1986).
276. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Second Amendment Act, 1987 (Tamil Nadu Act 4 of 1988).
277. The Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
(Amendment) Act, 1989 (Tamil Nadu Act 30 of 1989).
278. The West Bengal Land Reforms (Amendment) Act, 1981 (West Bengal Act 50 of 1981).
279. The West Bengal Land Reforms (Amendment) Act, 1986 (West Bengal Act 5 of 1986).
280. The West Bengal Land Reforms (Second Amendment) Act, 1986
(West Bengal Act 19 of 1986).
281. The West Bengal Land Reforms (Third Amendment) Act, 1986 (West Bengal Act 35 of 1986).
282. The West Bengal Land Reforms (Amendment) Act, 1989 (West Bengal Act 23 of 1989).
283. The West Bengal Land Reforms (Amendment) Act, 1990 (West Bengal Act 24 of 1990).
284. The West Bengal Land Reforms Tribunal Act, 1991 (West Bengal Act
12 of 1991).]
Explanation.—Any acquisition made under the Rajasthan Tenancy Act,
1955 (Rajasthan Act 3 of 1955), in contravention of the second proviso to clause (1) of article 31A shall, to the extent of the contravention, be void.]
## 1[Tenth Schedule [Articles 102(2) And 191(2)] Provisions As To Disqualification On Ground Of Defection
1. **Interpretation.—**In this Schedule, unless the context otherwise requires,—
(a) "House" means either House of Parliament or the Legislative Assembly or, as the case may be, either House of the Legislature of a State;
(b) "legislature party", in relation to a member of a House belonging to any political party in accordance with the provisions of paragraph 2 or 2*** paragraph 4, means the group consisting of all the members of that House for the time being belonging to that political party in accordance with the said provisions;
(c) "original political party", in relation to a member of a House, means the political party to which he belongs for the purposes of subparagraph (1) of paragraph 2;
(d) "paragraph" means a paragraph of this Schedule.
2. **Disqualification on ground of defection.—**(1) Subject to the provisions of 3[paragraphs 4 and 5], a member of a House belonging to any political party shall be disqualified for being a member of the House—
(a) if he has voluntarily given up his membership of such political party; or
(b) if he votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs or by any person or authority authorised by it in this behalf, without obtaining, in either case, the prior permission of such political party, person or authority and such voting or abstention has not been condoned by such political party, person or authority within fifteen days from the date of such voting or abstention.
Explanation.—For the purposes of this sub-paragraph,—
(a) an elected member of a House shall be deemed to belong to the political party, if any, by which he was set up as a candidate for election as such member;
(b) a nominated member of a House shall,—
3. Subs. by s. 5, *ibid.,* for "paragraphs 3, 4 and 5". (w.e.f. 1-1-2004).
(Tenth Schedule)
(i) where he is a member of any political party on the date of his nomination as such member, be deemed to belong to such political party;
(ii) in any other case, be deemed to belong to the political party of which he becomes, or, as the case may be, first becomes, a member before the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.
(2) An elected member of a House who has been elected as such otherwise than as a candidate set up by any political party shall be disqualified for being a member of the House if he joins any political party after such election.
(3) A nominated member of a House shall be disqualified for being a member of the House if he joins any political party after the expiry of six months from the date on which he takes his seat after complying with the requirements of article 99 or, as the case may be, article 188.
(4) Notwithstanding anything contained in the foregoing provisions of this paragraph, a person who, on the commencement of the Constitution (Fiftysecond Amendment) Act, 1985, is a member of a House (whether elected or nominated as such) shall,—
(i) where he was a member of political party immediately before such commencement, be deemed, for the purposes of sub-paragraph (1) of this paragraph, to have been elected as a member of such House as a candidate set up by such political party;
(ii) in any other case, be deemed to be an elected member of the House who has been elected as such otherwise than as a candidate set up by any political party for the purposes of sub-paragraph (2) of this paragraph or, as the case may be, be deemed to be a nominated member of the House for the purposes of sub-paragraph (3) of this paragraph.
1* * * * *
4. Disqualification on ground of defection not to apply in case of merger.—(1) A member of a House shall not be disqualified under subparagraph (1) of paragraph 2 where his original political party merges with another political party and he claims that he and any other members of his original political party—
(a) have become members of such other political party or, as the case may be, of a new political party formed by such merger; or
(b) have not accepted the merger and opted to function as a separate group,
______________________________________________
(Tenth Schedule)
and from the time of such merger, such other political party or new political party or group, as the case may be, shall be deemed to be the political party to which he belongs for the purposes of sub-paragraph (1) of paragraph 2 and to be his original political party for the purposes of this sub-paragraph.
(2) For the purposes of sub-paragraph (1) of this paragraph, the merger of the original political party of a member of a House shall be deemed to have taken place if, and only if, not less than two-thirds of the members of the legislature party concerned have agreed to such merger.
5. Exemption.—Notwithstanding anything contained in this Schedule, a person who has been elected to the office of the Speaker or the Deputy Speaker of the House of the People or the Deputy Chairman of the Council of States or the Chairman or the Deputy Chairman of the Legislative Council of a State or the Speaker or the Deputy Speaker of the Legislative Assembly of a State, shall not be disqualified under this Schedule,—
(a) if he, by reason of his election to such office, voluntarily gives up the membership of the political party to which he belonged immediately before such election and does not, so long as he continues to hold such office thereafter, rejoin that political party or become a member of another political party; or
(b) if he, having given up by reason of his election to such office his membership of the political party to which he belonged immediately before such election, rejoins such political party after he ceases to hold such office.
6. Decision on questions as to disqualification on ground of defection.—(1) If any question arises as to whether a member of a House has become subject to disqualification under this Schedule, the question shall be referred for the decision of the Chairman or, as the case may be, the Speaker of such House and his decision shall be final:
Provided that where the question which has arisen is as to whether the Chairman or the Speaker of a House has become subject to such disqualification, the question shall be referred for the decision of such member of the House as the House may elect in this behalf and his decision shall be final.
(2) All proceedings under sub-paragraph (1) of this paragraph in relation to any question as to disqualification of a member of a House under this Schedule shall be deemed to be proceedings in Parliament within the meaning of article 122 or, as the case may be, proceedings in the Legislature of a State within the meaning of article 212.
*7. **Bar of jurisdiction of courts.—**Notwithstanding anything in this Constitution, no court shall have any jurisdiction in respect of any matter connected with the disqualification of a member of a House under this Schedule.
8. **Rules.—**(1) Subject to the provisions of sub-paragraph (2) of this paragraph, the Chairman or the Speaker of a House may make rules for giving effect to the provisions of this Schedule, and in particular, and without prejudice to the generality of the foregoing, such rules may provide for—
(a) the maintenance of registers or other records as to the political parties, if any, to which different members of the House belong;
(b) the report which the leader of a legislature party in relation to a member of a House shall furnish with regard to any condonation of the nature referred to in clause (b) of sub-paragraph (1) of paragraph 2 in respect of such member, the time within which and the authority to whom such report shall be furnished;
(c) the reports which a political party shall furnish with regard to admission to such political party of any members of the House and the officer of the House to whom such reports shall be furnished; and
(d) the procedure for deciding any question referred to in subparagraph (1) of paragraph 6 including the procedure for any inquiry which may be made for the purpose of deciding such question.
(2) The rules made by the Chairman or the Speaker of a House under sub-paragraph (1) of this paragraph shall be laid as soon as may be after they are made before the House for a total period of thirty days which may be comprised in one session or in two or more successive sessions and shall take effect upon the expiry of the said period of thirty days unless they are sooner approved with or without modifications or disapproved by the House and where they are so approved, they shall take effect on such approval in the form in which they were laid or in such modified form, as the case may be, and where they are so disapproved, they shall be of no effect.
(3) The Chairman or the Speaker of a House may, without prejudice to the provisions of article 105 or, as the case may be, article 194, and to any other power which he may have under this Constitution direct that any wilful contravention by any person of the rules made under this paragraph may be dealt with in the same manner as a breach of privilege of the House.]
______________________________________________
## 1[Eleventh Schedule (Article 243G)
1.
Agriculture, including agricultural extension.
2.
Land improvement, implementation of land reforms, land
consolidation and soil conservation.
3.
Minor
irrigation,
water
management
and
watershed
development.
4.
Animal husbandry, dairying and poultry.
5.
Fisheries.
6.
Social forestry and farm forestry.
7.
Minor forest produce.
8.
Small scale industries, including food processing industries.
9.
Khadi, village and cottage industries.
10.
Rural housing.
11.
Drinking water.
12.
Fuel and fodder.
13.
Roads, culverts, bridges, ferries, waterways and other means of
communication.
14.
Rural electrification, including distribution of electricity.
15.
Non-conventional energy sources.
16.
Poverty alleviation programme.
17.
Education, including primary and secondary schools.
18.
Technical training and vocational education.
19.
Adult and non-formal education.
20.
Libraries.
21.
Cultural activities.
22.
Markets and fairs.
23.
Health and sanitation, including hospitals, primary health
centres and dispensaries.
24.
Family welfare.
25.
Women and child development.
26.
Social welfare, including welfare of the handicapped and
mentally retarded.
27.
Welfare of the weaker sections, and in particular, of the
Scheduled Castes and the Scheduled Tribes.
28.
Public distribution system.
______________________________________________
29. Maintenance of community assets.]
## 1[Twelfth Schedule (Article 243W)
1.
Urban planning including town planning.
2.
Regulation of land-use and construction of buildings.
3.
Planning for economic and social development.
4.
Roads and bridges.
5.
Water supply for domestic, industrial and commercial purposes.
6.
Public health, sanitation conservancy and solid waste
management.
7.
Fire services.
8.
Urban forestry, protection of the environment and promotion of
ecological aspects.
9.
Safeguarding the interests of weaker sections of society,
including the handicapped and mentally retarded.
10.
Slum improvement and upgradation.
11.
Urban poverty alleviation.
12.
Provision of urban amenities and facilities such as parks,
gardens, playgrounds.
13.
Promotion of cultural, educational and aesthetic aspects.
14.
Burials and burial grounds; cremations, cremation grounds; and
electric crematoriums.
15.
Cattle pounds; prevention of cruelty to animals.
16.
Vital statistics including registration of births and deaths.
17.
Public amenities including street lighting, parking lots, bus stops
and public conveniences.
18.
Regulation of slaughter houses and tanneries.]
## ______________________________________________ Appendix I The Constitution ( One Hundredth Amendment) Act, 2015
[28*th May*, 2015.]
An Act further to amend the Constitution of India to give effect to the acquiring of territories by India and transfer of certain territories to Bangladesh in pursuance of the agreement and its protocol entered into between the Governments of India and Bangladesh. BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—
1. **Short title.**—This Act may be called the Constitution (One Hundredth Amendment) Act, 2015.
2. Definitions.—In this Act,—
(a) "acquired territory" means so much of the territories comprised in the India-Bangladesh agreement and its protocol and referred to in the First Schedule as are demarcated for the purpose of being acquired by India from Bangladesh in pursuance of the agreement and its protocol referred to in clause (c);
(b) "appointed day" means such date as the Central Government may, by notification in the Official Gazette, appoint as the date for acquisition of territories from Bangladesh and transfer of the territories to Bangladesh in pursuance of the India-Bangladesh agreement and its protocol, after causing the territories to be so acquired and transferred as referred to in the First Schedule and Second Schedule and demarcated for the purpose;
(c) "India-Bangladesh agreement" means the agreement between the Government of the Republic of India and the Government of the People's Republic of Bangladesh concerning the Demarcation of the Land Boundary between India and Bangladesh and Related Matters dated the 16th day of May, 1974, Exchange of Letters dated the 26th day of December, 1974, the 30th day of December, 1974, the 7th day of October,
1982, the 26th day of March, 1992 and protocol to the said agreement dated the 6th day of September, 2011, entered into between the Governments of India and Bangladesh, the relevant extracts of which are set out in the Third Schedule;
______________________________________________
31st day of July, 2015, vide notification No. S.O. 2094(E), dated 31st July, 2015.
## (Appendix I)
(d) "transferred territory", means so much of the territories comprised in the India-Bangladesh agreement and its protocol and referred to in the Second Schedule as are demarcated for the purpose of being transferred by India to Bangladesh in pursuance of the agreements and its protocol referred to in clause (c).
3. Amendment of First Schedule to Constitution.— As from the appointed day, in the First Schedule to the Constitution,—
(a) in the paragraph relating to the territories of the State of
Assam, the words, brackets and figures "and the territories referred to in Part I of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015, notwithstanding anything contained in clause (a) of section 3 of the Constitution (Ninth Amendment) Act, 1960, so far as it relates to the territories referred to in Part I of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015", shall be added at the end;
(b) in the paragraph relating to the territories of the State of West Bengal, the words, brackets and figures "and also the territories referred to in Part III of the First Schedule but excluding the territories referred to in Part III of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015, notwithstanding anything contained in clause (c) of section 3 of the Constitution (Ninth Amendment) Act, 1960, so far as it relates to the territories referred to in Part III of the First Schedule and the territories referred to in Part III of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015", shall be added at the end;
(c) in the paragraph relating to the territories of the State of Meghalaya, the words, brackets and figures "and the territories referred to in Part I of the First Schedule but excluding the territories referred to in Part II of the Second Schedule to the Constitution (One Hundredth Amendment) Act, 2015", shall be added at the end;
(d) in the paragraph relating to the territories of the State of Tripura, the words, brackets and figures "and the territories referred to in Part II of the First Schedule to the Constitution (One Hundredth Amendment) Act, 2015, notwithstanding anything contained in clause (d) of section 3 of the Constitution (Ninth Amendment) Act, 1960, so far as it relates to the territories referred to in Part II of the First Schedule to the Constitution (One Hundredth Amendment) Act, 2015", shall be added at the end.
## The First Schedule
[*See* sections 2(a), 2*(b)* and 3]
## Pa R T I
The acquired territory in relation to Article 2 of the agreement dated the
16th day of May, 1974 and Article 3 (I) (b) (ii) (iii) (iv) (v) of the protocol dated the 6th day of September, 2011.
## Pa Rt I I
The acquired territory in relation to Article 2 of the agreement dated the
16th day of May, 1974 and Article 3 (I) (c) (i) of the protocol dated the 6th day of September, 2011.
## Part Iii
The acquired territory in relation to Articles 1(12) and 2 of the agreement dated the 16th day of May, 1974 and Articles 2 (II), 3 (I) (a) (iii) (iv) (v) (vi) of the protocol dated the 6th day of September, 2011.
## The Second Schedule [*See* Sections 2(B), 2*(D)* And 3] Pa R T I
The transferred territory in relation to Article 2 of the agreement dated 16th day of May, 1974 and Article 3 (I) (d) (i) (ii) of the protocol dated 6th day of September, 2011.
## Pa Rt I I
The transferred territory in relation to Article 2 of the agreement dated the
16th day of May, 1974 and Article 3 (I) (b) (i) of the protocol dated 6th day of September, 2011.
## Part Iii
The transferred territory in relation to Articles 1(12) and 2 of the agreement dated the 16th day of May, 1974 and Articles 2 (II), 3 (I) (a) (i) (ii) (vi) of the protocol dated the 6th day of September, 2011.
## The Third Schedule
[*See* section 2(c)]
## I. Extracts From The Agreement Between Government Of The Republic Of India And The Government Of The People'S Republic Of Bangladesh Concerning The Demarcation Of The Land Boundary Between India And Bangladesh And Related Matters Dated The 16Th Day Of May, 1974
Article 1 (12): ENCLAVES
The Indian enclaves in Bangladesh and the Bangladesh enclaves in India should be exchanged expeditiously, excepting the enclaves mentioned in paragraph 14 without claim to compensation for the additional area going to Bangladesh. Article 2:
The Governments of India and Bangladesh agree that territories in adverse possession in areas already demarcated in respect of which boundary strip maps are already prepared, shall be exchanged within six months of the signing of the boundary strip maps by the plenipotentiaries. They may sign the relevant maps as early as possible as and in any case not later than the 31st December, 1974. Early measures may be taken to print maps in respect of other areas where demarcation has already taken place. These should be printed by the 31st May, 1975 and signed by the plenipotentiaries thereafter in order that the exchange of adversely held possessions in these areas may take place by the 31st December, 1975. In sectors still to be demarcated, transfer of territorial jurisdiction may take place within six months of the signature by plenipotentiaries on the concerned boundary strip maps.
## Ii. Extracts From The Protocol To The Agreement Between The Government Of The Republic Of India And The Government Of The People'S Republic Of Bangladesh Concerning The Demarcation Of The Land Boundary Between India And Bangladesh And Related Matters, Dated The 6Th Day Of September, 2011
Article 2:
(II) Article 1 Clause 12 of the 1974 Agreement shall be implemented as follows:—
Enclaves
111 Indian Enclaves in Bangladesh and 51 Bangladesh Enclaves in India as per the jointly verified cadastral enclave maps and signed at the level of DGLR&S, Bangladesh and DLR&S, West Bengal (India) in April, 1997, shall be exchanged without claim to compensation for the additional areas going to Bangladesh. Article 3:
(I) Article 2 of the 1974 Agreement shall be implemented as follows:—
The Government of India and the Government of Bangladesh agree that the boundary shall be drawn as a fixed boundary for territories held in Adverse Possession as determined through joint survey and fully depicted in the respective adversely possessed land area Index Map (APL map) finalised by the Land Records and Survey Departments of both the countries between December, 2010 and August, 2011, which are fully described in clause (a) to (d) below.
The relevant strip maps shall be printed and signed by the Plenipotentiaries and transfer of territorial jurisdiction shall be completed simultaneously with the exchange of enclaves. The demarcation of the boundary, as depicted in the above-mentioned Index Maps, shall be as under:—
## (A) West Bengal Sector
(i) *Bousmari - Madhugari (Kushtia-Nadia) area*
The boundary shall be drawn from the existing Boundary Pillar Nos. 154/5-S to 157/1-S to follow the centre of old course of river Mathabanga, as depicted in consolidation map of 1962, as surveyed jointly and agreed in June, 2011.
(ii) *Andharkota (Kushtia-Nadia) area*
The boundary shall be drawn from existing Boundary Pillar No. 152/5-S to Boundary Pillar No. 153/1-S to follow the edge of existing River Mathabanga as jointly surveyed and agreed in June, 2011.
##
(iii) *Pakuria (Kushtia-Nadia) area*
The boundary shall be drawn from existing Boundary Pillar No. 151/1-S to Boundary Pillar No. 152/2-S to follow the edge of River Mathabanga as jointly surveyed and agreed in June, 2011. (iv) *Char Mahishkundi (Kushtia-Nadia) area*
The boundary shall be drawn from existing Boundary Pillar No. 153/1-S to Boundary Pillar No. 153/9-S to follow the edge of River Mathabanga as jointly surveyed and agreed in June, 2011.
(v) Haripal/Khutadah/Battoli/Sapameri/LNpur (Patari)
(Naogaon-Malda) area The boundary shall be drawn as line joining from existing Boundary Pillar No. 242/S/13, to Boundary Pillar No. 243/7-S/5 and as jointly surveyed and agreed in June, 2011. (vi) *Berubari (Panchagarh-Jalpaiguri area)*
The boundary in the area Berubari
(Panchagarh-Jalpaiguri)
adversely held by Bangladesh, and Berubari and Singhapara-Khudipara (Panchagarh-Jalpaiguri), adversely held by India shall be drawn as jointly demarcated during 1996-1998.
## (B) Meghalaya Sector
(i) *Lobachera-Nuncherra*
The boundary from existing Boundary Pillar No. 1315/4-S to Boundary Pillar No. 1315/15-S in Lailong - Balichera, Boundary Pillar No. 1316/1-S to Boundary Pillar No. 1316/11-S in Lailong- Noonchera, Boundary Pillar No. 1317 to Boundary Pillar No. 1317/13-S in Lailong- Lahiling and Boundary Pillar No. 1318/1-S to Boundary Pillar No. 1318/2-S in Lailong- Lobhachera shall be drawn to follow the edge of tea gardens as jointly surveyed and agreed in December, 2010.
(ii) *Pyrdiwah/ Padua Area*
The boundary shall be drawn from existing Boundary Pillar No. 1270/1-S as per jointly surveyed and mutually agreed line till Boundary Pillar No.
1271/1-T. The Parties agree that the Indian Nationals from Pyrdiwah village shall be allowed to draw water from Piyang River near point No. 6 of the agreed Map.
(iii) *Lyngkhat Area*
(aa)
Lyngkhat-I/Kulumcherra and Lyngkhat-
II/ Kulumcherra The boundary shall be drawn from existing Boundary Pillar No. 1264/4-S to Boundary Pillar No. 1265 and BP No. 1265/6-S to
1265/9-S as per jointly surveyed and mutually agreed line.
(ab)
Lyngkhat-III/Sonarhat
The boundary shall be drawn from existing Boundary Pillar No. 1266/13-S along the nallah southwards till it meets another nallah in the east-west direction, thereafter it shall run along the northern edge of the nallah in east till it meets the existing International Boundary north of Reference Pillar Nos.1267/4-R-B and 1267/3-R-I.
(iv) *Dawki/Tamabil area*
The boundary shall be drawn by a straight line joining existing Boundary Pillar Nos. 1275/1-S to Boundary Pillar Nos. 1275/7-S. The Parties agree to fencing on 'zero line' in this area.
(v) *Naljuri/Sreepur Area*
(aa)
Naljuri I
The boundary shall be a line from the existing Boundary Pillar No. 1277/2-S in southern direction up to three plots as depicted in the strip Map No. 166 till it meets the nallah flowing from Boundary Pillar No. 1277/5-T, thereafter it will run along the western edge of the nallah in the southern direction up to 2 plots on the Bangladesh side, thereafter it shall run eastwards till it meets a line drawn in southern direction from Boundary Pillar No. 1277/4-S.
(ab) *Naljuri III*
The boundary shall be drawn by a straight line from existing Boundary Pillar No. 1278/2-S to Boundary Pillar No. 1279/ 3-S.
(vi) *Muktapur/ Dibir Hawor Area*
The Parties agree that the Indian Nationals shall be allowed to visit Kali Mandir and shall also be allowed to draw water and exercise fishing rights in the water body in the Muktapur / Dibir Hawor area from the bank of Muktapur side.
## (C) Tripura Sector
Chandannagar-Champarai Tea Garden area in Tripura/ Moulvi Bazar sector The boundary shall be drawn along Sonaraichhera river from existing Boundary Pillar No. 1904 to Boundary Pillar No. 1905 as surveyed jointly and agreed in July, 2011.
## (D) Assam Sector
(i) *Kalabari (Boroibari) area in Assam sector*
The boundary shall be drawn from existing Boundary Pillar No. 1066/24-T to Boundary Pillar No. 1067/16-T as surveyed jointly and agreed in August, 2011.
(ii) *Pallathal area in Assam sector*
The boundary shall be drawn from existing Boundary Pillar No. 1370/3-S to 1371/ 6-S to follow the outer edge of the tea garden and from Boundary Pillar No. 1372 to 1373/2-S along outer edge of the pan plantation.
III. LIST OF EXCHANGE OF ENCLAVES BETWEEN INDIA AND
BANGLADESH IN PURSUANT TO ARTICLE 1 (12) OF THE AGREEMENT DATED 16TH MAY, 1974 AND THE PROTOCOL TO THE AGREEMENT DATED 6TH SEPTEMBER, 2011
## A. Exchangeable Indian Enclaves In Bangladesh With Area
Sl. Name of Chhits
No.
Chhit No.
Lying within
Police station Bangladesh
Lying within Police station W. Bengal
Area in acres
1
2
3
4
5
6
## A. *Enclaves With Independent Chhits*
| 1. | Garati | 75 | Pochagar | Haldibari | 58.23 |
|-------|------------------|-------|-------------|--------------|----------|
| 2 | Garati | 76 | Pochagar | Haldibari | 0.79 |
| 3 | Garati | 77 | Pochagar | Haldibari | 18 |
| 4 | Garati | 78 | Pochagar | Haldibari | 958.66 |
| 5 | Garati | 79 | Pochagar | Haldibari | 1.74 |
| 6 | Garati | 80 | Pochagar | Haldibari | 73.75 |
| 7 | Bingimari Part-I | 73 | Pochagar | Haldibari | 6.07 |
| 1 | 2 | 3 | 4 | 5 | 6 |
|---------------|----------------|-----------|---------|-----------|-------------|
| 8. | Nazirganja | 41 | Boda | Haldibari | 58.32 |
| 9. | Nazirganja | 42 | Boda | Haldibari | 434.29 |
| 10. | Nazirganja | 44 | Boda | Haldibari | 53.47 |
| 11. | Nazirganja | 45 | Boda | Haldibari | 1.07 |
| 12. | Nazirganja | 46 | Boda | Haldibari | 17.95 |
| 13. | Nazirganja | 47 | Boda | Haldibari | 3.89 |
| 14. | Nazirganja | 48 | Boda | Haldibari | 73.27 |
| 15. | Nazirganja | 49 | Boda | Haldibari | 49.05 |
| 16. | Nazirganja | 50 | Boda | Haldibari | 5.05 |
| 17. | Nazirganja | 51 | Boda | Haldibari | 0.77 |
| 18. | Nazirganja | 52 | Boda | Haldibari | 1.04 |
| 19. | Nazirganja | 53 | Boda | Haldibari | 1.02 |
| 20. | Nazirganja | 54 | Boda | Haldibari | 3.87 |
| 21. | Nazirganja | 55 | Boda | Haldibari | 12.18 |
| 22. | Nazirganja | 56 | Boda | Haldibari | 54.04 |
| 23. | Nazirganja | 57 | Boda | Haldibari | 8.27 |
| 24. | Nazirganja | 58 | Boda | Haldibari | 14.22 |
| 25. | Nazirganja | 60 | Boda | Haldibari | 0.52 |
| 26. | Putimari | 59 | Boda | Haldibari | 122.8 |
| 27. | Daikhata Chhat | 38 | Boda | Haldibari | 499.21 |
| 28. | Salbari | 37 | Boda | Haldibari | 1188.93 |
| 29. | Kajal Dighi | 36 | Boda | Haldibari | 771.44 |
| 30. | Nataktoka | 32 | Boda | Haldibari | 162.26 |
| 31. | Nataktoka | 33 | Boda | Haldibari | 0.26 |
| 35 | Boda | Haldibari | 0.83 | 32. | |
| Beuladanga | | | | | |
| Chhat | | | | | |
| 3 | Debiganj | Haldibari | 1752.44 | 33. | |
| Balapara | | | | | |
| Iagrabar | | | | | |
| 30 | Dimla | Haldibari | 7.71 | 34. | |
| Bara | | | | | |
| Khankikharija | | | | | |
| Citaldaha | | | | | |
| 1 | 2 | 3 | 4 | 5 | 6 |
|---------------|----------------|-----------|---------|-----------------|-------------|
| 29 | Dimla | Haldibari | 36.83 | 35. | Bara |
| Khankikharija | | | | | |
| Citaldaha | | | | | |
| 36. | Barakhangir | 28 | Dimla | Haldibari | 30.53 |
| 37. | Nagarjikobari | 31 | Dimla | Haldibari | 33.41 |
| 38. | Kuchlibari | 26 | Patgram | Mekliganj | 5.78 |
| 39. | Kuchlibari | 27 | Patgram | Mekliganj | 2.04 |
| Patgram | Mekliganj | 4.35 | 40. | Bara Kuchlibari | |
| Fragment | | | | | |
| of J.L.107 | | | | | |
| of P.S | | | | | |
| Mekliganj | | | | | |
| 6 | Patgram | Mekliganj | 5.24 | 41. | |
| Jamaldaha- | | | | | |
| Balapukhari | | | | | |
| 115/2 | Patgram | Mekliganj | 0.32 | 42. | |
| Uponchowki | | | | | |
| kuchlibari | | | | | |
| 7 | Patgram | Mekliganj | 44.04 | 43. | |
| Uponchowki | | | | | |
| kuchlibari | | | | | |
| 44. | Bhothnri | 11 | Patgram | Mekliganj | 36.83 |
| 45. | Balapukhari | 5 | Patgram | Mekliganj | 55.91 |
| 46. | Bara Khangir | 4 | Patgram | Mekliganj | 50.51 |
| 47. | Bara Khangir | 9 | Patgram | Mekliganj | 87.42 |
| 48. | Chhat Bogdokra | 10 | Patgram | Mekliganj | 41.7 |
| 49. | Ratanpur | 11 | Patgram | Mekliganj | 58.91 |
| 50. | Bogdokra | 12 | Patgram | Mekliganj | 25.49 |
| Patgram | Mekliganj | 0.88 | 51. | Fulker Dabri | |
| Fragment | | | | | |
| of J.L. 107 | | | | | |
| of P.S | | | | | |
| Mekliganj | | | | | |
| 1 | 2 | 3 | 4 | 5 | 6 |
|---------------|---------------|-----------|---------|-------------|-----------|
| 52. | Kharkharia | 15 | Patgram | Mekliganj | 60.74 |
| 53. | Kharkharia | 13 | Patgram | Mekliganj | 51.62 |
| 54. | Lotamari | 14 | Patgram | Mekliganj | 110.92 |
| 55. | Bhotbari | 16 | Patgram | Mekliganj | 205.46 |
| 16A | Patgram | Mekliganj | 42.8 | 56. | |
| Komat | | | | | |
| Changrabandha | | | | | |
| 17A | Patgram | Mekliganj | 16.01 | 57. | |
| Komat | | | | | |
| Changrabandha | | | | | |
| 58. | Panisala | 17 | Patgram | Mekliganj | 137.66 |
| 18 | Patgram | Mekliganj | 36.5 | 59. | |
| Dwarikamari | | | | | |
| Khasbash | | | | | |
| 60. | Panisala | 153/P | Patgram | Mekliganj | 0.27 |
| 61. | Panisala | 153/O | Patgram | Mekliganj | 18.01 |
| 62. | Panisala | 19 | Patgram | Mekliganj | 64.63 |
| 63. | Panisala | 21 | Patgram | Mekliganj | 51.4 |
| 64. | Lotamari | 20 | Patgram | Mekliganj | 283.53 |
| 65. | Lotamari | 22 | Patgram | Mekliganj | 98.85 |
| 66. | Dwarikamari | 23 | Patgram | Mekliganj | 39.52 |
| 67. | Dwarikamari | 25 | Patgram | Mekliganj | 45.73 |
| 68. | Chhat Bhothat | 24 | Patgram | Mekliganj | 56.11 |
| 69. | Baakata | 131 | Patgram | Hathabhanga | |
| 22 | | | | | |
| . | | | | | |
| 35 | | | | | |
| 70. | Baakata | 132 | Patgram | Hathabhanga | 11.96 |
| 71. | Baakata | 130 | Patgram | Hathibhanga | 20.48 |
| 72. | Bhogramguri | 133 | Patgram | Hathibhanga | 1.44 |
| 73. | Chenakata | 134 | Patgram | Mekliganj | 7.81 |
| 74. | Banskata | 119 | Patgram | Mathabanga | 413.81 |
| 75. | Banskata | 120 | Patgram | Mathabanga | 30.75 |
| 76. | Banskata | 121 | Patgram | Mathabanga | 12.15 |
| 77. | Banskata | 113 | Patgram | Mathabanga | 57.86 |
| 78. | Banskata | 112 | Patgram | Mathabanga | 315.04 |
| 79. | Banskata | 114 | Patgram | Mathabanga | 0.77 |
| 1 | 2 | 3 | 4 | 5 | 6 |
|---------------|----------------|---------|--------------|------------|------------|
| 80. | Banskata | 115 | Patgram | Mathabanga | 29.2 |
| 81. | Banskata | 122 | Patgram | Mathabanga | 33.22 |
| 82. | Banskata | 127 | Patgram | Mathabanga | 12.72 |
| 83. | Banskata | 128 | Patgram | Mathabanga | 2.33 |
| 84. | Banskata | 117 | Patgram | Mathabanga | 2.55 |
| 85. | Banskata | 118 | Patgram | Mathabanga | 30.98 |
| 86. | Banskata | 125 | Patgram | Mathabanga | 0.64 |
| 87. | Banskata | 126 | Patgram | Mathabanga | 1.39 |
| 88. | Banskata | 129 | Patgram | Mathabanga | 1.37 |
| 89. | Banskata | 116 | Patgram | Mathabanga | 16.96 |
| 90. | Banskata | 123 | Patgram | Mathabanga | 24.37 |
| 91. | Banskata | 124 | Patgram | Mathabanga | 0.28 |
| 92. | Gotamari Chhit | 135 | Hatibandha | Sitalkuchi | 126.59 |
| 93. | Gotamari Chhit | 136 | Hatibandha | Sitalkuchi | 20.02 |
| 94. | Banapachai | 151 | Lalmonirhat | Dinhata | 217.29 |
| 152 | Lalmonirhat | Dinhata | 81.71 | 95. | |
| Banapachai | | | | | |
| Bhitarkuthi | | | | | |
| 96. | Dasiar Chhara | 150 | Fulbari | Dinhata | 1643.44 |
| 156 | Kurigram | Dinhata | 14.27 | 97. | |
| Dakurhat- | | | | | |
| Dakinirkuthi | | | | | |
| 98. | Kalamati | 141 | Bhurungamari | Dinhata | 21.21 |
| 99. | Bhahobganj | 153 | Bhurungamari | Dinhata | 31.58 |
| 100. | Baotikursa | 142 | Bhurungamari | Dinhata | 45.63 |
| 101. | Bara Coachulka | 143 | Bhurungamari | Dinhata | 39.99 |
| 102. | Gaochulka II | 147 | Bhurungamari | Dinhata | 0.9 |
| 103. | Gaochulka I | 146 | Bhurungamari | Dinhata | 8.92 |
| 104. | Dighaltari II | 145 | Bhurungamari | Dinhata | 8.81 |
| 105. | Dighaltari I | 144 | Bhurungamari | Dinhata | 12.31 |
| 149 | Bhurungamari | Dinhata | 17.85 | 106. | |
| Chhoto | | | | | |
| Garaljhora II | | | | | |
| 1 | 2 | 3 | 4 | 5 | 6 |
|------------------|--------------|-------------|-------|------|------------|
| 148 | Bhurungamari | Dinhata | 35.74 | 107 | Chhoto |
| Garaljhora I | | | | | |
| | Patgram | Mathabhanga | 3.5 | 108 | |
| 1 chhit | | | | | |
| | | | | | |
| without | | | | | |
| name & JL No. | | | | | |
| at the southern | | | | | |
| and of JL No. 38 | | | | | |
| & southern and | | | | | |
| of JL No. 39 | | | | | |
| (locally known | | | | | |
| as Ashokabari | | | | | |
| | | | | | |
| * | | | | | |
| ) | | | | | |
## Enclaves With Fragmented Chhits
| 109. | (i) Bewladanga | 34 | Haldibari | Boda | 862.46 |
|-------------|-------------------|-----------|--------------|----------|-----------|
| | (ii) Bewladanga | Fragment | Haldibari | Debiganj | |
| 110. | (i) Kotbhajni | 2 | Haldibari | Debiganj | 2012.27 |
| | (ii) Kotbhajni | Fragment | Haldibari | Debiganj | |
| | (iii) Kotbhajni | Fragment | Haldibari | Debiganj | |
| | (iv) Kotbhajni | Fragment | Haldibari | Debiganj | |
| 111. | (i) Dahala | Khagrabri | Haldibari | Debiganj | 2650.35 |
| | (ii) Dahala | Fragment | Haldibari | Debiganj | |
| | (iii) Dahala | Fragment | Haldibari | Debiganj | |
| | | | | | |
| (iv) Dahala | Fragment | Haldibari | Debiganj | | |
| | | | | | |
______________________________________________
Corrected *vide* 150th (54th) India-Bangladesh Boundary Conference held at Kolkata from 29th September to 2nd October, 2002.
* Corrected *vide* 152nd (56th) India-Bangladesh Boundary Conference held at Kochbihar, India from 18th—20th September, 2003.
| 1 | 2 | 3 | 4 | 5 | 6 |
|------|-------------|----------|-----------|----------|----------|
| | (v) Dahala | Fragment | Haldibari | Debiganj | |
| | (vi) Dahala | Fragment | Haldibari | Debiganj | |
| | | | | 17160.63 | |
The above given details of enclaves have been jointly compared and reconciled with records held by India and Bangladesh during the Indo- Bangladesh Conference held at Calcutta during 9th—12th October, 1996 as well as during joint field inspection at Jalpaiguri (West Bengal) Panchagarh (Bangladesh) sector during 21—24 November, 1996.
Note: Name of enclave in Sl. No. 108 above has been identified as Ashokabari by joint ground verification during field season 1996-97.
Md. Shafi Uddin Director-General, Land Records and Surveys, Bangladesh.
Brig. J.R. Peter Director Land Records & Survey (*Ex-Officio*) West Bengal, India & Director, Eastern Circle Survey of India, Calcutta.
## B. Exchangeable Bangladesh Enclaves In India With Area
Sl. No.
J.L.
No.
Name of Chhits
Lying within
Police station W. Bengal
Lying within Police station Bangladesh
Area in acres
1
2
3
4
5
6
A. Enclaves with independent chhits
1.
Chhit Kuchlibari
Mekliganj
Patgram
22
370.64
Mekliganj
Patgram
24
1.83
2.
Chhit Land of Kuchlibari
3.
Balapukhari
Mekliganj
Patgram
21
331.64
Mekliganj
Patgram
20
1.13
4.
Chhit Land of Panbari No. 2
| 1 | 2 | 3 | 4 | 5 | 6 |
|------------------|---------------------|-------------|------------|------|---------------|
| 5. | Chhit Panbari | Mekliganj | Patgram | 18 | 108.59 |
| 6. | Dhabalsati Mirgipur | Mekliganj | Patgram | 15 | 173.88 |
| 7. | Bamandal | Mekliganj | Patgram | 11 | 2.24 |
| 8. | Chhit Dhabalsati | Mekliganj | Patgram | 14 | 66.58 |
| 9. | Dhabalsati | Mekliganj | Patgram | 13 | 60.45 |
| 10. | Srirampur | Mekliganj | Patgram | 8 | 1.05 |
| 11. | Jote Nijjama | Mekliganj | Patgram | 3 | 87.54 |
| Mathabhanga | Patgram | 37 | 69.84 | 12 | Chhit Land of |
| Jagatber No. 3 | | | | | |
| Mathabhanga | Patgram | 35 | 30.66 | 13 | Chhit Land of |
| Jagatber No.1 | | | | | |
| Mathabhanga | Patgram | 36 | 27.09 | 14 | Chhit Land of |
| Jagatber No. 2 | | | | | |
| 15. | Chhit Kokoabari | Mathabhanga | Patgram | 47 | 29.49 |
| 16. | Chhit Bhandardaha | Mathabhanga | Patgram | 67 | 39.96 |
| 17. | Dhabalguri | Mathabhanga | Patgram | 52 | 12.5 |
| 18. | Chhit Dhabalguri | Mathabhanga | Patgram | 53 | 22.31 |
| Mathabhanga | Patgram | 70 | 1.33 | 19 | Chhit Land of |
| Dhabalguri No. 3 | | | | | |
| Mathabhanga | Patgram | 71 | 4.55 | 20 | Chhit Land of |
| Dhabalguri No. 4 | | | | | |
| Mathabhanga | Patgram | 72 | 4.12 | 21 | Chhit Land of |
| Dhabalguri No. 5 | | | | | |
| Mathabhanga | Patgram | 68 | 26.83 | 22 | Chhit Land of |
| Dhabalguri No. 1 | | | | | |
| Mathabhanga | Patgram | 69 | 13.95 | 23 | Chhit Land of |
| Dhabalguri No. 2 | | | | | |
| 24. | Mahishmari | Sitalkuchi | Patgram | 54 | 122.77 |
| 25. | Bura Saradubi | Sitalkuchi | Hatibandha | 13 | 34.96 |
| 1 | 2 | 3 | 4 | 5 | 6 |
|------------|-------------------|------------|--------------|------|-----------------|
| 26. | Falnapur | Sitalkuchi | Patgram | 64 | 505.56 |
| 27. | Amjhol | Sitalkuchi | Hatibandha | 57 | 1.25 |
| 28. | Kismat Batrigachh | Dinhata | Kaliganj | 82 | 209.95 |
| 29. | Durgapur | Dinhata | Kaliganj | 83 | 20.96 |
| Dinhata | Lalmonirhat | 1 | 24.54 | 30 | Bansua Khamar |
| Gitaldaha | | | | | |
| 31. | Poaturkuthi | Dinhata | Lalmonirhat | 37 | 589.94 |
| Dinhata | Bhurungamari | 38 | 151.98 | 32 | Paschim Bakalir |
| Chhara | | | | | |
| Dinhata | Bhurungamari | 39 | 32.72 | 33 | Madhya Bakalir |
| Chhara | | | | | |
| Dinhata | Bhurungamari | 40 | 12.23 | 34 | Purba Bakalir |
| Chhara | | | | | |
| 35. | Madhya Masaldanga | Dinhata | Bhurungamari | 3 | 136.66 |
| Dinhata | Bhurungamari | 8 | 11.87 | 36 | Madhya Chhit |
| Masaldanga | | | | | |
| Dinhata | Bhurungamari | 7 | 7.6 | 37 | Paschim Chhit |
| Masaldanga | | | | | |
| 38. | Uttar Masaldanga | Dinhata | Bhurungamari | 2 | 27.29 |
| 39. | Kachua | Dinhata | Bhurungamari | 5 | 119.74 |
| 40. | Uttar Bansjani | Tufanganj | Bhurungamari | 1 | 47.17 |
| 41. | Chhat Tilai | Tufanganj | Bhurungamari | 17 | 81.56 |
## B. *Enclaves With Fragmented Chhits*
| 42. | (i) Nalgram | Sitalkuchi | Patgarm | 65 | 1397.34 |
|------------|----------------|---------------|------------|-------|---------------|
| Sitalkuchi | Patgarm | 65 | | | (ii) Nalgram |
| (Fragment) | | | | | |
| Sitalkuchi | Patgarm | 65 | | | (iii) Nalgram |
| (Fragment) | | | | | |
| | | | | | |
| 1 | 2 | 3 | 4 | 5 | 6 |
|-------------------------|-----------------------|------------|----------|------|------------------------|
| 43. | (i) Chhit Nalgram | Sitalkuchi | Patgarm | 66 | 49.5 |
| Sitalkuchi | Patgarm | 66 | | | (ii) Chhit Nalgram |
| (Fragment) | | | | | |
| 44. | (i) Batrigachh | Dinhata | Kaliganj | 81 | 577.37 |
| Dinhata | Kaliganj | 81 | | | (ii) Batrigachh |
| (Fragment) | | | | | |
| Dinhata | Phulbari | 9 | | | (iii) Batrigachh |
| (Fragment) | | | | | |
| 45. | (i) Karala | Dinhata | Phulbari | 9 | 269.91 |
| | | | | | |
| (ii) Karala (fragment) | | | | | |
| Dinhata | Phulbari | 9 | | | |
| | | | | | |
| (iii) Karala (fragment) | | | | | |
| Dinhata | Phulbari | 8 | | | |
| 46. | (i) Sipprasad Mustati | Dinhata | Phulbari | 8 | 373.2 |
| Dinhata | Phulbari | 6 | | | (ii) Sipprasad Mustati |
| (Fragment) | | | | | |
| Dinhata | Bhurungamari | 6 | 571.38 | 47. | (i) Dakshin |
| Masaldanga | | | | | |
| Dinhata | Bhurungamari | 6 | | | (ii) Dakshin |
| Masaldanga | | | | | |
| (Fragment) | | | | | |
| Dinhata | Bhurungamari | 6 | | | (iii) Dakshin |
| Masaldanga | | | | | |
| (Fragment) | | | | | |
| Dinhata | Bhurungamari | 6 | | | (iv) Dakshin |
| Masaldanga | | | | | |
| (Fragment) | | | | | |
| Dinhata | Bhurungamari | 6 | | | (v) Dakshin |
| Masaldanga | | | | | |
| (Fragment) | | | | | |
| Dinhata | Bhurungamari | 6 | | | (vi) Dakshin |
| Masaldanga | | | | | |
| (Fragment) | | | | | |
| 1 | 2 | 3 | 4 | 5 | 6 |
|-----------------------|----------------------|-----------|--------------|----------|-----------------------|
| Dinhata | Bhurungamari | 4 | 29.49 | 48. | (i) Paschim |
| Masaldanga | | | | | |
| Dinhata | Bhurungamari | 4 | | | (ii) Paschim |
| Masaldanga (Fragment) | | | | | |
| Dinhata | Bhurungamari | 10 | 35.01 | 49. | (i) Purba Chhit |
| Masaldanga | | | | | |
| Dinhata | Bhurungamari | 10 | | | (ii) Purba Chhit |
| Masaldanga (Fragment) | | | | | |
| 50. | (i) Purba Masaldanga | Dinhata | Bhurungamari | 11 | 153.89 |
| Dinhata | Bhurungamari | 11 | | | (ii) Purba Masaldanga |
| (Fragment) | | | | | |
| 51. | (i) Uttar Dhaldanga | Tufanganj | Bhurungamari | 14 | 24.98 |
| Tufanganj | Bhurungamari | 14 | | | |
| (ii) Uttar Dhaldanga | | | | | |
| (Fragment) | | | | | |
| Tufanganj | Bhurungamari | 14 | | | |
| (iii) Uttar Dhaldanga | | | | | |
| (Fragment) | | | | | |
| | Total Area | | | 7,110.02 | |
The above given details of enclaves have been jointly compared and reconciled with records held by India and Bangladesh during the Indo- Bangladesh Conference held at Calcutta during 9th—12th October, 1996 as well as during joint field inspection at Jalpaiguri (West Bengal) - Panchagarh (Bangladesh) sector during 21—24 November, 1996.
Md. Shafi Uddin Director General, Land Records and Surveys, Bangladesh. Brig. J.R. Peter Director Land Records & Survey (Ex officio) West Bengal, India & Director, Eastern Circle Survey of India, Calcutta.
# Appendix Ii 1The Constitution (Application To Jammu And Kashmir) Order, 2019 C.O. 272
In exercise of the powers conferred by clause (1) of article 370 of the Constitution, the President, with the concurrence of the Government of State of Jammu and Kashmir, is pleased to make the following Order:—
1. (1) This Order may be called the Constitution (Application to Jammu and Kashmir) Order, 2019.
(2) It shall come into force at once, and shall thereupon supersede the Constitution (Application to Jammu and Kashmir) Order, 1954 as amended from time to time.
2. All the provisions of the Constitution, as amended from time to time, shall apply in relation to the State of Jammu and Kashmir and the exceptions and modifications subject to which they shall so apply shall be as follows:–
To article 367, there shall be added the following clause, namely:―
"(4) For the purposes of this Constitution as it applies in relation to the State of Jammu and Kashmir–
(a) references to this Constitution or to the provisions thereof shall be construed as references to the Constitution or the provisions thereof as applied in relation to the said State;
(b) references to the person for the time being recognized by the President on the recommendation of the Legislative Assembly of the State as the Sadar-i-Riyasat of Jammu and Kashmir, acting on the advice of the Council of Ministers of the State for the time being in office, shall be construed as references to the Governor of Jammu and Kashmir;
(c) references to the Government of the said State shall be construed as including references to the Governor of Jammu and Kashmir acting on the advice of his Council of Ministers; and
(d) in proviso to clause (3) of article 370 of this Constitution, the expression "Constituent Assembly of the State referred to in clause (2)" shall read "Legislative Assembly of the State"."
______________________________________________
## Appendix Iii
# 1Declration Under Article 370(3) Of The Constitution
## C.O. 273
In exercise of the powers conferred by clause (3) of article 370 read with clause (1) of article 370 of the Constitution of India, the President, on the recommendation of Parliament, is pleased to declare that, as from the 6th August, 2019, all clauses of the said article 370 shall cease to be operative except the following which shall read as under, namely :—
"370. All provisions of this Constitution, as amended from time to time, without any modifications or exceptions, shall apply to the State of Jammu and Kashmir notwithstanding anything contrary contained in article 152 or article 308 or any other article of this Constitution or any other provision of the Constitution of Jammu and Kashmir or any law, document, judgement, ordinance, order, by-law, rule, regulation, notification, custom or usage having the force of law in the territory of India, or any other instrument, treaty or agreement as envisaged under article 363 or otherwise.".
______________________________________________ |
65c43cfe57bc5671070682d1 | budget_reports |
## Demand For Grants 2017-18 Analysis Defence
The Ministry of Defence's role is to frame policy on defence and security-related matters, and ensure its implementation by the defence services (i.e. Army, Navy and Air Force). In addition, it is responsible for production establishments such as ordnance factories and defence public sector undertakings, research and development organisations, and ancillary services that assist the defence services (ex. Armed Forces Medical Services). This note analyses budgetary allocations and expenditure trends in the Ministry. It also provides insights into key issues affecting the defence sector.
## Overview Of Finances
In 2017-18, the Ministry of Defence has been allocated Rs 3,59,854 crore (including pensions) for expenditure across the various services, production establishments and research and development organisations. This forms 16.8% of the central government's budget of 2017-18 and
2.1% of India's estimated GDP. Note that this is the highest allocation among all central ministries.
## India'S Defence Budget Decreasing As A Percentage Of Gdp
India's defence budget 2017-18 has decreased from 2.4% of GDP in 2011-12 to 2.1% of GDP in 2017-
18. This year's allocation is also the lowest allocation as a share of GDP since 2011-12. It has been recommended that India's defence budget should be about 3% of GDP to ensure adequate preparedness of the defence services.1
As a share of the total central government budget, the defence budget has been about 16%-17% every year between 2011-12 and 2017-18. However, there has been a decrease from last year's 17.1% to this year's 16.8%.
| Defence | Share of central |
|-------------|---------------------|
| Year | |
| Share of | |
| GDP (%) | |
| expenditure | |
| (Rs crore) | |
| government | |
| budget(%) | |
| 2011-12 | 2,13,673 |
| 2012-13 | 2,30,642 |
| 2013-14 | 2,54,133 |
| 2014-15 | 2,85,005 |
| 2015-16 | 2,93,920 |
| 2016-17* | 3,45,106 |
| 2017-18** | 3,59,854 |
*Revised Estimates ** Budget Estimates Sources: Union Budget Documents; Central Statistics Office; PRS.
Tel: (011) 2323 4801-02, 4343 4035-36
According to the Stockholm International Peace Research Institute (SIPRI), India ranks sixth among countries with the highest defence expenditure.2 Figure 1 compares India's defence expenditure with that of the top five defence spenders (United States of America (USA), China, Saudi Arabia, Russia and United Kingdom (UK)). Note that while other countries' defence expenditure as a share of GDP has remained the same or has increased in the last decade (except USA), India's share has decreased.
Note: Includes expenditure on armed forces, central paramilitary forces, defence ministry and defence pensions.
Sources: Trends in World Military Expenditure 2015, Stockholm International Peace Research Institute; PRS.
## Growth Of 4% Over Last Year'S Defence Budget
| RE | BE |
|-------------|----------|
| | |
| Actuals | |
| 2015-16 | |
| 2016-17 | 2017-18 |
| BE 2017-18/ | |
| RE 2016-17 | |
| Salaries | 74,200 |
| Capital | |
| Outlay | |
| 79,950 | 79,327 |
| Pensions | 60,201 |
| Stores | 37,780 |
| Others | 41,788 |
| Total | 2,93,920 |
BE: Budget Estimates; RE: Revised Estimates. Note: Salaries and pensions are of the three services; Pensions do not include rewards; Capital outlay includes capital expenses for research and development and ordnance factories; Stores includes ammunition, repairs and spares; Others include administration expenses, construction of roads and bridges in border areas and housing. Sources: Expenditure Budget, Union Budget 2017-18; PRS.
The Ministry of Defence's budget is estimated to grow by 4% in 2017-18 over revised estimates 2016-17. This is low compared to the 19% growth between 2015-16 and 2016-17.
The 4% growth is primarily because of an increase in salaries of the defence services and capital outlay. Capital outlay includes purchase of defence equipment, weaponry, aircrafts, naval ships and land for the defence services, production establishments and research organisations. However, note that allocation for defence stores is 1% less than last year's expenditure on the same. Stores include ammunition, petrol, oil, rations and spares that are key in maintaining defence capital, and ensuring preparedness of the defence forces.
## Expenditure In 2016-17 Overshot The Budget Estimates, But Capital Allocation Underspent
In 2016-17, Ministry of Defence spent Rs 3,45,106 crore according to the revised estimates, 1% more than the budget estimates (Rs 3,40,922 crore). This was primarily due to higher expenditure on salaries and pensions of Army, Navy and Air Force. On the other hand, the expenditure on capital outlay was 8% below the budget estimates 2016- 17. The government had budgeted to spend Rs 86,298 crore on purchase of defence capital, but revised estimates provide that Rs 79,327 crore have been spent. Among the three services, the capital outlay on Army, Navy and Air Force was 11%, 11% and 5% lower than Budget Estimates 2016-17 respectively.
## Salaries And Pensions Comprise Half The Budget
In 2017-18, salaries and pensions of the defence services form the largest portion of the defence budget (50% of the budget or Rs 1,80,823 crore).
This is followed by capital outlay (24% or Rs 86,488 crore), i.e. expenditure on defence equipment, weaponry, aircrafts, naval ships, land, etc. The remaining allocation is toward stores (includes ammunition, spares and other items required for maintenance of defence equipment), administration of the defence services, construction of roads and bridges, the Coast Guard, etc.
## Allocations Do Not Meet The Projected Requirements Of The Defence Services
Expenditure on the defence services is typically lower than the requirements projected by the defence services. For example, the Ministry of Defence deposed before the Standing Committee on Defence that in 2014-15, Army, Navy and Air Force projected their requirement of funds to be Rs 2,84,080 crore.3 However, they were allocated Rs 2,10,404 crore, and of this Rs 1,70,373 crore was ultimately spent. This implies a shortfall of 29% (see Figure 3). Note that projected requirements of the defence services in 2017-18 and comparable revised expenditure in 2016-17 are unavailable in the public domain as of February 2017.
* Expenditure is till January 2016. Sources: 19th Report, Standing Committee on Defence, May 2016; PRS.
Consequently, the defence services have to reprioritise their activities and purchases according to the funds they receive. The Standing Committee has noted that this affects expenses on stores (ex. ammunition, repairs, fuel), and purchase of new defence machinery and equipment.3,4,5 This is because other expenses like pays and pensions are committed liabilities of the government that cannot be defaulted upon. Note that a 2015 CAG audit report has found that 50% of the ammunition stocks with Army were at critically low levels in 2012-13 (i.e. they would last for less than 10 days of intense conflict, while the requirement was to last for 40 days).6 The situation has worsened since 2008-09, when about 15% of the stocks were at critically low levels.6 Even with regard to repairs and refits, the Standing Committee has noted poor capacity of shipyards to carry out maintenance of naval fleets. For example, in the case of INS Sindhukirti, one of the oldest operational submarines with Navy, repairs and upgradation took 10 years, from 2006 to 2016.4
## Declining Share Of Capital Expenditure
In 2017-18, defence capital expenditure is budgeted at Rs 91,580 crore, and it accounts for 25% of the defence budget. Capital outlay includes expenditure on purchasing defence equipment, weaponry, aircrafts, naval ships, land, and construction of roads and bridges in border areas. This is significantly lower as compared to 2010-11 and 2011-12 when it used to be 33% of the defence budget. Note that in 2016-17, share of capital expenditure was the lowest in the last 10 years, at 24% (Rs 84,460 crore) of the defence budget. The remaining defence expenditure is revenue expenditure which includes expenditure on salaries, pensions, stores required for running the defence services and maintenance of equipment and buildings. Share of revenue expenditure is typically high because the Indian defence forces are personnel-intensive, with a sanctioned strength of
14.8 lakh personnel.7
Sources: Union Budget Documents; PRS.
The dip in defence capital expenditure and the simultaneous increase in revenue expenditure in 2016-17 may be attributed to the increase in salaries and pensions. This was due to implementation of the One Rank One Pension scheme, and some recommendations of the Seventh Pay Commission (2016-17 onwards).8,3
| | | | | 2015-16 | 2016-17 | 2017-18 |
|-------|-----|-----|-----|------------|------------|------------|
| | Rev | Cap | Rev | Cap | Rev | Cap |
| Army | 86 | 14 | 87 | 13 | 87 | 13 |
| Navy | 37 | 63 | 42 | 58 | 43 | 57 |
| Air | | | | | | |
| Force | | | | | | |
| 40 | 60 | 49 | 51 | 44 | 56 | |
Note: 2015-16 refers to Actuals, 2016-17 to Revised Estimates and 2017-18 to Budget Estimates; Revenue expenditure includes salaries, pensions and stores. Sources: Union Budget Documents; PRS.
Among the three defence services, Army's expenditure has the smallest capital component (13% of its expenditure is on capital under Budget 2017-18). The Standing Committee on Defence has noted that Army is operating with large scale vintage equipment.4 Further, there is shortfall in number of bulletproof jackets, vehicles, small arms, infantry specialist weapons, surveillance equipment, communication equipment, radars and power generators.4 Given there are ammunition shortfalls in Army as well (as mentioned on Pg. 2), this may have serious implications for border security and defence preparedness.6 In this context, the Standing Committee has recommended that it is essential to have a revenue capital ratio in favour of the capital segment to ensure all the services are in a war-ready mode.5
## Underspending Of Capital Budget
In 2016-17, the Ministry of Defence is estimated to have spent Rs 79,327 crore on capital assets, which is 8% lower than its budget estimates (Rs 86,298 crore). In the last decade, in most years there has been similar underspending of the capital budget. However, there has been overspending on revenue items, above budget estimates (Figure 5).
* Revised Estimates used instead of Actuals. Sources: Union Budget Documents; PRS.
The Standing Committee on Defence has noted two key reasons behind Actuals being lower than Budget Estimates for the capital segment. One, the Ministry of Finance imposes budgetary cuts at the Revised Estimates stage because of the overall resource constraints of the central government. This affects acquisition of new capital because revenue items like salaries and pensions are committed liabilities of the government. Two, there is an absence of proper planning in defence procurement, and delays in the procurement process, preventing optimum utilisation of the capital budget.4,5 Note that in March 2016, the government replaced the earlier guidelines regulating defence procurement with the Defence Procurement Procedure, 2016 to address delays and other issues in defence procurement.9 In light of these trends, the Standing Committee has recommended need for a non-lapsable and rollon capital allocation.5 This will allow unspent balances from a year to be carried over and added to the next year's capital budget. It has also recommended appointment of an expert committee to monitor the progress of defence procurement and ensure compliance with time schedules across procurement contracts.5 Further, the Committee has emphasised on need for outcome-oriented planning in defence, under which annual targets must be fixed and implemented for specified categories of defence assets (ex. artillery and air defence guns, bulletproof jackets, submarines, aircraft, mid-air refuellers).5 It may be noted that internationally defence services endeavour to maintain their capital outlay in the ratio 30:40:30, with 30% for state-of-the-art technology, 40% for current technology and 30% for technology that is becoming obsolete. In India, the Ministry of Defence has stated that the reason behind not meeting this standard ratio is insufficient capital budget.5
## Defence Procurement Procedure 2016
Defence procurement refers to acquisition of military
equipment, systems and platforms required by the defence
services from domestic and foreign vendors. Detailed
guidelines regulating how defence procurement takes place
were issued in 2016 as the Defence Procurement
Procedure (DPP) 2016. These guidelines replaced the
earlier DPP 2013 from April 1, 2016.
Under the DPP 2013, there were five methods of capital
acquisition. The DPP 2016 has added one more category,
'Buy (Indian- Indigenously Designed, Developed and
Manufactured), as the most preferred route of capital
acquisition. This means, purchasing from an Indian vendor,
products that have either: (i) been indigenously designed,
developed and manufactured with minimum 40%
indigenous content, or (ii) not been indigenously designed
or developed but have at least 60% indigenous content.
Further, it has also allowed for streamlining of the
procurement process, by mandating changes to defence
acquisitions planning, the bidding process and criteria for
disqualifying vendors.
DPP 2016 has seven chapters, six of which have been
released. The chapter of the DPP 2016 that has not been
released will outline how long term strategic partners in the
private sector will be selected to manufacture some
complex military platforms, like aircrafts and submarines.
Sources: Defence Procurement Procedure 2016; PRS.
## Significant Expenditure On Committed Liabilities
Payments for purchase of defence assets are generally made over several years, in a phased manner. For example, purchase of defence aircraft may require an upfront payment of about 10%, and the remaining amount may be paid in a phased manner over subsequent years. The upfront payment may be called payment toward a new liability, while payments for contracts from previous years are referred to as committed liabilities. Typically, about 90% of the capital budget is spent on committed liabilities from previous years (see Table 4). In 2016-17, government was estimated to spend Rs 8,590 crore on purchase of new defence equipment and machinery, i.e. about 12% of the capital budget.
## Liabilities (In Rs Crore)
CL as % of
New
Year
Committed
Liabilities
Liabilities
(CL)
Total
Capital
Budget
Capital
Budget
2014-15
61,158
5,402
66,560
92%
2015-16
71,336
6,071
77,407
92%
2016-17
61,410
8,590
70,000
88%
Note: Capital Budget is a total of committed and new liabilities of the defence services and their joint staff. Sources: 22nd Report, Standing Committee on Defence, May 2016; PRS.
Note that there is a significant shortage of certain kinds of defence equipment and machinery. For example, the Standing Committee has noted that Navy has 138 vessels and 235 aircrafts, against its requirement of 212 vessels and 458 aircrafts.4
Similarly, against Air Force's requirement of 45
fighter squadrons, it has 33 active fighter squadrons.4 However, recently the government finalised an agreement with France to induct 36 Rafale aircraft (about 2 squadrons) between September 2019 and April 2022.10 Further, some of the current equipment is old and needs to be de-commissioned. For example, INS
Viraat, one of the two aircraft carriers in India, is being decommissioned.4 With regard to Air Force, the Ministry of Defence has admitted that the rate at which the fighter aircraft are retiring exceeds the rate at which their replacements are being inducted.4 This may pose a challenge for modernisation of the defence services.
## Increasing Import Bill
India's defence requirements are met through both imports and domestic sources. However, there is greater reliance on imports. Currently, indigenous content in defence acquisition is about 35%.11 Going forward, the target of the government is to achieve about 70% indigenisation in defence procurement by 2027.11 It may be noted that India was the world's largest importer of arms between 2010-2014.11 According to SIPRI, its share of international arms imports was 15% in this period.11 Some of the countries from which India imports defence equipment are: Russia, USA, Israel and France.12 The kind of equipment imported includes aircrafts, unmanned aerial vehicles, helicopters and ammunition.13 The Standing Committee on Defence noted that India's defence import bill has been increasing over the years.5 The Committee also observed that a substantial percentage of raw materials and parts used by local production establishments are procured from outside India. For example, the import component of equipment manufactured by Hindustan Aeronautics Limited ranges from 44%- 60%, and Bharat Electronics Limited ranges from 41%-49%.5 Between 2012-13 to 2014-15, India signed 162 contracts with Indian and foreign vendors, with a total value of Rs 1,33,093 crore.14 Of these, 95 contracts were signed with Indian vendors and 67 with foreign vendors (including Russia (18 contracts), USA (17), Israel (13) and France (6)).
Note that the impact of Make in India on India's defence sector is unclear.
## Salaries And Pensions
The two significant components of revenue expenditure in the defence budget are: (i) salaries (26% of the defence budget), and (ii) pensions (24%), of the three services. As Army is a personnel-intensive defence service, a significant part of both the salary and pensions budget is spent on its personnel (current and former). In 2017-18, of the salaries budget 80% will be spent on Army, 6% on Navy and 14% on Air Force. Similarly, of the pensions budget, 90%, 4% and 6% will be spent on Army, Navy and Air Force respectively.
## Pensions (In Rs Crore)
| RE | BE |
|----------|---------|
| | |
| Actuals | |
| 2015-16 | 2016-17 |
| BE 2017- | |
| 18/ RE | |
| 2016-17 | |
| Salaries | |
| Army | 59,656 |
| Navy | 4,373 |
| Air | |
| Force | |
| 10,172 | 12,224 |
| Total | 74,200 |
| Pensions | |
| Army | 54,116 |
| Navy | 2,311 |
| Air | |
| Force | |
| 3,774 | 6,422 |
| Total | 60,201 |
BE: Budget Estimates; RE: Revised Estimates. Sources: Expenditure Budget, Union Budget 2017-18; PRS.
Salaries: In 2017-18, Rs 95,117 crore has been allocated for pays and allowances of the servicemen and servicewomen. Between 2015-16 (actuals) and 2016-17 (revised estimates), there was an increase of 19% in the salaries budget of the defence services. Note that the government accepted recommendations of the Seventh Pay Commission regarding increase in salaries and allowances for defence personnel in 2016.8 However, it is unclear how much has been allocated for implementation of these recommendations in 2016-17 and 2017-18.
Currently the sanctioned strength of the defence services is 14.8 lakh personnel.7 However, there are 5% vacancies (73,402 vacancies) within the forces, with the Navy having maximum vacancies at 14%.
| | Authorised | Actual | Vacancies |
|-----------|---------------|-----------|--------------|
| % | | | |
| Vacancies | | | |
| Army | 12,52,090 | 12,00,255 | 51,835 |
| Navy | 79,023 | 67,865 | 11,158 |
| Air | | | |
| Force | | | |
| 1,50,840 | 1,40,431 | 10,409 | 7% |
| Total | 14,81,953 | 14,08,551 | 73,402 |
Sources: Unstarred Question No. 4484, Lok Sabha, August 12, 2016; PRS.
Pensions: In 2017-18, Rs 85,705 crore has been allocated for pensions of ex-servicemen, roughly equivalent to the expenditure on it last year. There was a substantial increase in defence pensions between 2015-16 (actuals) and 2016-17 (revised estimates) of 42% (Rs 22,095 crore), from Rs 60,201 crore to Rs 85,592 crore. This was because of implementation of the One Rank One Pension (OROP) scheme by the government in 2016-17. Under OROP, uniform pensions are being paid to armed forces personnel retiring at the same rank with the same length of service, irrespective of the date of retirement. Further, future increases in rates of pension will be automatically passed on to existing pensioners through a revision carried out every five years.
OROP is being implemented retrospectively from July 1, 2014. It covers 20,63,529 beneficiary pensioners. According to the Defence Ministry, as of November 2016, 1,27,561 pensioners had not received the benefits of OROP.15 Details of allocation and utilisation of funds under OROP are provided in Table 7 (as of November 12, 2016).
| | Allocation |
|--------------------------|---------------|
| 2015-16 | |
| No separate | |
| allocation | |
| 3,000 | |
| 2016-17 | 12,456 |
| 3,021 | |
| (till November 12, 2016) | |
Sources: "One Rank One Pension", Press Information Bureau, Ministry of Defence, November 25, 2016; PRS.
Note that ex-servicemen associations have been demanding changes to the methodology of calculating pension, periodicity of its revision, coverage of ex-servicemen who take premature retirement under OROP, etc. The government had set up a judicial committee under Justice L.
Narasimha Reddy to inquire into some of these anomalies of implementation. The committee
##
1 "2nd Report: Demand for Grants (2014-15) General Defence Budget", Standing Committee on Defence, December 22, 2014, http://164.100.47.193/lsscommittee/Defence/16_Defence_2.pdf; "14th Report: Action taken by the Government on Observations/
Recommendations contained in the Second Report", Standing Committee on Defence, February 26, 2016, http://164.100.47.193/lsscommittee/Defence/16_Defence_14.pdf 2 Trends in World Military Expenditure 2015, Stockholm International Peace Research Institute, April 5, 2016, https://www.sipri.org/sites/default/files/EMBARGO%20FS1604 %20Milex%202015.pdf. 3 "19th Report: Demand for Grants (2016-17) General Defence Budget, Civil Expenditure and Defence Pensions", Standing Committee on Defence, May 3, 2016, http://164.100.47.193/lsscommittee/Defence/16_Defence_19.pdf 4 "20th Report: Demand for Grants (2016-17) Army Navy and Air Force", Standing Committee on Defence, May 3, 2016, http://164.100.47.193/lsscommittee/Defence/16_Defence_20.pdf 5 "22nd Report: Demand for Grants (2016-17) Capital Outlay on Defence Services, Procurement Policy and Defence Planning", Standing Committee on Defence, May 3, 2016, http://164.100.47.193/lsscommittee/Defence/16_Defence_22.pdf 6 "Report of the Comptroller and Auditor General of India on Ammunition Management in Army", Performance Audit 19 of
2015, http://www.saiindia.gov.in/english/home/Our_Products/Audit _Report/Government_Wise/union_audit/recent_reports/union _performance/2015/Defence/Report_19/Report_19.html. 7 Unstarred Question No. 4484, Lok Sabha, August 12, 2016.
submitted its report on October 26, 2016, but the report is not yet in the public domain.16
between military and civilian personnel", Press Information Bureau, Ministry of Defence, November 25, 2016.
9 Defence Procurement Procedure, 2016, March 2016, http://mod.nic.in/writereaddata/dppm.pdf.pdf. 10 Starred Question No. 225, Rajya Sabha, December 6, 2016. 11 "Report of the Experts Committee for Amendments to DPP
2013 including Formulation of Policy Framework", Ministry of Defence, July 2015, http://mod.nic.in/writereaddata/Reportddp.pdf. 12 "Demand for Grants (2016-17): Capital Outlay on Defence Services, Procurement Policy and Defence Planning", Standing Committee on Defence, May 2016, http://164.100.47.134/lsscommittee/Defence/16_Defence_22.pdf 13 Unstarred Question No. 975, Lok Sabha, July 22, 2016. 14 Unstarred Question No. 593, Lok Sabha, February 26, 2016. 15 "One Rank One Pension", Press Information Bureau, Ministry of Defence, November 18, 2016. 16 "Protest by ex-servicemen over OROP", Press Information Bureau, Ministry of Defence, November 29, 2016.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS").
The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-forprofit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
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65c43cfe57bc567107068299 | budget_reports | # Union Budget 2021-22 Analysis Of Expenditure By Ministries March 2021
Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi - 110 002 Tel: (011) 4343-4035, 2323-4801 www.prsindia.org
## Contributors:
Mandira Kala Prachee Mishra Aditya Kumar Manish Kanadje Prachi Kaur Saket Surya Shruti Gupta Suyash Tiwari
## Table Of Contents
Overview ........................................................................................................................................... 1 Budget at a glance ............................................................................................................................. 3
Receipts Highlights ......................................................................................................................................................................... 8
Expenditure Highlights ............................................................................................................................................................ .... 10
Defence ............................................................................................................................................15 Food and Public Distribution ..............................................................................................................23
Railways ...........................................................................................................................................36
Home Affairs .....................................................................................................................................46 Rural Development ...........................................................................................................................56 Agriculture and Farmers' Welfare .....................................................................................................64 Road Transport and Highways ..........................................................................................................76 Education .........................................................................................................................................84 Health and Family Welfare ................................................................................................................97 Jal Shakti ........................................................................................................................................108 Telecommunications .......................................................................................................................119 Housing and Urban Affairs ..............................................................................................................126 Petroleum and Natural Gas .............................................................................................................136
Science and Technology .................................................................................................................143 Environment ...................................................................................................................................153
## Overview
The central government's expenditure is authorised through the Union Budget by the Parliament every year.
The Constitution requires all expenditure (other than charged expenditure) to be submitted to Lok Sabha in the form of Ministry-wise Demand for Grants. These Demand for Grants are referred to the respective Departmentally Related Standing Committees for detailed examination. They are then discussed in the House and approved. After Lok Sabha authorises these demands, an Appropriation Bill is introduced and passed to permit this expenditure out of the Consolidated Fund of India. This document contains a short analysis of the Union Budget, and a close look at the allocations made by 15 ministries, which account for 54% of the total expenditure by the centre. Further, we analyse the allocation trends over the years, and the extent of their utilisation. We also examine the implementation of various schemes and policies and their resulting outcomes. Note that due to the impact of COVID-19, 2020-21 was not a standard year with respect to the performance of the economy and government finances. In this note, we have compared the budget estimates of 2021-22 with the actual expenditure for 2019-20 (in terms of compounded annual growth rate or CAGR).
The Union Budget 2021-22 which was presented on February 1, 2021 proposes an expenditure of Rs 34,83,236 (net of devolution of taxes to states) for the year. This amount will be funded through receipts (other than borrowings) of Rs 19,76,424 crore and borrowings of Rs 15,06,812 crore. Fiscal deficit is budgeted at 6.8% of GDP as compared to 4.6% in 2019-20. The target for revenue deficit is 5.1% of the GDP, higher than the actual revenue deficit of 3.3% in 2019-20. Devolution to states from centre's tax revenue is estimated to be Rs 6,65,563 crore in 2021-22, which is marginally higher than the devolution of Rs 6,50,678 crore in 2019-20. In 2020-21, the devolution to states reduced by 30% from an estimate of Rs 7,84,181 crore at the budgeted stage to Rs 5,49,959 crore at the revised stage. This would adversely impact the expenditure by states, especially for those where the taxes devolved from the centre form a significant share of the revenue. Besides the overall financial outlay, the budget also provides details of tax proposals in the Finance Bill. The budget proposes to limit tax-free income from provident funds at Rs 2.5 lakh. Other proposals include: (i) extension of certain temporary tax incentives up to the financial year 2021-22, (ii) levy of a new agriculture and infrastructure development cess on petrol, diesel, and imports of certain items, and (iii) a reduction in the time limit specified for reopening income tax assessments from six years to three years. Allocations to the top 15 schemes account for 12% of the total expenditure. Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has the highest allocation at Rs 73,000 crore. This is followed by the allocation to the PM-KISAN scheme (income support to farmers) at Rs 65,000 crore.
The issues discussed in the analysis of each ministry include the following:
-
Defence: The Ministry of Defence has been allocated Rs 4,78,196 crore. This constitutes 13.7% of the
central government's budget and 2.1% of India's estimated GDP for 2021-22. However, the share of
defence budget as a proportion of total government expenditure has decreased. The actual expenditure on defence by the three armed forces has also been lower (by 12% to 36%) than the amount projected by the three services. Expenditure on salaries forms the largest portion of the defence budget (30%), followed by expenditure on capital outlay (27%) and pensions (24%).
-
Consumer Affairs, Food and Public Distribution: The Ministry has two departments: (i) Food and Public Distribution, which has been allocated Rs 2,42,836 crore (99% of the Ministry's allocation), and (ii) Consumer Affairs, which has been allocated Rs 2,974 crore. This year the allocation for food subsidy to Food Corporation of India (FCI) has been increased significantly (64% annual increase over 2019-20) to enable the FCI to clear its dues (loans it had taken from the NSSF).
-
Railways: Railways' revenue for 2021-22 is estimated at Rs 2,17,460 crore, which is an annual increase of 12% from the actual expenditure of 2019-20. Revenue expenditure by Railways is projected at Rs 2,10,899 crore which is an annual increase of 10% from the actual expenditure for 2019-20. The Operating Ratio is estimated to be 96.2%. Due to the impact of COVID-19, the freight traffic volume in 2020-21 is estimated to decline by 7%, and consequently, Railways' own revenue is estimated to decline by 35% from the budget estimate
-
Home Affairs: The Ministry of Home Affairs has been allocated Rs 1,66,547 crore. Since 2019, expenditure of the Ministry also includes grants to the newly formed Union Territories (UTs) of Jammu
and Kashmir, and Ladakh. 62% of the Ministry's expenditure is on police (includes the central armed police forces and Delhi Police), and 32% is on grants made to UTs.
-
Rural Development: Expenditure by the Ministry of Rural Development is estimated at Rs 1,33,690 crore. This Ministry administers some large schemes such as MGNREGS, PMAY-G (rural housing) and PMGSY
(rural roads). About 56% of the Ministry's allocation is towards MGNREGS. In 2021-22, allocation towards MGNREGS is estimated to increase at an annual rate of 1% compared to actual expenditure in 2019-20, while that for PMGSY is estimated to be increase by 3%.
-
Agriculture: The Ministry has been allocated Rs 1,31,531 crore in 2021-22, which is a 14% annual increase from the actual expenditure for 2019-20. 49% of the allocation to the Ministry in 2021-22 is for the PM-KISAN scheme. All other programmes of the Ministry, including interest subsidy and crop insurance, have been allocated Rs 66,531 crore in 2021-22, a 12% annual increase over 2019-20.
-
Road Transport and Highways: Allocation to this Ministry is estimated at Rs 1,18,101 crore, an annual increase of 23% over the actual expenditure for 2019-20. Between 2014 and 2019, the share of borrowings
in the investment on road sector has grown from 6% to 43%, while the share of both budgetary support and
private investment has decreased from 57% to 44% and from 37% to 13% respectively.
-
Education: In 2021-22, the Ministry has been allocated Rs 93,224 crore, which is an annual increase of 2% from the actual expenditure in 2019-20. Allocation to the Department of School Education and Literacy is estimated at Rs 54,874 crore (59% of the Ministry's total allocation). The Department of Higher Education has been allocated Rs 38,351 crore. The allocation constitutes 2.67% of the central government's estimated expenditure for 2021-22. The National Education Policy, 2020 recommends increasing public investment on education to 6% of GDP.
-
Health: In 2021-22, the Ministry's estimated expenditure is Rs 73,932 crore, which is an annual increase of 7% over the actual expenditure in 2019-20. In addition, Rs 35,000 crore is provided in the Finance Ministry's Demands towards COVID-19 vaccination. The Ministry is expected to have an additional spending of Rs 15,817 crore at the revised stage in 2020-21, of which, Rs 14,217 crore will be spent for COVID-19 emergency response, health system preparedness package, and COVID-19 vaccination.
-
Jal Shakti: The Ministry estimates an expenditure of Rs 69,053 crore in 2021-22, which is a 64% annual increase over the actual expenditure in 2019-20. The Jal Jeevan Mission, which aims to provide adequate and safe drinking water to the rural population, has been allocated Rs 50,011 crore in 2021-22 (123% annual increase over 2019-20). The 15th Finance Commission also recommends that 60% (Rs 1,42,084 crore) of the total grants for rural local bodies be spent on drinking water and sanitation during 2021-26.
-
Telecommunications: The Department of Telecommunications has been allocated Rs 58,737 crore, which
is a 44% annual increase over the actual expenditure in 2019-20. This increase is to provide for the revival
plan for BSNL and MTNL. The non-tax revenue for 2021-22 from communication services is projected at Rs 53,987 crore, an annual decrease of 12% over 2019-20.
-
Housing and Urban Affairs: Expenditure by the Ministry is estimated at Rs 54,581 crore. Majority of this expenditure is on metro projects (Rs 23,500 crore). Allocation towards urban housing (PMAY-Urban) is estimated at Rs 8,000 crore which is an 8% annual increase from 2019-20. The Smart Cities Mission has been allocated Rs 6,450 crore, which is a 42% annual increase over 2019-20.
-
Petroleum and Natural Gas: The Ministry has been allocated Rs 15,944 crore, which is an annual decrease of 39% over the actual expenditure for 2019-20. About 88% of the Ministry's budget is towards LPG subsidy. No funds have been allocated for kerosene subsidy. The share of total cess as a percentage of total duty has increased from 56% in April, 2017 to 96% in February, 2021 in case of petrol.
-
Science and Technology: The Ministry has been allocated Rs 14,794 crore, which is an annual increase of 8% over 2019-20. Almost all expenditure under the Ministry is revenue expenditure (99.7% on average). In 2020-21, all departments saw a cut in the allocation at the revised stage compared to budget estimates (20% on aggregate). India's expenditure on research and development has been declining since 2004-05.
-
Environment: The Ministry has been allocated Rs 2,870 crore, which is an annual increase of 6% over the actual expenditure in 2019-20. 27% of the allocation is estimated to be on centrally sponsored schemes on environment, forests and wildlife such as National Mission for Green India and Integrated Development of Wildlife Habitats.
## Budget At A Glance 2021-22 Budget Highlights
-
Expenditure: The government proposes to spend Rs 34,83,236 crore in 2021-22. As per the revised
estimates, the government spent Rs 34,50,305 crore in 2020-21, 13% higher than the budget estimate.
-
Receipts: The receipts (other than borrowings) are expected to be Rs 19,76,424 crore in 2021-22, which
is 23% higher than the revised estimates of 2020-21. In 2020-21, revised estimates for receipts were 29% lower than budget estimates. Given the impact due to COVID-19, it is useful to see the growth from 20219-20, an annual average of 6.2%.
-
GDP growth: Nominal GDP is expected to grow at of 14.4% (i.e., real growth plus inflation) in 2021-22.
-
Deficits: Revenue deficit is targeted at 5.1% of GDP in 2021-22, which is lower than the revised estimate
of 7.5% in 2020-21 (3.3% in 2019-20). Fiscal deficit is targeted at 6.8% of GDP in 2021-22, down from
the revised estimate of 9.5% in 2020-21 (4.6% in 2019-20). The government aims to steadily reduce fiscal
deficit to 4.5% of GDP by 2025-26.
-
Ministry allocations: Among the top 13 ministries with the highest allocations, the highest annual increase
over 2019-20 is observed in the Ministry of Jal Shakti (64%), followed by the Ministry of Consumer Affairs, Food and Public Distribution (48%) and the Ministry of Communications (31%).
## Main Tax Proposals In The Finance Bill
-
No changes in income tax rates for individuals and corporations.
-
Limit on tax-free Income from provident funds: Tax exemption on the interest income on the
employees' contributions to provident funds will be limited up to Rs 2.5 lakh.
-
Extensions on tax incentives by a year upto the end of fiscal 2021-22. This includes tax deduction upto
Rs 1.5 lakh on interest on housing loan, and tax holiday for affordable housing projects, profits of startups,
and investing capital gains in start-ups.
-
Agriculture and Infrastructure Development Cess: The cess will be levied on some imported items
including gold, silver, alcoholic beverages, coal, and cotton, and basic customs duty will be reduced by an equal amount. The cess will be levied on petrol and diesel at the rate of Rs 2.5 and Rs 4 per litre respectively, with equivalent cuts in excise duty. As the cess is not part of the divisible pool of revenue
shared with states, their revenue receipts will be adversely affected.
-
Changes in customs duty: The duty has been increased on some items such as cotton, silk, some auto and
mobile parts.
-
"Mini-budget" announcements made earlier: The safe harbour threshold for real estate transactions
above the circle rate increased from 10% to 20%. Encashment of leave travel concession will be exempt
from tax if the amount is used for purchasing certain goods.
-
Reduction in time for income tax proceedings: Time limit for the re-opening of income tax assessment
will be reduced from 6 years presently to 3 years.
-
Exemption from audit: Businesses which carry 95% of their transactions digitally and whose turnover is
less than five crore rupees, are exempted from keeping audited accounts. The threshold will be increased to
Rs 10 crore.
## Non-Tax Proposals In The Finance Bill
-
There are some items that may not meet the Money Bill definition. These are listed below.
-
LIC Act, 1956 amended to create a board of directors, issue shares, reduce government shareholding upto
51% of equity (minimum 75% in the first five years), cap voting rights at 5% to shareholders other than central government.
-
Securities Contracts (Regulations) Act, 1956 amended to allow pooled investment fund which collects
money from investors. They may borrow money or issue debt securities. Consequential amendments made in SARFAESI Act, 2002 and in the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
-
SEBI Act, 1992 amended to require registration by Alternative Investment Trusts and Business Trusts.
## Policy Highlights
- **Legislative Changes**: A Securities Markets Code will be introduced to consolidate four Acts including the
SEBI Act, 1992 and the Government Securities Act, 2007. The Insurance Act, 1938 will be amended to increase the permissible FDI limits in insurance companies from 49% to 74%, and allow foreign ownership
and control with safeguards. The Companies Act, 2013 will be amended to revise the definition of small companies by increasing threshold for paid up capital (from Rs 50 lakh to Rs 2 crore) and annual turnover (from Rs 2 crore to Rs 20 crore). Certain offences under the Limited Liability Partnership Act, 2008 will be decriminalised. The Deposit Insurance and Credit Guarantee Corporation Act, 1961 will be amended to ensure that depositors get time-bound and easy access to their deposits to the extent of their insurance cover. The minimum loan size for NBFCs to be eligible for debt recovery under the SARFAESI Act, 2002 will be reduced from Rs 50 lakh to Rs 20 lakh.
- **Disinvestment**: Disinvestment of Air India, IDBI Bank, and Pawan Hans will be completed in 2021-22.
Legislative amendments will be introduced to privatise two public sector banks and a General Insurance company. The IPO for LIC will also be completed in 2021-22. The government has approved a strategic
disinvestment policy under which CPSEs will be maintained only in four sectors, with the rest being
privatised. States will be incentivised to disinvest their public sector companies. A Special Purpose Vehicle will be used to monetise government owned land.
- **Finance:** An Asset Reconstruction Company Limited and Asset Management Company will be set up to
consolidate and take over existing stressed debt, and manage and dispose assets. An institutional framework will be created for the corporate bond market to instil confidence among participants and enhance liquidity of secondary markets. An investor charter will be introduced for financial investors across all products.
- **Corporate Affairs:** Alternate methods of debt resolution and special frameworks for MSMEs will be
introduced. A Conciliation Mechanism will be set up for quick resolution of contractual disputes.
- **Commerce and Industry:** Seven textile parks will be established over three years to create infrastructure
and increase exports. Incorporation of one-person companies will be encouraged by regulatory changes such as removal of restrictions on paid up capital and turnover, and NRIs will be allowed to establish such companies.
- **Labour and Employment:** A portal to collect information on gig workers, and construction workers,
among others will be launched to help frame schemes on health, housing, insurance, and others for migrant unorganised workers. The Apprenticeship Act will be amended to enhance apprenticeship opportunities.
- **Health and Nutrition**: PM Atma Nirbhar Swasth Bharat Yojana will be launched to develop capacity of
health systems, strengthen national institutions, and create institutions to detect and cure new and emerging diseases. Mission Poshan 2.0 will be launched after merging Supplementary Nutrition Programme and the Poshan Abhiyan to strengthen nutrition outcomes. The National Nursing and Midwifery Commission Bill
will be introduced.
- **Education:** Legislation to set-up a Higher Education Commission of India will be introduced, having
vehicles for standard-setting, accreditation, regulation, and funding. A grant to create formal umbrella structures for institutes of higher education in nine cities will be created. More than 15,000 schools will be strengthened to include all components of the National Education Policy and subsequently mentor other schools to achieve ideals of Policy.
- **Infrastructure and Real Estate:** A Bill to establish a Development Financial Institution for infrastructure
financing will be introduced. The DFI will be used to establish a lending portfolio of at least five lakh crore rupees for financing infrastructure projects. A National Monetisation Pipeline of potential infrastructure assets such as dedicated freight corridor assets of the railways will be launched. Debt financing of real estate and infrastructure investment trusts by foreign portfolio investors will be enabled to ease access of finance in the infrastructure and real estate sectors.
- **Transport:** Economic corridors to augment road infrastructure are being planned in Tamil Nadu, Kerala,
West Bengal, and Assam. A scheme to enable private sector to finance, acquire, operate and maintain buses in public transport services will be launched. New technologies including MetroLite and MetroNeo will be used to develop metro rail systems in Tier-1 and Tier-2 cities. Seven projects for major ports will be offered on public-private partnership mode in 2021-22. A voluntary vehicle scrapping policy to phase out old and unfit vehicles was also announced.
- **Energy:** A reforms-based scheme to provide assistance to power distribution companies for infrastructure
creation will be launched to address concerns over viability. A framework to provide choice to consumers
among distribution companies will be launched. Ujjwala scheme will be extended to cover one crore more beneficiaries. An independent gas transport system operator will be set up to coordinate booking of common carrier capacity in all natural-gas pipelines. A Hydrogen Energy Mission to generate hydrogen from green power sources will be launched.
- **Agriculture and allied sectors:** Operation Green Scheme, currently applicable to tomatoes, onions, and
potatoes, will be enlarged to include 22 perishable products. The Agriculture Infrastructure Fund will be made available to APMCs to improve infrastructure facilities.
- **Water and Sanitation**: The Jal Jeevan Mission (Urban) will be implemented to enable universal water
supply and liquid waste management in urban areas. The Urban Swachh Bharat Mission 2.0 will focus on sludge and waste water management, and on ensuring a reduction in single-use plastic and air pollution.
- **Science and Technology:** A scheme to provide financial incentives for digital modes of payments has been
proposed. The Deep Ocean Mission will be launched, covering explorations and conservation of biodiversity.
- **Social Justice**: To facilitate credit flow for SCs, STs, and women, margin money requirement under Stand-
Up India scheme will be reduced from 25% to 15%. 750 Eklavya model residential schools will be
established in tribal areas.
## Budget Estimates Of 2021-22 As Compared To Actuals For 2019-20
The Finance Minister, Ms. Nirmala Sitharaman, introduced Budget 2021-22 on February 1, 2021, amidst the COVID-19 pandemic. 2020-21 was a non-standard year with respect to the performance of the economy and government finances. In this note, the budget estimates for 2021-22 have been compared to the actual expenditure for 2019-20.
-
Total Expenditure: The government is estimated to spend Rs 34,83,236 crore during 2021-22 which is
an annual increase of 14% over 2019-20. Out of the total expenditure, revenue expenditure is estimated to be Rs 29,29,000 crore (12% annual increase over 2019-20) and capital expenditure is estimated to be Rs 5,54,236 crore (29% annual increase over 2019-20).
-
Total Receipts: The government receipts (excluding borrowings) are estimated to be Rs 19,76,424 crore,
annual increase of 6% over 2019-20. Borrowings are estimated at Rs 15,06,812 crore (27% annual increase over 2019-20).
-
Transfer to states: The central government will transfer Rs 13,88,502 crore to states and union
territories in 2021-22 (annual increase of 10% over 2019-20). This includes devolution of (i) Rs
6,65,563 crore to states, out of the centre's share of taxes (increase of 1%), and (ii) Rs 7,22,939 crore in the form of grants and loans (increase of 21%). In 2020-21, while devolution to states fell by 30% at the revised stage (compared to budget estimates), grants were higher by 26%.
-
Deficits: Revenue deficit is targeted at 5.1% of GDP, and fiscal deficit is targeted at 6.8% of GDP in
2021-22. The target for primary deficit (which is fiscal deficit excluding interest payments) is 3.1% of GDP. In 2020-21, as per the revised estimate, revenue deficit is 7.5% of GDP, and fiscal deficit is 9.5% of GDP.
-
GDP growth estimate: The nominal GDP is estimated to grow at a rate of 14.4% in 2021-22. In Budget
2020-21, GDP was estimated to grow at 10%, which was revised to -13%.
Change
(Annualised)
(Actuals
Actuals 2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
2019-20 to BE
2021-22)
Revenue Expenditure
23,50,604
26,30,145
30,11,142
29,29,000
12%
Capital Expenditure
3,35,726 4,12,085 4,39,163 5,54,236
29%
of which:
Capital outlay
3,11,312 3,80,322 3,32,247 5,13,862
29%
Loans
24,414
31,763 1,06,916
40,374
29%
Total Expenditure
26,86,330
30,42,230
34,50,305
34,83,236
14%
Revenue Receipts
16,84,059
20,20,926
15,55,153
17,88,424
3%
Capital Receipts
68,620 2,24,967
46,497 1,88,000
66%
of which:
Recoveries of Loans
18,316
14,967
14,497
13,000
-16%
Other receipts (including disinvestments)
50,304 2,10,000
32,000 1,75,000
87%
Total Receipts (without borrowings)
17,52,679
22,45,893
16,01,650
19,76,424
6%
Revenue Deficit
6,66,545 6,09,219
14,55,989
11,40,576
31%
% of GDP
3.3%
2.7%
7.5%
5.1%
Fiscal Deficit
9,33,651 7,96,337
18,48,655
15,06,812
27%
% of GDP
4.6%
3.5%
9.5%
6.8%
Primary Deficit
3,21,581
88,134
11,55,755 6,97,111
47%
% of GDP
1.6%
0.4%
5.9%
3.1%
Notes: Budgeted estimates (BE) are budget allocations announced at the beginning of each financial year. Revised Estimates (RE) are estimates of projected amounts of receipts and expenditure until the end of the financial year. Actual amounts are audited accounts of expenditure and receipts in a year. Change from Actuals 2019-20 to BE 2021-22 represents the compounded annual growth rate (CAGR) for the period. Sources: Budget at a Glance, Union Budget Documents 2021-22; PRS.
-
Expenses which bring a change to the government's assets or liabilities (such as construction of roads or recovery of loans) are capital expenses, and all other expenses are revenue expenses (such as payment of salaries or interest payments).
-
In 2021-22, **capital expenditure** is estimated at Rs 5,54,236 crore (annual increase of 29% over 2019-20).
Revenue expenditure is estimated to be Rs 29,29,000 crore (annual increase of 12% over 2019-20). In 2020-
21, total expenditure was 13% higher than the budget estimate, with revenue expenditure increasing by 15% and capital expenditure by 7%.
-
In 2019-20, capital outlay formed 12% of the total expenditure of the central government. This is estimated to increase to 15% of the total expenditure in 2021-22.
-
In 2021-22, disinvestment is estimated at Rs 1,75,000 crore which is 3.5 times higher than the actual disinvestment in 2019-20. The highest disinvestment achieved over the last few years was in 2017-18, of Rs 1,00,045 crore.
## Receipts Highlights For 2021-22
-
Total receipts (including borrowings) in 2021-22 are estimated to be Rs 34,83,236 crore and net
receipts (excluding borrowings) are estimated at Rs 19,76,424 crore. Receipts (without borrowings)
are estimated to record an annual increase of 6% over 2019-20.
-
Gross tax revenue is estimated at Rs 22,17,029 crore (annual increase of 5% over 2019-20). Net tax
revenue of the central government (excluding states' share in taxes) is estimated to be Rs 15,45,397 crore in 2021-22.
-
Devolution to states from centre's tax revenue is estimated to be Rs 6,65,563 crore in 2021-22, marginally higher than the devolution of Rs 6,50,678 crore in 2019-20.
-
Non-tax revenue is expected to be Rs 2,43,028 crore in 2021-22 an annual decrease of 14% over the
actuals for 2019-20.
-
Capital receipts (without borrowings) are estimated to record an annual increase of 66% over 2019-
20. This is on account of disinvestments, which are expected to be Rs 1,75,000 crore in 2021-22, as
compared to Rs 50,304 crore in 2019-20. **Borrowings** are expected to be Rs 15,06,812 crore in 2021-
22 (annual increase of 27% over 2019-20). Borrowings in 2021-22 are estimated to be lower than the revised estimate for 2020-21 (of Rs 18,48,655 crore) by 19%.
Change (Annualised)
(Actuals 2019-20 to BE
Actuals 2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
2021-22)
Gross Tax Revenue
20,10,059
24,23,020
19,00,280
22,17,059
5%
of which:
Corporation Tax
5,56,876
6,81,000
4,46,000 5,47,000
-1%
Taxes on Income
4,92,654
6,38,000
4,59,000 5,61,000
7%
Goods and Services Tax
5,98,750
6,90,500
5,15,100 6,30,000
3%
Customs
1,09,283
1,38,000
1,12,000 1,36,000
12%
Union Excise Duties
2,40,615
2.67,000
3,61,000 3,35,000
18%
Service Tax
6,029
1,020
1,400
1,000
-59%
A. Centre's Net Tax Revenue
13,56,902
16,35,909
13,44,501
15,45,397
7%
Devolution to States
6,50,678
7,84,181
5,49,959 6,65,563
1%
B. Non Tax Revenue
3,27,157
3,85,017
2,10,653 2,43,028
-14%
of which:
Interest Receipts
12,349
11,042
14,005
11,541
-3%
Dividend and Profits
1,86,132
1,55,396
96,544
1,03,538
-25%
Other Non-Tax Revenue
1,28,675
2,18,580
1,00,105 1,27,949
-0.3%
C. Capital Receipts (without borrowings)
68,620
2,24,967
46,497
1,88,000
66%
of which:
Disinvestment
50,304
2,10,000
32,000
1,75,000
87%
Receipts (without borrowings) (A+B+C)
17,52,679
22,45,893
16,01,651
19,76,424
6%
Borrowings
9,33,651
7,96,337
18,48,655
15,06,812
27%
Total Receipts (including borrowings)
26,86,330
30,42,230
34,50,306
34,83,236
14%
Sources: Receipts Budget, Union Budget Documents 2021-22; PRS.
-
Indirect taxes: The total indirect tax collections are estimated to be Rs 11,02,000 crore in 2021-22. Of
this, the government has estimated to raise Rs 6,30,000 crore from GST. Out of the total tax collections under GST, 84% is expected to come from central GST (Rs 5,30,000 crore), and 16% (Rs 1,00,000 crore) from the GST compensation cess.
-
Union Excise Duties: Revenue from Union Excise Duties is estimated at Rs 3,35,000 crore (annual
increase of 18% over 2019-20). In 2020-21, the revised estimate for revenue from excise duties was higher than the budget estimate by 35% due to revenue from duty on petrol and diesel.
-
Corporation tax: The collections from taxes on companies are expected to be Rs 5,47,000 crore in 2021-
22, marginally lower (1%) than 2019-20. In 2020-21, as per revised estimates, revenue from corporation
tax was Rs 4,46,000 crore, 35% lower than the budget estimate. Among all direct taxes revenue from corporation tax declined the most.
-
Income tax: The collections from income tax are expected to record an annual increase of 7% in 2021-22 to
Rs 5,61,000 crore. In 2020-21, the revised estimate for revenue from income tax was 28% lower than the
budget estimate.
-
Non-tax receipts: Non-tax revenue consists of interest receipts on loans given by the centre, dividends and
profits, external grants, and receipts from general, economic, and social services, among others. Non-tax revenue is expected to decrease by 14% over 2019-20 to Rs 2,43,028 crore. The decline is due to a 40% fall in the dividend received from the Reserve Bank of India, nationalised banks and other financial institutions owned by the government.
-
Disinvestment target: The disinvestment target for 2021-22 is Rs 1,75,000 crore. This target is 3.5 times
higher than the disinvestment of Rs 50,304 crore in 2019-20.
## Expenditure Highlights For 2020-21
-
Total expenditure in 2021-22 is expected to be Rs 34,83,236 crore, which is 1% higher than the revised
estimate of 2020-21. Expenditure in 2021-22 has increased at an annual rate of 14% over 2019-20. Out of
this, (i) Rs 10,51,703 crore is proposed to be spent on central sector schemes (18% annual increase over 2019-20), and (ii) Rs 3,81,305 crore is proposed to be spent on centrally sponsored schemes (11% annual increase over 2019-20).
-
The government is expected to spend Rs 8,09,701 crore on interest payments in 2021-22, which is 17% higher than the revised estimate of 2020-21. It makes up 23% of the government's estimated expenditure in 2021-22. Expenditure on pensions in 2021-22 is expected to be Rs 1,89,328 crore.
Change
(Annualised)
Actuals
2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
(Actuals 2019-20 to
BE 2021-22)
Central Expenditure
Establishment Expenditure of Centre
5,70,244
6,09,585
5,98,672
6,09,014
3%
Central Sector Schemes/ Projects
7,57,091
8,31,825
12,63,690
10,51,703
18%
Other Expenditure
7,27,025
8,87,574
8,26,536
10,11,887
18%
Centrally Sponsored Schemes and other transfers
Centrally Sponsored Schemes
3,09,553
3,39,895
3,87,900
3,81,305
11%
Finance Commission Grants
1,23,710
1,49,925
1,82,352
2,20,843
34%
of which:
Rural Local Bodies
59,361
69,925
60,750
44,901
-13%
Urban Local Bodies
25,098
30,000
25,000
22,114
-6%
Grants-in-aid
10,938
20,000
22,262
35,376
80%
Post Devolution Revenue Deficit Grants
28,314
30,000
74,340
1,18,452
105%
Other Grants
1,98,707
2,23,427
1,91,155
2,08,484
2%
Total Expenditure
26,86,330
30,42,230
34,50,305
34,83,236
14%
Sources: Budget at a Glance, Union Budget Documents 2021-22; PRS.
Expenditure on Subsidies: In 2021-22, the total expenditure on subsidies is estimated to be Rs 3,69,899 crore, an annual increase of 19% over 2019-20. This is largely due to a higher allocation to food subsidy. Details are given below (Table 4):
-
Food subsidy: Allocation to food subsidy is estimated at Rs 2,42,836 crore in 2021-22, a 49% annual
increase as compared to 2019-20. In 2020-21 budget, Rs 1,15,570 crore was allocated to food subsidy. However, the revised estimate is 266% higher than the budgeted estimate at Rs 4,22,618 crore. According to the budget speech, additional allocation has been made in the 2021-22 budget to clear the pending food subsidy dues of the Food Corporation of India.
-
Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 79,530 crore in 2021-22, a 1%
annual decrease as compared to 2019-20. In 2020-21, the revised allocation to fertiliser subsidy is 88% higher than the budgeted allocation.
-
Petroleum subsidy: Allocation to petroleum subsidy decreased at an annual rate of 40% from 2019-20 to
2021-22. The allocation in 2021-22 is 64% lower than the 2020-21 revised estimate at Rs 14,073 crore. Petroleum subsidy consists of subsidy on LPG and kerosene. In 2021-22, the LPG subsidy is estimated to decrease to Rs 14,073 crore (from Rs 36,072 crore in 2020-21) and no allocation has been made for the kerosene subsidy (as compared to Rs 2,982 crore in 2020-21).
-
Other subsidies: The government also provides certain other subsidies such as interest subsidies on loans
given under various government schemes and subsidies for procurement of agricultural produce other than paddy and wheat. In 2021-22, the expenditure on these other subsidies is estimated to be Rs 33,460 crore, a 1% annual decrease over 2019-20.
Change (Annualised)
(Actuals 2019-20 to BE 2021-
Actuals 2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
22)
Food subsidy
1,08,688
1,15,570
4,22,618
2,42,836
49%
Fertiliser subsidy
81,124
71,309
1,33,947
79,530
-1%
Petroleum subsidy
38,529
40,915
39,055
14,073
-40%
Other subsidies
33,963
34,315
53,116
33,460
-1%
Total
2,62,304
2,62,109
6,48,736
3,69,899
19%
Sources: Expenditure Profile, Union Budget 2020-21; PRS.
Expenditure by Ministries: The ministries with the 13 highest allocations account for 53% of the total budgeted expenditure in 2021-22. Of these, the Ministry of Defence has the highest allocation in 2021-22 at Rs 4,78,196 crore (14% of the total budgeted expenditure of the government). Other Ministries with high allocation include: (i) Consumer Affairs, Food and Public Distribution, (ii) Home Affairs, (iii) Rural Development, and (iv) Agriculture and Farmers' Welfare. Table 5 shows the expenditure on Ministries with the
13 highest allocations for 2021-22 and the annual growth estimated over 2019-20.
Change (Annualised)
(Actuals 2019-20 to BE
Actuals
2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
2021-22)
Defence
4,52,996
4,71,378
4,84,736
4,78,196
3%
Consumer Affairs, Food and Public Distribution
1,17,096
1,24,535
4,50,687
2,56,948
48%
Home Affairs
1,34,978
1,67,250
1,49,388
1,66,547
11%
Rural Development
1,23,622
1,22,398
1,98,629
1,33,690
4%
Agriculture and Farmers' Welfare
1,01,775
1,42,762
1,24,520
1,31,531
14%
Road Transport and Highways
78,249
91,823
1,01,823
1,18,101
23%
Railways
69,972
72,216
1,11,234
1,10,055
25%
Education
89,437
99,312
85,089
93,224
2%
Chemicals and Fertilisers
82,063
71,897
1,35,559
80,715
-1%
Communications
43,939
81,957
61,060
75,265
31%
Health and Family Welfare
64,258
67,112
82,928
73,932
7%
Jal Shakti
25,683
30,478
24,286
69,053
64%
Housing and Urban Affairs
42,054
50,040
46,791
54,581
14%
Other Ministries
12,60,209
14,49,071
13,93,577
16,41,398
14%
Total Expenditure
26,86,330
30,42,230
34,50,305
34,83,236
14%
Note: Expenditure is net of recoveries such as fines, and ticket sales. Sources: Expenditure Budget, Union Budget 2021-22; PRS.
-
Ministry of Consumer Affairs, Food and Public Distribution: Allocation to the Ministry in 2021-22
saw an annual increase of 48% over 2019-20 due to a higher allocation for food subsidy. Due to the same reason, the Ministry's revised allocation for 2020-21 has also been increased, by Rs 3,26,151 crore (262%) from the budgeted allocation for the year.
-
Ministry of Railways: Allocation to the Ministry of Railways in 2021-22 is Rs 1,10,055 crore, an annual
increase of 25% over 2019-20. 2020-21 RE includes Rs 79,398 crore allocated through a special loan to: (i) bridge the resource gap of Indian Railways caused due to COVID-19 in 2020-21, and (ii) clear its pension dues for the year 2019-20.
-
Ministry of Health and Family Welfare: Allocation to the Ministry of Health and Family Welfare in
2021-22 is Rs 73,932 crore, an annual increase of 7% over 2019-20. In 2020-21, the Ministry was allocated Rs 67,112 crore at the budgeted stage, which has been increased by 24% to Rs 82,928 crore at the revised stage. This increase is primarily due to an allocation of Rs 11,757 crore for the COVID-19 Emergency Response and Health System Preparedness Package.
-
Ministry of Jal Shakti: Allocation to the Ministry increased to Rs 69,053 crore in 2021-22, which is 184%
higher than the revised estimate of 2020-21. This increase is primarily due to a higher allocation for the Jal Jeevan Mission (earlier known as the National Rural Drinking Water Mission), which accounts for 72% of
the allocation to the Ministry.
## Expenditure On Major Schemes Table 6: Scheme-Wise Allocation In 2021-22 (Rs Crore)
Change (Annualised)
(Actuals 2019-20 to BE
Actuals 2019-20
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
2021-22)
MGNREGS
71,687
61,500
1,11,500
73,000
1%
PM-KISAN
48,714
75,000
65,000
65,000
16%
Jal Jeevan Mission*
10,030
11,500
11,000
50,011
123%
National Health Mission
35,155
34,115
35,554
37,130
3%
National Education Mission
33,654
39,161
28,244
34,300
1%
Pradhan Mantri Awas Yojana
24,964
27,500
40,500
27,500
5%
Integrated Child Development Services
22,032
28,557
20,038
24,114#
5%
Pradhan Mantri Fasal Bima Yojana
12,639
15,695
15,307
16,000
13%
Pradhan Mantri Gram Sadak Yojana
14,017
19,500
13,706
15,000
3%
National Livelihood Mission
9,755
10,005
10,005
14,473
22%
AMRUT and Smart Cities Mission
9,599
13,750
9,850
13,750
20%
Green Revolution
9,895
13,320
10,474
13,408
16%
Swachh Bharat Mission
9,469
12,294
7,000
12,294
14%
Pradhan Mantri Krishi Sinchai Yojana
8,200
11,127
7,954
11,588
19%
Mid-Day Meal Programme
9,699
11,000
12,900
11,500
9%
Note: *Earlier known as the National Rural Drinking Water Mission. #Umbrella ICDS scheme till 2020-21 and sum of its individual schemes in 2021-22. Sources: Expenditure Profile, Union Budget 2021-22; PRS.
-
Among schemes, the MGNREGS has the highest allocation in 2021-22 at Rs 73,000 crore. Allocation to the scheme has seen an annual increase of 1% over 2019-20. However, in 2020-21, allocation to the scheme has been increased by Rs 50,000 crore (81%) from the budgeted stage to the revised stage, following the announcement made under the Aatmanirbhar Bharat Economic Package in May 2020.
-
The PM-KISAN scheme (income support to farmers) has the second highest allocation in 2021-22 at Rs 65,000 crore, an annual increase of 16% over 2019-20. In 2020-21, allocation to the scheme has decreased by 13% from Rs 75,000 crore at the budgeted stage to Rs 65,000 crore at the revised stage.
-
Allocation to the Jal Jeevan Mission (earlier known as the National Rural Drinking Water Mission) has increased by 355% over the revised estimate of 2020-21 to Rs 50,011 crore.
## Covid-19 Vaccination: The Central Government Has Allocated Rs 35,000 Crore To The Ministry Of Finance For Covid-19 Vaccination In 2021-22. This Allocation Has Been Made For Providing Financial Assistance To States To Meet Their Expenditure On Covid-19 Vaccination. Expenditure On Scheduled Caste And Scheduled Tribe Sub-Plans And Schemes For Welfare Of Women, Children And Ner
% change
Budgeted
2020-21
Revised
2020-21
Budgeted
2021-22
(RE 2020-21 to
BE 2021-22)
Welfare of Women
1,43,462
2,07,261
1,53,326
-26.0%
Welfare of Children
96,042
80,462
85,713
6.5%
Scheduled Castes
83,257
82,708
1,26,259
52.7%
-
Programmes for the welfare of women and children have been allocated Rs 2,39,039 crore in 2021-22, a decrease of 17% over the revised estimate of 2020- 21. These allocations include programmes under all the ministries.
| Scheduled Tribes | 53,653 | 53,304 | 79,942 | 50.0% |
|----------------------------|-----------|-----------|-----------|----------|
| North Eastern Region (NER) | 60,112 | 51,271 | 68,020 | 32.7% |
Sources: Expenditure Profile, Union Budget 2021-22; PRS.
-
The sub-plans for Scheduled Castes and Scheduled Tribes have been allocated a total of Rs 2,06,201 crore in 2021-22, which is a 51% increase over the revised estimate of 2020-21.
## Deficits, Debt And Frbm
Table 8: Deficits (as % of GDP)
Actuals 2019-20
Revised
2020-21
Budgeted
2021-22
Fiscal Deficit
4.6%
9.5%
6.8%
Revenue Deficit
3.3%
7.5%
5.1%
Sources: Union Budget 2021-22; PRS.
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively reduce its outstanding debt, revenue deficit and fiscal deficit. The central government gives threeyear rolling targets for these indicators when it presents the Union Budget each year. The government was supposed to achieve fiscal deficit of 3% of GDP by March 31, 2021. In Budget 2020-21, the fiscal deficit target was relaxed to 3.5% (as permitted by the FRBM Act) and it was estimated that fiscal deficit of 3.1% will be achieved by 2022-23. In 2021-22, the government has not provided target for the next three years, and will amend the FRBM Act to accommodate the higher fiscal deficit.
Fiscal deficit is an indicator of borrowings by the government for financing its expenditure. The estimated fiscal deficit for 2021-22 is 6.8% of GDP. For 2020-21, fiscal deficit is estimated at 9.5% of GDP, higher than the budget estimate of 3.5%. This was primarily due to higher spending, and lower revenue collection due to COVID-19. The government intends to reach fiscal deficit of 4.5% by 2025-26.
Note that in 2019-20 and 2020-21, the government showed certain expenditure carried out by public sector entities (such as the Food Corporation of India) as extra-budgetary resources, which was not included in the fiscal deficit calculation. In 2020-21, extra-budgetary resources were estimated at 0.9% of GDP. Extrabudgetary resources for 2020-21 were revised downwards to 0.6% of GDP. In 2021-22, extra-budgetary resources are estimated to be 0.1% of GDP as the government has accounted for most of the extra-budgetary resources in the budget.
Sources: Medium Term Fiscal Policy Statement, Union Budget (multiple years); PRS.
-
Revenue deficit is the excess of revenue expenditure over revenue receipts. Such a deficit implies the
government's need to borrow funds to meet expenses which may not provide future returns. The estimated
revenue deficit for 2021-22 is 5.1% of GDP. In 2020-21, revenue deficit was 7.5%, higher than the budget estimate of 2.7%.
-
Outstanding debt is the accumulation of borrowings over the years. A higher debt implies that the government
has a higher loan repayment obligation over the years. Outstanding debt of the government decreased from 66.7% of GDP in 2004-05 to 48% of GDP in 2018-19. The revised estimate of outstanding debt for 2019-20 was 48%. However, the Medium-Term Fiscal Policy Statement has not given the estimate of outstanding debt for 2021-22, or revised estimate for 2020-21. High borrowings in the current year (indicated by fiscal deficit) and increase in outstanding debt leads to high interest cost. In 2021-22, interest payments are estimated to be 15% higher than the interest obligations in 2019-20. Interest payment is estimated at 45% of revenue receipts in
2021-22, up from 36% in 2019-20.
Recommendations by the 15th **Finance Commission**: The 15th Finance Commission for 2021-26 suggested a path for fiscal consolidation for the centre by reducing fiscal deficit to 4% of GDP, and outstanding liabilities to 56.6% by 2025-26. For details on recommendations of the Commission see the Annexure
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
Fiscal Deficit
7.4%
6.0%
5.5%
5.0%
4.5%
4.0%
Revenue Deficit
5.9%
4.9%
4.5%
3.9%
3.3%
2.8%
Outstanding liabilities
62.9%
61.0%
61.0%
60.1%
58.6%
56.6%
Sources: Report of the 15th Finance Commission for 2021-26; PRS.
## Annexure: Recommendations Of The 15Th Finance Commission For 2021-26
The 15th Finance Commission (Chair: Mr. N. K. Singh) has submitted two reports. The first report, consisting of recommendations for the financial year 2020-21, was tabled in Parliament in February 2020. The final report with recommendations for the 2021-26 period was tabled in Parliament on February 1, 2021. Key recommendations of the Commission include:
-
Devolution Criteria: The criteria for distribution
of central taxes among states for 2021-26 period is same as that for 2020-21. The Commission has used 2011 population data for determining the share of states during its entire award period. To reward efforts made by states in controlling their population, the Commission has used the Demographic Performance criterion. States with a lower fertility ratio will be scored higher on this
criterion.
-
Grants-in-aid: The Commission has recommended
grants from the centre to states and local bodies worth Rs 10.3 lakh crore for the 2021-26 period. These include: (i) revenue deficit grants to 17 states, (ii) grants to urban and rural local bodies, (iii) disaster management grants, (iv) grants for eight sectors including health, education, and agriculture, and (v) certain state-specific grants (see Table 11).
-
Funding of defence and internal security: A
dedicated non-lapsable fund called the Modernisation Fund for Defence and Internal Security (MFDIS) will be constituted to primarily bridge the gap between budgetary requirements and allocation for capital outlay in defence and internal security. The fund will have an estimated corpus of Rs 2,38,354 crore over the five years (2021-26). Of this, Rs 1,53,354 crore will be transferred from the Consolidated Fund of India. Rest of the amount will be generated from measures such as disinvestment of defence PSUs and monetisation of
defence lands.
-
Fiscal consolidation: The Commission suggested
that the Centre bring down fiscal deficit to 4% of GDP by 2025-26. It recommended the fiscal deficit limit (as % of GSDP) for states to be: (i) 4% in 2021-22, (ii) 3.5% in 2022-23, and (iii) 3% during 2023-26. Extra annual borrowing worth 0.5% of GSDP will be allowed to states during 2021-25 for undertaking power sector reforms.
-
The Commission observed that the recommended path for fiscal deficit for the Centre and states will result in a reduction of total liabilities of: (i) the Centre from 62.9% of GDP in 2020-21 to 56.6% in 2025-26, and (ii) the states on aggregate from 33.1% of GDP in 2020-21 to 32.5% by 2025-26. It recommended forming a high-powered inter-governmental group to: (i) review the fiscal responsibility legislation (FRBM Act), (ii)
recommend a new fiscal responsibility framework and oversee its implementation.
Criteria
14th FC
2015-20
15th FC
2020-21
15th FC
2021-26
Income Distance
50.0
45.0
45.0
Area
15.0
15.0
15.0
Population (1971)
17.5
-
-
Population (2011)#
10.0
15.0
15.0
Demographic Performance
-
12.5
12.5
Forest Cover
7.5
-
-
Forest and Ecology
-
10.0
10.0
Tax and fiscal efforts*
-
2.5
2.5
Total
100
100
100
Note: #14th FC used the term "demographic change" which was defined as Population in 2011. *The report for 2020-21 used the term "tax effort", however, there is no difference in the definition of the criteria.
Sources: Reports of the 14th and 15th Finance Commissions; PRS.
| Grants | Amount |
|----------------------------------------|-----------|
| Revenue deficit grants | 2,94,514 |
| Local governments grants | 4,36,361 |
| Disaster management grants | 1,22,601 |
| Sector-specific grants | 1,29,987 |
| Health | 31,755 |
| School Education | 4,800 |
| Higher Education | 6,143 |
| Implementation of agricultural reforms | 45,000 |
| Maintenance of PMGSY roads | 27,539 |
| Judiciary | 10,425 |
| Statistics | 1,175 |
| Aspirational districts and blocks | 3,150 |
| State-specific grants | 49,599 |
| Total | 10,33,062 |
Source: Report of the 15th Finance Commission; PRS.
## Demand For Grants: Defence
The Ministry of Defence frames policies on defence and security-related matters, and ensures its implementation by the defence services (i.e. Army, Navy and Air Force). In addition, it is responsible for production establishments such as ordnance factories and defence public sector undertakings, research and development organisations, and ancillary services that assist the defence services, such as the Armed Forces Medical Services. This note analyses budgetary allocation and expenditure trends of the Ministry. The note also discusses certain issues such as large pension expenditure, lower capital outlay, and high import dependence for defence procurement.
## Overview Of Finances
In 2021-22, the Ministry of Defence has been allocated Rs 4,78,196 crore. This includes expenditure on salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance, and research and development organisations. The allocation to the Ministry of Defence is the highest (14%) among all ministries of the central government.
Defence budget has decreased as a proportion of total government expenditure
In the last decade (2011-12 to 2021-22), the budget of the Ministry of Defence has grown at an annual average rate of 8.4%, while total government expenditure has grown at 10.3%.
Note: Figures for 2021-22 are Budget Estimates and for 2020-21 are Revised Estimates. Sources: Union Budget Documents 2011-2022; PRS.
During this period, defence expenditure as a proportion of central government expenditure decreased from 16.4%, to 13.7%. The year-wise budget of the Ministry is shown in Figure 1. Defence expenditure as a percentage of GDP declined from 2.4% in 2011-12 to 2.1% in 2021-22. The Standing Committee on Defence (2018) had recommended that the Ministry of Defence should be allocated a fixed budget of about 3% of GDP to ensure adequate preparedness of the armed forces.1
## India Is The 3Rd Largest Military Spender
According to the Stockholm International Peace Research Institute (SIPRI), India was the thirdlargest defence spender in absolute terms in 2019 (after USA and China).2 USA spent more than India on defence, both in absolute terms, and as a percentage of GDP. China spent lower in terms of percentage of GDP, but its absolute expenditure on defence was 3.7 times that of India.
Country
Expenditure (in USD billion)
Expenditure (as % of GDP)
USA
731.75
3.4%
China
261.08
1.9%
India
71.13
2.4%
Russia
65.10
3.9%
Saudi Arabia
61.87
8.0%
France
50.12
1.9%
UK
48.65
1.7%
Pakistan
10.26
4.0%
Sources: "SIPRI Military Expenditure Database", Stockholm International Peace Research Institute, 2019; PRS.
Actual expenditure has been less than the projected amount by the defence forces The expenditure on defence by the three armed forces has been significantly lower than the amount projected by the three services, with the shortfall ranging from 12% to 36%. For instance, in 2015- 16, while the forces projected a required expenditure of Rs 3,63,270 crore, the actual expenditure during the year was Rs 2,10,637 crore (a shortfall of 20%). Figure 2 shows the difference (shortfall) between the amounts projected by the three forces and the actual expenditure between 2015-16 and 2019-20. The average shortfall for revenue expenditure was 14% while for capital expenditure it was 38%. Note that since 2016-17, the budget allocation for capital expenditure has been fully utilised.
Note: Calculation for 2019-20 is based on expenditure up to December 2019. Sources: 7th Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, March 2020; PRS.
Growth of 3% over Budget 2019-20
The allocation for the Ministry of Defence is estimated to grow at an annual average rate of 3% in 2021-22 over 2019-20. This is lower than the growth in overall central government expenditure of 14%. Similarly, growth in capital outlay for defence was 10% in 2021-22 (over 2019-20), while growth in total capital expenditure of the central government was 29%. Capital outlay for defence includes expenditure on construction work, machinery, and equipment such as tanks, naval vessels, and aircrafts. Between 2011-12 and 2021-22, capital outlay for defence grew at an annual average rate of 7%, while overall capital expenditure of the central government grew at 13%. The share of capital outlay for defence in total government capital expenditure decreased from 41% to 23% in this period.
Composition of defence budget
The share of capital outlay has also decreased within the defence budget. It fell from 30% in 2011-12 to 22% in 2018-19. During this time, the share of pensions increased from 18% to 26%. This trend has reversed since 2019-20, as discussed below. In 2021-22, expenditure on salaries and pensions forms the largest portion of the defence budget (Rs 2,58,628 crore, 54% of the defence budget). Capital outlay of Rs 1,28,150 crore, forms 27% of the defence budget. The remaining allocation is towards stores (maintenance of equipment), border roads, research, and administrative expenses.
Change
RE
BE
Major
Head
Actuals 2019-20
2020-21
2021-22
(annualised
) 2019-20 to
2021-22
Salaries
1,35,771
1,35,787
1,42,778
3%
Capital outlay
1,06,483
1,31,510
1,28,150
10%
Pensions
1,17,810
1,25,000
1,15,850
-1%
Stores
42,907
49,660
44,861
2%
Other expenses
50,026
42,780
46,557
-4%
Total
4,52,996
4,84,736
4,78,196
3%
Note: Salaries, pensions and capital outlay are of the three services. Salaries include salary for civilians, auxiliary forces, Rashtriya Rifles, Jammu and Kashmir Light Infantry and Coast Guard. Pensions include rewards. Capital outlay includes capital expenses on border roads and coast guard. Stores includes ammunition, repairs and spares. Others include administration expenses, expense on research and development and housing. RE is revised estimate and BE is budget estimate. Sources: Expenditure Budget, Union Budget 2021-22; PRS.
Expenditure is estimated to record an annual average increase of 3% over 2019-20. The increase is highest for capital outlay, which is expected to grow at 10%. Allocation for salaries increased by 3% and allocation for pension decreased by 1%.
## Share Of Pensions
Defence pensions provides for pensionary charges for retired Defence personnel of the three services (including civilian employees) and employees of Ordnance Factories. It covers payment of service pension, gratuity, family and disability pension, commuted value of pension and leave encashment. Expenditure on defence pensions has grown at an average annual rate of 12% in the last 10 years. This is higher than the average annual growth rate of the defence budget (8.4%). The share of pension in the defence budget has increased from 18% to 26% (in 2019-20), before declining to 24%.
## 2021-22) (In Rs Crore)
Note: Figures for 2020-21 are Revised Estimates and 2021-22
are Budget Estimates.
Sources: Union Budget 2011-22; PRS.
In 2020-21, the budget estimate for pension (Rs 1.34 lakh crore), was revised down to Rs 1.25 lakh crore (5% decline). This allocation has been further reduced for 2021-22 to Rs 1.16 lakh crore.
In November 2015, One Rank One Pension (OROP) was implemented for armed forces personnel. This implies that a uniform pension will be paid for defence personnel retiring at the same rank, irrespective of their date of retirement. Until November 2020, Rs 42,740 crore had been disbursed to 20 lakh pensioners on account of implementation of OROP.3 The Standing Committee on Defence (2019) noted that the defence pension liabilities will continue to increase exponentially every year due to increase in number of retirees, amount of dearness relief, gratuity, and other retirement benefits.4 The share of funds spent on pensions is bound to rise since approximately 60,000 personnel retire every year.5 This reduces the funds available for modernisation of the armed forces. Some suggestions to reduce the pension bill include introducing a different pension scheme or assured jobs on early retirement.
## Share Of Capital Outlay
Capital outlay for defence includes expenditure on construction work, machinery, and equipment such as tanks, naval vessels, and aircrafts. Over the last 10 years, the share of the defence budget spent on capital outlay has declined. The share was highest during 2011-12 at 30% of the total defence budget, which fell to 22% in 2018-19 (the lowest), and recovered to 27% (in 2020-21).
Note: Figures for 2020-21 are Revised Estimates and 2021-22 are Budget Estimates. Sources: Union Budgets 2011-2022; PRS.
The share of capital outlay increased from 24% in 2019-20 to 27% in 2020-21 (revised estimates). Expenditure in 2020-21 of Rs 1,31,510 crore was also higher than the budget estimates of 2020-21 by almost Rs 25,000 crore (23% increase). This was due to additional spending of Rs 20,000 crore on naval fleet, aircrafts, and other equipment for the Navy and the Air Force. In 2021-22, capital outlay has been budgeted at Rs 1,28,150 crore (27% of the budget of the Ministry).
## Committed Liabilities
Note that capital acquisition of the armed forces consists of two components: (i) committed liabilities, and (ii) new schemes. Committed liabilities are payments anticipated during a financial year in respect of contracts concluded in previous years (as acquisition is a complex process involving long gestation periods). New schemes include new projects which are at various stages of approval and are likely to be implemented in future. The budget allocation for capital acquisition which should cover both committed liabilities and new schemes does not cover all committed liabilities. 6 Inadequate allocation for committed liabilities could lead to default on contractual obligations.
modernisation budget (2016-17 to 2019-20) (in Rs crore)
Shortfall
Year
Committed
liabilities
Budget
allocation
(in %)
2016-17
73,553
62,619
15%
2017-18
91,382
68,965
25%
2018-19
1,10,044
73,883
33%
2019-20
1,13,667
80,959
29%
Sources: 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019; PRS.
The Standing Committee examining the Demand for Grants 2020-21 reports that the Ministry did not supply information regarding committed liabilities and new schemes separately. Therefore, there is no information in Table 3 for 2020-21.11
## Non-Lapsable Fund For Modernisation
The Report of the 15th Finance Commission for 2021-26 studied the issue of whether a separate mechanism for funding of defence and internal security should be set up.7 The Commission recommended setting up a dedicated, non-lapsable Modernisation Fund for Defence and Internal Security to bridge the gap between projected budgetary requirements and budget allocation.8 The Commission recommended an allocation of Rs 1.5 lakh crore to the Fund over a period of five years (2021-26) by allocating 1% of the gross revenue receipts of the central government for this purpose. The Fund may also contain disinvestment proceeds of the defence public sector enterprises, and funds collected through monetisation of surplus defence land (to be used only for defence expenditure). The Commission expects the fund to collect Rs 2.38 lakh crore over the 2021-26 period. A similar recommendation to create a Non- Lapsable Capital Fund Account for defence modernisation was made by the Standing Committee on Defence (2017).9 At the time, the Ministry of Finance had objected to the creation of such a fund on various grounds. It had held that though the fund is non-lapsable, it would not be available to the Ministry of Defence automatically, as it would require Parliament's sanction.10 The Finance Minister had maintained that the present mechanism of authorisation of budget on an annual basis is working well.11
## Analysis Of The Three-Armed Forces
This section analyses the budget of the three-armed forces, as well as issues related to their operational preparedness and modernisation. In 2021-22, the total allocation to the three forces (including pensions) is Rs 4,51,704 crore, 94% of the total defence budget. The rest of the allocation is towards research and development and defence services ordnance factories. 61% of the defence budget is allocated for the Army, 20% for the Air Force, and 14% for the Navy. Table 4 details the defence budget allocation amongst the three forces.
Major Head
Actuals
2019-20
Revised
2020-21
Budgeted
2021-22
Share of
Budget
Army
2,76,050
2,92,964
2,90,073
61%
Navy
61,819
71,761
67,553
14%
Air Force
87,220
97,559
94,078
20%
Other
27,908
22,452
26,492
6%
Total expenditure
4,52,996
4,84,736
4,78,196
-
Note: Expenditure for Army includes expense on Border Roads Organisation, and Jammu and Kashmir Light Infantry.
Expenditure for Navy includes expense on Coast Guard Organisation.
Sources: Expenditure Budget, Union Budget 2021-22; PRS. Composition of service budgets
Air Force and Navy are more capital intensive than the Army. But across all three branches, the ratio of capital to revenue expenditure is falling, with the share of pensions and salary increasing.
## Army
The Army is the largest of the three forces, both in terms of its budget as well as the number of personnel. An amount of Rs 2,90,073 crore has been allocated for the Army in 2021-22. This includes Rs 2,11,614 crore for salaries and pensions which is 73% of the Army's budget. Note that as of July 2017, the Army has a sanctioned strength of 12.6 lakh personnel.12 Significant expenditure on salaries and pensions, leaves only 11% of the Army's budget (Rs 30,637 crore) for modernisation. Table 5 provides the composition of the Army's budget for 2021-22. Compared to the revised estimate for 2020-21, the allocation for pension has decreased (by Rs 8387
crore) and the allocation for modernisation has increased (by Rs 4,568 crore) in 2021-22.
Head
Amount allocated
% of service
budget
Salaries
1,11,693
39%
Pensions
99,921
34%
Modernisation
30,637
11%
Maintenance
20,332
7%
Others
27,490
9%
Total
2,90,073
100%
Sources: Union Budget 2021-22; PRS. Note: Salaries include salary for civilians, auxiliary forces, Rashtriya Rifles, Jammu and Kashmir Light Infantry. Modernisation funds for the Army is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Rolling Stock, and (v) Rashtriya Rifles.
Modernisation involves acquisition of state-of-theart technologies and weapons systems to upgrade and augment defence capabilities of the forces. Figure 5 shows the expenditure on modernisation of the Army over the last 10 years. Funds for modernisation of the Army have grown at an annual average rate of 11% between 2011-12 and 2021-22. In 2021-22, modernisation spending for the Army is estimated to grow at an annual rate of 15% over 2019-20.
Notes: Figures for 2020-21 are Revised Estimates and for 2021- 22 are Budget Estimates.
Sources: Union Budgets 2011-22; PRS.
The Standing Committee on Defence (2018) has noted that modern armed forces should have onethird of its equipment in the vintage category, onethird in the current category, and one-third in the state-of-the-art category.12 However, the current position of the Indian Army is that 68% of its equipment is in the vintage category, 24% in the current category, and only 8% in the state-of-the-art category.10 Further, the Committee noted that the Indian Army has a significant shortage of weapons and ammunition. According to the Committee, these shortages have persisted since adequate attention was lacking both in terms of policy and budget for modernisation.
Such a situation could impact Army preparedness in the context of a two-front war.12
## Navy
The Navy has been allocated Rs 67,553 crore (including pensions) in 2021-22. Modernisation comprises 46% (Rs 31,031 crore) of the budget of the Navy. Table 6 below provides the composition of the Navy's budget for 2021-22.
Head
Amount allocated
% of service budget
Modernisation
31,031
46%
Salaries
13,121
19%
Maintenance
7,610
11%
Pensions
5,694
8%
Others
10,097
15%
Total
67,553
100%
Note: Salaries include salary for civilians and coast guard. Modernisation funds for the Navy is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Joint Staff, (v) Naval Fleet, and (viii) Naval Dockyards and Projects. Sources: Union Budget 2021-22; PRS.
Modernisation spending for the Navy as a percentage of total defence budget has declined from 8.7% in 2015-16 to 4.9% in 2018-19. The Standing Committee on Defence (2018) has stated that this could lead to a delay in induction of critical capabilities and resultant cost-overruns.12 Modernisation spending for the Navy has since recovered to 6.5% in 2021-22. Figure 6 shows the expenditure on modernisation of the Navy over the last 10 years. Expenditure on modernisation has grown at an annual average rate of 5% between 2011-12 and 2021-22. In 2021-22, though modernisation spending is estimated to grow at an annual rate of 10% over 2019-20, it is lower than the spending in 2020-21 (as per the revised estimates).
Notes: Figures for 2020-21 are Revised Estimates and for 2021- 22 are Budget Estimates. Sources: Union Budgets 2011-22; PRS.
## Air Force
The Indian Air Force (IAF) has been allocated Rs 94,078 crore for the year 2021-22 (including pensions for retired personnel). Modernisation comprises 52% (Rs 48,870 crore) of the total budget of the IAF.
Head
Amount allocated
% of service budget
Modernisation
48,870
52%
Salaries
17,964
19%
Pensions
10,211
11%
Maintenance
9,429
10%
Others
7,605
8%
Total
94,078
100%
Note: Note: Salaries include salary for civilians. Modernisation funds for the Air Force is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, and (iii) Other Equipment.
Source: Union Budget 2021-22; PRS.
Figure 7 shows the expenditure on modernisation 2020-21.
Notes: Figures for 2020-21 are Revised Estimates and for 2021- 22 are Budget Estimates.
Sources: Union Budgets 2011-22; PRS.
The CAG has raised issues in relation to the capital acquisition process of the IAF.13 In its report (2019), the CAG examined 11 contracts of capital acquisition signed between 2012-13 and 2017-18, with a total value of approximately Rs 95,000 crore. It found that the current acquisition system was unlikely to support the operational preparedness of the IAF and recommended that the Ministry of Defence undertake structural reforms of the entire acquisition process.13 The Estimates Committee (2018) has noted that there should be 70% serviceability of aircrafts since aircrafts have to undergo standard maintenance checks.14 However, as of November 2015, the serviceability of aircrafts was 60%. Serviceability measures the number of aircrafts that are mission capable at a point in time.
Issues in defence procurement
Defence procurement refers to the acquisition of defence equipment, systems and platforms which is undertaken by the Ministry of Defence, and the three armed forces. The Ministry released the Defence Procurement Procedure (DPP), 2016 in March 2016 which lays down detailed guidelines regulating defence procurement in India.15 This was replaced by the Defence Acquisition Policy, 2020, released in September 2020.16 Procurement of defence hardware is a long process, involving large number of stakeholders. Coordination issues between these stakeholders sometimes results in delays.14 For example, in the case of procurement of equipment for the air force, the CAG found that it took three to five years to just sign the contract, and another three to five years to complete the delivery.13 There was a need to remove procedural bottlenecks, simplify procedures, hasten defence acquisition, and ensure greater participation from the industry.17 The defence procurement executive is currently in the Ministry of Defence.18 An Expert Committee on Defence Procurement (2015) observed that a procurement organisation needs to have specialised knowledge of various fields including technology, commercial negotiations, cost estimations, and financial structures.18 Therefore, it recommended the creation of a separate defence procurement executive, with specialist wings and personnel, outside the formal structure of the Ministry of Defence. This executive would spearhead the procurement process, with the Ministry of Defence and Service Headquarters. Note that countries such as France and the United Kingdom have independent agencies responsible for defence procurement.18
## High Dependence On Imports
According to the Stockholm International Peace Research Institute, between 2015-19, India was the second largest importer of major arms, after Saudi Arabia, accounting for 9% of global imports. 19 The Estimates Committee (2018) had stated that dependence on foreign suppliers for military hardware not only results in huge expenditure on imports, but makes national security vulnerable as suppliers may not provide weapons during emergency situations.14 Table 8 notes the total procurement from foreign and Indian vendors during 2014-15 to 2019-20. For 2020-21, the Ministry has targeted domestic procurement of Rs 52,000 crore.20
procurement
Foreign
vendors
Indian
vendors
% Foreign
vendors
2014-15
65,860
25,981
39,879
39.4%
2015-16
62,342
23,192
39,150
37.2%
2016-17
69,150
27,278
41,872
39.4%
2017-18
72,732
29,035
43,697
39.9%
2018-19
75,921
36,957
38,964
48.7%
2019-20*
67,287
31,058
36,228
46.2%
Note: *Data for 2019-20 is up to December 31, 2019. Sources: 7th Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, March 2020; PRS.
The Estimates Committee (2018) has observed that the indigenisation level in the defence sector is increasing at a very slow rate. It further stated that nothing concrete has been done for the implementation of the strategic partnership model, which envisaged a key role for private players in building platforms such as submarines and fighter jets in India.14 The Committee also noted the high dependence on external content by Defence Public Sector Undertakings (DPSUs). For example, the import content for platforms manufactured by Hindustan Aeronautics Limited (in terms of value of the platform), ranged between 40% to 60%.14
Indigenisation and growth of the defence sector
## Import Embargo
In August 2020, the Ministry of Defence published a list of 101 items for which there will be an embargo (ban) on import.20 The list includes weapon systems, such as artillery guns, and antisubmarine rocket launchers, and equipment such as high-power radar and upgrade systems. The ban on each item will apply as per the deadline specified. For 67 items, the ban came into effect from December 2020. The Ministry expects the ban on imports to give a push to self-reliance in the defence sector by boosting the domestic industry. It estimates that the embargo will result in domestic contracts of nearly four lakh crore rupees within the next five to seven years. Between April 2015 and August 2020, Rs 3.5 lakh crore worth of these items was procured.20
## Draft Defence Production And Export Promotion Policy
In August 2020, the Ministry released the Draft Defence
Production and Export Promotion Policy to boost the
defence production capabilities, reduce dependence on
imports, and promote exports for self-reliance in the defence
industry.21 The domestic defence industry (including aerospace and
naval shipbuilding) is currently estimated to be about Rs
80,000 crore. The Policy aims to achieve a turnover of Rs
1.75 lakh crore in aerospace and defence goods and
services by 2025 (including exports of Rs 35,000 crore).
Currently, the procurement from the domestic industry is
nearly Rs 70,000 crore (60% of overall defence
procurement). The Policy aims to double this to Rs 1,40,000
crore by 2025. It proposes creating a distinct head for
domestic capital procurement in the defence budget, and
increasing allocation for domestic capital procurement by a
minimum of 15% per year for the next five years.
## Defence Acquisition Procedure, 2020
The Defence Acquisition Procedure (DAP) governs the acquisition of weapons and equipment for India's defence forces.16 The DPP 2016 specified two modes of capital acquisition: (i) buy, and (ii)
buy and make. The DAP has introduced 'leasing'
as a new mode of acquisition. Leasing substitutes initial capital outlays with periodical rental payments. It is preferred in situations where: (i) procurement is not feasible due to time constraint, or (ii) the asset is required only for a specific time.
'Make' refers to manufacturing portion of the contract. Other key features of the DAP are discussed below.
## Increase In Indigenous Content
Table 9 shows the categories of capital acquisition in the DPP 2016 and DAP for the Buy, and Buy and Make modes. The DAP has enhanced the indigenous content (IC) requirement in various categories of procurement. IC is the percent of cost of indigenous content in base contract cost. Categories of acquisition provided in DAP are: (i) Buy (Indian-IDDM) refers to the procurement of products from an Indian vendor that have been indigenously designed, developed and manufactured; (ii) Buy (Indian) refers to the procurement of products from an Indian vendor; (iii) Buy and Make (Indian) refers to an initial procurement of equipment from an Indian vendor in a tie-up with a foreign vendor, followed by indigenous production involving transfer of technology; (iv) Buy (Global-Manufacture in India) refers to a purchase from a foreign vendor where the 50% IC value can be achieved in 'Make'
through an Indian subsidiary of the vendor; and (v)
Buy (Global) refers to outright purchase of equipment from foreign or Indian vendors.
Table 9: Indigenous content requirement for different categories of acquisition
Category
DPP-2016
DAP-2020
Buy (Indian-IDDM)
40% or more
50% or more
Buy (Indian)
40% or more
50% or more (for indigenous design)
Buy and Make (Indian)
50% or more of 'Make' part
50% or more of 'Make' part
Buy and Make
Not specified
Category not present
Buy (Global- Manufacture in India)
Category not present
50% or more
Buy (Global)
Not specified
30% or more (for Indian vendor)
Note: Buy and Make category refers to an initial procurement of equipment from a foreign vendor, followed by transfer of technology. Sources: DPP-2016, DAP-2020; PRS.
Procurement from DRDO, DPSUs The DAP adds a separate mechanism for acquisition of systems designed by the Defence Research and Development Organisation (DRDO), Defence Public Sector Undertakings (DPSUs), and Ordnance Factory Boards (OFBs). Based on operational requirements, the procuring agency will identify equipment which can be designed and developed by DRDO, DPSUs, or OFBs. Such cases would then be categorised under Buy (Indian- IDDM) for subsequent procurement. This is expected to enhance domestic development capabilities.
Changes to acquisition procedure The acquisition process starts with a request for information and formulation of requirements before the project is cleared. Thereafter, contractors submit bids which are evaluated and field tested (trials) before the contract is awarded. The DAP seeks to: (i) formulate service quality requirements using verifiable parameters, in a standardised format, and (ii) provide for single stage clearance for acquisitions of up to Rs 500 crore. The DAP will also rationalise trial and testing procedures to ensure transparency and avoid duplication of trials.
## Project Management Unit
A Project Management Unit (PMU) has been mandated to support contract management. It was announced as part of the Aatmanirbhar Bharat reforms.22 The PMU will facilitate provision of consultancy support during the acquisition process. This is expected to ensure a time bound procurement process and enable faster decision making.
##
Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex- Servicemen, Defence Pensions, Ex-Servicemen Contributory Health Scheme", Standing Committee on Defence, Lok Sabha, March 12, 2018, http://164.100.47.193/lsscommittee/Defence/16_Defence_40.pdf 2 "SIPRI Military Expenditure Database", Stockholm International Peace Research Institute, https://www.sipri.org/sites/default/files/Data%20for%20all%20c ountries%20from%201988%E2%80%932018%20as%20a%20s hare%20of%20GDP%20%28pdf%29.pdf. 3 "Five years of historic decision to implement OROP", Press Information Bureau, Ministry of Defence, November 6, 2020. 4 "1st Report: Demands for Grants (2019-20) General Defence Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex- Servicemen, Defence Pensions, Ex-Servicemen Contributory Health Scheme", Standing Committee on Defence, December 2019, http://164.100.47.193/lsscommittee/Defence/17_Defence_1.pdf. 5 "46th Report: Demands for Grants (2018-19) General Defence Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex- Servicemen, Defence Pensions, Ex-Servicemen Contributory Health Scheme", Standing Committee on Defence, January
2019, http://164.100.47.193/lsscommittee/Defence/16_Defence_46.pdf 6 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019, http://164.100.47.193/lsscommittee/Defence/17_Defence_3.pdf. 7 Notification S.O. 2691(E), Ministry of Finance, July 29, 2019, http://finance.cg.gov.in/15%20Finance%20Commission/GoI%2 0Notification/29-07-2019.pdf. 8 Chapter 11, Report of the 15th Finance Commission for 2021- 26, https://fincomindia.nic.in/WriteReadData/html_en_files/fincom1 5/Reports/XVFC%20VOL%20I%20Main%20Report.pdf. 9 "32nd Report: Creation of Non-Lapsable Capital Fund Account, Instead of the Present System", Standing Committee on Defence, Lok Sabha, August 4, 2017, http://164.100.47.193/lsscommittee/Defence/16_Defence_32.pdf 10 "48th Report: Action Taken by the Government on the Observations/Recommendations contained in the Fortieth Report (16th Lok Sabha) on 'Demands for Grants of the year 2018-19 on Capital Outlay on Defence Services, Procurement Policy and Defence Planning", Standing Committee on Defence, Lok Sabha, January 7, 2019, http://164.100.47.193/lsscommittee/Defence/16_Defence_48.pdf 11 7th Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence,
## Increase In Fdi Limit
In September 2020, the limit for foreign direct investment under the automatic route was increased from 49% to 74%.23 FDI beyond 74% is permitted with government approval which may be given where FDI is likely to result in access to modern technology.24 Domestic companies can benefit from enhanced access to capital and state of the art technology. This change was announced as part of the Aatmanirbhar Bharat Abhiyaan.22
March 2020, http://164.100.47.193/lsscommittee/Defence/17_Defence_7.pdf. 12 "41st Report: Demands for Grants (2018-19) Army, Navy, Air Force", Standing Committee on Defence, March 12, 2018, http://164.100.47.193/lsscommittee/Defence/16_Defence_41.pdf 13 "Report No. 3 of 2019: Performance Audit Report of the Comptroller and Auditor General of Indian on Capital Acquisition in Indian Air Force", Comptroller and Auditor General, February 13, 2019. 14 "29th Report: Preparedness of Armed Forces- Defence Production and Procurement", Committee on Estimates, July 25,
2018, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_29. pdf. 15 Defence Procurement Procedure 2016, Ministry of Defence, March 28, 2016, https://mod.gov.in/dod/sites/default/files/Updatedver230818.pdf 16 Defence Acquisition Policy, 2020, Ministry of Finance, September 28, 2020, https://www.mod.gov.in/dod/sites/default/files/DAP2030new.pd f. 17 "Raksha Mantri Shri Rajnath Singh approves a Committee to review Defence Procurement Procedure to strengthen 'Make in India'", Press Information Bureau, Ministry of Defence, August
17, 2019. 18 "Committee of Experts for Amendments to DPP 2013 Including Formulation of Policy Framework", Ministry of Defence, July 2015, https://mod.gov.in/sites/default/files/Reportddp.pdf.
19 SIPRI Yearbook 2020, Armaments, Disarmament and International Security, https://www.sipri.org/sites/default/files/2020- 06/yb20_summary_en_v2.pdf. 20 "MoD's big push to Atmanirbhar Bharat initiative; Import embargo on 101 items beyond given timelines to boost indigenisation of defence production", Press Information Bureau, Ministry of Defence, August 9, 2020. 21 Draft Defence Production and Export Promotion Policy (DPEPP), 2020, https://www.makeinindiadefence.gov.in/admin/webroot/writerea ddata/upload/recentactivity/Draft_DPEPP_03.08.2020.pdf. 22 "Presentation of details of 4th Tranche announced by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman under Aatmanirbhar Bharat Abhiyaan to support Indian economy in fight against COVID-19", May 16, 2020, https://static.pib.gov.in/WriteReadData/userfiles/AatmaNirbhar %20Bharat%20Full%20Presentation%20Part%204%2016-5- 2020.pdf. 23 Press Note No. 4 (2020 Series), Ministry of Commerce and Industry, https://dipp.gov.in/sites/default/files/pn4-2020_0.PDF. 24 "FDI in Defence Sector", Press Information Bureau, Ministry of Defence, September 14, 2020.
## Demand For Grants: Food And Public Distribution
The Ministry of Consumer Affairs, Food and Public Distribution has two Departments: (i) Food and Public Distribution, and (ii) Consumer Affairs. Allocation to the Ministry accounts for 7% of the budget of the central government in 2021-22.1
Department of Consumer Affairs is responsible for spreading awareness among consumers about their rights, protecting their interests, implementing standards, and preventing black marketing.2 In
2021-22, the Department has been allocated Rs
2,974 crore, a 24% annual increase over 2019-20.3
Department of Food and Public Distribution is responsible for ensuring food security through procurement, storage, and distribution of foodgrains, and for regulating the sugar sector.4 In 2021-22, the Department has been allocated Rs 2,42,836 crore (99% of the Ministry's allocation).5 This is an annual increase of 48% over 2019-20 expenditure.
% change
Department
2019-20 Actuals
2020-21
Revised
2021-22
Budgeted
(annualised)
in 2021-22
over 2019-20
Food & Public Distribution
1,15,173 4,38,649
2,53,974
48%
Consumer Affairs
1,923
12,038
2,974
24%
Total
1,17,096 4,50,687
2,56,948
48%
Sources: Expenditure Budget, Union Budget 2021-22; PRS.
This note examines the allocation to the Department of Food and Public Distribution. It also discusses the broad issues in the sector and key observations and recommendations made in this regard.
## Overview Of Finances
Food subsidy is the largest expenditure by the Department of Food and Public Distribution. 96% of the Department's allocation in 2021-22 is towards food subsidy (see Table 10 in the Annexure for more details). The subsidy is provided to the Food Corporation of India (FCI) and states for procuring foodgrains from farmers at government notified prices and selling them at lower subsidised prices (known as Central Issue Prices), under the National Food Security Act, 2013. The Act mandates coverage of 75% of the population in rural areas and 50% in urban areas, and covers 81 crore persons.6,7 The subsidy also covers the storage cost incurred by FCI in maintaining buffer stocks in order to ensure food security in the country. Table 2 shows the expenditure on food subsidy during 2011-21.
Table 2: Expenditure on food subsidy (Rs crore)
Year
Allocation
Expenditure
% utilisation
2011-12
60,573
72,822
120%
2012-13
75,000
85,000
113%
2013-14
90,000
92,000
102%
2014-15
1,15,000
1,17,671
102%
2015-16
1,24,419
1,39,419
112%
2016-17
1,34,835
1,10,173
82%
2017-18
1,45,339
1,00,282
69%
2018-19
1,69,323
1,01,327
60%
2019-20
1,84,220
1,08,688
59%
2020-21
1,15,570
4,22,618#
366%
2021-22
2,42,836*
-
-
Note: *Budget estimate; #Revised estimate. Sources: Expenditure Budget, Union Budgets (2011-21); PRS.
The Department was allocated Rs 1,84,220 crore for food subsidy in 2019-20. However, only 59% of the allocation was utilised as the food subsidy provided to FCI decreased from Rs 1,51,000 crore (budget estimate) to Rs 75,000 crore. As directed by the Ministry of Finance, the Department deferred the payment of food subsidy due to FCI, resulting in an underspending of Rs 76,000 crore.8 Due to such deferment, more so since 2016-17, the food subsidy paid to FCI has been much lower than the amount allocated in the budget for this purpose. As a result, the food subsidy payment due to FCI increased over the years, from Rs 50,037 crore at the end of 2015- 16 to Rs 2,43,779 crore at the end of 2019-20.9
In the meanwhile, the government provided loans to FCI from the National Small Savings Fund (NSSF) to meet its operational requirements. NSSF loans worth Rs 2,54,600 crore were outstanding with FCI at the end of 2019-20.10 In her 2021-22 budget speech, the Finance Minister announced that the government will discontinue the NSSF loans given to FCI and accordingly make budget provisions in 2020-21 and 2021-22.11 It estimates the NSSF loans outstanding with FCI to reduce to Rs 63,712 crore by the end of 2021-22.12 Thus, the government has significantly increased the allocation for food subsidy to FCI to clear its dues, which in turn will be used by FCI to repay the NSSF loans. In 2020- 21, the allocation has increased from Rs 77,983 crore (budget estimate) to Rs 3,44,077 crore (revised estimate). In 2021-22, Rs 2,02,616 crore has been allocated, a 64% annual increase over 2019-20. Note that the increase seen in allocation in 2020-21 is also on account of the additional expenditure incurred by FCI in providing free foodgrains to poor under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).13 The scheme was announced in March 2020 as a part of the COVID-19 relief package for the poor. Under the scheme, five kg of wheat or rice and one kg of pulses were provided for free every month to persons from poor families during the period April-November 2020. All beneficiaries under the National Food Security Act, 2013 were eligible for these benefits in addition to their existing foodgrain entitlements. The cost of providing free foodgrains under the scheme PMGKAY was borne by the Department in 2020, which is estimated to be nearly Rs 1,34,030 crore.14 This expenditure was in the form of: (i) food subsidy to FCI, (ii) food subsidy to states, and
(iii) assistance to states for intra-state movement of foodgrains and margin of fair price shop dealers. In May 2020, the government extended the benefits provided under PMGKAY to migrants (who were not eligible for the benefits otherwise) for a period of two months in 2020 under the Aatmanirbhar Bharat Economic Package.15 This scheme's cost for the Department is estimated to be Rs 989 crore.16
## Components Of Food Subsidy
Expenditure on food subsidy can be classified under the following three heads (break-up in Table 3):
-
Subsidy to FCI: The Food Corporation of
India (FCI) receives subsidy for procuring foodgrains from farmers at government notified prices and selling them at lower subsidised prices. It also receives subsidy for the storage cost incurred in maintaining buffer stocks.
-
Subsidy to states: Under the decentralised
procurement scheme, states may choose to undertake the operations of procurement,
storage, and distribution on behalf of FCI, for
which they are provided with subsidy.
-
Sugar subsidy: Sugar subsidy is provided for
giving one kg of sugar per month at subsidised rates to families covered under the Antyodaya Anna Yojana (i.e., poorest of the poor families).
In 2021-22, subsidy to FCI and states form 83% and 16% of the allocation for food subsidy, respectively.
% change
Subsidy
2019-20 Actuals
2020-21
Revised
2021-22
Budgeted
(annualised)
in 2021-22
over 2019-20
Subsidy to FCI
75,000 3,44,077
2,02,616
64%
33,508
78,338
40,000
9%
Subsidy to states (decentralised procurement) Sugar subsidy
180
203
220
11%
Total
1,08,688 4,22,618
2,42,836
49%
Sources: Expenditure Budget, Union Budget 2021-22; PRS.
## Issues In The Sector
FCI and state agencies procure foodgrains from farmers at the government notified Minimum Support Prices (MSPs). These foodgrains are provided to the economically weaker sections at subsidised prices through fair price shops under the Public Distribution System (PDS). The central and state governments provide subsidised foodgrains to beneficiaries under the National Food Security Act, 2013 as well as certain other welfare schemes such as the Mid-Day Meal scheme. In this section, we examine some issues relating to the: (i) pending dues of FCI, (ii) provision of food subsidy, (iii) PDS, and (iv) sugarcane dues to farmers.
## Pending Dues Of Fci
The central government provides food subsidy to FCI as reimbursement of the loss it incurs in its procurement, storage, and distribution operations. During the period 2016-20, although the Department used to receive sufficient allocation for payment to FCI, due to budget cuts made during the year, the actual amount paid to FCI was much lower. The CAG (2019) observed that when the food subsidy budget is not sufficient to clear FCI's dues, such dues are carried over to the next year.17 Due to such carryovers every year, payment due to FCI for food subsidy increased from Rs 50,037 crore at the end of 2015-16 to Rs 2.44 lakh crore at the end of 2019-20. In 2020-21, the allocation for food subsidy to FCI has been increased by 359% over 2019-20 to Rs 3.44 lakh crore (revised estimate). In comparison, the subsidy cost incurred by FCI in 2020-21 has also increased significantly due to the additional benefits provided under the COVID-19 relief packages. The cost incurred by FCI in 2020-21 is estimated to be Rs 2.19 lakh crore, 65% higher over 2019-20. Thus, there is a surplus allocation of Rs 1.25 lakh crore in
2020-21 for clearing the dues of FCI. This would reduce FCI's outstanding dues from Rs 2.44 lakh crore to Rs 1.19 lakh crore by the end of 2020-21. In 2021-22, Rs 2.03 lakh crore has been allocated for food subsidy to FCI. Assuming that the subsidy cost incurred by FCI in 2021-22 is the same as that in 2019-20 (Rs 1.33 lakh crore), this allocation would further reduce the outstanding subsidy dues of FCI to Rs 48,703 crore by the end of 2021-22. Due to the delay in clearing dues by the Department, FCI borrows money for its operational requirements.
When FCI uses such borrowings to fill the resource gap, the Department has to provide additional funds in subsequent years for payment of interest on these borrowings. The CAG observed that the central government has adopted this off-budget method of financing the subsidy dues, thereby deferring the payment to FCI.17 This understates a particular fiscal year's expenditure by keeping deferred expenditure off-budget for that year, and prevents transparent depiction of fiscal indicators. For instance, if the central government had cleared all the subsidy dues of FCI in the year 2019-20 itself, its fiscal deficit (borrowings) for 2019-20 would have increased from 4.6% of GDP to 5.8% of GDP.
## Provision Of Food Subsidy
The Targeted Public Distribution System (TPDS), through which foodgrains are distributed at subsidised prices, seeks to provide food security to people below the poverty line. Over the years, the spending on food subsidy has increased and the ratio of people below the poverty line has decreased from 54.9% in 1973-74 to 21.9% in 2011-12 (Table 4).
| Year | Poverty ratio (in %) | No. of Poor (in crore) |
|---------|-------------------------|---------------------------|
| 1973-74 | 54.9% | 32.1 |
| 1977-78 | 51.3% | 32.9 |
| 1983-84 | 44.5% | 32.3 |
| 1987-88 | 38.9% | 30.7 |
| 1993-94 | 36.0% | 32 |
| 2004-05 | 27.5% | 30.2 |
| 2011-12 | 21.9% | 26.9 |
Note: Figures from 1973-74 to 2004-05 have been computed using the Lakdawala methodology, and figures for 2011-12 have been computed using the Tendulkar methodology. Sources: Planning Commission; PRS.
The proportion of undernourished persons reduced from 18.6% in 2000-02 to 14% in 2017-19 (Table 5). However, due to population growth, the number of undernourished persons has not reduced much (from 20 crore in 2000-02 to 18.9 crore in 2017-19).
Number of
Year
Proportion of population
undernourished (in %)
undernourished
persons (in crore)
2000-02
18.6%
20.0
2003-05
22.2%
25.1
2008-10
16.4%
20.0
2013-15
15.3%
19.8
2017-19
14%
18.9
Sources: Food and Agriculture Organisation, 2020; PRS.
Nutritional balance: The National Food Security Act, 2013 guarantees five kg of foodgrains per person per month to entitled beneficiaries at subsidised prices. Further, Antyodaya Anna Yojana households, which constitute the poorest of the poor, are entitled to 35 kg per household per month at subsidised prices. Presently, the food items provided by the central government for distribution under PDS are mainly rice, wheat, and sugar.18 As shown in Figure 2 and Figure 3, there has been a change in the pattern of nutritional intake among people in both rural and urban areas (details given in Table 6 and Table 7 in the Annexure). Although cereals or foodgrains contain only 10%
protein, their share as a percentage of the total protein intake has been over 50% in both rural and urban areas.19 However, other food items such as meat and pulses contain more than 20% protein but contribute to only 15% of the total protein intake. Sources: Nutritional Intake in India (2011-12), NSSO; PRS. The share of cereals in calorie intake has reduced by 10% in rural areas and 7% in urban areas, whereas that of milk, eggs, fish, and meat has increased (see Table 12 in the Annexure). This indicates a reduced preference for rice and wheat, and an increase in preference towards other protein-rich food items. The National Food Security Act, 2013 requires the central and state governments to undertake steps to diversify commodities distributed under PDS.20
Imbalance in farm production: MSP is the assured price announced by the central government at which foodgrains are procured from farmers by the central and state governments and their agencies, for the central pool of foodgrains. The central pool is used for providing foodgrains under PDS and other welfare schemes, and also kept as reserve in the form of buffer stock. While MSPs are annually announced for 23 crops, public procurement is limited to a few crops such as paddy (rice), wheat, and, to a limited extent, pulses (Figure 4). The Economic Survey 2019-20 observed that the regular increase in MSP is seen by farmers as a signal to opt for crops which have an assured procurement system (for example, rice and wheat).21
Thus, MSP incentivises farmers to grow crops which are procured by the government. As wheat and rice are major foodgrains provided under the PDS, the focus of procurement is on these crops. This skews the production of crops in favour of wheat and paddy (particularly in states where procurement levels are high), and does not offer an incentive for farmers to produce other items such as pulses.22 Further, this puts pressure on the water table as these crops are water-intensive (also applicable to sugarcane which has assured purchase by private sugar mills).23 Note that the National Food Security Act, 2013 requires the central and state governments to undertake steps to diversify commodities distributed under PDS. The procurement of foodgrains is largely concentrated in a few states. Three states (Madhya Pradesh, Punjab, and Haryana) producing 46% of the wheat in the country account for 85% of its procurement. Six states (Punjab, Telangana, Andhra Pradesh, Chhattisgarh, Odisha, and Haryana) with 40% of the production of rice have 74% share in procurement. The National Food Security Act, 2013 requires the central, state, and local governments to strive to progressively realise certain objectives for advancing food and nutritional security. One of these objectives involves geographical diversification of the procurement operations.
As procurement of wheat and paddy is done at MSP (which is often above market prices), their stocks have grown over the years. At the end of 2019-20, the stock of these foodgrains was 19% more than the offtake in that year (see Table 10 in the Annexure).
## Revision Of Central Issue Price (Cip)
Under the National Food Security Act, 2013, food subsidy is given to beneficiaries at the CIP, which was last revised in 2002. Table 13 shows the CIP
for wheat and rice for various beneficiaries.
| Foodgrain | AAY | BPL | APL |
|--------------|--------|--------|--------|
| Rice | 3 | 5.65 | 7.95 |
| Wheat | 2 | 4.15 | 6.1 |
Note: AAY - Antyodaya Anna Yojana, BPL - Below Poverty Line, APL - Above Poverty Line. Sources: Department of Food and Public Distribution; PRS.
In comparison to the CIP, the economic cost (including procurement, stocking, distribution) for wheat is Rs 30 per kg and for rice is Rs 43 per kg as of February 2021.9 Food subsidy is calculated as the difference between the economic cost of procuring foodgrains, and their CIP. While the economic cost for rice has increased from Rs 11 per kg in 2001-02 to Rs 43 per kg in 2021-22 (Figure 7), and of wheat from Rs 9 per kg to Rs 30 per kg over the same period (Figure 8), their CIPs have not been revised. This has led to an increasing gap between the economic cost and CIP, leading to an increase in expenditure on food subsidy.
The Standing Committee on Food, Consumer Affairs and Public Distribution (2016-17) noted that the reasons for increase in food subsidy include: (i) increase in the procurement cost of foodgrains, (ii) non-revision of the Central Issue Prices since 2002, and (iii) implementation of the National Food Security Act, 2013 in all states.24 In 2018-19, the Ministry had stated that increasing the CIP could be one of the measures to bridge the gap between the funds it requires, and the funds it is finally allocated.
## Delivery Of Food Subsidy
Leakages in PDS: Leakages refer to foodgrains not reaching the intended beneficiaries. Note that recent data on leakage is not publicly available. The latest available data is for 2011. According to the 2011 data, leakages in PDS were estimated to be 46.7% (see Table 12 in the Annexure).25,26 Leakages may be of three types: (i) pilferage or damage during transportation of foodgrains, (ii) diversion to non-beneficiaries at fair price shops through issue of ghost cards, and (iii) exclusion of people entitled to foodgrains but who are not on the beneficiary list.27,28 Studies have shown that targeting mechanisms such as TPDS are prone to large exclusion and inclusion errors.29
Exclusion errors occur when entitled beneficiaries do not get foodgrains. It refers to the percentage of poor households that are entitled to but do not have PDS cards. Exclusion errors had declined from 55%
in 2004-05 to 41% in 2011-12 (Figure 9).
Inclusion errors occur when those that are ineligible get undue benefits. Inclusion errors had increased from 29% in 2004-05 to 37% in 2011-12. Declining exclusion errors and increasing inclusion errors are due to two reasons. First, increase in the coverage of TPDS has reduced the proportion of poor who do not have access to PDS cards. Second, despite a decline in poverty rate, non-poor are still identified as poor by the government thus allowing them to continue using their PDS cards.30
Note that under the National Food Security Act, 2013, states are responsible for the identification of beneficiaries. In 2016, the Comptroller and Auditor General of India (CAG) found that this process had not been completed by the states, and 49% of the beneficiaries were yet to be identified by states.31
Sources: Evaluation study on the role of PDS in shaping households and nutritional security in India, NITI Aayog, December 2016; PRS.
Alternative subsidy systems: Over the years, several solutions have been suggested to plug leakages, including: (i) Direct Benefit Transfer (DBT) in lieu of food subsidy, and (ii) end-to-end computerisation of the PDS operations.25
The National Food Security Act, 2013 requires the central and state governments to progressively reform TPDS by taking various measures, including introduction of schemes such as cash transfer or food coupon.20 Various experts and bodies have also suggested replacing TPDS with a DBT system.32,33 Advantages and disadvantages of these two methods of delivering benefits have been discussed below.
-
TPDS: TPDS assures beneficiaries that they
would receive foodgrains, and insulates them against inflation and price volatility. Further, foodgrains are delivered through fair price shops in villages, which are easy to access.34,35
However, high leakages have been witnessed in the system, both during transportation and distribution. These include pilferage and errors of inclusion and exclusion from the beneficiary list. In addition, it has also been argued that the distribution of only wheat and rice may cause an imbalance in the nutritional intake of beneficiaries.20 Beneficiaries have also reported receiving poor quality foodgrains under TPDS.
-
DBT: DBT or cash transfers seek to increase
the choices available with a beneficiary, and provide direct financial assistance. It has been argued that the costs of DBT may be lesser than TPDS, owing to lesser costs incurred on
transportation and storage of foodgrains.36,37
On the other hand, it has been argued that the cash received through DBT may be spent on non-food items. Further, such a system may expose beneficiaries to inflation. In this regard, one may need to consider the low penetration and access to banking in rural areas.38
In 2015, the Department released two notifications: the Cash Transfer of Food Subsidy Rules and the Food Security (Assistance to State Governments) Rules.39,40 As per these notifications, the central government offers two choices to states and union territories for reforming their respective PDS machinery: (i) replacing the existing TPDS with a DBT system, or (ii) Fair Price Shop automation, which involves installation of Point of Sale devices, for authentication of the beneficiaries and electronic capturing of transactions. As of January 2021, the DBT system is under implementation in the union territories of Chandigarh and Puducherry.41 As of February 2021, 4.94 lakh (91%) Fair Price Shops have been automated across the country.42
Details regarding the status of computerisation of PDS are given in Table 14 in the Annexure.
| 1. CIP | Rs 3 per kg |
|--------------------------------------------|----------------|
| 2. MSP | Rs 20 per kg |
| 3. Subsidy (3=2-1) | Rs 17 per kg |
| Rs 27 per kg | |
| 4. Cost to government | |
| (Subsidy + Costs on procurement, | |
| storage, and distribution) | |
| 5. Cash subsidy to beneficiaries | Rs 22 per kg |
| 6. Government saving (6=4-5) | Rs 5 per kg |
| 7. Increase in beneficiary benefit (7=5-3) | Rs 5 per kg |
Sources: High-Level Committee Report on Restructuring of FCI, January 2015; PRS.
The High-Level Committee on Restructuring of FCI (2015) had suggested that switching to DBT for food subsidy would reduce the food subsidy bill of the government by more than Rs 30,000 crore.25 While making this recommendation, the Committee illustrated this by taking the case of subsidy given on rice (Table 8). It assumed that the government would transfer Rs 22 for per kg rice to a beneficiary.
Aadhaar: The High-Level Committee (2015) had also recommended the introduction of biometric authentication and Aadhaar to plug leakages in PDS. Such transfers could be linked to Jan Dhan account, and be indexed to inflation.25 As of February 2021, 128.3 crore Aadhaar cards have been generated.43 In February 2017, the Ministry made it mandatory for beneficiaries under the National Food Security Act, 2013 to use Aadhaar as proof of identification for receiving foodgrains (deadline for linking Aadhaar with ration cards extended to March 31, 2021).44,45 This aims to facilitate the removal of bogus ration cards, check leakages, and ensure better delivery of foodgrains.25,46,47
Note that beneficiaries may face issues with Aadhaar authentication while availing PDS benefits. According to the data submitted by UIDAI to the Supreme Court in Justice K. S. Puttaswamy vs Union of India, the Aadhaar authentication failure rate (across all purposes) was 8.5% for iris scans and 6% for fingerprints.48 In its judgement, the Court held that services cannot be denied to beneficiaries due to Aadhaar authentication failure. As of March 2020, while 100% ration cards had been digitised, the seeding of these cards with Aadhaar was at 90%.49 As of February 12, 2021, more than 70% of the transactions on Point of Sale devices are done using biometric authentication.42 Further, between 2013 and 2020, nearly 4.4 crore ration cards were deleted due to detection of bogus, ghost, and duplicate cards during Aadhaar seeding.42
## Current Challenges In Pds
Storage: The Department allocates funds for the construction of godowns and silos to increase the storage capacity of FCI and state agencies. In 2021- 22, Rs 60 crore has been allocated for this purpose, whereas this was Rs 63 crore in 2019-20 and Rs 44 crore in 2020-21 (revised estimate). As of December 31, 2020, the total storage capacity in the country was 819 lakh tonnes, against 530 lakh tonnes of foodgrain stock.50 Of the total capacity, 699 lakh tonnes was covered storage and 150 lakh tonnes (18%) was CAP (cover and plinth) storage. In 2021-22, out of the Rs 60 crore allocation for creation of storage capacity, Rs 45 crore has been allocated for the north-eastern region. The Standing Committee on Food, Consumer Affairs and Public Distribution (2020) noted that FCI could not achieve the targets set for construction of godowns in 2019- 20.49 In the north-eastern region, against the target of 25,000 tonnes of storage, only 10% of the target was achieved. In other states, no new godown was constructed, whereas the target was 2,240 tonnes.
The Committee observed that FCI faces various issues in construction of godowns in the northeastern region such as difficult terrain, frequent bandhs, and difficulty in acquisition of land. The Committee recommended that the Department should coordinate with the state governments to resolve these issues. It further recommended that a roadmap should be chalked out by the government for creating mini-godowns across the country. In 2016, the CAG observed that, until 2014, the foodgrain stock in the central pool was higher than the FCI's storage capacity (Figure 2).31 It noted that in 2015, the foodgrain stock in the central pool became lower than the storage capacity due to an increase in decentralised procurement by states.
Sources: CAG; PRS.
Under the decentralised procurement system, the state governments and their agencies undertake procurement, storage, and distribution of foodgrains on behalf of FCI. The expenditure incurred by them is reimbursed by the central government in the form of food subsidy. The Standing Committee (2020) observed that the decentralised procurement system reduces FCI's handling and transportation cost and increases the efficiency of procurement.49 As of March 2020, 17 states had adopted the decentralised procurement system. The Committee recommended that more states should be encouraged to adopt the decentralised procurement system.49 FCI should create necessary infrastructure for procurement of foodgrains in coordination with state governments.
Fair Price Shops: Fair Price Shops are licensed ration shops which provide foodgrains and kerosene under the public distribution system. They may also sell certain other goods in some states. It has been observed by various experts and the Ministry that the margins on which the Fair Price Shops operate are low.51 Further, in the absence of economic viability, there may be cases where the dealer resorts to unfair practices. In order to make these shops viable, some states have taken steps such as:
-
Chhattisgarh provided interest-free seed capital of Rs 75,000 to each fair price shop for 20 years. It also increased the commission on foodgrains from Rs 8/ quintal to Rs 30/ quintal.
-
States such as Assam and Delhi have permitted the sale of non-PDS items at these fair price shops. Such items include oil, potatoes, onion, tea, and mobile recharge coupons.
## Sugarcane Dues
The Department is also responsible for formulation of policies and regulations for the sugar sector. In 2021-22, Rs 4,337 crore has been allocated for providing assistance to sugar mills through various measures, an annual increase of 10% over 2019-20 (Table 8). These measures include: (i) direct assistance to mills for clearing the sugarcane dues of farmers, (ii) reimbursing the mills for maintaining buffer stock, (iii) facilitating export of sugar, and
(iv) improving their ethanol production capacity.
% change
2019-20 Actuals
2020-21
Revised
2021-22
Budgeted
(annualised)
in 2021-22
over 2019-20
For facilitating export of sugar
551
350
2,000
91%
Direct assistance for clearing dues
2,155
5,073
1,200
-25%
For maintaining buffer stock
530
650
650
11%
For ethanol production
50
150
300
145%
Other measures
310
594
187
-22%
Total
3,595
6,818
4,337
10%
Sources: Expenditure Budget, Union Budget 2021-22; PRS.
The assistance is being provided with the aim of improving the liquidity of sugar mills in order to facilitate payment of sugarcane dues of farmers.52,53 Note that as of January 31, 2021, payment of Rs 19,260 crore is pending with sugar mills as dues for
2019-20 and previous years.54 State-wise details of the dues are given in Table 16 in the Annexure. These sugarcane dues accumulate due to delay in payments to farmers for their produce. In years of surplus production, the sugar prices fall impacting the sale of sugar and liquidity of mills.55 As a result, mills are unable to pay farmers leading to delay in payments and accumulation of dues. Note that sugar mills are obligated to purchase sugarcane from all farmers within their specified area at a price fixed by the government. Conversely, farmers are bound to sell to the respective mills. Rationalisation of sugarcane pricing has been recommended as one of the steps for improving the efficiency of the sugar industry. The central government fixes the Fair and Remunerative Price (FRP) for sugarcane, which is the minimum price that must be paid by sugar mills to farmers.56 The FRP is fixed based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). It is recommended taking into consideration: (i) the cost of production, (ii) rate of recovery of sugar, (iii) availability of sugar to consumers at a fair price, (iv) returns to farmers from alternative crops and the general trend of prices of agricultural commodities, (v) realisation from sale of by-products, and (vi) reasonable margins for farmers on account of risks and profits. State governments can also intervene in sugarcane pricing by announcing a State Advised Price (SAP). SAPs are usually much higher than the FRP. This creates a distortion in the industry as SAP is neither https://consumeraffairs.nic.in/about-us/about-dca. Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe14.pdf. 4 Introduction, Department of Food and Public Distribution, https://dfpd.gov.in/index.htm. 5 Department of Food and Public Distribution, Expenditure Budget, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe15.pdf. 6 The National Food Security Act, 2013, Ministry of Consumer Affairs, Food and Public Distribution, http://www.egazette.nic.in/WriteReadData/2013/E_29_2013_429 .pdf. 7 Lok Sabha Unstarred Question No. 1192, Ministry of Consumer Affairs, Food and Public Distribution, February 9, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU1192.pdf. 8 Lok Sabha Unstarred Question No. 47, Ministry of Consumer Affairs, Food and Public Distribution, February 2, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU47.pdf. 9 Subsidy Position of FCI, Food Corporation of India, as of February 13, 2021, https://fci.gov.in/finances.php?view=109. 10 Statement of Extra Budgetary Resources, Expenditure Profile, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/stat27.pdf. 11 Budget Speech, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 12 National Small Savings Fund, Receipt Budget, Union Budget
2021-22, https://www.indiabudget.gov.in/doc/rec/annex11.pdf. 13 "Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus", Press Information Bureau, Ministry of Finance, March 26, 2020. 14 "Estimated cost for distribution of foodgrains and pulses under Pradhan Mantri Garib Kalyan Ann Yojana during April -
November 2020 is around Rs 1,48,938 crore", Press Information Bureau, Ministry of Consumer Affairs, Food and Public Distribution, July 1, 2020. 15 "Cabinet approves AtmaNirbhar Bharat Package for allocation of foodgrains to the migrants / stranded migrants", Press Information Bureau, Cabinet, May 20, 2020. 16 Agriculture and Food Management, Chapter 7, Volume II, Economic Survey 2020-21, January 2021, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter /echap07_vol2.pdf. 17 Report no. 20 of 2018: 'Compliance of the Fiscal linked to sugar recovery nor it takes into account domestic and global prices and other relevant parameters. As a result, when sugar prices are low, mill owners are unable to pay farmers resulting in delayed payment and accumulation of dues. The CACP (2018) recommended that the FRP must be implemented in all states and the announcement of SAP by states should be stopped immediately.56 In case state governments decide to continue with SAP, the difference between SAP and FRP should be paid by the state governments directly to farmers.
18 Public Distribution System, Department of Food and Public Distribution, https://dfpd.gov.in/public-distribution.htm. 19 "Nutritional Intake in India 2011-12, NSS 68th Round, National Sample Survey Office, Ministry of Statistics and Programme Implementation, October 2014, http://mospi.nic.in/sites/default/files/publication_reports/nss_repo rt_560_19dec14.pdf. 20 The National Food Security Act, 2013, Ministry of Consumer Affairs, Food and Public Distribution, http://www.egazette.nic.in/WriteReadData/2013/E_29_2013_429 .pdf. 21 Chapter 4, Volume I, Economic Survey 2019-20, January 2020, https://www.indiabudget.gov.in/budget2020- 21/economicsurvey/doc/vol1chapter/echap04_vol1.pdf. 22 Prices, Agriculture and Food Management, Chapter 5, Volume II, Economic Survey 2015-16, January 2016, http://unionbudget.nic.in/budget2016-2017/es2015-16/echapvol2- 05.pdf. 23 Agriculture and Food Management, Chapter 7, Volume II, Economic Survey 2018-19, January 2019, https://www.indiabudget.gov.in/budget2019- 20/economicsurvey/doc/vol2chapter/echap07_vol2.pdf. 24 Report no. 15, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demands for Grants (2017-18), Department of Food and Public Distribution', Lok Sabha, March
2017, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/16_Food_Consumer_Affair s_And_Public_Distribution_15.pdf. 25 Report of the High Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://www.fci.gov.in/app2/webroot/upload/News/Report%20of %20the%20High%20Level%20Committee%20on%20Reorientin g%20the%20Role%20and%20Restructuring%20of%20FCI_Engl ish_1.pdf. 26 Third Report of the Standing Committee on Food, Consumer Affairs and Public Distribution: Demands for Grants 2015-16, Department of Food and Public Distribution, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/16_Food_Consumer_Affair s_And_Public_Distribution_3.pdf. 27 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_D irect_Cash_Transfers_to_the_Poor.pdf. 28 Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds. pdf. 29 Report of the Expert Group to advise the Ministry of Rural Development in the methodology for conducting the Below Poverty Line (BPL) Census for 11th Five Year Plan, August 2009, http://rural.nic.in/sites/downloads/circular/ReportofExpertGroup Chaired-Dr.N.C.Saxena.pdf. 30 Evaluation Study on the Role of Public Distribution System in shaping household and nutritional security in India, NITI Aayog, December 2016,
http://niti.gov.in/writereaddata/files/document_publication/Final %20PDS%20Report-new.pdf. 31 Report no. 54 of 2015: 'Audit on the Preparedness for Implementation of National Food Security Act, 2013 for the year ended March, 2015', Comptroller and Auditor General of India, April 2016, https://cag.gov.in/uploads/download_audit_report/2016/Union_C ivil_National_Food_Security_Report_54_of_2015.pdf. 32 Prices, Agriculture and Food Management, Chapter 5, Volume I, Economic Survey 2015-16, January 2016, http://unionbudget.nic.in/budget2016-2017/es2015-16/echapvol2- 05.pdf. 33 Working Paper 294, "Leakages from Public Distribution System", January 2015, ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf. 34 Revival of the Public Distribution System: Evidence and Explanations, The Economic and Political Weekly, November 5, 2011, http://www.epw.in/system/files/pdf/2011_46/44- 45/Revival_of_the_Public_Distribution_System_Evidence_and_ Explanations.pdf. 35 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_D irect_Cash_Transfers_to_the_Poor.pdf. 36 Revival of the Public Distribution System: Evidence and Explanations, The Economic and Political Weekly, November 5, 2011, http://www.epw.in/system/files/pdf/2011_46/44- 45/Revival_of_the_Publ ic_Distribution_System_Evidence_and_Explanations.pdf. 37 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_D irect_Cash_Transfers_to_the_Poor.pdf. 38 Report of the Internal Working Group on Branch Authorisation Policy, Reserve Bank of India, September 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/IWG99F1 2F147B6E4F8DBEE8CEBB8F09F103.PDF. 39 The Cash Transfer of Food Subsidy Rules, 2015, Ministry of Consumer Affairs, Food and Public Distribution, September 3, 2015, http://dfpd.nic.in/writereaddata/Portal/News/32_1_cash.pdf. 40 The Food Security (Assistance to States) Rules, 2015, Ministry of Consumer Affairs, Food and Public Distribution, August 17, 2015, http://dfpd.nic.in/fgAvAHcAcgBpAHQAZQByAGUAYQBkAG QAYQB0AGEALwBQAG8AcgB0AGEAbAAvAE0AYQBnAG EAegBpAG4AZQAvAEQAbwBjAHUAbQBlAG4AdAAvAA== /1_135_1_Food-Security.pdf. 41 Foodgrain Bulletin, Department of Food and Public Distribution, January 2021, https://dfpd.gov.in/writereaddata/Portal/Magazine/FoodgrainBull etinforJanuary2021Bilingual.pdf.
42 Rajya Sabha Unstarred Question No. 1358, Ministry of Consumer Affairs, Food and Public Distribution, February 12, 2021, https://pqars.nic.in/annex/253/AU1358.pdf. 43 Aadhaar Dashboard, Unique Identification Authority of India, as of February 18, 2021, https://uidai.gov.in/aadhaar_dashboard/.
44 S.O. 371 (E), Gazette of India, Ministry of Consumer Affairs, Food and Public Distribution, February 8, 2017, http://egazette.nic.in/WriteReadData/2017/174131.pdf. 45 Rajya Sabha Unstarred Question No. 1370, Ministry of Consumer Affairs, Food and Public Distribution, February 12, 2021, https://pqars.nic.in/annex/253/AU1370.pdf. 46 Lok Sabha Unstarred Question No. 844, Ministry of Consumer Affairs, Food and Public Distribution, February 7, 2017, http://164.100.47.190/loksabhaquestions/annex/11/AU844.pdf. 47 "Envisioning a role for Aadhaar in the Public Distribution System", Unique Identification Authority of India, Planning Commission, June 2010, http://uidai.gov.in/UID_PDF/Working_Papers/Circulated_Aadha ar_PDS_Note.pdf. 48 Justice K. S. Puttaswamy (Retd.) and Anr. vs Union of India and Ors., W. P. (C.) No. 494 of 2012. 49 Report no. 3, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demand for Grants (2020-21), Department of Food and Public Distribution', Lok Sabha, March
2020, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/17_Food_Consumer_Affair s_And_Public_Distribution_3.pdf. 50 Lok Sabha Unstarred Question No. 1343, Ministry of Consumer Affairs, Food and Public Distribution, February 9, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU1343.pdf. 51 Newsletter of the Department of Food and Public Distribution, Jan-March, 2015, http://dfpd.nic.in/writereaddata/images/pdf/Final_English_versio n_of_newsletter_May_29_2015.pdf. 52"Cabinet approves comprehensive policy to deal with excess sugar production in the country", Press Information Bureau, Cabinet Committee on Economic Affairs, September 26, 2018. 53 "Cabinet approves soft loan to sugar mills to facilitate payment of cane dues of the farmers for the current sugar season", Press Information Bureau, Cabinet Committee on Economic Affairs, February 28, 2019. 54 Lok Sabha Starred Question No. 113, Ministry of Consumer Affairs, Food and Public Distribution, February 9, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AS113.pdf.
55 Report of the Committee on the Regulation of Sugar Sector in India: The Way Forward, October 2012, http://eac.gov.in/reports/rep_sugar1210.pdf. 56 Report on Price Policy for Sugarcane, 2019-20 season, Commission for Agricultural Costs and Prices, Ministry of Agriculture and Farmers' Welfare, August 2017, https://cacp.dacnet.nic.in/ViewReports.aspx?Input=2&PageId=41 &KeyId=622.
## Annexure
% change
2019-20 Actuals
2020-21
Budgeted
2020-21
Revised
2021-22
Budgeted
(annualised) in
2021-22 over
2019-20
Food subsidy
1,08,688
1,15,570
4,22,618
2,42,836
49%
Subsidy to Food Corporation of India (FCI)
75,000
77,983
3,44,077
2,02,616
64%
Subsidy to states (decentralised procurement)
33,508
37,337
78,338
40,000
9%
Sugar subsidy payable under PDS
180
250
203
220
11%
Assistance to state agencies for intra-state movement of foodgrains and for margin of fair price shops' dealers
1,679
3,983
8,000
4,000
54%
Investment in equity capital of FCI
1,000
1,000
1,000
2,500
58%
Scheme for defraying expenditure on transport and marketing of sugar exports, including handling and processing
551
200
350
2,000
91%
Assistance to sugar mills for the seasons 2017-18 to 2019-20
2,155
700
5,073
1,200
-25%
Scheme for creation and maintenance of buffer stock of sugar
530
200
650
650
11%
Financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity
50
50
150
300
145%
Schemes for development of sugar industries
210
172
176
187
-6%
Scheme for extending soft loan to sugar mills
100
120
418
-
-
Department
1,15,173
1,22,235
4,38,649
2,53,974
48%
Sources: Demand no. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2021-22; PRS.
| Vegetables & | Meats, |
|-----------------|-----------|
| | |
| Cereals | |
| Pulses, nuts, | |
| & oilseeds | fruits |
| Milk & milk | |
| products | |
| Miscellaneous | |
| Rural | |
| 1993-94 | 71.0 |
| 1999-00 | 67.6 |
| 2004-05 | 67.5 |
| 2009-10 | 64.2 |
| 2011-12 | 61.1 |
| Urban | |
| 1993-94 | 58.5 |
| 1999-00 | 55.1 |
| 2004-05 | 56.1 |
| 2009-10 | 55.0 |
| 2011-12 | 51.6 |
Sources: Table T18, Nutritional Intake in India, 2011-12, NSSO; PRS.
Year
Cereals
Pulses
Milk and milk products
Egg, fish, and meat
Other food
Rural
1993-94
69.4
9.8
8.8
3.7
8.4
1999-00
67.4
10.9
9.2
4.0
8.4
2004-05
66.4
9.5
9.3
4.0
10.8
2009-10
64.9
9.1
10.0
4.0
12.0
2011-12
62.5
10.6
10.6
4.7
11.7
Urban
1993-94
59.4
11.5
11.7
5.3
12.1
1999-00
57.0
13.1
12.4
6.0
11.5
2004-05
56.2
11.0
12.3
5.5
15.0
2009-10
56.4
11.3
13.8
5.6
13.0
2011-12
53.7
12.4
13.6
6.4
13.9
Sources: Table T21, Nutritional Intake in India, 2011-12, NSSO; PRS.
| State/ UT | Total consumption from PDS | Offtake (2011-12) | Leakage | % Leakage |
|-------------------|-------------------------------|----------------------|------------|--------------|
| Andhra Pradesh | 36.1 | 40.7 | 4.6 | 11.3% |
| Arunachal Pradesh | 0.8 | 1.0 | 0.2 | 20.0% |
| Assam | 9.5 | 24.4 | 14.9 | 61.1% |
| Bihar | 11.3 | 36.2 | 24.9 | 68.8% |
| Chhattisgarh | 16.7 | 16.7 | 0.0 | 0.0% |
| Goa | 0.4 | 0.8 | 0.4 | 50.0% |
| Gujarat | 4.4 | 15.7 | 11.3 | 72.0% |
| Haryana | 2.2 | 7.3 | 5.1 | 69.9% |
| Himachal Pradesh | 4.9 | 6.3 | 1.4 | 22.2% |
| Jammu and Kashmir | 8.8 | 9.1 | 0.3 | 3.3% |
| Jharkhand | 3.1 | 12.4 | 9.3 | 75.0% |
| Karnataka | 16.2 | 30.1 | 13.9 | 46.2% |
| Kerala | 11.4 | 20.1 | 8.7 | 43.3% |
| Madhya Pradesh | 15.5 | 30.7 | 15.2 | 49.5% |
| Maharashtra | 19.3 | 42.7 | 23.4 | 54.8% |
| Manipur | 0.0 | 2.0 | 2.0 | 100.0% |
| Meghalaya | 0.8 | 2.5 | 1.7 | 68.0% |
| Mizoram | 0.9 | 1.1 | 0.2 | 18.2% |
| Nagaland | 0.1 | 2.0 | 1.9 | 95.0% |
| Odisha | 15.4 | 24.4 | 9.0 | 36.9% |
| Punjab | 3.4 | 8.7 | 5.3 | 60.9% |
| Rajasthan | 10.1 | 29.8 | 19.7 | 66.1% |
| Sikkim | N/A | N/A | - | - |
| Tamil Nadu | 39.5 | 45 | 5.5 | 12.2% |
| Tripura | 2.7 | 3.3 | 0.6 | 18.2% |
| Uttar Pradesh | 43.2 | 82.9 | 39.7 | 47.9% |
| Uttarakhand | 4.6 | 6.6 | 2.0 | 30.3% |
| West Bengal | 13.4 | 43.9 | 30.5 | 69.5% |
| Total | 295.5 | 554.5 | 259 | 46.7% |
Note: Data from National Sample Survey 2011-12. Sources: Table 1, Working Paper 294, "Leakages from Public Distribution System", ICRIER, January 2015; PRS.
| | Year | |
|-------------|---------|-------|
| Procurement | Offtake | |
| % Offtake | | |
| Stocks | | |
| Rice | Wheat | Total |
| 2004-05 | 24.7 | 16.8 |
| 2005-06 | 27.6 | 14.8 |
| 2006-07 | 25.1 | 9.2 |
| 2007-08 | 28.7 | 11.1 |
| 2008-09 | 34.1 | 22.7 |
| 2009-10 | 32 | 25.4 |
| 2010-11 | 34.2 | 22.5 |
| 2011-12 | 35 | 28.3 |
| 2012-13 | 34 | 38.2 |
| 2013-14 | 31.9 | 25.1 |
| 2014-15 | 31.6 | 28 |
| 2015-16 | 34.1 | 28.1 |
| 2016-17 | 36.5 | 23.6 |
| 2017-18 | 37.6 | 30.6 |
| 2018-19 | 42.7 | 35 |
| 2019-20 | 46.1 | 34.1 |
Sources: Database on Indian Economy, Reserve Bank of India, as of February 18, 2021; PRS.
% of Fair Price
Online Allocation
Shops with
State/ UT
Digitisation of
Ration Cards
Aadhaar Seeding
with Ration Cards
of Foodgrains
Computerisation
of Supply Chain
Operational ePoS
Andhra Pradesh
100%
100%
Implemented
Implemented
100%
Arunachal Pradesh
100%
57%
Implemented
-
1%
Assam
100%
0%
Implemented
Implemented
0%
Bihar
100%
76%
Implemented
Implemented
96%
Chhattisgarh
100%
98%
Implemented
Implemented
97%
Goa
100%
98%
Implemented
Implemented
100%
Gujarat
100%
100%
Implemented
Implemented
100%
Haryana
100%
100%
Implemented
Implemented
100%
Himachal Pradesh
100%
100%
Implemented
Implemented
100%
Jharkhand
100%
95%
Implemented
Implemented
100%
Karnataka
100%
100%
Implemented
Implemented
99%
Kerala
100%
100%
Implemented
Implemented
100%
Madhya Pradesh
100%
90%
Implemented
Implemented
100%
Maharashtra
100%
99%
Implemented
Implemented
100%
Manipur
100%
82%
Implemented
-
12%
Meghalaya
100%
0%
Implemented
Implemented
0%
Mizoram
100%
93%
Implemented
-
0%
Nagaland
100%
70%
Implemented
-
23%
Odisha
100%
99%
Implemented
Implemented
100%
Punjab
100%
100%
Implemented
Implemented
100%
Rajasthan
100%
97%
Implemented
Implemented
100%
Sikkim
100%
91%
Implemented
Implemented
99%
Tamil Nadu
100%
100%
Implemented
Implemented
100%
Telangana
100%
99%
Implemented
Implemented
100%
Tripura
100%
100%
Implemented
Implemented
100%
Uttar Pradesh
100%
100%
Implemented
Implemented
100%
Uttarakhand
100%
94%
Implemented
Implemented
65%
West Bengal
100%
80%
Implemented
Implemented
92%
Andaman and Nicobar Islands
100%
98%
Implemented
Implemented
96%
Chandigarh
100%
99%
Direct Benefit
Direct Benefit
NA
Dadra and Nagar Haveli
100%
100%
Implemented
Implemented
100%
Daman and Diu
100%
100%
Implemented
Implemented
100%
Delhi
100%
100%
Implemented
Implemented
0%
Jammu and Kashmir (including Ladakh)
100%
84%
Implemented
-
100%
Lakshadweep
100%
100%
Implemented
NA
100%
Puducherry
100%
100%
Direct Benefit
Direct Benefit
NA
Total
100%
90%
34
28
89%
Sources: Report no. 3, Standing Committee on Food, Consumer Affairs and Public Distribution, Lok Sabha, March 13, 2020; PRS.
Year
Paddy (common)
% increase over last year
Wheat
% increase over last year
2011-12
1,080
8.0%
1,285
14.7%
2012-13
1,250
15.7%
1,350
5.1%
2013-14
1,310
4.8%
1,400
3.7%
2014-15
1,360
3.8%
1,450
3.6%
2015-16
1,410
3.7%
1,525
5.2%
2016-17
1,470
4.3%
1,625
6.6%
2017-18
1,550
5.4%
1,735
6.8%
2018-19
1,750
12.9%
1,840
6.1%
2019-20
1,815
3.7%
1,925
4.6%
2020-21
1,868
2.9%
1,975
2.6%
Sources: Commission for Agricultural Costs and Prices, Ministry of Agriculture and Farmers' Welfare; PRS.
| State | 2017-18 | 2018-19 | 2019-20 | 2020-21 | Total Arrears |
|----------------|------------|------------|------------|------------|------------------|
| Andhra Pradesh | - | 37 | 44 | 91 | 171 |
| Bihar | 0 | 58 | 85 | 411 | 554 |
| Chhattisgarh | 2 | 6 | - | 55 | 63 |
| Goa | - | 2 | - | - | 2 |
| Gujarat | 2 | - | 0 | 1,044 | 1,046 |
| Haryana | - | - | 4 | 670 | 674 |
| Karnataka | - | 11 | 49 | 3,585 | 3,645 |
| Madhya Pradesh | - | - | - | 257 | 257 |
| Maharashtra | 27 | 118 | 0 | 2,030 | 2,176 |
| Odisha | - | - | - | 22 | 22 |
| Punjab | - | - | 137 | 576 | 713 |
| Tamil Nadu | 61 | 74 | 30 | 56 | 221 |
| Telangana | - | - | 12 | 114 | 126 |
| Uttar Pradesh | 34 | - | 1,406 | 7,555 | 8,995 |
| Uttarakhand | 75 | 105 | - | 416 | 596 |
| Total | 200 | 410 | 1,766 | 16,883 | 19,260 |
Sources: Lok Sabha Starred Question No. 113, February 9, 2021; PRS.
## Demand For Grants: Railways
The Railways finances were presented on February 1, 2021, by the Finance Minister Ms. Nirmala Sitharaman along with the Union Budget 2021-22. The Ministry of Railways manages the administration of Indian Railways and policy formation through the Railway Board. Indian Railways is a commercial undertaking of the central government.1 Expenditure of Railways is financed through: (i) its internal resources (freight and passenger revenue, and leasing of railway land), (ii) budgetary support from the central government, and (iii) extrabudgetary resources (primarily borrowings but also includes institutional financing, public-private partnerships, and foreign direct investment).
Railways' working expenses (salaries, staff amenities, pension, asset maintenance) are met through its internal resources. Capital expenditure (such as procurement of wagons, station redevelopment) is financed through extrabudgetary resources, the budgetary support from the central government, and internal resources. This note looks at the proposed expenditure of the Ministry of Railways for the year 2021-22, its finances over the last few years, and issues with the same.
## Highlights
-
Revenue: Railways' revenue for 2021-22 is
estimated at Rs 2,17,460 crore which is an annual increase of 12% over 2019-20.
-
Traffic revenue: Total revenue from traffic
for 2021-22 is estimated to be Rs 2,17,110
crore, an annual increase of 12% over 2019-20. In 2021-22, revenue from both freight and passenger traffic is expected to grow at an annual rate of 10% over 2019-20. In 2020-21, revenue from freight and passenger traffic is estimated to be 16% and 75% less than the budget estimates, respectively.
-
Expenditure: The total revenue expenditure
by Railways for 2021-22 is projected to be Rs 2,10,899 crore, an annual increase of 10% over 2019-20. In 2020-21, revenue expenditure is estimated to be 34% lower than the budget estimate. In 2021-22, capital expenditure is projected at Rs 2,15,058 crore, an annual increase of 21% over 2019-20. In 2020-21, capital expenditure is estimated to be 0.4% higher than the budget estimates.
-
Operating Ratio: In 2021-22, the Railways'
Operating Ratio is estimated to be 96.2%. This is marginally better than the operating ratio of 98.4% in 2019-20.
## 2021-22 Budget Announcements2
Key announcements and proposals related to Railways made in Budget 2021-22 include:
-
National Rail Plan 2030 has been prepared for infrastructure development. Under the plan, following dedicated freight corridors projects will be undertaken: (i) East Coast Corridor from Kharagpur to Vijaywada, (ii) East-West Corridor from Bhusaval to Kharagpur to Dankuni, and (iii) North-South Corridor from Itarsi to Vijaywada.
-
Railways will monetise dedicated freight corridor assets for operation and maintenance.
-
High-density network and highly utilised network routes will be provided with an indigenously developed automatic train protection system that eliminates train collision due to human error.
-
Coaches with enhanced facilities will be introduced on the tourist routes to provide a better experience.
Finances in 2020-21: Impact of COVID3
More than 90% of internal revenue of Railways comes from the core business of running freight and passenger trains. In 2020-21, passenger traffic volume is estimated to decline by 87% over the previous year (Figure 1), as against an increase of 1% estimated at the budget stage. During the initial phase of the national lockdown (March-April 2020), passenger services of Railways were completely suspended.4 Services have since resumed to some extent with provisioning of special trains, however, are yet to return to the pre- COVID level. Freight services continued during the lockdown. However, due to a decline in the economic activities during April-June 2020, the demand for freight services may also have been impacted. In 2020-21, the freight traffic volume is estimated to decline by 7% as compared to the previous year (2019-20), as against an increase of 3% estimated at the budget stage. Consequently, in 2020-21, Railways' own revenue is estimated to be 35% less than the budget estimate (Table 1). A similar decline is estimated in revenue expenditure (34%). This has helped the operating ratio to remain at a level similar to the budget estimate (97% at the revised stage as against 96.3% at the budget stage). Operating ratio is a measure of operational efficiency. It is the ratio of the working expenditure (day-to-day operational expenses of Railways) to the revenue earned from the traffic.
Note: Number for 2020-21 is as per revised estimates. Traffic volume taken in terms of: (i) NTKM-Net Tonne Kilometre (One NTKM is the net weight of goods carried for a kilometre) for freight, and (ii) PKM –Passenger Kilometre (One PKM is when a passenger is carried for a kilometre) for passenger services; Source: Expenditure Profile; Union Budget Documents; PRS.
| Particular | BE | RE |
|--------------------------|----------|----------|
| % change | | |
| From BE | | |
| to RE | | |
| 1. Internal Revenue | 2,25,913 | 1,46,609 |
| Gross Traffic Receipts | 2,25,613 | 1,46,309 |
| Freight revenue | 1,47,000 | 1,24,184 |
| Passenger revenue | 61,000 | 15,000 |
| 2. Budgetary Support | 70,250 | 29,250 |
| 3. Extra Budgetary | | |
| Resources | | |
| 83,292 | 1,28,567 | 54% |
| 4. Special Loan from the | | |
| central government* | | |
| 0 | 79,398 | - |
| Total Receipts | | |
| (1+2+3+4) | | |
| 3,79,455 | 3,83,824 | 1% |
| 5. Revenue Expenditure | 2,19,413 | 1,43,809 |
| Ordinary Working | | |
| Expenses | | |
| 1,62,753 | 1,40,786 | -13% |
| Pension Fund | 53,160 | 523 |
| 6. Capital Expenditure | 1,61,042 | 1,61,692 |
| 7. Appropriation of | | |
| Special Loan* | | |
| 0 | 79,398 | - |
| Total Expenditure | | |
| (5+6+7) | | |
| 3,80,455 | 3,84,899 | 1% |
| Operating Ratio | 96.3% | 97.0% |
Note: *Special Loan from the general revenue of the central government has been provided for COVID-19 related resource gap in 2020-21 and to liquidate adverse balance in Public Account in 2019-20 to Pension Fund. Source: Expenditure Profile; Union Budget 2021-22; PRS.
However, most of the decrease in revenue expenditure is due to less than required appropriation to the pension fund. Against the budget estimate of Rs 53,160 crore, the appropriation to the pension fund is estimated to be Rs 523 crore at the revised stage (99% less). If appropriation were to be as per the requirement, the operating ratio will worsen to 131.5%.5 In 2019-20 also, appropriation to the pension fund was 60% less than the budget estimate (Rs 20,708 crore as against the budget estimate of Rs 50,000
crore). The operating ratio in 2019-20 was 98.4%. If appropriation to the pension fund were to be as per the requirement, the operating ratio in 2019-20 will be 114.2%.5
Usually, Railways runs only a marginal revenue surplus. Hence, it finances most of its capital expenditure from: (i) budgetary support provided by the central government, and (ii) extra budgetary resources. In 2020-21, while capital expenditure target has not seen any notable change from the budget to the revised stage, the budgetary support by the central government is estimated to decline by 58%. As a result, the dependency on extra budgetary resources for financing capital expenditure will increase further. Extra budgetary resources are estimated to be 54% higher than the budget estimate. The Standing Committee on Railways (2020) had observed that the allocation for capital expenditure at the budget stage in 2020-21 (Rs 1,61,042 crore) was about 18% less than the demand (Rs 1,97,295 crore).6 It further observed that these funds may not be adequate for enforcing the ambitious investment plan of Railways as well as expeditious completion of pending projects.6 As per the revised estimates, in 2020-21, Railways will receive a special loan of Rs 79,398 crore from the central government to: (i) meet the resource gap due to COVID-19 in 2020-21, and (ii) meet pension fund obligations for 2019-20.5
## Overview Of Finances3 Railways' Revenue Internal Resources
Railways earns its internal revenue primarily from passenger and freight traffic. In 2019-20 (latest actuals), freight and passenger traffic contributed to about 65% and 29% of the internal revenue, respectively. In 2021-22, Railways expects to earn 63% of its internal revenue from freight and 28% from passenger traffic. The remaining 9% will be earned from other miscellaneous sources such as parcel service, coaching receipts, and sale of platform tickets. For details, please see Table 10 in the Annexure.
Freight traffic: In 2019-20, Railways generated most of its freight revenue from the transportation of coal (48%), followed by iron ore (10%), and cement (8%) (see Figure 2). Railways mostly transports bulk freight, and the freight basket has mostly been limited to raw materials for certain industries such as power plants, and the iron and steel plants. In 2021-22, Railways expects to earn Rs 1,37,810 crore from goods traffic, an annual increase of 10% over 2019-20.
While the share of coal in freight volume has been slowly coming down (from 43% in 2015-16 to 37% in 2021-22), its contribution to revenue has remained consistent (45% in 2015-16 as well as 2021-22). This may be indicative of an increasing dependency on coal for revenue as compared to other items in the freight basket.
Passenger traffic and revenue: Passenger traffic is broadly divided into two categories: suburban and non-suburban traffic. Suburban trains are passenger trains that cover short distances of up to 150 km and help move passengers within cities and suburbs. Majority of the passenger revenue (94.4% in 2019-20) comes from the non-suburban traffic (or the long-distance trains). In 2021-22, Railways expects to earn Rs 61,000 crore from passenger traffic, an annual increase of 10% over 2019-20. In 2021-22, passenger traffic is estimated to grow at an annual rate of 2% over 2019-20. Note that due to the prevalence of COVID-19, there may be uncertainties in the return of passenger traffic volume to its normal level in 2021-22, this could impact these estimates.
## Challenges In Raising Revenue
Over the last few years, there has been a decline in the growth of both rail-based freight and passenger traffic (see Figure 4). This affects Railways' earnings from its core business of running freight and passenger trains. In 2021-22, Railways estimates a decline in some of its key revenue earning traffic. For example, coal traffic is estimated to register an annual decrease of 5% over 2019-20. Overall freight traffic is estimated to have an annual increase of only 1% over 2019-20.
Note: *The growth rate for 2021-22 BE is compounded annual growth rate over 2019-20. The figure for 2020-21 is not shown as it was a non-standard year. Sources: Expenditure Profile, Union Budget Documents; PRS.
Railways is also steadily losing freight traffic share to other modes of transport. The share of Railways in total freight traffic has declined from 89% in 1950-51 to 30% in 2011-12.7 During the same period, the share of roads on total freight traffic increased from 11% to 61%. As per the draft National Rail Plan 2030, the share of Railways in total freight traffic stood at 27% in 2020.8 NITI Aayog (2018) had highlighted shortfall in carrying capacity and lack of price competitiveness as some of the reasons for the decline in freight share.9 It further observed that since passenger and freight traffic run on the same tracks, India has not been able to increase speed or capacity in a significant manner when compared to global benchmarks.9 Note that various dedicated freight corridors have been planned by Railways for improvement in facilities for freight. The freight basket is also limited to a few commodities, most of which are bulk in nature (see Figure 5). For example, in 2019-20, coal contributed to about 48% of freight revenue. Therefore, any shift in transport patterns of any of these bulk commodities (coal, cement, iron ore) could affect Railways' finances significantly.10
## Freight Cross-Subsidises Passenger Traffic
In 2017-18, passenger and other coaching services incurred losses of Rs 46,025 crore, whereas freight operations made a profit of Rs 45,923 crore.10 Hence, all of the profit earned from freight operations was utilised to compensate for the loss from passenger and other coaching services. The total passenger revenue during this period was Rs 48,643 crore. This implies that losses in the passenger business were about 94.6% of its revenue. Therefore, in 2017-18, for every one rupee earned from its passenger business, Indian Railways ended up spending Rs 1.95. As of 2017- 18, except AC third tier and AC chair car services, all other classes of passenger services registered operational losses (Table 2). NITI Aayog (2016) noted that such crosssubsidisation has resulted in high freight tariffs.11 It also observed (2018) that high freight tariffs are one of the reasons for a sub-optimal share of Railways in freight.9
| AC-1st Class | -127 | -176 | -139 | -165 |
|-----------------|---------|---------|---------|---------|
| 1st Class | -70 | -58 | -53 | -35 |
| AC 2 Tier | -496 | -463 | -559 | -604 |
| AC 3 Tier | 882 | 898 | 1,041 | 739 |
| AC Chair car | -142 | -6 | 118 | 98 |
| Sleeper Class | -8,510 | -8,301 | -9,313 | -11,003 |
| Second class | -7,642 | -8,570 | -10,025 | -11,524 |
| Ordinary Class | -11,674 | -13,238 | -14,648 | -16,568 |
| EMU suburban | | | | |
| services | | | | |
| -4,679 | -5,125 | -5,324 | -6,184 | |
Source: CAG; PRS.
Losses in passenger services are primarily caused due to: (i) passenger fares being lower than the costs, and (ii) concessions to various categories of passengers (senior citizens, National award winners etc.).11 Railways classifies these provisions as social service obligations. The Committee on Restructuring Railways (2015) had observed that several decisions on the Indian Railways such as increase in fares, introduction of new trains, and provision of halts are not taken based on commercial considerations.12 The Standing Committee on Railways (2020) had recommended that both freight and passenger fares should be rationalised prudently.6 It observed that any fare increase needs to take into account the competition from other transport modes.6 The Committee recommended that the social service obligations of Railways should be revisited.6
## Budgetary Support From Central Government
The central government supports Railways in the expansion of its network and investments. Until recently, this budgetary support from the central government used to be the primary source of funds for capital expenditure for Railways. However, since 2015-16, an increasingly higher proportion of the capital expenditure is being met through extra budgetary resources. In 2019-20, 53% of the capital expenditure was met through extrabudgetary resources. In 2021-22, the gross budgetary support from the central government is proposed at Rs 1,07,300 crore. This is an annual increase of 26% over 2019-20 (Rs 67,842 crore).
Extra Budgetary Resources Extra Budgetary Resources include market borrowings such as financing from banks, institutional financing, and external investments. External investments in Railways could be in the form of public-private partnerships (PPPs), joint ventures, or market financing by attracting private investors to potentially buy bonds or equity shares in Railways. Railways mostly borrows funds through the Indian Railways Finance Corporation (IRFC). IRFC borrows funds from the market (through taxable and tax-free bond issuances, term loans from banks and financial institutions), and then follows a leasing model to finance the rolling stock assets and project assets of Indian Railways. In the past few years, borrowings have increased sharply to bridge the gap between the available resources and expenditure. In 2021-22, Rs 1,00,258 crore is estimated to be raised through extra-budgetary resources, which is an annual increase of 13% over 2019-20. The Committee on Restructuring Railways (2015) had observed that increased reliance on borrowings could further exacerbate the financial situation of Railways.12
CAGR
(19-20 to
2019-20 Actuals
2020-21
Revised
2021-22
Budget
21-22)
67,842
29,250 1,07,300
26%
Gross Budgetary Support Internal Resources
1,321
3,875
7,500
138%
78,902
83,292
1,28,567
13%
Extra Budgetary Resources Total
1,48,064 1,61,692
2,15,058
21%
Sources: Expenditure Profile, Union Budget 2021-22; PRS.
Note: RE - Revised Estimates, BE - Budget Estimates. Sources: Expenditure Profile, Union Budget 2021-22; PRS.
## Capital Expenditure
The total proposed capital expenditure for 2021-22 is Rs 2,15,058 crore. This is an annual increase of 21% over 2019-20. Majority of the capital expenditure will be financed through the budgetary support from the central government (50%) followed by extra budgetary resources (47%). For the first time since 2015-16, the budgetary support from the central government will be higher than the borrowings. Railways will fund only 3% of this capital expenditure from its own resources. Railways' capability to fund its capital expenditure from its own revenue stream has been declining (Figure 6). Over the last few years, actual capital expenditure has been considerably less than the budget estimates (Figure 7).
Source: Expenditure Profile; Union Budget Documents; PRS.
Debt repayment Railways pays lease charges to IRFC. The lease charges have a principal and interest component. The principal component of the lease charges forms part of the capital expenditure of Railways. In 2021-22, allocation towards payment of principal component of lease charges is Rs 19,459 crore (9% of the total capital expenditure), an annual increase of 36% over 2019-20 (Rs 10,462 crore). CAG (2020) had observed that ideally, the principal component of lease charges should be paid from the Capital Fund.10 Capital Fund is a dedicated fund of Railways to repay the principal component of market borrowing and financing works of capital nature.6 However, no allocation has been made to this fund since 2015-16.
The Ministry of Railways noted that appropriation to the Capital Fund is made from net revenue after meeting obligatory revenue expenditure.6 The Ministry further observed that no appropriation is being made to the Capital Fund due to inadequate internal resources.6 Hence, gross budgetary support provided by the central government has been used to pay the principal component of lease charges. CAG (2020) observed that utilisation of gross budgetary support for repayment of lease charges is not a healthy trend as it deprives Railways of additional investments in capital works.10 CAG (2019) had observed that if obligations towards IRFC have to be met from budgetary support, the government might as well borrow directly from the market, as the cost of borrowings would be lower.10
## Future Capital Expenditure Requirements
The Ministry of Railways has prepared the National Rail Plan 2030 for augmenting its infrastructure during the 2021-51 period.8 The draft of the National Rail Plan 2030 (NRP), released in December 2020, noted that Railways could be left with a financing gap of over two lakh crore rupees for its capital expenditure projects in next five years.8 This relates to the funding gap for projects under the annual work plan of Railways and the National Infrastructure Pipeline prior to the National Rail Plan.8 The National Infrastructure Pipeline is a plan of infrastructure projects worth Rs 102 lakh crore between 2019-20 and 2024-25. It includes projects worth Rs 13.7 lakh crore for Railways pertaining to track infrastructure, terminal infrastructure, rolling stock, and urban public transport (Table 4). The draft National Rail Plan envisages an additional capital expenditure worth Rs 5.8 lakh crore during the 2021-26 period (Table 5).8 However, note that there may be some overlap in projects envisaged under the National Rail Plan and the National Infrastructure Pipeline.8
Railways under the National Infrastructure Pipeline (in Rs crore)
Year
Amount
2019-20
1,33,387
2020-21
2,62,465
2021-22
3,08,800
2022-23
2,73,831
2023-24
2,21,209
2024-25
1,67,870
Total
13,67,563
Source: Draft National Rail Plan, Ministry of Railways; PRS.
The draft National Rail Plan estimates that on average, funds available with Indian Railways for capital expenditure over the next five years will be: (i) about Rs 60,000 crore per annum as gross budgetary support, (ii) about Rs 7,000 crore per annum from internal resources, and (iii) a maximum of Rs 1,30,000 crore per annum from extra budgetary resources.8 It noted that it would be challenging to fund the projects envisaged under the National Rail Plan from internal resources due to persistently high operating ratio.8
Head
2021
-26
2026
-31
2031
-41
2041
-51
Total
Dedicated Freight Corridors
-
1.5
0.5
0.3
2.3
High Speed Rail Corridors
-
5.1
2.9
7.0
15.0
Network improvements
1.3
0.7
2.2
1.8
6.0
Flyovers and Bypasses
0.8
-
-
-
0.8
Terminals
0.6
0.2
0.1
0.04
0.9
Rolling Stock
3.1
1.7
3.6
4.8
13.2
Total
5.8
9.2
9.3
13.9
38.2
Source: Draft National Rail Plan, Ministry of Railways; PRS.
## Revenue Expenditure
In 2021-22, Indian Railways is estimated to spend a significant portion of its money on staff (45% of its working expenditure), followed by expenses on pension fund (26%), and fuel (13%). In 2021-22, the total revenue expenditure by Railways is estimated at Rs 2,10,899 crore which is an annual increase of 10% over 2019-20.
## Staff Wages And Pension
Staff wages and pension constitute about 70% of the Railways' estimated revenue expenditure in 2021-22. For 2021-22, the expenditure on staff is estimated at Rs 93,676 crore, which is an annual increase of 4% over 2019-20. The Committee on Restructuring Railways (2015) had observed that the Railways' expenditure on staff is extremely high and unmanageable.12 It also sees a significant jump every few years due to revisions by the Pay Commission. Allocation to the Pension Fund is estimated at Rs 53,300 crore, which is an annual increase of 6.4% over 2018-19. As discussed earlier, appropriation to the pension fund was much less than required in 2019-20 and 2020-21 (60% and 99% less than the budget estimate, respectively). The Standing Committee on Railways (2017) had observed that the pension bill may increase further in the next few years, as about 40% of the Railways staff was above the age of 50 years in 2016-17.13
The Standing Committee on Railways (2020) noted that the new pension scheme implemented in 2004 to reduce the pension bill will show results only around 2034-35.6 The Committee recommended that feasibility of bearing a part of pension liabilities from the general revenue of the central government till 2034-35 should be explored.6 Further, employee costs (including pensions)
reduces Railways' ability to generate a surplus and allocate resources towards operations.12 The Committee on Restructuring Railways (2015) had recommended that Railways should rationalise its manpower, and make the organisation more business-oriented, amenable to private participation while retaining an optimal level of functional specialisation within.12 Railways has taken steps to enhance private participation in the operation of passenger train services. For instance, proposals have been invited for private participation in the operation of passenger train services over 109 origin-destination pairs of routes through the introduction of 151 trains.14 The private entity will be responsible for financing, procuring, operating, and maintaining these trains.
## Lease Charges
The interest component of lease charges forms part of the revenue expenditure of Railways. In 2021- 22, Rs 15,648 crore is estimated to be spent on the interest component of lease charges, which is an annual increase of 23% over 2019-20 (Rs 10,391 crore).
Fuel and electricity In 2021-22, the expense on fuel and electricity is estimated to be Rs 26,085 crore, an annual decrease of 9% over 2019-20 (Rs 31,573 crore).
## Appropriation To Funds Depreciation Reserve Fund (Drf)
Appropriation to the DRF is intended to finance the costs of new assets replacing old ones.6 In 2021- 22, appropriation to DRF is estimated at Rs 800 crore. In the last few years, appropriation to DRF has declined (Figure 8). In recent years, appropriation has also been less than the budget estimates (Figure 9). As per CAG (2020), at the end of 2018-19, the value of over-aged assets pending for replacement using this fund was estimated to be Rs 96,403 crore.10 CAG (2020) observed that provision to DRF for replacement and renewal of assets has been inadequate.10
The Ministry of Railways observed that the decline in appropriation to DRF is due to major part of renewal and replacement works having safety implications being financed through Rashtriya Rail Sanraksha Kosh (RRSK).6 RRSK was created in 2017-18 to finance critical safety-related works of renewal, replacement, and augmentation of assets.6 The fund has a corpus of one lakh crore rupees over five years (partially funded by the central government). Railways is required to allocate Rs
5,000 crore annually to RRSK during these five years.6 The Ministry observed that RRSK will not continue beyond 2021-22.6 Beyond 2021-22, all renewal and replacement works will be financed from DRF.6 This could lead to an increase in appropriation to DRF in the coming years.
## Rashtriya Rail Sanraksha Kosh (Rrsk)
In 2021-22, Railways has allocated Rs 5,000 crore towards RRSK. However, the actual appropriation to RRSK has been less than the requirement in all three years between 2018-19 and 2020-21.
| Year | Budget | Actual |
|--------------------|-----------|-----------|
| % change | | |
| (Budget to Actual) | | |
| 2018-19 | 5,000 | 3,024 |
| 2019-20 | 5,000 | 201 |
| 2020-21 RE | 5,000 | 2,000 |
| 2021-22 BE | 5,000 | - |
Note: RE: Revised Estimates, BE: Budget Estimates.
Sources: Expenditure Profile; Union Budget Documents; PRS.
The Ministry of Railways mentioned that the desired level of appropriation to RRSK has not been made due to adverse resource position.6 The Standing Committee on Railways (2020) observed that the purpose of RRSK is gradually being eroded due to non-appropriation of required funds from internal resources of Railways.6
## Expenditure On Safety
The expenditure on safety includes revenue expenditure such as repairs and maintenance of tracks and wagons. It also includes capital expenditure such as track renewals, bridge works, creating level crossings, and road over bridges and under bridges (Table 7). In 2021-22, Railways estimates to spend Rs 78,716 crore towards safety, an annual increase of 6.6% over 2019-20. In 2021-
22, the capital expenditure towards safety-related works is estimated to register an annual increase of 18.4% over 2019-20.
2019-20 Actuals
2020-21 Revised
2021-22 Budget
CAGR
(19-20 to
21-22)
Revenue
48,194
43,933
49,206
1.0%
Capital
21,047
26,094
29,510
18.4%
Total
69,241
70,027
78,716
6.6%
Sources: Expenditure Profile, Union Budget 2021-22; PRS.
## Revenue Surplus And Operating Ratio
Railways' surplus is calculated as the difference between its total internal revenue and its revenue expenditure (this includes working expenses and appropriation to pension and depreciation funds). Operating Ratio is the ratio of the working expenditure (expenses arising from day-to-day operations of Railways) to the revenue earned from traffic. Therefore, a higher ratio indicates a poorer ability to generate a surplus that can be used for capital investments such as laying new lines or deploying more coaches. The CAG (2019) noted that in 2017-18, the decline in revenue surplus led to a decline in appropriation to the various funds managed by Railways from its internal resources.10 As mentioned earlier, a similar trend has been seen in 2019-20 and 2020-21 where appropriation to the pension fund, DRF, and RRSK was reduced. In the last decade, Railways has been struggling to generate a higher surplus. Consequently, the Operating Ratio has consistently been higher than 90% for more than a decade. In 2021-22, Railways expects to generate a surplus of Rs 6,561 crore. This is an annual increase of 103% over 2019-20 (Rs 1,389 crore). In 2019-20, the operating ratio worsened to 98.4% as compared to the estimated ratio of 95%. The CAG (2020) had noted that if certain advances for 2019-20 were not included in receipts for 2018-19, the operating ratio for 2018-
19 would have been 101.77%.10 If appropriation to the pension fund were to be as per the requirement, the operating ratio for 2019-20 and 2020-21 will be 114.2% and 131.5%, respectively.5
## Network Expansion And Modernisation
Railways has not been able to meet some key physical targets for expansion and modernisation in recent years. It has missed its budget targets in all three years between 2017-18 and 2019-20 for: (i) construction of new lines, and (ii) gauge conversion (Table 8). In 2018-19 and 2019-20, Railways also missed targets for electrification of railway lines.
3 Overview of Receipts and Expenditure, https://www.indiabudget.gov.in/doc/eb/railstat1.pdf; Railway Expenditure, https://www.indiabudget.gov.in/doc/eb/railstat2.pdf, Investment: Part A Financials (Budget + IEBR), Investment: Part B Physical Targets, Investment: Part C Revenue Earning Traffic Performance Targets, https://www.indiabudget.gov.in/doc/eb/railstat4.pdf, Railway Budget at a Glance, Expenditure Profile, Union Budget 2021-22. 4 "Cancellation of all train Services by Indian Railways in the wake of COVID-19", Press Information Bureau, Ministry of Railways, March 22, 2020. 5 Notes on Overview of Receipts and Expenditure- Railways, Expenditure Profile, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/railstat1.pdf . 6 "3rd Report: Demand for Grants (2020-21) - Ministry of Railways", Standing Committee on Railways, 2020-21, http://164.100.47.193/lsscommittee/Railways/17_Railways_3.pd f. 7 "India Transport Report: Moving India to 2032: Volume II, National Transport Development Policy Committee 2013, June 17, 2014. http://planningcommission.gov.in/sectors/index.php?sectors=Na tional%20Transport%20Development%20Policy%20Committee %20(NTDPC).
Note that Railways aims to achieve 100% electrification of all broad gauge routes by 2023.6 As per revised estimates for 2020-21, the achievement will be less than the budget target on almost all the indicators listed in Table 8. While examining the progress of construction of new lines, the Standing Committee on Railways (2020) had observed that revision in allocation towards capital expenditure requires reworking of priorities and rescheduling of activities, which leads to tardy progress in the construction of new lines.6
| Indicator | 17-18 | 18-19 | 19-20 |
|-----------------|----------|----------|----------|
| 20-21 | | | |
| RE | | | |
| -49% | -52% | -28% | -40% |
| Construction of | | | |
| new lines | | | |
| (Route Kms) | | | |
| -50% | -40% | -32% | -33% |
| Gauge | | | |
| conversion | | | |
| (Route Kms) | | | |
| -45% | 20% | -45% | -26% |
| Doubling of | | | |
| lines (Route | | | |
| Kms) | | | |
| Wagons | | | |
| (vehicle units) | | | |
| -48% | -20% | -24% | -17% |
| Track renewals | | | |
| (Route Kms) | | | |
| 12% | 7% | 15% | -20% |
| Electrification | | | |
| (Route Kms) | | | |
| 2% | -12% | -37% | 0% |
Note: RE: Revised Estimates. Source: Expenditure Profile; Union Budget Documents; PRS. 8 The Draft National Rail Plan, Ministry of Railways, December 2020, http://indianrailways.gov.in/NRP- %20Draft%20Final%20Report%20with%20annexures.pdf. 9 "Strategy for New India @75", NITI Aayog, November 2018, https://niti.gov.in/writereaddata/files/Strategy_for_New_India.p df. 10 Report No. 8 of 2020: Railways Finances, Financial Audit, For the year ended March 2019, Report of the Comptroller and Auditor General of India, July 20, 2020, https://cag.gov.in/uploads/download_audit_report/2020/Report %20No.%208%20of%202020_English- 05f75b32f3ecdc0.39910555.pdf. 11 "Reviewing the Impact of "Social Service Obligations" by Indian Railways", NITI Aayog, http://niti.gov.in/writereaddata/files/document_publication/Socia l-Costs.pdf.
12 Report of the Committee for Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board, Ministry of Railways, June 2015, http://www.indianrailways.gov.in/railwayboard/uploads/director ate/HLSRC/FINAL_FILE_Final.pdf.
13 "13th Report: Demands for Grants (2017-18)", Standing Committee on Railways, March 10, 2017, http://164.100.47.193/lsscommittee/Railways/16_Railways_13.p df. 14 "Ministry of Railways invites Request for Qualifications (RFQ) for private participation for operation of passenger train services over 109 Origin Destination (OD) pairs of routes", Press Information Bureau, Ministry of Railways, July 1, 2020.
## Appendix I: Railways Budget 2021-22 Summary Table 9: Railways Receipts And Expenditure For 2021-22 (In Rs Crore)
% Change
(20-21 BE to
Actuals 2019-20
2020-21
Budget
2020-21
Revised
2021-22
Budget
CAGR (19-20
to 21-22 BE)
20-21 RE)
Receipts
1
Passenger
50,669
61,000
15,000
-75%
61,000
10%
2
Freight
113,488
147,000
124,184
-16%
137,810
10%
3
Other traffic sources
10,200
17,613
7,125
-60%
18,300
34%
4
Gross Traffic Receipts (1+2+3)
174,357 225,613
146,309
-35%
217,110
12%
5
Miscellaneous
338 300
300
0%
350
2%
6
Total Internal Revenue (4+5)
174,695
225,913
146,609
-35%
217,460
12%
Expenditure
7
Ordinary Working Expenses
150,211
162,753
140,786
-13%
154,399
1%
8
Appropriation to Pension Fund
20,708
53,160
523
-99%
53,300
60%
9
Appropriation to Depreciation Reserve Fund
400
800
200
-75%
800
41%
10
Total Working Expenditure (7+8+9)
171,319
216,713
141,509
-35%
208,499
10%
11
Miscellaneous
1,786
2,700
2,300
-15%
2,400
16%
12
Total Revenue Expenditure (10+11)
173,105
219,413
143,809
-34%
210,899
10%
13
Net Surplus (6-12)
1,590
6,500
2,800
-57%
6,561
103%
14
Appropriation to Development Fund
1,389
1,500
800
-47%
1,561
6%
15
Appropriation to Capital Fund
-
- -
-
-
16
Appropriation to Debt Service Fund
17
Appropriation to Railway Safety Fund
-
- -
-
18
Appropriation to Rashtriya Rail Sanraksha Kosh
201
5,000
2,000
-60%
5,000
399%
19
Operating Ratio
98.4%
96.3%
97.0%
96.2%
Note: RE - Revised Estimate, BE - Budget Estimate. Source: Expenditure Profile; Union Budget 2021-22; PRS.
## Explanatory Notes Performance Parameters
1.
'Net Surplus' represents the excess of revenue receipts over revenue expenditure (Railways' internal revenue and expenditure).
2.
'Operating Ratio' is the ratio of operating expenses to receipts. A lower ratio indicates a higher surplus availability for investments.
## Railway Funds
3.
Depreciation Reserve Fund - Finances the cost of new assets replacing old assets including the cost of any improved features. Appropriation to this fund is made on the recommendations of the Railway Convention Committee (RCC).
4.
Pension Fund - Finances all pension payments to retired Railway staff.
5.
Rashtriya Rail Sanraksha Kosh - Finances critical safety-related works of renewal, replacement and augmentation of assets.
CAGR
(19-20 to 21-22
2019-20
2020-21
Revised
2021-22
Budget
% share in
2021-22 BE
BE)
Commodity
NTKM
Earning
NTKM
Earning
NTKM
Earning
NTKM
Earning
NTKM
Earning
Coal
293,051
54,427 218,020
49,776 267,019
61,485
-5%
6%
37%
45%
Iron Ore
50,321
10,966 57,991
12,990 59,508
14,072
9%
13%
8%
10%
Cement
63,933 8,745
64,630 9,482 67,440
10,794
3%
11%
9%
8%
Other Goods
53,631 7,389
60,407 7,946 59,064 8,942
5%
10%
8%
6%
Foodgrains
52,641 6,154
74,344 9,397 64,860 8,866
11%
20%
9%
6%
Pig Iron & finished steel
45,029 7,287
41,693 6,863 47,070 8,772
2%
10%
7%
6%
Fertilisers
47,162 5,808
49,720 6,618 49,305 7,358
2%
13%
7%
5%
Container Service
56,686 2,554
50,837 5,447 56,032 6,518
-1%
60%
8%
5%
Petroleum & Lubricants
30,774 5,928
30,330 5,803 29,992 6,088
-1%
1%
4%
4%
Miscellaneous earnings
-
2,016
-
7,979
-
2,518
-
12%
0%
2%
Raw Material for Steel Plants
14,437 2,216
12,520 1,882 14,661 2,397
1%
4%
2%
2%
Total
707,665
113,488 660,492
124,184 714,951
137,810
1%
10%
-
Notes: NTKM - Net Tonne Kilometre (One NTKM is the net weight of goods carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates. Source: Expenditure Profile; Union Budget 2021-22; PRS.
##
CAGR
2019-20
2020-21
Revised
2021-22
Budget
(2019-20 to 2021-22 BE)
PKM
Earning
PKM
Earning
PKM
Earning
PKM
Earning
Total Suburban
137,130
2,843
17,189
345
157,435
3,746
7%
15%
Non-Suburban
AC First class
1,696
453
481
230
1,860
581
5%
13%
AC Sleeper
22,771
3,779
5,257
1,561
24,137
4,879
3%
14%
AC 3 Tier
95,593
12,370
23,518
5,444
91,149
12,778
-2%
2%
Executive Class
617
180
42
22
520
277
-8%
24%
AC Chair Car
10,669
1,754
1,456
428
10,537
2,023
-1%
7%
First Class (M&E)
20
13
27
21
16%
26%
First Class (ordinary)
330
16
2
0
378
21
7%
16%
Sleeper Class (M&E)
267,629
13,552
56,836
5,149
304,243
18,596
7%
17%
Sleeper Class (ordinary)
1,849
90
1
0
972
55
-27%
-22%
Second Class (M&E)
383,858
12,563
30,518
1,787
365,063
13,957
-2%
5%
Second Class (Ordinary)
128,576
3,057
817
34
142,806
4,066
5%
15%
Total Non-Suburban
913,608
47,826
118,928
14,655
941,692
57,254
2%
9%
Total
1,050,738
50,669
136,117
15,000
1,099,127
61,000
2%
10%
Notes: PKM - Passenger Kilometre (One PKM is when a passenger is carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates.
## Demand For Grants: Home Affairs
The Ministry of Home Affairs is responsible for matters concerning internal security, centre-state relations, central armed police forces, border management, and disaster management. In addition, the Ministry makes certain grants to eight Union Territories (UTs). The Ministry was also the nodal authority for managing the COVID-19 pandemic.1,2,3,4,5 In this note we analyse the expenditure trends and budget proposals of the Ministry for 2021-22, and discuss some issues across the sectors administered by the Ministry.
## Overview Of Finances
The Ministry has been allocated Rs 1,66,547 crore in Union Budget 2021-22. This is an 11% annualised increase from the actual expenditure in 2019-20. The budget for the Ministry constitutes 4.8% of the total expenditure budget of the central government in 2021-22 and is the third highest allocation.6 Figure 1 shows the expenditure of the Ministry between 2011 to 2021. Since 2019, expenditure of the Ministry also includes grants to the newly formed UTs of Jammu and Kashmir, and Ladakh. The average annual growth rate in the expenditure over the last ten years has been 13.5%.
Note: Figures for 2020-21 are Revised Estimates and for 2021- 22 are Budget Estimates. Sources: Union Budget 2011-12 to 2021-22; PRS.
Figure 2 shows the budget allocation and actual expenditure between 2011-12 and 2021-22, and the percentage of utilisation of funds. Revised estimates for expenditure in 2020-21 were 10.7% lower than budgeted expenditure. This is the first estimate since 2015-16, where expenditure of the Ministry has been lower than the budgeted estimates.
Note: Figures for 2020-21 are Revised Estimates. Sources: Union Budget 2011-22; PRS.
Of the Ministry's total budget for 2021-22, (i) 62% of the expenditure is on police, (ii) 32% is on grants made to all UTs, and (iii) 6% is on miscellaneous items such as disaster management, rehabilitation of refugees and migrants, census, and Cabinet. Table 1 shows the allocations to these three heads.
(Annualised)
Major
Head
2021-22
Budgeted
2019-20 Actuals
2020-21
Revised
(Actuals
2019-20 to
BE 2021-22)
Police
1,02,027
92,849
1,03,803
1%
UTs
15,128
51,282
53,026
87%
Others
17,822
5,257
9,718
-26%
Total
1,34,978
1,49,388
1,66,547
11%
Note: BE - Budget Estimates. Other expenditure within the Ministry includes disaster management and administrative matters. Sources: Union Budget 2021-22; PRS.
Police: Expenditure on police includes allocation towards the Central Armed Police Forces, the Intelligence Bureau, and the Delhi Police. For 2021-22, Rs 1,03,803 crore has been allocated towards police. This is an increase of 1% over the actual expenditure on police in 2019-20. Grants and loans to Union Territories: In 2021-
22, Rs 53,026 crore has been allocated for grants and loans for the administration of UTs. This is 87% higher than the actual expenditure for 2019-20 (Rs 1,03,803 crore). This is primarily because of the allocation to the new UTs of Jammu and Kashmir, and Ladakh (post reorganisation of the state in 2019). Allocation to these two UTs is 69% of the total amount allocated to all the UTs. Allocations under this head include grants to five UTs without legislatures (Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, and Ladakh), and three UTs with legislatures (Delhi, Puducherry, and Jammu and Kashmir). Allocation towards each of the UTs is detailed in the Annexure.
Other items: Other items include disaster management, rehabilitation of refugees and migrants, and administrative matters (relating to the census, the secretariat and Cabinet). In 2021-22, these items have been allocated Rs 9,718 crore. This is 26% lower than the actual expenditure in
2019-20. Further, the allocation for 2021-22 is
85% higher than the revised estimates for 2020-21 (Rs 5,257 crore). This is primarily due to an increase in allocation towards conducting the Census of India 2021 from Rs 755 crore in 2020-21 (as per the revised estimates) to Rs 3,768 crore in 2021-22.
Managing the COVID-19 pandemic
Key measures taken by the Ministry of Home Affairs to manage the COVID-19 pandemic include:
-
The National Disaster Management Authority (which is under the Ministry) imposed a 21-day national lockdown in March 24, 2020 to contain the spread of COVID-19. All inter-state movement except those categorised as essential services were stopped. The lockdown has been extended twelve times, with the latest extension till February 28, 2021.5 Gradual relaxations on movement and services have been introduced in the extended lockdowns. The Ministry has stated that the capacity and health infrastructure such as availability of ICU beds and ventilators have been ramped up during the lockdown. The Standing Committee on Home Affairs (2021) observed that the sudden imposition of the lockdown had severe social and economic impact.1
-
The Ministry constituted 11 Empowered Groups on different aspects of COVID-19 management in March, 2020. These included: (i) medical emergency planning, (ii) augmenting human resource and capacity building, and (iii) technology and data management.4
-
Inter-Ministerial central teams were established in West Bengal, Maharashtra, Madhya Pradesh and Rajasthan to examine issues including: (i) supply of essential commodities, (ii) preparedness of health infrastructure, and (iii) conditions of relief camps.2
-
The Ministry allowed states to spend up to 50% of the funds in State Disaster Response Funds to contain COVID-19. The permission applies towards expenditure on: (i) quarantine, sample collection and screening facilities, and (ii) procurement of essential equipment/labs for COVID-19.3
## Analysis Of Key Areas Of Expenditure Police
In 2021-22, Rs 1,03,803 crore has been budgeted for police expenditure. This includes allocations to various police organisations, including: (i) the Central Armed Police Forces, primarily responsible for border protection and internal security, (ii) the Delhi Police, responsible for maintenance of law and order in the national capital territory, and (iii) the Intelligence Bureau, which is the nodal agency for collection of domestic intelligence. Besides these, funds are also allocated for modernisation of police, development of police, and border infrastructure.
The budget for police is estimated to increase by
1% in 2021-22 over the revised estimates of 2020- 21.
Change
(Annualised)
2020-21
Revise
Department
2019-20
Actual
2021-22
Budget
d
(Actuals
2019-20 to
BE 2021-22)
Central Armed Police Forces
75,672
73,590
77,838
1%
Delhi Police*
8,424
8,242
7,909
-3%
Police Infrastructure
4,063
1,816
3,612
-6%
Modernisation of police
4,637
1,864
2,803
-22%
Intelligence Bureau
2,388
2,434
2,839
9%
Border Infrastructure
2,156
1,495
2,130
-0.6%
Others**
4,688
3,408
6,672
19%
1,03,20
1,03,80
Total
1,02,02
8
2
3
0.9%
Notes: *Includes expenditure on traffic management and communication network, upgradation of infrastructure and training, and induction of technology. ** Others includes schemes for safety of women, education and research, criminology and forensic science, Land Port Authority of India, and India Reserve Battalion. BE - Budget Estimates. Sources: Union Budget 2021-22; PRS.
Figure 3 shows the trend in police expenditure over the last ten years (2012-22). Expenditure on police has increased at an average annual rate of 9%.
Note: Revised Estimates used for 2020-21 and Budget Estimates for 2021-22. Actuals used for all other years. Sources: Union Budgets 2011-21; PRS.
Figure 4 shows the difference between the budget estimates and actuals expenditure for Police in percentage from 2011-22. Since 2015-16, the Ministry has been overspending on police than the estimates at the budget stage. However, in 2020- 21, revised estimates were 12% lower than the budgeted estimates.
Note: Figures for 2020-21 are Revised Estimates.
Sources: Union Budgets 2011-22; PRS.
## Central Armed Police Forces
The Ministry is responsible for the Central Armed Police Forces which is composed of seven forces: (i) Central Reserve Police Force (CRPF) which assists in internal security and law and order, (ii) Central Industrial Security Force (CISF) which protects vital installations (like airports) and Public Sector Undertakings, (iii) National Security Guards (NSG) which is a special counter-terrorism force, and (iv) four border guarding forces, namely Border Security Force (BSF), Indo-Tibetan Border Police (ITBP), Sashastra Seema Bal (SSB) and Assam Rifles (AR). Table 9 in the Annexure discusses expenditure on each of the CAPFs in the past ten years. The CAPFs are estimated to receive a total allocation of Rs 77,838 crore in 2021-22. This
accounts for 75% of the expenditure on police. The highest expenditure is towards the CRPF which will receive 34% (Rs 26,198 crore) of the total allocation for CAPF. This is an increase from the
2020-21 revised expenditure (Rs 24,788 crore) and the actual expenditure in 2019-20 (Rs 25,133 crore). The second highest expenditure is towards the Border Security Force which has been allocated 27% of the budget, i.e., Rs 20,730 crore. The allocation is an increase from the 2020-21 allocation (Rs 19,378 crore) and the actual expenditure in 2019-20 (Rs 20,254 crore).
## Vacancies And Delayed Recruitment
As of January 2020, 10% of sanctioned posts were vacant in the CAPFs. The seven CAPFs had a total of 1,05,486 vacancies.7 26% of total vacancies are from the BSF and 24% are from the CRPF. Table 3 shows the percentage of vacancies as of January 2020.
CAPFs
Sanctioned
Strength
Actual
Strength
% of vacancies
CRPF
3,24,340
2,99,410
8%
BSF
2,65,173
2,37,750
10%
CISF
1,62,541
1,41,650
13%
SSB
97,244
78,809
19%
ITBP
89,567
82,631
8%
AR
66,408
60,524
9%
NSG
10,844
9,857
9%
Total
10,16,117
9,10,631
10%
Note: CRPF- Central Reserve Police Force; BSF- Border Security Force; CISF-Central Industrial Security Force; SSB- Sashastra Seema Bal; ITBP-Indo Tibetan Border Police; AR- Assam Rifles; NSG-National Security Guard.
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2020; PRS.
The Standing Committee on Home Affairs (2019) noted that continued vacancies were observed in the Central Armed Police Forces.8,9 Further vacancies for doctors, cooks and other staff were not being filled in a timely manner which impacts service and living conditions for personnel. The Standing Committee (2018) observed that there was a lack of foresight, planning, and estimation of future vacancies, leading to delay in recruitment.10 Delays in recruitment lead to a failure to regularise training cycle by forces.8 It has recommended the Ministry to proactively identify vacancies and report the same to recruitment agencies in a timebound manner.
## Service And Living Conditions
The Standing Committee on Home Affairs (2018, 2019) has highlighted shortfall in housing, poor quality of food, and lack of access to clean drinking water among the issues in living conditions for CAPFs.8,9,10 The Standing Committee (2019) while discussing the housing shortage for the four border-guarding CAPFs noted that 39% of the 2.7 lakh sanctioned houses were available. Another 2019 report also stated that only 12% of houses sanctioned for CRPF were available.8 Within the available housing, there is a further shortage of housing for non-gazetted officers. The government states that this is primarily due to difficulty in land acquisition and limited executive power at the local level.
Housing shortage has also been highlighted as an issue for other CAPFs.9 The issue of food quality has also been highlighted. In case of border-guarding CAPFs, the Standing Committee (2019) has observed that it is difficult to ensure a regular supply of nutritious food due to postings in remote areas. However, it has recommended to ensure routine inspection of quality and supply of food.8 For other CAPFs, the Committee recommends establishing location specific systems of procurement and provision of food. It further suggested implementing inbuilt quality checks through external food inspections.9 Access to clean drinking water for border-guarding forces is also a challenge. The government estimates that 82% of ITBP, 78% SSB, 43% of AR, and 16% of BSF out-posts have not been provided with potable water. The Committee has recommended the Ministry to take requisite steps and for the forces to ensure inspections to ensure continued access to water for personnel.9,10
## Training And Management
All CAPFs have set up training institutes to meet their training requirements and imparting professional skills on specialised topics. The Estimates Committee (2020) recommended that the contents of training should include latest technologies such as IT and cyber security alongside conventional training.11 In terms of organisational management, the Standing Committee (2019) highlighted the issue of stagnation in promotion among personnel of the CAPFs. For example, in the ITBP, a constable gets promoted to head constable in 12-13 years, against the required period of five years.10 In the case of CISF, the same promotion takes 22 years.12 In this context, the Standing Committee (2018) recommended that cadre review of the CAPFs must be expedited to ensure that promotions take place in a timely manner.12
## Modernisation Of Capfs
Figure 5 shows the distribution between revenue and capital expenditure for the seven CAPFs between 2012-13 and 2021-22. Capital expenditure is allocation for procurement of machinery and equipment, and motor vehicles, whereas revenue expenditure is on items such as salaries, arms and ammunition, and clothing. Note that the capital component does not include funds for construction.
Note: Figures for 2020-21 are Revised Estimates and for 2021-
22 are Budget Estimates. Figures for all other years are actuals.
Sources: Union Budget 2012-22; PRS.
The average capital expenditure between 2012-13 and 2021-22 was 2% of the total expenditure on CAPFs. Between 2013-18, the actual capital expenditure was Rs 726 crore out of a budgeted amount of Rs 1,128 crore.11 The Estimates Committee (2018) stated that the procurement process under the Modernisation Plan was cumbersome and time-consuming.13 It recommended that bottlenecks in procurement should be identified and corrective action taken. Further, it stated that the Ministry and CAPFs should hold negotiations with ordnance factories and manufacturers in public or private sector to ensure uninterrupted supply of equipment.13 The 15th Finance Commission has recommended establishing the Modernisation Fund for Defence and Internal Security to bridge the gap between budgetary requirements and allocation for capital outlay in defence and internal security. The fund will have an estimated corpus of Rs 2.4 lakh crore over 2021-26.14
## Mobility And Connectivity In Border Areas
Mobility of border guarding forces has been identified as an issue affecting their operational efficiency.10 There is a shortage of 4,210 km of road at the Indo-Pakistan and Indo-Bangladesh border where BSF personnel are located. There is also a lack of adequate all-weather roads in remote areas where personnel from the Assam Rifles are posted.10 The Standing Committee on Home Affairs (2019) has also noted that there is no provision for mobile connectivity in many border outposts, and had recommended that the Ministry provide optical fibre cable connectivity and expand telecom connectivity. Table 4 shows the expenditure towards border infrastructure and management. This includes allocations for maintenance of border works, border check posts and out posts, and capital outlays for various items including barbed wire fencing, construction of roads, and hi-tech surveillance on Indo-Bangladesh and Indo-Pakistan borders. For 2021-22, Rs 2,130 crore has been budgeted for border infrastructure and management. Further, note that, the revised estimates in 2020-21 (Rs 1,495 crore) were 31% lower than the actual expenditure in 2019-20.
Change
(Annualised)
Department
2019-20 Actuals
2020-21
Revised
2021-22
Budget
(Actuals
2019-20 to
BE 2021-22)
217
206
209
-2%
Maintenance and Border Check post Capital Outlay
1,939
1,289
1,921
-0.5%
Total
2,156
1,495
2,130
-1%
Sources: Union Budget 2021-22; PRS.
Figure 6 shows the total expenditure on border infrastructure and management between 2011 and 2021. The expenditure has increased at an annual average growth rate of 5% during this period.
Sources: Union Budgets 2011-22; PRS. Note: Revised Estimates used for 2020-21 and Budget Estimates used for 2021-22. Figures for all other years are actuals.
## Delhi Police
An amount of Rs 7,909 crore has been allocated to the Delhi Police in the 2021-22 budget. This is an annualised decrease of 3.1% compared to the actual expenditure for 2019-20.
## Quality Of Investigation
The number of solved and unsolved cases of the Delhi Police between 2015-2018 is in Table 5.
## By The Delhi Police (2015-2018)
| Cumulative | Cumulative |
|---------------|---------------|
| Year | |
| % of cases | |
| unsolved | |
| Cases | |
| reported | |
| Cases | |
| solved | |
| 2015 | 1,91,377 |
| 2016 | 2,09,519 |
| 2017 | 2,33,580 |
| 1,25,668 | 37,390 |
| 2018 | |
| (up to July, | |
| 2018) | |
Sources: Starred Question No. 227, Rajya Sabha, Ministry of Home Affairs, August 8, 2018; PRS.
The Standing Committee on Home Affairs in its report on the functioning of Delhi Police (2014), had recommended that investigation should be separated from law-and-order duties. This is primarily because police personnel were found to be overburdened by multi-faceted tasks including administration and personal security. Further, the Committee suggested that since investigation requires legal expertise, the training module of Delhi Police must include advanced courses on law and jurisprudence.15 The Committee also observed that extraneous pressure on investigating agencies was impacting quality of investigations and causing delays in resolution of cases.15
## Vacancies
As of January 2020, 11% of the total sanctioned posts in the Delhi Police were vacant.16 The vacancies between 2015-20 are given in Table 6.
% of
Year
Sanctioned
strength
Actual
strength
vacancies
2015
82,242
77,083
6%
2016
82,224
76,348
7%
2017
84,417
82,979
2%
2018
86,531
74,712
14%
2019
91,963
82,190
11%
2020
91,962
82,195
11%
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2015-20; PRS.
The Standing Committee on Home Affairs (2014) stated that steps should be taken to assess the actual requirement of police strength to improve the police-population ratio.15 It recommended that the Delhi Police may take the assistance of the Bureau of Police Research and Development to improve the operational efficiency of the organisation.
## Corruption And Transparency
The Standing Committee on Home Affairs (2014) stated that public perception and anecdotal evidence pointed towards widespread corruption and rent-seeking within the Delhi Police.15 The Committee recommended several measures including: (i) establishing proactive vigilance squads and strict follow up actions to investigations, (ii) prompt enquiry into complaints of corruption, and (iii) mandatory filing of returns for assets by officers of every rank. The central government has stated that vigilance units of the Delhi Police strictly monitor police personnel and are empowered to take suo-moto action. Helplines to complain or inform about instances of bribery or corruption have also been established by the Ministry in 2014.17
## Intelligence Bureau
The Intelligence Bureau (IB) is responsible for the collection of intelligence within India, and is the primary agency for counter-intelligence. An amount of Rs 2,839 crore has been allocated to the IB in 2021-22, which is 9% higher than the actual expenditure in 2019-20 (Rs 2,388 crore).
## Multi Agency Centre
The government set up a Group of Ministers (GoM) in 2000, to comprehensively review the national security framework.18 The GoM recommended that the Ministry of Home Affairs should put in place arrangements for intelligence sharing, in which the IB would play the lead role, along with representatives of the state and central police forces.18 Based on these recommendations, the Multi Agency Centre was set up in the IB, for collating and sharing intelligence with all other security agencies.18 Further, Subsidiary Multi Agency Centres have been set up at the state-level to ensure better coordination between intelligence agencies.18 The Standing Committee on Home Affairs (2017) observed that state agencies have made lower contribution in the overall inputs received by the Multi Agency Centre.18 It recommended that the Ministry should hold consultations with states to find out the reasons for this low level of contribution. Further, the Committee recommended that there should be a mechanism to perform validity checks on information obtained from other agencies, before it is shared with the Multi Agency Centre.18
## Modernisation Of Police Forces
For 2021-22, the central government has made allocations towards four items related to modernisation of police force. These are: (i) Modernisation of State Police Forces Scheme; (ii)
the Crime and Criminal Tracking Network and Systems (CCTNS) scheme; (iii) Security Related Expenditure (SRE) scheme; and (iv) Special Infrastructure Scheme (SIS) for Left Wing Areas.
The Modernisation of State Police Forces Scheme is a centrally sponsored scheme. The cost-sharing pattern between centre and states is: (i) 90:10 for north-eastern and Himalayan states, and (ii) 60:40 for all other states.19 Rs 2,803 crore has been allocated for the modernisation of police forces in 2021-22, which is 22% lower than the actual expenditure for 2019-20. Revised estimates for 2020-21 are 40% lower than the actual expenditure for 2019-20.
Change
(Annualised)
20-21
Revised
Major Head
19-20
Actuals
21-22
Budget
(Actuals
2019-20 to
BE 2021-22)
3,707
1,757
2,135
-24%
SRE and SIS for LWE areas
930
107
669
-15%
Modernisation of State Police Forces and CCTNS Total
4,637
1,864
2,803
-22%
Sources: Union Budget 2021-22; PRS. BE - Budget Estimates, RE - Revised Estimates.
of police forces between 2010-22.
Sources: Union Budgets 2010-22; PRS. Notes: Revised Estimates used for 2020-21 and Budget Estimates used for 2021-22. Actuals used for all other years.
The expenditure has increased at an average annual rate of 3% in this period.
## Shortage Of Infrastructure
Funds from the modernisation scheme are utilised for improving police infrastructure through construction of police stations, and provision of modern weaponry, surveillance, and communication equipment. Other objectives under the scheme include upgradation of training infrastructure, police housing, and computerisation of records.11 The Comptroller and Auditor General (CAG) has highlighted lapses in the implementation of the modernisation scheme in various states. For instance, in case of Jharkhand, a 2020 CAG report found that shortage of modern weapons increased between 2013-2018.20 Further, distribution of arms and ammunitions in the field was not uniform and impacted performance. Resource mapping was also found to be inadequate. For instance, 91% of communication sets used by the police were found to be analogue, which were susceptible to interception.20
An audit of Karnataka for the period 2012-17, found shortages of weapons ranging between 37%
and 72% for various types of arms. The audit also found that, as of March 2017, all communication sets available with the Karnataka police were obsolete.21 In the case of Maharashtra, an audit was carried out for the period 2011-12 to 2016-17. 22 The CAG found a shortage of 45% for modern weaponry in the state. Further, only 8% of the planned construction work under the scheme (including police stations), was completed between 2011-16.22 The Standing Committee (2020) noted that there was under-utilisation of funds and recommended measures to improve capacity of implementing agencies. The Committee has also highlighted that a major share of funds earmarked for the purpose of modernisation of police forces went towards improving infrastructure. It recommends allocating more funds for enabling mandatory training of police forces to develop people friendly attitudes, and for maintaining equipment bought for further use.23 The importance of training with efforts for modernisation has also been iterated by the CAG in its reports.20,21
## Disaster Management
The Ministry of Home Affairs is the nodal ministry for handling all disasters other than drought, which is handled by the Ministry of Agriculture.24 Disaster management includes capacity building, mitigation, and response to natural calamities and man-made disasters. Allocation towards various items is shown in Table 8. Currently, centre and state governments share costs for disaster management initiatives. The cost-sharing pattern between centre and states is: (i) 90:10 for north-eastern and Himalayan states, and (ii) 75:25 for all other states. State disaster management funds have a corpus of Rs 1.6 lakh crore (centre's share is Rs 1.2 lakh crore. In 2021, the 15th Finance Commission (2021) recommended retaining this pattern.14
## Disaster Management (In Rs Crore)
Change
(Annualised)
20-21
Actuals
Department
19-20
Actuals
Revised
21-22
Budget
2019-20 - BE
2021-22)
934
1,033
1,209
14%
National Disaster Response Force
146
106
72
-30%
Disaster management infrastructure
225
99
296
15%
National Cyclone Risk Mitigation Project Other schemes
128
122
113
-6%
Total
1,433
1,360
1,691
9%
Note: BE - Budget Estimates. Sources: Union Budget 2021-22; PRS.
## National Disaster Response Force
The National Disaster Response Force (NDRF) is a specialised force that is responsible for disaster response and relief. For 2021-22, the budget estimate for the NDRF is Rs 1,209 crore, which is 14% higher than the actual expenditure for 2019- 20. The Standing Committee on Home Affairs (2018) noted that there was a standard operating procedure for deployment of NDRF during a disaster, according to which, states can requisition for forces.28 However, states may be unable to make optimal assessments of the requirements which could lead to competing demands for mobilisation of forces in disaster-stricken areas. The Committee therefore recommended that the National Disaster Management Authority make an independent assessment of the number of battalions required to be deployed. This would ensure rational assessment of needs and optimal prepositioning of NDRF.28
The 15th Finance Commission (2021) has recommended sub-dividing allocations to the NDRF encompassing the complete disaster management cycle: (i) response and relief, recovery and reconstruction, (ii) preparedness and capacity building. It recommends ensuring flexibility for reallocation within these sub-windows. The Commission further recommends providing central assistance to states on a graded cost-sharing pattern. States must contribute: (i) 10% of assistance for grants of up to Rs 250 crore, (ii) 20% of assistance for grants between Rs 250-500 crore, and (iii) 25% of assistance for grants of more than Rs 500 crore.14
## National Cyclone Risk Mitigation Project
The National Cyclone Risk Mitigation Project (NCRMP) was launched by the Ministry of Home Affairs with the aim of minimising vulnerability in states and UTs that are prone to cyclone hazards. Key objectives of the project include: (i) improving early warning dissemination systems, and (ii) construction and maintenance of cyclone shelters. For 2021-22, a budgetary allocation of Rs 296 crore has been made to this project. This is a 15% increase from the actual expenditure for 2019-20. The Standing Committee (2018), noted that forecasting the rapid intensification of cyclones (as in the case of cyclone Ockhi), is an area of concern.
It stated that the rapid intensification of cyclones is no longer a rare phenomenon due to global warming, and recommended that the existing capacity for advanced cyclone warning needs to be bolstered.28 The Standing Committee (2020) further said that commissioning of early-warning dissemination systems in states including Odisha and Andhra Pradesh may increase pre-cyclone preparedness.21 However, even for projects commissioned in 2015, construction had not begun, which may have adverse impacts during the cyclonic season.23
## National Disaster Response Fund
The Disaster Management Act, 2005, mandates the creation of a National Disaster Response Fund and State Disaster Response Funds. Relief assistance is provided to states from the National Disaster Response Fund in case of severe natural calamities, where the State Disaster Response Fund is insufficient to cover the required expenditure.25
##
efforts to fight and contain spread of COVID-19 effectively", Press Information Bureau, Ministry of Home Affairs, April 20, 2020. 3 "Items and norms of assistance under State Disaster Response Fund (SDRF) for containment measures of COVID-19", Ministry of Home Affairs, September 23, 2020, https://www.mha.gov.in/sites/default/files/MHALetterdt230920 20.pdf. 4 "Constitution of the Empowered Groups under the Disaster Management Act, 2005", Ministry of Home Affairs, 2020, https://mha.gov.in/sites/default/files/MHA%20Order%20on%20 %20Disaster%20Management%20Act%202005.pdf. 5 Order No. 40-3/2020-DM-I(A), Ministry of Home Affairs, January 29, 2021, https://www.mha.gov.in/sites/default/files/MHAorderdt_270120 21.pdf.
Allocations to the National Disaster Response Fund are made by the Ministry of Finance, though it is administratively controlled by the Ministry of Home Affairs.25 For the year 2021-22, a budgetary allocation of Rs 1,209 crore has been made to the fund, which is a 38% decrease from the actual expenditure in 2019-20 (Rs 934 crore). The National Disaster Response Fund is financed through the National Calamity Contingency Duty (NCCD) imposed on specified goods under central excise and customs.26
In order to receive assistance from the NDRF, state governments must submit a memorandum indicating the damage and requirement of funds.27
On receipt of the memorandum, an Inter- Ministerial Central Team (IMCT) is constituted which will submit a report after an on-the-spot assessment of the damage. Thereafter, a High- Level Committee approves the amount of relief to be released from the NDRF. The Standing Committee on Home Affairs (2018) noted that there was significant difference between funds sought by state governments and amounts approved by the High-Level Committee.28 In most cases the shortfall was more than 70%, and in some cases more than 95%. According to the Committee, a reason for this shortfall could be that by the time the IMCT reaches the disaster-affected area, the signs of disaster are on the verge of diminishing. Therefore, it recommended that the IMCT should make a preliminary visit to the disaster affected areas, within one week of the disaster. Further, a joint preliminary damage assessment should be done with the state governments concerned.28
8 "220th Report: Action Taken by Government on the Recommendations/Observations Contained in the Two Hundred Fifteenth Report on Working Conditions in Non-Border Guarding Central Armed Police Forces (Central Industrial Security Force, Central Reserve Police Force and National Security Guard), Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, December 11, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/122/220_2020_9_12.pdf. 9 221st Report: Action Taken by Government on the Recommendations/Observations Contained in the Two Hundred Fourteenth Report on Working Conditions in Border Guarding Forces (Assam Rifles, Sashastra Seema Bal, Indo-Tibetan Border Police and Border Security Force), Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, December 11, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/122/221_2020_12_16.pdf.
10 "214th Report: Working Conditions in Border Guarding Forces (Assam Rifles, Sashastra Seema Bal, Indo-Tibetan Border Police and Border Security Force)", Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/107/214_2018_12_15.pdf. 11 "2nd Report: Action taken by the Government on the recommendations contained in Twenty-Eight Report (Sixteenth Lok Sabha) of the Committee on Estimates", Lok Sabha, 2020, http://164.100.47.193/lsscommittee/Estimates/17_Estimates_2.p df. 12 "215th Report: Working Conditions in Non-Border Guarding Central Armed Police Forces (Central Industrial Security Force, Central Reserve Police Force, and National Security Guard)", Department-Related Standing Committee on Home Affairs, Rajya Sabha, December 12, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/107/215_2018_12_15.pdf. 13 "28th Report: Central Armed Police Forces and Internal Security Challenges- Evaluation and Response Mechanism",Committee on Estimates, Lok Sabha, March 16,
2018, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_28. pf 14 Report for 2021-26, 15th Finance Commission, February, 2021, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC%20Complete_Report.pdf. 15 "176th Report: The Functioning of Delhi Police", Department- Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, February 19, 2014, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/15/176_2016_6_17.pdf. 16 Data on Police Organisations, 2020, Bureau of Police Research and Development, Ministry of Home Affairs, October, 2020, https://bprd.nic.in/WriteReadData/userfiles/file/2021010112010 11648364DOPO01012020.pdf. 17 "184th Report: Action Taken by Government on the recommendations/observations contained in the 176th Report on the Functioning of Delhi Police", Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, December 12, 2015, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/15/189_2018_7_15.pdf. 18 "203rd Report: Border Security: Capacity Building and Institutions", Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, April 11, 2017,
https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/15/203_2017_4_11.pdf. 19 Unstarred Question No. 1017, Ministry of Home Affairs, Rajya Sabha, February 10, 2021, https://pqars.nic.in/annex/253/AU1017.pdf.
20 Audit Report on General, Social and Economic Sectors for year ending in March, 2018, CAG, 2020, https://cag.gov.in/uploads/download_audit_report/2017/Report %202%20of%202020%20GSES%202017- 18,%20Jharkhand,%20Eng-05f6c7ef871cbb3.88824404.pdf. 21 Audit Report (General and Social Sector) for the year ended March 2017 for Karnataka, Comptroller and Auditor General, https://cag.gov.in/sites/default/files/audit_report_files/Report_N o_2_of_2018_- _General_and_Social_Sector_Government_of_Karnataka.pdf. 22 Audit Report (General and Social Sector) for the year ended March 2016 for Maharashtra, Comptroller and Auditor General, https://cag.gov.in/sites/default/files/audit_report_files/Report_N o.4_of_2017_%E2%80%93_General_and_Social_Sector_Gover nment_of_Maharashtra.pdf. 23 "224th Report: Demand for Grants", Ministry of Home Affairs, Standing Committee on Home Affairs, March, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/122/224_2020_3_15.pdf. 24 Report of the Fourteenth Finance Commission, 2014, http://www.thehinducentre.com//multimedia/archive/02321/14th _Finance_Commi_2321247a.pdf. 25 "Operational Guidelines for Constitution and Administration of the National Disaster Response Fund", Ministry of Home Affairs, September 28, 2010, http://doe.gov.in/sites/default/files/Guidelines%20for%20Nation al%20Disaster%20Response%20Fund%20%28NDRF%29.pdf. 26 "71st Report: Central Assistance for Disaster Management and Relief", Standing Committee on Finance, Lok Sabha, http://164.100.47.193/lsscommittee/Finance/16_Finance_71.pdf. 27 National Disaster Management Plan, Government of India,2016, https://ndma.gov.in/images/policyplan/dmplan/National%20Dis aster%20Management%20Plan%20May%202016.pdf. 28 "211th Report: The Cyclone Ockhi- Its Impact on Fishermen and damage caused by it", Department-Related Parliamentary Standing Committee on Home Affairs, April 2, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/
ReportFile/15/101/211_2018_7_11.pdf.
% change BE
21-22 /RE 20-21
% of total
allocation
2019-20 Actuals
2020-21
Revised
2021-22
Budget
Jammu and Kashmir
-
30,757
30,757
0%
58%
Ladakh
-
5,958
5,958
0%
11%
Andaman and Nicobar
4,949
4,825
5,317
10%
10%
Chandigarh
4,144
4,155
4,661
12%
9%
Puducherry
1,601
1,703
1,730
2%
3%
Lakshadweep
1,297
1,350
1,441
7%
3%
Dadra and Nagar Haveli and Daman and Diu
2,115
1,419
2,204
55%
4%
Delhi
1,022
1,116
958
-14%
2%
Total
15,128
51,282
53,026
3%
Sources: Union Budget 2021-22; PRS. Note: BE - Budget Estimates, RE - Revised Estimates.
Department
2012-13
2013-14
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
CRPF
9,983
11,124
14,327
16,804
18,560
21,974
25,133
24,788
26,198
BSF
9,095
10,294
12,996
14,909
16,019
18,652
20,254
19,378
20,730
CISF
3,798
4,301
3,773
6,563
7,614
9,115
10,421
10,677
10,342
ITBP
2,506
3,051
5,662
4,641
5,078
5,699
6,625
6,150
6,567
AR
2,901
3,276
3,848
4,724
5,031
5,694
5,632
5,580
6,161
SSB
2,179
2,719
3,417
4,045
4,641
5,420
6,382
5,950
6,480
NSG
500
498
569
697
968
1,007
1,113
955
1,235
Departmental Accounting
58.4
66.18
77.6
91.7
95
110
111
112
126
Total
31,020
35,329
44,668
52,474
58,006
67,670
75,671
73,590
77,838
Sources: Union Budget 2012-21; PRS. Notes: Revised Estimates used for 2020-21 and Budgeted Estimates used for 2021-22; Actuals used for all other years. CRPF: Central Reserve Police Force; BSF: Border Security Force; CISF: Central Industrial Security Force; AR: Assam Rifles; ITBP: Indo Tibetan Police Force; SSB: Sashastra Seema Bal; NSG: National Security Guard.
2012
2013
2014
2015
2016
2017
2018
2019
2020
Sanctioned strength
8.9
9.1
9.3
9.5
9.7
11.5
10.8
11
10.1
Actual strength
7.6
8.3
8.7
8.9
9
9.9
10
10
9.1
% of vacancies
14%
9%
6%
7%
7%
14%
7%
9%
10%
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2012-20; PRS. Note: Figures for each year are as of January 1 of that year.
| State | Releases from NDRF | % of total releases |
|-------------|-----------------------|------------------------|
| West Bengal | 1000 | 62% |
| Odisha | 500 | 31% |
| Rajasthan | 69 | 4% |
| Manipur | 27 | 2% |
| Meghalaya | 17 | 1% |
| Tripura | 13 | 1% |
| Total | 1624 | |
Sources: Allocation and Release of Funds from SDRF/ NDRF during 2021-22, Disaster Management Division, Ministry of Home Affairs; PRS
## Demand For Grants: Rural Development
The Ministry of Rural Development is responsible for the development of and welfare activities in rural areas. It aims at increasing livelihood opportunities, providing social safety nets, and improving infrastructure for growth. The Ministry has two departments: (i) rural development, and (ii) land resources. This note presents the budgetary allocations to the Ministry for 2021-22, and analyses various issues related to the schemes implemented by it.
## Allocation In Union Budget 2021-22
The Ministry of Rural Development has the fourth highest allocation across Ministries in 2021-22, at Rs 1,33,690 crore.1 Table 1 gives the trend in budgetary allocation towards the Ministry over the past three years.
Annualised
Department
Actuals
19-20
RE
20-21
BE
21-22
change
(Actuals
19-20 to
BE 21-22)
Rural Development
1,22,098
1,97,377
1,31,519
4%
Land Resources
1,524
1,252
2,170
19%
Total
1,23,622
1,98,629
1,33,690
4%
Note: BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2021-22, Ministry of Rural Development; PRS.
In 2021-22, the Department of Rural Development has been allocated Rs 1,31,519 crore, accounting for 98% of the Ministry's allocation. This is a 4% annual increase over the actual expenditure in
2019-20. On the other hand, the Department of Land Resources has an allocation of Rs 2,170 crore, which is a 19% annual increase over the actual expenditure in 2019-20. In 2020-21, the Department was allocated Rs 2,251 crore, which decreased by Rs 999 crore (44%) at the revised estimates stage.
## Department Of Rural Development
The **Department of Rural Development** under the Ministry is responsible for implementation of schemes targeted at poverty reduction, provision of basic services, employment generation, rural infrastructure, and habitation development. In the past 10 years, the expenditure of the Department has seen an annual growth of 11.3%. In 2020-21, the Department was allocated Rs 1,20,147 crore, which increased by Rs 77,229 crore (64%) at the revised estimates stage. This was due to increased expenditure on schemes such as MGNREGS and the National Social Assistance Programme, to combat the effects of the Covid-19 pandemic. Thus, in 2021-22 the estimated expenditure is 33% less than the revised estimates for 2020-21.
Note: Values for 2020-21 and 2021-22 are revised estimates and budget estimates respectively.
Sources: Union Budgets 2012-13 to 2021-22; PRS.
The Standing Committee on Rural Development (2020-21) noted that the allocation for the Department has not increased substantially over the past few years.2 It highlighted that the dearth of funds might be an obstacle to the progress of the schemes under the Department and recommended the Department to seek increased fund allocation.2
## Major Schemes Under The Department
In 2021- 22, 56% of the Department's expenditure is estimated to be on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). This is followed by the rural component of Pradhan Mantri Awaas Yojana - Gramin (PMAY-G) (15%), and Pradhan Mantri Gram Sadak Yojana (PMGSY) (11%). Figure 2 shows the composition of expenditure of the Department.
Note: MGNREGS is Mahatma Gandhi National Rural Employment Scheme, PMAY-G is Pradhan Mantri Awaas Yojana - Gramin, PMGSY is Pradhan Mantri Gram Sadak Yojana, NRML is National Rural Livelihood Mission, NSAP is National Social Assistance Program, Others include Rurban Mission, and projects like socio-economic and caste survey. Sources: Demands for Grants 2021-22, Department of Rural Development: PRS.
| Scheme | |
|-----------|----------------------------|
| Actuals | |
| 19-20 | |
| RE | |
| 20-21 | |
| BE | |
| 21-22 | 19-20 to |
| BE 21-22) | |
| MGNREGS | 71,687 1,11,500 73,000 |
| PMAY-G | 18,116 19,500 19,500 |
| PMGSY | 14,017 13,706 15,000 |
| NRLM | 9,022 |
| NSAP | 8,692 42,617 |
| Rurban | |
| Mission | |
| 304 | 372 |
| Others | 259 |
| Total | 1,22,098 1,97,377 1,31,519 |
Note: BE is budget estimate and RE is revised estimate. Others include projects like management support to rural development programs, socio-economic and caste census survey and centre's expenditure. Sources: Demands for Grants 2021-22, Department of Rural Development, Ministry of Rural Development; PRS.
-
MGNREGS continues to account for more than half of the Department's budget. The funds allocated to it saw a marginal 1% annualised increase over the actual expenditure in 2019-20.
-
Funds allocated to the National Rural Livelihood Mission (NRLM) has seen an annualised increase of 23% over the actual expenditure in 2019-20.
## Financial Allocations Comparing Outcomes Mahatma Gandhi National Rural Employment Guarantee Scheme **(Mgnregs)**
MGNREGS seeks to provide guaranteed 100 days of wage employment per year to every rural household whose adult members volunteer to do unskilled manual work.3
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 specifies a list of works that can be undertaken to generate employment. These are related to water conservation, land development, construction, and agriculture, among
others. The scheme at present covers all districts of the country with the exception of those with
100% urban population.4
In 2021-22, the scheme has been allocated Rs 73,000 crore. The budget allocation for the scheme was increased by Rs 40,000 crore in 2020- 21 (under the Atmanirbhar Bharat package) to address the need for more work during the Covid- 19 pandemic including for returning migrant workers during the lockdown.5
Budgeted versus actual expenditure: Figure 3
shows the expenditure on the scheme from 2012- 13 to 2021-22.
70.0% 60.0% 50.0% 40.0% 30.0%
20.0%
10.0% 0.0%
2021-22 are budgeted estimates. Sources: Union Budgets from 2012-13 to 2021-220-21; PRS.
The actual expenditure on the scheme from 2015- 16 to 2019-20 has been higher than the budget estimates for the year. However, in 2020-21, the revised estimate is 81% higher than the budgeted estimate to provide for employment initiatives during the Covid-19 pandemic. Table 3 shows the trends in allocation and actual expenditure on MGNREGS over the past nine years.
MGNREGS (Rs crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2012-13 | 33,000 | 30,273 | 92% |
| 2013-14 | 33,000 | 32,992 | 100% |
| 2014-15 | 34,000 | 32,977 | 97% |
| 2015-16 | 34,699 | 37,341 | 108% |
| 2016-17 | 38,500 | 48,215 | 125% |
| 2017-18 | 48,000 | 55,166 | 115% |
| 2018-19 | 55,000 | 61,815 | 112% |
| 2019-20 | 60,000 | 71,687 | 119% |
| 2020-21 | 61,500 | 1,11,500 | 181% |
| 2021-22 | 73,000 | - | - |
Note: The 'actuals' figure for 2020-21 is the revised estimate. Sources: Union Budgets from 2012-13 to 2021-22; PRS.
Demand for work: MGNREGS is a demand driven scheme. From 2015-16 to 2019-20, the average demand from registered households was 42% (in the range of 40% to 43%). However, in 2020-21, the demand for work under the scheme increased to 51% of the registered households. The share of households that were provided employment as compared to the ones demanding employment, reduced slightly from 90% in 2015- 16 to 87% in 2020-21.6
Employment provided: The scheme guarantees
100 days of employment. However, from 2016-17 to 2020-21, the average number of days of employment has been 47 days, with a maximum of 51 days of employment in 2018-19. As MGNREGS is a demand driven scheme, this could be either due to lower demand for such work (signalling sufficient opportunities to obtain work in the open market) or not providing employment when demanded.
Year
Employment days / household
| 2016-17 | | 46 |
|-------------------------------------------|-----|-------|
| 2017-18 | | 46 |
| 2018-19 | | 51 |
| 2019-20 | | 48 |
| 2020-21 | | 46 |
| Sources: MGNREGS MIS Report 2018-19; PRS. | | |
Work Completed: The scheme also aims to create durable assets to improve rural livelihood through the work done while providing employment. As indicated in figure 4, the percentage of work completed under the scheme has been falling for the last four years. In 2020-21 (as of February
2021) percentage of work completed was at 14%.
PRS.
Delayed payments: MGNREGS stipulates that wage payments must be made within 15 days of the date of closure of the muster roll.4 Delays in payments are calculated from the 16th day onwards. Table 5 shows the percentage of delayed payments out of the total payments over the past six years. It also indicates the number of days by which payments were delayed. As shown in the table, the proportion of delayed payments has reduced from 63% in 2015-16 to 2% in 2020-21. The Economic Survey 2018-19, stated that the implementation of direct benefit transfers has helped in reducing delays in payments.7
Composition of delayed payments
Year
% Delayed
Payment
(%)
>90 days
61-90
31-60
15-30
2015-16
63.1%
9.5%
8.1% 19.0%
26.5%
2016-17
56.6%
14.2%
8.4% 15.9%
18.1%
2017-18
15.5%
1.8%
0.9%
3.6%
9.2%
2018-19
10.5%
1.9%
0.7%
2.0%
5.8%
2019-20
6.2%
1.8%
0.7%
1.1%
2.6%
2020-21
2.0%
0.3%
0.2%
0.4%
1.1%
Sources: MGNREGS MIS Report, Delayed Payments (as on February 8, 2021; PRS.
Unemployment allowance: Currently under MGNREGS, unemployment allowance (if employment is not provided by the state government within 15 days of application) is paid from state government funds.3 A CAG report (2013) on the scheme states that this puts an additional burden on the states.8 It suggested that the Ministry of Rural Development should consider partial reimbursement of unemployment allowance.8 Further, the Standing Committee on Rural Development (2020) noted that in the financial year 2019-20, only four states had paid unemployment allowances to the tune of Rs 12,000 (in total).2 It expressed doubts on whether all other job seekers were provided jobs in the stipulated time and noted this as states not providing the unemployment allowance.2 It recommended that the Department of Rural Development devise measures to oversee the implementation of the provision of unemployment allowance.2
Indexing of minimum wage rate: The minimum wage rate under the scheme is fixed by the central government on the basis of the Consumer Price Index-Agricultural Labourers (CPI-AL). If this is not available, the minimum wage rate fixed by the states for agricultural labourers is considered.9 The Standing Committee on Rural Development (2020) noted that the wage rate under MGNREGS is much less than the minimum wages fixed by states.2
Further, the agricultural labourers receive wages higher than the MGNREGS workers. The Committee noted that this may be discouraging labourers from enrolling under MGNREGS and migrating to cities for work.2 It recommended increasing the minimum wages under MGNREGS periodically after taking inflation into account.2 The Committee on Alignment of MGNREGS wages under the Ministry of Rural Development (2017) also noted that the type of work done by agricultural labourers and MGNREGS workers is different.10 Thus, there should be difference in their minimum wages. It also noted that the Consumer Price Index-Rural was more recent and provided for higher expenditure on education and medical care compared to CPI-AL.10 It recommended using CPI-Rural instead of the existing CPI-AL for revising MGNREGS wages.10
Further, every state has its defined Schedule of Rates for defining work output and calculating wages, thus the wage can be different for every state. The Standing Committee on Rural Development (2020) noted the existing disparity in MGNREGS wages in various states.2 The Committee on Alignment of MGNREGS (2017) noted that this variation is not desirable for a programme where wage component is fully funded by the centre. It recommended convergence on Schedule of Rates across states to avoid variation.10
## Pradhan Mantri Awaas Yojana- Gramin
Pradhan Mantri Awaas Yojana- Gramin (PMAY-
G) has the second highest allocation in the Department's budget in 2021-22. The funds allocated to the scheme (Rs 19,500 crore) comprise
15% of the Department's finances.
In the past eleven years, the expenditure on the scheme has seen an average annual growth of 7%.
Note: Value for 2020-21 is revised estimate. Sources: Union Budgets from 2010-11 to 2021-22; PRS.
Target construction of houses: Figure 6 shows the number of houses completed compared to the target construction in the last five years. The construction rate has been lower than the target for all these years. However, the construction rate declined substantially in 2019-20 and 2020-21. Till October 2020, the completion rate for 2020-21 was at 3%. This may be due to the inability to carry out construction due to the lockdown enforced due to the Covid-19 pandemic.
Note: Data for 2020-21 is as of October 30, 2020. Sources: Awaassoft (MIS), PMAY-G; PRS.
The Standing Committee on Rural Development (2020) noted the slow pace of progress under the scheme.2 It observed that one of the biggest hurdles for the timely completion of houses, is delay in the release of instalments under PMAY-G to beneficiaries. It recommended the Department of Rural Development to streamline the method for the timely release of instalments and explore ways to ensure that construction of houses is completed within the targeted time frame.2
Increase in financial assistance under PMAY-G:
Under PMAY-G, financial assistance of Rs 1,20,000 in plain areas and Rs 1,30,000 in hilly areas is provided to rural BPL households for construction of a dwelling unit. The Standing Committee on Rural Development (2019) noted that the financial assistance provided is not proportionate with the rising inflationary cost of the construction, material and other aspects of house building.11 Further, Standing Committee on Rural Development (2020-21) noted the disparity in assistance for constructing a house in rural and urban areas (assistance of about Rs 2,50,000 per house). 2 It noted that there are several logistical issues in rural areas that may not be there in urban areas. It recommended the Ministry to increase the assistance provided by them under the PMAY-G scheme and bring parity between the per-unit assistance in rural and urban areas.2,11
## Pradhan Mantri Gram Sadak Yojana
Pradhan Mantri Gram Sadak Yojana (PMGSY) seeks to provide all-weather road connectivity to all eligible unconnected habitations, existing in the core network in rural areas of the country. The scheme has been allocated Rs 15,000 crore in 2021-22, accounting for 11.4% of the Department's budget. As Figure 7 indicates, the expenditure on the scheme has been decreasing since 2015-16.
Underutilisation of funds: Table 6 shows the trends in allocation and actual estimates of expenditure on PMGSY. Since 2017-18, there has been significant underutilisation of funds.
Year
Budgeted
Actuals % of Budgeted
2014-15
14,391
14,188
99%
2015-16
14,291
18,290
128%
2016-17
19,000
17,923
94%
2017-18
19,000
16,862
89%
2018-19
19,000
15,414
81%
2019-20
19,000
14,017
74%
2020-21
19,500
13,706
70%
2021-22
15,000
-
-
Note: The 'Actuals' figure for 2020-21 is the revised estimate. Sources: Union Budgets from 2014-15 to 2021-22; PRS.
Slow pace of work: The Standing Committee on Rural Development (2020-21) noted that the pace of work under the scheme has been slow, especially in hilly states like Uttarakhand.2 It noted that the delay in approval of Detailed Project Reports is the main cause for the slow pace of the scheme. It recommended that the Department of Rural Development ensure timely preparation and approval of Detailed Project Reports and increase the pace of completion of projects.2
## Difference Between Targets And Achievements:
Figures 8 and 9 give details of length of roads constructed and habitations connected in the last five years, under the scheme.
Note: Data for 2020-21 is as of February 4, 2021. Sources: Pradhan Mantri Gram Sadak Yojana Online Management, Monitoring and Accounting System (OMMAS), Ministry of Rural Development; PRS.
Since 2016-17, the Ministry has not been able to achieve its targets for both the number of habitations to be connected and the road length to be constructed. Between April 2020 and Feb 2021, only 30% of the targets for roads to be constructed and target habitations to be connected were completed. While slow pace of construction in
2020-21 could be attributed to the Covid-19 induced lockdown, note that the rate of construction was low in 2019-20 as well (54% of target length was completed and 43% of target habitations were connected).
Note: Data for 2020-21 is as of February 4, 2021. Sources: Pradhan Mantri Gram Sadak Yojana Online Management, Monitoring and Accounting System (OMMAS), Ministry of Rural Development; PRS.
Maintenance of roads: For ensuring sustainability of roads built under PMGSY, each contractor has to provide for: (i) defect liability for five years, and (ii) paid routine maintenance after completion of work. The Standing Committee on Rural Development (2020-21) noted that the upkeep and maintenance of roads has been poor. It recommended the Ministry to ensure stricter norm compliance and hold the contractors and agencies accountable for their negligence.2
## National Social Assistance Program
National Social Assistance Program (NSAP) is a welfare program comprising of sub-schemes aimed at providing public assistance to citizens in case of unemployment, old age, sickness, and any form of disability. The major schemes include Indira Gandhi National Old Age Pension Scheme, Indira Gandhi National Widow Pension Scheme, and Indira Gandhi National Disability Pension Scheme. In 2021-22, the scheme has been allocated Rs 9,200 crore (7% of the Department's finances), which is a 4% annualised increase over the actual expenditure in 2019-20. The expenditure on the scheme was increased substantially in 2020-21, owing to Rs 30,957 crore spent on direct benefit transfers to women account holders of Pradhan Mantri Jan Dhan Yojana (Rs. 500 for three months).12 This was an initiative under the PM Garib Kalyan Package to combat the economic effects of the Covid-19 pandemic. Table 7 shows the budget estimates and actual expenditure under the scheme from 2014-15 to 2020-21. It can be noted that the allocation towards the scheme has been similar since 2014-15.
Table 7: Expenditure under NSAP (Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2014-15
10,635
7,087
67%
2015-16
9,082
8,616
95%
2016-17
9,500
8,854
93%
2017-18
9,500
8,694
92%
2018-19
9,975
8,418
84%
2019-20
9,200
8,692
94%
2020-21
9,197
42,617
463%
2021-22
9,200
-
-
Note: The 'Actuals' figure for 2020-21 is the revised estimate. Sources: Union Budgets from 2014-15 to 2021-22; PRS.
Increase of assistance amount: The Standing Committee on Rural Development (2020-21) noted that the assistance amount (ranging from Rs 200 to Rs 500 per month) under the different components of the scheme is inadequate.2 It recommended the Department of Rural Development to increase the assistance amounts under the scheme.2
## National Rural Livelihoods Mission
National Rural Livelihoods Mission (NRLM) aims to reduce poverty through promotion of diversified and gainful self-employment and skilled wage employment opportunities. In 2021-22, the funds allocated to the scheme (Rs 13,678 crore) comprise 10.4% of the Department's finances.
Table 8: Expenditure under NRLM (Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2012-13
3,915
2,195
56%
2013-14
4,000
2,022
51%
2014-15
4,000
1,413
35%
2015-16
2,505
2,514
100%
2016-17
3,000
3,157
105%
2017-18
4,500
4,327
96%
2018-19
5,750
5,783
101%
2019-20
9,024
9,022
100%
2020-21
9,210
9,210
100%
2021-22
13,678
-
-
Note: From 2015-16, allocation to start-up village entrepreneurship program has also been included. Sources: Union Budgets from 2012-13 to 2021-22; PRS.
## Department Of Land Resources
The **Department of Land Resources** aims to increase productivity of degraded land through the process of integrated watershed management. It also aims to develop an integrated land information management system to improve real-time information on land, and to optimise use of land resources. The Department of Land Resources implements two key schemes: (i) Integrated Watershed Development Component of Pradhan Mantri Krishi Sinchai Yojana (WDC-PMKSY), and (ii) Digital India Land Records Modernisation Programme (DILRMP). In 2021-22, the Department was allocated Rs 2,170 crore, which is a 19% annualised increase over the actual expenditure in 2019-20.
## Of Land Resources (Rs Crore)
Annualised
change
Revised
Budgeted
(Actuals 19-20
Major Heads
Actuals
19-20
20-21
21-22
to
BE 21-22)
WDC - PMKSY
1,467
1,000
2,000
17%
DILRMP
44
238
150
85%
Secretariat
13
14
20
28%
Total
1,524
1,252
2,170
19%
Note: WDC - Watershed Development Component PMKSY is Pradhan Mantri Krishi Sinchai Yojana. DILRMP is Digital India Land Records Modernisation Programme. BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2021-22, Department of Land Resources, Ministry of Rural Development; PRS.
## Watershed Development Component Of Pradhan Mantri Krishi Sinchai Yojana
The Integrated Watershed Management Programme aims to develop rain fed portions of net cultivated area and culturable wastelands.13 In 2015, it was subsumed as one of the components of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
The activities under Watershed Development Component are drainage line treatment, soil and moisture conservation, rain water harvesting, and afforestation, among others. The scheme received the highest allocation of Rs 2,000 crore (92%) under the Department's budget. Table 10 shows the actual expenditure under the scheme from 2015-16 to 2020-21. Note that there is under-utilisation of the budgeted amounts for the last five years.
## Crore)
| Year | Budgeted | | Actuals | |
|----------|------------|-------|-----------|------|
| % of | | | | |
| Budgeted | | | | |
| 2015-16 | | 1,530 | 1,527 | 100% |
| 2016-17 | | 1,550 | 1,510 | 97% |
| 2017-18 | | 2,150 | 1,671 | 78% |
| 2018-19 | | 2,251 | 1,786 | 79% |
| 2019-20 | | 2,066 | 1,467 | 71% |
| 2020-21 | | 2,000 | 1,000 | 50% |
| 2021-22 | 2,000 | - | - | |
Note: The 'Actuals' figure for 2020-21 is revised estimate. Sources: Union Budgets from 2015-16 to 2021-22; PRS.
Completion of projects: The Standing Committee on Rural Development (2020-21) noted the slow pace of completion of projects under the scheme.2 As of November 2020, of the 8,214 sanctioned projects, 4,486 (55%) projects have been reported completed.14 The Committee recommended accelerating the pace of project completion.2
## Digital India Land Records Modernisation Programme (Dilrmp)
DILRMP is a part of the Digital India initiative.15 The scheme was changed into a Central Sector Scheme in April 2016.16 With this change, the scheme is now implemented by the central government with 100% of the grants coming from the centre. The major components of the programme include: (i) computerisation of all existing land records, (ii) digitisation of maps, (iii) survey/resurvey, and updating of all settlement records, and (iv) computerisation of registration and its integration with the land records maintenance system.
In 2021-22, the programme has been allocated Rs 150 crore, which is an 85% annualised increase over the actual expenditure in 2019-20. Table 11 shows the trends in allocation and actual expenditure on the programme over the past six years. Note that there is significant underspending across all the years except 2020-21.
## Expenditure On Dilrmp (Rs Crore)
| Year | Budgeted | | Actuals | |
|----------|------------|-----|-----------|------|
| % of | | | | |
| Budgeted | | | | |
| 2015-16 | | 90 | 40 | 44% |
| 2016-17 | | 150 | 139 | 93% |
| 2017-18 | | 150 | 93 | 62% |
| 2018-19 | | 250 | 68 | 27% |
| 2019-20 | | 150 | 44 | 29% |
| 2020-21 | | 239 | 238 | 100% |
| 2021-22 | 150 | - | - | |
Note: The 'utilised' figure for 2020-21 is the revised estimate. Sources: Union Budgets 2015-16 to 2021-22; PRS.
## Progress Of Components Under Dilrmp: Dilrmp Is Currently Being Implemented In All States, But With Differential Progress.17
Land records have been computerised for 91% of the villages.17 However, the mutation records (recording the transfer of ownership) have been computerised for only 71% of the villages.17 This means that the remaining 27% of the villages do not have updated records with the current data on ownership. If the intent of digitising records is to have easy access to correct data, real time updating of property records becomes essential. Further, real time updation of Record of Right (RoR) and maps has been done for only 30% of the villages.17 The RoR is the primary record that shows how rights on land are derived for the land owner, and records the property's transactions from time to time. 30 states/ UTs have started issuing digitally signed RoRs.17
Slow pace of work: The Standing Committee on Rural Development (2020-21) noted that the work under the programme is being completed at a slow
1 Demand No. 86, Department of Rural Development, Ministry of Rural Development, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe86.pdf; Demand No. 87, Department of Land Resources, Ministry of Rural Development, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe87.pdf. 2 "Standing Committee on Rural Development, Demand for Grants 2020-21, Department of Rural Development, Ministry of Rural Development", http://164.100.47.193/lsscommittee/Rural%20Development/17_ Rural_Development_4.pdf. 3 The National Rural Employment Guarantee Act, 2005 https://nrega.nic.in/amendments_2005_2018.pdf. 4 Mahatma Gandhi National Rural Employment Guarantee Act, 2005, Operational Guideline 2013, https://nrega.nic.in/Circular_Archive/archive/Operational_g uidelines_4thEdition_eng_2013.pdf. 5 15th Finance Commission Report, Volume III, February 1, 2021, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC%20Complete_Report.pdf 6 MNREGA MIS Report, 2015-16 to 2021-22, Ministry of Rural Development, http://mnregaweb4.nic.in/netnrega/MISreport4.aspx. 7 Effective use of technology for welfare schemes - Case of MGNREGS. Economic Survey 2018-19, Volume I. https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapte r/echap10_Vol1.pdf. 8 "Report No. 6, Performance Audit of Mahatma Gandhi National Rural Employment Guarantee Scheme", Comptroller and Auditor General of India, 2013, http://www.cag.gov.in/sites/default/files/audit_report_files/Unio n_Performance_Civil_Ministry_Rural_Development_6_2013.p df. 9 The National Rural Employment Guarantee Act, 2005, https://nrega.nic.in/amendments_2005_2018.pdf. 10 "Report of the Committee on Alignment of MGNREGA Wages with Minimum Agricultural Wages." July, 2017.
pace.2 It recommended the Ministry to ensure expeditious completion of modernisation of land records in all states.2
Ministry of Rural Development, MGNREGA Division.
http://www.im4change.org/siteadmin/tinymce/uploaded/Draft%
20report%20of%20Nagesh%20Singh%20Committee%20July% 202017.pdf. 11 "Standing Committee on Rural Development, 2019-20, Department of Land Resources, Ministry of Rural Development"
http://164.100.47.193/lsscommittee/Rural%20Development/17_ Rural_Development_3.pdf. 12 "Direct cash transfer to women PMJDY account holders under PM Garib Kalyan Package for the month of April 2020 in the light of COVID-19 pandemic", Ministry of Rural Development, April 3, 2020.
13 Programme Details, Watershed Development Component Of Pradhan Mantri Krishi Sinchai Yojana (WDC-PMKSY), Department Of Land Resources, Ministry of Rural Development https://dolr.gov.in/programme-schemes/pmksy/watersheddevelopment-component-pradhan-mantri-krishi-sinchai-yojanawdc-pmksy.
14 Unstarred Question no. 1587, Ministry of Agriculture and Farmer Welfare, September 2020, http://164.100.24.220/loksabhaquestions/annex/174/AU1587.pd f. 15 Digital India Land Records Modernization Program, Department of Land Resources, Ministry of Rural Development, http://nlrmp.nic.in/faces/common/home.xhtml.
16 "Rationalization of Centrally Sponsored Scheme DILRMP as Central Sector Scheme", Department of Land Resources, Ministry of Rural Development, September 22, 2016. http://dolr.nic.in/dolr/downloads/PDFs/DILRMP%20Clarifi cations%202016-09-22.pdf.
17 "Digital India Land Records Modernization Programme - MIS, last accessed on February 11, 2021, http://dilrmp.gov.in/#.
## Demand For Grants: Agriculture And Farmers' Welfare
The Ministry of Agriculture and Farmers' Welfare has two Departments: (i) Agriculture, Cooperation and Farmers' Welfare, which implements policies and programmes related to crop husbandry and manages agriculture inputs, and (ii) Agricultural Research and Education, which coordinates and promotes agricultural research and education. This note examines the budget allocations to the two Departments of the Ministry and their expenditure, and discusses issues in the agriculture sector.
## Overview Of Finances
The Ministry has been allocated Rs 1,31,531 crore in 2021-22, a 14% annual increase over 2019-20.1 Allocation to the Ministry accounts for 4% of the government's budget. The Ministry had estimated an expenditure of Rs 1,42,762 crore in 2020-21, which has been reduced by 13% to Rs 1,24,520 crore at the revised stage.2 This includes a cut of Rs 10,000 crore in the proposed expenditure on the PM-KISAN scheme (income support scheme for farmers), due to coverage of lower beneficiaries than initially estimated.3 In 2020-21 and 2021-22, PM-KISAN is estimated to cost Rs 65,000 crore. 49% of the allocation to the Ministry in 2021-22 is for the PM-KISAN scheme. All other programmes of the Ministry, including interest subsidy and crop insurance, have been allocated Rs 66,531 crore in 2021-22, a 12% annual increase over 2019-20. Before PM-KISAN, the Ministry's expenditure saw a large increase in 2016-17 due to the interest subsidy provided on short-term credit to farmers. The subsidy, earlier provided by the Ministry of Finance, is being provided by the Ministry of Agriculture and Farmers' Welfare since 2016-17.
## Policy Proposals In The Budget Speech
In her 2021-22 budget speech, the Finance Minister made the following proposals regarding agriculture:
- An Agriculture and Infrastructure Development Cess will
be levied on certain goods for financing agriculture infrastructure and other development activities. These goods include certain imports such as cotton, coal, gold, silver, and alcoholic beverages, and petrol and diesel.
- The Agriculture Infrastructure Fund will be made
available to the Agriculture Produce Market Committees (APMCs) for augmenting their infrastructure facilities. 1,000 more mandis will be integrated with the electronic National Agriculture Market (e-NAM).
- The Operation Green Scheme, which presently provides
a subsidy on the storage and transportation of tomatoes, onions, and potatoes, will be extended to cover 22 perishable products to boost value addition and exports.
Departments: The Department of Agriculture, Cooperation and Farmers' Welfare has received
94% of the allocation to the Ministry in 2021-22, while 6% has been allocated to the Department of Agricultural Research and Education (Table 1).
Department
2019-20 Actuals
2020-21
Revised
2021-22
Budget
% change
(annualised)
in 2021-22
over 2019-20
94,252 1,16,758 1,23,018
14%
Agriculture, Cooperation and Farmers' Welfare
7,523
7,762
8,514
6%
Agricultural Research and Education Ministry
1,01,775 1,24,520 1,31,531
14%
Sources: Expenditure Budget, Union Budget 2021-22; PRS.
The Department of Agriculture, Cooperation and Farmers' Welfare has been allocated Rs 1,23,018 crore in 2021-22, which is a 14% annual increase over 2019-20. 76% of the Ministry's budget is proposed to be spent on three schemes under this Department: the income support scheme, i.e., PM- KISAN (49%), interest subsidy on short-term credit to farmers (15%), and the crop insurance scheme, i.e., Pradhan Mantri Fasal Bima Yojana (12%). The Department of Agricultural Research and Education has been allocated Rs 8,514 crore in 2021-22, a 6% annual increase over 2019-20.4 Allocation to the Indian Council of Agricultural Research (ICAR) accounts for 63% of the Department's allocation in 2021-22. See Table 8 and in the Annexure for more details.
Allocation vs actual expenditure: Expenditure of both the Departments has been lower than their budget allocations in almost all years during the period 2012-21 (Figure 2). The Ministry spent
27% less than its budget allocation in 2019-20, primarily due to an underspending of Rs 26,286 crore (35%) in PM-KISAN (owing to coverage of lower beneficiaries than targeted). Further, the Standing Committee on Agriculture (2016) noted that a slow pace of fund utilisation in the first half of the financial year results in a cut in allocation for the rest of the year, which leads to underspending.5
Sources: Expenditure Budget, Union Budgets (2012-22); PRS.
Issues in the sector
## Growth Of The Agriculture Sector
Growth of the sector comprising of agriculture and allied activities has been volatile over the years (Figure 3). In 2020-21, the sector is estimated to grow at 2.3%, as compared to 4.3% in 2019-20. The contribution of the agriculture sector in the economy has significantly decreased from 51% in 1951 to 19% in 2011, and further to 14.8% in 2019- 20.6 Meanwhile, the share of workers who are dependent on agriculture has decreased at a lower rate from 70% in 1951 to 55% in 2011. This implies that the average income of these workers grew at a slower pace than that of workers in other sectors. The Committee on Doubling Farmers' Income (Chair: Mr. Ashok Dalwai, 2017) observed that one way of significantly improving income of farmers is by shifting the agricultural workforce to more productive employment in non-farm sectors.7
## And In The Total Number Of Workers (In %)
Sources: Agricultural Statistics at a Glance 2019, Ministry of Agriculture and Farmers' Welfare; CSO, MOSPI; PRS.
## Income Support To Farmers
The PM-KISAN scheme was launched in February 2019 to provide income support of Rs 6,000 per year (disbursed in three instalments of Rs 2,000) to farmer families with the aim of supplementing their financial needs in procuring inputs for appropriate crop health and yields.8 Earlier, only small and marginal landholder farmer families, i.e., families with total cultivable landholding of up to two hectares, were eligible for the scheme. In May 2019, the Union Cabinet approved the extension of the scheme to all farmer families irrespective of their size of landholdings. With this increase in coverage, expenditure on the scheme was estimated to increase from the budget allocation of Rs 75,000 crore to Rs 87,218 crore in 2019-20.9 However, in 2019-20, the Ministry spent Rs 48,714 crore on the scheme, 35% lower than the budget allocation. For 2020-21, the allocation has been cut down from the budget estimate of Rs 75,000 crore to Rs 65,000 crore (revised estimate).
Implementation: Initially, the scheme was expected to cover 12.5 crore beneficiaries.9 With the increase in coverage, this was revised to 14.5 crore beneficiaries.9 Till January 2021, 10.75 crore beneficiaries have been covered (received at least one instalment) under the scheme.10 However, the coverage under different instalments vary. In 2020-21, 10.5 crore beneficiaries have received the first instalment (Apr-Jul), 10.2 crore beneficiaries have received the second instalment (Aug-Nov), and 9.5 crore beneficiaries have received the third instalment (Dec-Mar), till February 10, 2021.11 The Standing Committee on Agriculture (2020) noted that the scheme is facing the following issues in implementation: (i) non-availability of proper land records in some states, (ii) slow identification of beneficiaries and delay in the uploading of data by states, (iii) issues with the matching of demographic data between the PM-KISAN database and Aadhaar data, (iv) incorrect bank accounts, and (v) poor internet connectivity in rural areas hampering the uploading of data.12 The Committee recommended that the government should hold regular consultation with states to resolve issues and take corrective steps.
Land as an eligibility criterion: Farmer families owning cultivable landholding are eligible for receiving income support under the scheme. The beneficiaries are identified by states based on their land records. The scheme does not cover landless agricultural labourers who form 55% of the agricultural workers in the country (Figure 5).13 Agricultural workers include cultivators and labourers working in the agriculture sector. The share of landless agricultural labourers in total agricultural workers has increased over the years from 28% in 1951 to 55% in 2011. The Standing Committee (2020) noted that tenant farmers, who are a significant part of landless farmers in many states, do not receive the income support benefits.12 It recommended the government to examine this issue in coordination with states so that landless farmers can also receive benefits under the scheme.
## Agricultural Credit
Agriculture credit is provided to farmers at a subsidised cost through interest subsidy.14 An interest subsidy of two percent is provided to farmers on their short-term crop loans of up to three lakh rupees. An additional interest subsidy of three percent is provided to farmers repaying their loan on time, i.e., within a year. In 2021-22, Rs 19,468 crore has been allocated for interest subsidy, which is 2% lower than the 2020- 21 revised estimate (Rs 19,832 crore). However, a significant difference has been observed in the last few years between the estimates presented in the budget (even the revised estimate) and the actual expenditure at the end of the year (Table 2).
actual expenditure on interest subsidy (Rs crore)
| Year | Budgeted | Revised | Actuals | % shortfall |
|---------|-------------|------------|------------|----------------|
| 2016-17 | 15,000 | 13,619 | 13,397 | -11% |
| 2017-18 | 15,000 | 14,750 | 13,046 | -13% |
| 2018-19 | 15,000 | 14,987 | 11,496 | -23% |
| 2019-20 | 18,000 | 17,863 | 16,219 | -10% |
| 2020-21 | 21,175 | 19,832 | - | -6% |
Sources: Expenditure Budget, Union Budgets (2016-21); PRS.
Short-term vs long-term loans: In 2015, the Committee on Medium-term Path on Financial Inclusion under the Reserve Bank of India (RBI) observed that the interest subsidy provided for short-term crop loans discriminates against longterm loans.15 Short-term crop loans are used for pre-harvest activities such as weeding, harvesting, sorting, and transporting. Long-term loans are taken to invest in agricultural machinery and equipment, or irrigation system. The Committee observed that the scheme does not incentivise longterm capital formation in agriculture, which is essential to boost productivity in the sector. Over the past few decades, the trend of short-term and long-term agricultural credit has reversed. In 1990-91, a majority of the agricultural credit were long-term loans, whereas short-term loans were only about a quarter of the total credit.16 In 2019- 20, the share of long-term loans in total agricultural credit was at 40% (Figure 6).17 A lower share of long-term agricultural credit implies that farmers are taking more loans for recurring expenditure rather than to fund long-term investments.
Sources: Reports of the Standing Committee on Agriculture (2020) and the RBI Working Group on Agriculture Credit; PRS.
The Committee on Doubling Farmers' Income (2017) recommended that the central and state governments should provide interest subsidy on long-term or investment credit taken by farmers, particularly small and marginal farmers.18 In May 2020, under the Aatmanirbhar Bharat Economic Package, the central government announced the setting up of an Agriculture Infrastructure Fund of one lakh crore rupees for financing farm-gate infrastructure.19 Under the scheme, the government will provide an interest subsidy of 3% on loans of up to two crore rupees issued under the Fund.
Land ownership: The 2015 RBI Committee on Financial Inclusion observed that the owner of the land is often not the cultivator, even in the case of small and marginal holdings. For example, a landowner may get the benefit of subsidised credit at times and may be the moneylender to his cultivator.20 The Committee recommended that agricultural credit must flow to the actual cultivator for which substantial reform is necessary.20 Further, it stated that the subsidised credit increases the probability of misuse. The Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (2016) also recommended the transfer of benefits to farmers directly, instead of subsidy and waivers.21 Access to agricultural credit is linked to formal land titles. An Internal Working Group of the RBI constituted to review Agricultural Credit (2019) noted that the absence of a proper land leasing framework and a lack of land records restricted access to institutional credit.22 It recommended the central government to encourage states to digitise and update land records in a time-bound manner. The 2015 RBI Committee on Financial Inclusion recommended that credit eligibility certificates, which would act as tenancy or lease certificates, should be issued to tenant farmers.15 These certificates would enable landless tenant cultivators to obtain agricultural credit.
Small and marginal farmers: Farmers with landholdings of less than a hectare primarily borrow from informal sources of credit such as moneylenders, whereas those with landholdings of two or more hectares primarily borrow from banks (Figure 7).15 Informal sources of credit are typically offered at higher rates of interests, and may not have proper documentation. Note that 68% of the agricultural landholdings in the country belong to the marginal (less than one hectare) category.23 Another 18% belong to the small category (between one to two hectare). Further, the share of the marginal category in total agricultural landholdings has been increasing over the years, from 51% in 1970-71 to 68% in 2015-16. The RBI Internal Working Group on Agricultural Credit (2019) noted that only 41% of the small and marginal farmers have been covered by banks.22
## Crop Insurance
Crop insurance is provided to farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY).24 All farmers, including sharecroppers and tenant farmers, who are growing notified crops in notified areas are eligible under the scheme. In 2021-22, the scheme has been allocated Rs 16,000 crore, a 5% increase over the 2020-21 revised estimate. Issues faced in providing crop insurance include:
Awareness about crop insurance: The Economic Survey 2017-18 noted that the share of agricultural households getting their crops insured was low.25 Among households cultivating major crops, such as rice and wheat, less than 5% of them got their crops insured. Lack of awareness about crop insurance among farmers is a major reason for not getting their crops insured. Lack of awareness about the government's crop insurance programmes is another reason for not getting their crops insured.
Coverage of farmers: During the period 2016-19, the scheme covered 36-40% of the farmers.26 Note that before Kharif season 2020, enrolment was mandatory for farmers with loans and optional for others. To address the demand of farmers, the scheme has been made voluntary for all farmers.27
Assessment of losses: The Standing Committee on Agriculture (2017) observed that states are not readily accepting and adopting the technologies used for assessing yield loss.28 The Committee recommended the Ministry to pursue states to adopt technology aids and satellite imagery for crop cutting experiments. Under the revised guidelines of the scheme, the government has proposed a twostep process of using weather and satellite indicators for an early assessment of yield loss.27 Further, based on the increased efficiency seen in the implementation of the scheme in some states, the government has proposed the use of smart sampling technique through satellite data by all states for conducting crop cutting experiments.27
Grievance redressal: The Standing Committee on Agriculture (2019) observed that farmers are facing issues in lodging complaints with the insurance companies due to the absence of local offices of the companies at the district and block-level.26 It recommended that the Ministry should ensure the availability of a common helpline number for lodging of complaints. Under the revised scheme guidelines, states have to constitute grievance redressal committees at the district and state level.29
## Minimum Support Prices (Msps)
MSP is the assured price announced by the central government at which foodgrains are procured from farmers by the central and state governments and their agencies, for the central pool of foodgrains.30 The central pool is used for providing foodgrains under the Public Distribution System and other welfare schemes at subsidised prices and also kept as reserve in the form of buffer stock. The cost of procuring from farmers at MSP and distributing under PDS at subsidised prices is borne by the Department of Food and Public Distribution. However, the MSPs for all crops are decided by the Ministry of Agriculture and Farmers' Welfare. MSPs are notified based on the recommendations of the Commission for Agricultural Costs and Prices, an attached office of the Ministry of Agriculture and Farmers' Welfare.31 While MSPs are annually announced for 23 crops, public procurement is limited to a few crops such as paddy, wheat, and, to a limited extent, pulses. The foodgrain procurement is largely concentrated in a few states. Three states (Madhya Pradesh, Punjab, and Haryana) producing 46% of the wheat in the country account for 85% of its procurement. For rice, six states (Punjab, Telangana, Andhra Pradesh, Chhattisgarh, Odisha, and Haryana) with 40% production have a 74% share in procurement.
According to the central government's procurement policy, the objective of public procurement is to ensure that farmers get remunerative prices for their produce and do not have to resort to distress sale.32 If farmers get a better price in comparison to MSP, they are free to sell their produce in the open market. The Economic Survey 2019-20 observed that the regular increase in MSP is seen by farmers as a signal to opt for crops which have an assured procurement system (for example, rice and wheat).33 It also noted that this indicates market prices do not offer remunerative options for farmers, and MSP has, in effect, become the maximum price that the farmers are able to realise. Thus, MSP incentivises farmers to grow crops which are procured by the government. As wheat and rice are major food grains provided under the PDS, the focus of procurement is on these crops. This skews the production of crops in favour of wheat and paddy (particularly in states where procurement levels are high) and does not offer an incentive for farmers to produce other items such as pulses. Further, this puts pressure on the water table as these crops are water-intensive crops.
In a report to measure the efficacy of MSPs, NITI
Aayog (2016) found that a low proportion of farmers (10%) were aware of MSPs before the sowing season.34 62% of the farmers were informed of MSPs after sowing their crops. The pricing policy of MSPs would be effective only if farmers are aware of it at the time of deciding what crops to grow. NITI Aayog recommended that the awareness level of farmers regarding MSPs must be increased and the mediums of dissemination of this information must be strengthened. Other issues with the implementation of the MSP regime include long distances to the procurement centres, increasing transportation cost for farmers, irregular hours of the procurement centres, lack of covered storage godowns and inadequate storage capacity, and delays in the payment of MSPs to farmers.
## Irrigation
As of 2016-17, 49% of the country's net sown area was under irrigation.35 The remaining agricultural area in the country depends on rainfall. Major irrigation sources for agriculture include tubewells
(48%) and other wells (16%), and canals (23%). Sources such as canals and tubewells use the flood irrigation technique, where water is allowed to flow in the field and seep into the soil.36 This results in wastage of water since excess water seeps into the soil or flows off the surface without being utilised. It has been recommended that farmers move from flood irrigation to micro-irrigation systems (drip or sprinkler irrigation systems) to conserve water.37 The Pradhan Mantri Krishi Sinchai Yojana was launched in 2015 to increase the coverage of the area under irrigation.38 The Ministry implements the 'Per Drop More Crop' component under the scheme to increase water efficiency through microirrigation and other interventions. During the period 2013-21, 60.3 lakh hectares of area has been covered under micro-irrigation (Table 3).39
| Year | Target | Achievement | Achievement % |
|---------|-----------|----------------|------------------|
| 2013-14 | 6.6 | 4.3 | 66% |
| 2014-15 | 5.7 | 4.3 | 74% |
| 2015-16 | 5 | 5.7 | 115% |
| 2016-17 | 8 | 8.4 | 105% |
| 2017-18 | 12 | 10.5 | 87% |
| 2018-19 | 16 | 11.6 | 72% |
| 2019-20 | 14 | 11.7 | 84% |
| 2020-21 | 0 | 3.7 | - |
| Total | 67.3 | 60.3 | 90% |
Sources: Pradhan Mantri Krishi Sinchai Yojana website; PRS.
Shortfall in funds: In 2021-22, the scheme has been allocated Rs 4,000 crore, which is 56% higher than the 2020-21 revised estimate. Though the budget allocation to the scheme seems higher than the previous year, it is usually cut down at the revised stage, resulting in a lower expenditure than the allocation (Table 4). Allocation to the scheme for 2020-21 has been revised down by 36% from Rs 4,000 crore to Rs 2,563 crore (revised estimate).
scheme with its actual expenditure (in Rs crore)
| Year | Allocation* | Expenditure | % shortfall |
|---------|----------------|----------------|----------------|
| 2015-16 | 1,800 | 1,556 | 14% |
| 2016-17 | 2,340 | 1,991 | 15% |
| 2017-18 | 3,400 | 2,819 | 17% |
| 2018-19 | 4,000 | 2,918 | 27% |
| 2019-20 | 3,500 | 2,700 | 23% |
| 2020-21 | 4,000 | 2,563 | |
| # | | | |
| | 36% | | |
Note: *Budget estimate; #Revised estimate used as expenditure. Sources: Expenditure Budget, Union Budgets (2015-21); PRS.
## Soil Health And Fertilisers
While the Ministry of Chemicals and Fertilisers is responsible for monitoring the production, distribution, and prices of fertilisers, the Ministry of Agriculture and Farmers' Welfare is responsible for the promotion of balanced use of fertilisers.40 Balanced use refers to the use of a proper combination of various nutrients and other micronutrients. Three major nutrients are primarily used: Nitrogen (N), Phosphatic (P), and Potassic (K).
The government subsidises fertilisers through: (i) subsidy for urea (containing N fertiliser), and (ii) nutrient-based subsidy for P and K fertilisers. The fertiliser subsidy is provided to the fertiliser manufacturers and importers so that farmers can directly buy them at affordable or subsidised prices. In 2021-22, Rs 79,530 crore has been allocated to the Department of Fertilisers for fertiliser subsidy, an annual decrease of 1% over 2019-20 (Table 5).
Subsidy
2019-20 Actuals
2020-21
Revised
2021-22
Budgeted
% change
(annualised)
in 2021-22
over 2019-20
Urea
54,755
94,957
58,768
3.6%
Nutrient based
26,369
38,990
20,762
-11.3%
Total
81,124
1,33,947
79,530
-1.0%
Sources: Expenditure Budget, Union Budget 2021-22; PRS.
In November 2020, under the Aatmanirbhar Bharat Economic Package, the government announced an additional allocation of Rs 65,000 crore in 2020-21 for fertiliser subsidy.41 As a result, the allocation for 2020-21 has increased from Rs 71,309 crore at the budgeted stage to Rs 1,33,947 crore at the revised stage. Note that in March 2020, the Standing Committee on Chemicals and Fertilisers had recommended that the Ministry should be provided a one-time allocation to clear off all the pending fertiliser subsidy dues owed to companies, as the 2020-21 budget allocation is insufficient for this purpose.42 The Committee observed that as of February 2020, the Ministry owed Rs 43,483 crore as dues to companies, which could not be paid in previous years due to insufficient budget allocation.
The Standing Committee (2020) observed that many fertiliser manufacturing plants are operating with very old technology and systems, and not at their highest efficiency.43 The government bears the cost of their inefficiency in the form of higher subsidy. The Committee recommended that the companies should be set free to manufacture and sell fertilisers as per their own system. A farmer should have the choice to buy from various brands of fertilisers while getting the subsidy directly in his bank account. This will push manufacturers to produce and sell their fertilisers in the most costeffective manner and push the inefficient ones out. It recommended that the government should set out a clear and firm roadmap for switching to a direct subsidy system, where the manufacturing and importing of fertilisers is set free to market forces. Prices of urea are controlled by the government, whereas that of P and K fertilisers are marketdriven.40 This has led to lower prices of urea (N) over the years, whereas the market prices of P and K fertilisers have remained higher. This is one of the reasons for imbalanced use of nutrients as urea is used more than other fertilisers.40 While the ratio recommended for use of the N, P, and K fertilisers is 4:2:1, the ratio was 6.3:2.5:1 in 2018-19.44 Table
9 in the Annexure shows their consumption trend. Overuse of fertilisers could lead to an imbalance of nutrients in the soil and deteriorate its quality. The Standing Committee on Agriculture (2015) observed that use of fertilisers in the country was not based on scientific analysis of soil due to near absence of soil testing facilities, low awareness, and over-reliance on urea.45
Soil Health Cards: In order to provide farmers with information regarding the quality of their soil, the Soil Health Card scheme was launched in 2015.46 Under the scheme, farmers are issued soil health cards, which contain information such as nutrient status of soil and recommended dose of nutrients to be provided to improve its fertility. In 2021-22, Rs 315 crore has been allocated for the National Project on Soil Health and Fertility, a 41% increase over the 2020-21 revised estimate. During the first cycle (2015-17) of the scheme, 10.74 crore soil health cards were provided as per the target.47 During the second cycle (2017-19), 11.87 crore soil health cards were provided against the target of 12.54 crore cards. During the period 2019-21, 18.9 lakh soil health cards have been distributed under the Model Village Programme (82% of the target).
## Rashtriya Krishi Vikas Yojana
The umbrella scheme was initiated in 2007 for ensuring holistic development of agriculture and allied sectors by allowing states to choose their own development activities as per district and state agriculture plans.48 With the aim of making farming a remunerative economic activity, the Ministry provides financial assistance to states to spend on sub-schemes such as: (i) pre-harvest and post-harvest infrastructure, (ii) value addition using agri-business models, and (iii) projects based on local and national priorities. In 2021-22, Rs 3,712 crore has been allocated to the scheme, a 46% increase over the revised estimate of 2020-21. The Standing Committee on Agriculture (2017) observed that the allocations for the scheme are not utilised optimally and timely.49 This is due to a delay in the approval of projects and funds by states and consequent slow pace of implementation, causing a reduction in the release of funds. For instance, in 2020-21, Rs 3,700 crore was allocated to the scheme, which has been cut by 31% at the revised stage to Rs 2,551 crore. The Standing Committee on Agriculture (2020)
noted that the scheme's allocation gets cut at the revised stage as states are not able to timely submit their utilisation certificates, due to the delays in completion of infrastructure projects.12 It recommended that there is a need to increase the time period for submission of utilisation certificates for schemes involving infrastructure projects.
## Horticulture
Between 2001-02 and 2019-20, the production of horticulture crops increased from 146 million tonnes to 320 million tonnes (Figure 10).50 This implies that the horticulture production increased at an average rate of 4.5%. Production of food grains increased at a rate of 1.9% during the same period. In 2019-20, fruits and vegetables are estimated to contribute to 31% and 60% of the total horticultural production, respectively.51 The National Mission on Horticulture seeks to promote horticulture by providing availability of quality inputs such as planting material, and post-harvest interventions such as reduction in losses and access to markets.
In 2021-22, the scheme has been allocated Rs 2,385 crore, 48% more than the 2020-21 revised estimate. However, over the past few years, the actual expenditure on the scheme has been lower than the allocation made in the budget (Table 6).
| Year | Allocation* | Expenditure | % shortfall |
|---------|----------------|----------------|----------------|
| 2016-17 | 1,620 | 1,493 | 8% |
| 2017-18 | 2,320 | 2,027 | 13% |
| 2018-19 | 2,536 | 1,997 | 21% |
| 2019-20 | 2,225 | 1,331 | 40% |
| 2020-21 | 2,300 | 1,610 | |
| # | | | |
| | 30% | | |
Note: *Budget estimate; #Revised estimate used as expenditure. Sources: Expenditure Budget, Union Budgets (2016-21); PRS.
## Agricultural Marketing
The Integrated Scheme on Agriculture Marketing includes sub-schemes such as: (i) agriculture marketing infrastructure, to create storage capacity and farmer consumer markets, (ii) market research and information network, (iii) strengthening of Agmark grading facilities, (iv) agro-business development to provide market linkages to farmers, and (v) e-NAM (National Agriculture Market), which is a national electronic market platform on which farmers can sell their produce.
In 2021-22, the scheme has been allocated Rs 410 crore. This is 17% higher than the 2020-21 revised estimate. However, the allocation for 2020-21 has been revised down by 29%, from Rs 490 crore to Rs 350 crore. Till January 24, 2021, 1,000 mandis across 18 states and three union territories have been integrated with e-NAM.52
Regulation: Agriculture markets in most states are regulated by the Agriculture Produce Marketing Committees (APMCs) established by the state governments. APMCs were set up to ensure fair trade between buyers and sellers for effective price discovery of farmers' produce.53 APMCs can: (i)
regulate the trade of farmers' produce by providing licenses to buyers, commission agents, and private markets, (ii) levy market fees or any other charges on trade, and (iii) provide necessary infrastructure within their markets to facilitate the trade. The Standing Committee on Agriculture (2019) observed that the APMC laws are not implemented in their true sense and need urgent reforms.53 Issues identified by the Committee include: (i) most APMCs have a limited number of traders operating, which leads to cartelization and reduces competition, and (ii) undue deductions in the form of commission charges and market fees.53 Traders, commission agents, and other functionaries organise themselves into associations, which do not allow easy entry of new persons into market yards, stifling competition.54 The Acts are highly restrictive in promotion of multiple channels of marketing and competition in the system.53
Parliament enacted three laws in September 2020:
(i) the Farmers' Produce Trade and Commerce
(Promotion and Facilitation) Act, 2020, (ii) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, and (iii) the Essential Commodities (Amendment) Act, 2020.55,56,57 These laws collectively seek to (i) facilitate barrier-free trade of farmers' produce outside the markets notified under the various state APMC laws, (ii) define a framework for contract farming, and (iii) impose stock limits on agricultural produce only if there is a sharp increase in retail prices. The three laws together aim to increase opportunities for farmers to enter into sale contracts, increase the availability of buyers, and permit buyers to purchase bulk produce. However, following protests against the laws, in January 2021, the Supreme Court stayed their implementation until further orders.58
Marketing infrastructure: The Standing Committee on Agriculture (2019) noted that the availability of a transparent, easily accessible, and efficient marketing platform is a pre-requisite to ensure remunerative prices for farmers.53 Most farmers lack access to government procurement facilities and APMC markets.53 Small and marginal farmers (who hold 86% of the agricultural landholdings in the country) face various issues in selling their produce in APMC markets such as inadequate marketable surplus, long-distance to the nearest APMC markets, and lack of transportation facilities.53 The average area served by an APMC market is 496 sq. km., much higher than the 80 sq. km. recommended by the National Commission on Farmers (Chair: Dr. M. S. Swaminathan) in 2006.53
The Standing Committee (2019) noted that Gramin Haats (small rural markets) can emerge as a viable alternative for agricultural marketing if they are provided with adequate infrastructure facilities.53 It recommended that the Gramin Agricultural Markets scheme (which aims to improve infrastructure and civic facilities in 22,000 Gramin Haats across India) should be made a fully funded central scheme and scaled to ensure the presence of a Haat in each panchayat of the country.53 The central government has proposed development of basic infrastructure in Gramin Haats through the MGNREGS and of marketing infrastructure through the Agri-Market Infrastructure Fund.59 The Fund will be set up by NABARD to provide Rs 1,000 crore to states at a concessional interest rate for development of marketing infrastructure in Gramin Haats. In the 2021-22 budget, the government has proposed that the Agriculture Infrastructure Fund will be made available to APMCs for augmenting infrastructure facilities.60
It has also proposed the levy of an Agriculture and Infrastructure Development Cess, which will be used to generate funds for financing agricultural infrastructure and other development activities. It will be levied on petrol, diesel, and imports such as cotton, coal, gold, silver, and alcoholic beverages.
## Agricultural Research
The Indian Council of Agricultural Research (ICAR) has been allocated Rs 5,322 crore for the year 2021-22, which is 7% higher than the revised estimate of 2020-21. The allocation is primarily for salaries, pensions, administrative expenses, and different schemes under ICAR. The Standing Committee on Agriculture (2019) noted that almost 75% of the allocation to the Department of Agricultural Research and Education is incurred on items such as salaries and pensions, and only 25% is available for research activities.61
## 15Th Finance Commission'S Grants For Agricultural Reforms
The 15th Finance Commission, in its report for the period 2021-26, has recommended a total of Rs 45,000 crore as performance-based grants for states implementing agricultural reforms. It has identified four areas (with equal weightage) where states need to carry out reforms to be eligible for their share under these performance-based grants. These four areas are: Land leasing: States are required to create legal provisions for liberalisation and recognition of agricultural land lease. The instances of leasing of agricultural land are rising but since these agreements are largely informal, the tenant is not recognised by the law. They are also not eligible for benefits under various government schemes. The 15th Finance Commission has recommended states to amend their landrelated laws (on the lines of NITI Aayog's Model Agricultural Land Leasing Act, 2016) to allow short-term and long-term lease of agricultural land for agricultural purpose, agro-industry, logistics for agricultural trade, and supply chains. Sustainable and efficient water use: States are required to maintain and augment groundwater stock and check the fall in the water table. Despite groundwater levels falling at an alarming rate, agricultural policies encourage profligate use of water and the sector uses about 90% of the total water used in the country. The 15th Finance Commission has recommended three measures which states can adopt to reduce water use in agriculture: (i) replacing free/ subsidised power supply with direct benefit transfers to facilitate judicious use of water and a shift from water-guzzling crops, (ii) encouraging new technologies, such as drip, sprinkler, and sensor-based irrigation, for efficient use, and (iii) conserving and harvesting rainwater to increase the availability of water. Export promotion: States are required to increase exports in the agriculture sector. India exports 7% of its domestic production. Despite being the second-highest agricultural producer in the world, India's share in the global market is just 2.5%. An Expert Group constituted by the 15th Finance Commission has recommended various measures to increase agricultural exports, including: (i) focusing on certain crop value chains with high export potential, (ii) supporting these value chains through a cluster approach and preparing comprehensive plans to develop these clusters, and (iii) reducing logistics' cost to make exports more competitive. Contribution towards Aatmanirbhar Bharat: States are required to increase the production of oilseeds, pulses, and wood and wood products. These grants aim to make India self-reliant in the production of these commodities where there is a sizeable deficit. The Green Revolution, focusing on wheat and rice, created a strong disadvantage for production of pulses and oilseeds. The per capita domestic availability of pulses declined from 69 gm per person per day in 1961 to less than 55 gm in recent years, leading to under-nutrition and malnutrition. More than 60% of the domestic demand for vegetable oil is met from imports, valued at Rs 69,000 crore. Similarly, 40% of the non-fuel timber requirement is met from imported wood and wood products, valued at Rs 42,000 crore.
The Committee recommended that more funds should be provided to the Department to promote agricultural research and education. It also recommended the Department to work towards attracting Corporate Social Responsibility (CSR) funds for investment in agricultural research.
Research under crop sciences and animal sciences has been allocated Rs 968 crore and Rs 462 crore in 2021-22, respectively. Observing that vegetable oils, pulses, cashew are among the major import commodities between 2011 and 2016, the Standing Committee on Agriculture (2017) recommended that there is a need for enhancing the production of these commodities.62 It also recommended the government to allocate additional funds to ICAR for this purpose. It also noted that the production of animal vaccines is inadequate in the country. It recommended that adequate resources and manpower must be devoted to ICAR for the development of animal vaccines.
International comparison: The Committee on
Doubling Farmers' Income (Chair: Mr. Ashok Dalwai, 2017) observed that the expenditure on agricultural research in India has remained around 0.3-0.4% of the agriculture GDP since 2001 (except in 2011 when it was 0.52% because of higher plan allocations by the government).63 The Committee observed that this is substantively lower in comparison to many developed countries,
and also vis-à-vis comparable developing
economies. The share of agricultural research in agriculture GDP is much higher in Brazil (1.8%), Mexico (1.05%), Malaysia (0.99%), and China (0.62%).
It observed that in the high-income countries, the share stands at 3.01%. The Committee recommended that expenditure on agricultural research should be increased to up to one percent of agriculture GDP.
Income, Ministry of Agriculture and Farmers Welfare, August 2017, http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%202.pd f.
8 Operational Guidelines of "Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)", Ministry of Agriculture and Farmers Welfare, http://agricoop.gov.in/sites/default/files/operational_GuidePM.p df. 9 "PM-KISAN Scheme extension to include all eligible farmer families irrespective of the size of landholdings", Press Information Bureau, Cabinet, May 31, 2019. 10 Rajya Sabha Starred Question No. 60, Ministry of Agriculture and Farmers' Welfare, February 5, 2021, https://pqars.nic.in/annex/253/AS60.pdf. 11 PM-KISAN scheme dashboard, Ministry of Agriculture and Farmers' Welfare, as on February 10, 2021, https://pmkisan.gov.in/. 12 Report no. 9, Standing Committee on Agriculture: 'Demand for Grants (2020-21), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, March 2020, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 9.pdf. 13 "March of Agriculture since Independence and Growth Trends", Report of the Committee on Doubling Farmers'
Income, Ministry of Agriculture and Farmers Welfare, August 2017, http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%201.pd f. 14 "Cabinet approves Interest Subvention to banks on short-Term crop loans to farmers", Press Information Bureau, Ministry of Agriculture and Farmers' Welfare, June 14, 2017. 15 Report of the Committee on Medium-term Path on Financial Inclusion, Reserve Bank of India, December 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/FFIRA27 F4530706A41A0BC394D01CB4892CC.PDF. 16 Report of the Internal Working Group to Revisit the Existing Priority Sector Lending Guidelines, Reserve Bank of India, March 2, 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/PSGRE0 20315.pdf. 17 Report no. 19, Standing Committee on Agriculture: Action taken by the government on the report: 'Demand for Grants
(2020-21), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, February 2021, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 19.pdf. 18 "Input Management for Resource Use Efficiency and Total Factor Productivity", Report of the Committee on Doubling Farmers' Income, Volume 7, Ministry of Agriculture and Farmers' Welfare, March 2018, https://farmer.gov.in/imagedefault/DFI/DFI%20Volume%207.p df. 19 "Setting up of Agriculture Infrastructure Fund", Press Information Bureau, Ministry of Agriculture and Farmers' Welfare, September 18, 2020. 20 Report of the Committee on Medium-term Path on Financial Inclusion, Reserve Bank of India, December 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/FFIRA27 F4530706A41A0BC394D01CB4892CC.PDF. 21 Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, Reserve Bank of India, January 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CFS0701 14RFL.pdf. 23 Agriculture Census 2015-16 (provisional), Ministry of Agriculture and Farmers Welfare, September 2018, https://agcensus.nic.in/document/agcen1516/T1_ac_2015_16.pd f. 24 "Pradhan Mantri Fasal Bima Yojana (PMFBY), Ministry of Agriculture, http://agricoop.nic.in/imagedefault/whatsnew/sch_eng.pdf;
"Cabinet approves New Crop Insurance Scheme - Pradhan Mantri Fasal Bima Yojana", Press Information Bureau, Ministry of Agriculture, January 13, 2016. 25 Agriculture and Food Management, Economic Survey 2017- 18, January 2018, https://mofapp.nic.in/economicsurvey/economicsurvey/pdf/099- 119_Chapter_07_Economic_Survey_2017-18.pdf. 26 Report no. 6, Standing Committee on Agriculture: 'Demand for Grants (2019-20), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, December 2019, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 6.pdf. 27 Lok Sabha Unstarred Question No. 97, Ministry of Agriculture and Farmers' Welfare, February 2, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU97.pdf. 28 Report no. 35, Standing Committee on Agriculture: 'Demand for Grants (2017-18), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, March 2017, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_ 35.pdf. 29 Report no. 17, Standing Committee on Agriculture: Action taken by the government on the report: 'Demand for Grants (2019-20), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, February 2021, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 17.pdf. 30 The National Food Security Act, 2013, India Code, Ministry of Law and Justice, as on September 16, 2020, https://www.indiacode.nic.in/bitstream/123456789/2113/1/2013 20.pdf.
31 Commission for Agricultural Costs and Prices, Ministry of
Agriculture and Farmers' Welfare,
https://cacp.dacnet.nic.in/content.aspx?pid=32. 32 Procurement policy, Department of Food and Public Distribution, https://dfpd.gov.in/Procurement-Policy.htm. 33 Economic Survey 2019-20, Chapter 4, Volume 1, January 2020, https://www.indiabudget.gov.in/budget2020- 21/economicsurvey/doc/vol1chapter/echap04_vol1.pdf. 34 Evaluation Report on Efficacy of Minimum Support Prices (MSPs), NITI Aayog, January 2016, http://www.niti.gov.in/writereaddata/files/document_publication
/MSP-report.pdf. 35 Land Use Statistics at a Glance, Directorate of Economics and Statistics, Ministry of Agriculture and Farmers' Welfare, as on February 1, 2021, https://eands.dacnet.nic.in/LUS_2016- 17/final%20lus%202007-08%20to%202016-17.xls.
36 "Agriculture: More from less", Economic Survey 2015-16, http://unionbudget.nic.in/es2015-16/echapvol1-04.pdf. 37 Natural Resource Management, State of Indian Agriculture 2015-16, Ministry of Agriculture and Farmers' Welfare, May 2016, http://agricoop.nic.in/imagedefault/state_agri_1516.pdf. 38 State of Indian Agriculture 2015-16, Ministry of Agriculture and Farmers Welfare, http://eands.dacnet.nic.in/PDF/State_of_Indian_Agriculture,201 5-16.pdf. 39 Website of the Pradhan Mantri Krishi Sinchai Yojana, Ministry of Agriculture and Farmers' Welfare, as on February
12, 2021, https://pmksy.gov.in/mis/frmDashboard.aspx. 40 Report no. 43, Standing Committee on Chemicals and Fertilisers: 'Demand for Grants (2018-19), Department of Fertilisers', Lok Sabha, March 2018, http://164.100.47.193/lsscommittee/Chemicals%20&%20Fertili zers/16_Chemicals_And_Fertilizers_43.pdf. 41 "Presentation of details under Aatmanirbhar Bharat Package 3.0 to support Indian economy in fight against COVID-19 as announced by Union Finance & Corporate Affairs Minister Smt.
##
Nirmala Sitharaman", Press Information Bureau, Ministry of Finance, November 12, 2020, https://static.pib.gov.in/WriteReadData/userfiles/MOF.pdf. 42 Report no. 7, Standing Committee on Chemicals and Fertilisers: 'Demand for Grants (2020-21), Department of Fertilisers', Lok Sabha, March 2020, http://164.100.47.193/lsscommittee/Chemicals%20&%20Fertili zers/17_Chemicals_And_Fertilizers_7.pdf. 43 Report no. 5, Standing Committee on Chemicals and Fertilisers: 'Study of System of Fertiliser Subsidy', Lok Sabha, March 2020, http://164.100.47.193/lsscommittee/Chemicals%20&%20Fertili zers/17_Chemicals_And_Fertilizers_5.pdf. 44 Agricultural Statistics at a Glance 2019, Ministry of Agriculture and Farmers' Welfare, March 2020, https://eands.dacnet.nic.in/PDF/At%20a%20Glance%202019%2 0Eng.pdf. 45 Report no. 29, Standing Committee on Agriculture: 'Impact of Chemical Fertilizers and Pesticides on Agriculture and allied sectors in the country', August 2016, http://164.100.47.134/lsscommittee/Agriculture/16_Agriculture_ 29.pdf. 46 "Soil health card Scheme Completes 5 years on 19-2-2020", Press Information Bureau, Ministry of Agriculture and Farmers' Welfare, February 17, 2020. 47 Website of the Soil Health Card scheme, Ministry of Agriculture and Farmers' Welfare, as on February 12, 2021, https://www.soilhealth.dac.gov.in/. 48 Revised guidelines, Rashtriya Krishi Vikas Yojana, Department of Agriculture, Cooperation and Farmers' Welfare, https://rkvy.nic.in/static/download/pdf/RKVY_14th_Fin._Com m.pdf. 49 Report no. 35, Standing Committee on Agriculture: 'Demand for Grants (2017-18), Department of Agriculture, Cooperation and Farmers'
Welfare', Lok Sabha, March 2017, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_ 35.pdf. 50 Horticulture Statistics at a Glance 2017, Ministry of Agriculture and Farmers' Welfare, http://agricoop.gov.in/sites/default/files/Horticulture%20At%20 a%20Glance%202017%20for%20net%20uplod%20%282%29.p df. 51 Second Advance Estimates of Horticultural Production in 2019-20, Ministry of Agriculture and Farmers' Welfare, http://agricoop.nic.in/sites/default/files/2019- 20%282nd%20Advance%20Estimates%29%20%281%29.pdf. 52 Lok Sabha Starred Question No. 20, Ministry of Agriculture and Farmers' Welfare, February 2, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AS20.pdf.
53 Report No. 62, Standing Committee on Agriculture (2018-19):
'Agriculture Marketing and Role of Weekly Gramin Haats', Lok Sabha, January 3, 2019, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_ 62.pdf.
54 Report of Committee of State Ministers, In-charge of Agriculture Marketing to Promote Reforms, January 2013, https://dmi.gov.in/Documents/stminprreform.pdf. 55 The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, Gazette of India, Ministry of Agriculture and Farmers' Welfare, September 27, 2020, http://www.egazette.nic.in/WriteReadData/2020/222039.pdf. 56 The Essential Commodities (Amendment) Act, 2020, Gazette of India, Ministry of Consumer Affairs, Food and Public Distribution, September 27, 2020, http://www.egazette.nic.in/WriteReadData/2020/222038.pdf. 57 The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020, Gazette of India, Ministry of Agriculture and Farmers' Welfare, September 27,
2020, http://www.egazette.nic.in/WriteReadData/2020/222040.pdf. 58 Order dated January 12, 2021, Rakesh Vaishnav vs Union of India, W.P.(C) No. 1118/2020, Supreme Court of India, https://main.sci.gov.in/supremecourt/2020/21097/21097_2020_3 1_19_25372_Order_12-Jan-2021.pdf. 59 Report No. 8, Standing Committee on Agriculture (2019-20): Action taken by the government on the report 'Agriculture Marketing and Role of Weekly Gramin Haats', Lok Sabha, December 12, 2019, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 8.pdf. 60 Budget Speech, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 61 Report no. 3, Standing Committee on Agriculture: 'Demand for Grants (2019-20), Department of Agricultural Research and Education', Lok Sabha, December 2019, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 3.pdf. 62 Report no. 36, Standing Committee on Agriculture: 'Demand for Grants (2017-18), Department of Agricultural Research and Education', Lok Sabha, March 2017, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_ 36.pdf. 63 "Science for Doubling Farmers' Income", Report of the Committee on Doubling Farmers' Income, Ministry of Agriculture and Farmers Welfare, February 2018, http://farmer.gov.in/imagedefault/DFI/DFI%20Vol-12A.pdf.
## Allocation To Major Expenditure Heads Under The Departments Table 7: Allocation Under The Department Of Agriculture, Cooperation And Farmers' Welfare (Rs Crore)
| % change in RE | % change (annualised) |
|----------------------------------------|--------------------------|
| in BE 2021-22 over | |
| | |
| 2019-20 | |
| Actuals | |
| 2020-21 | |
| Budgeted | |
| 2020-21 | |
| Revised | |
| 2021-22 | |
| Budgeted | |
| 2020-21 over | |
| BE 2020-21 | 2019-20 |
| PM-KISAN | 48,714 |
| Interest subsidy for short-term credit | |
| to farmers | |
| 16,219 | 21,175 |
| Pradhan Mantri Fasal Bima Yojana | 12,639 |
| Pradhan Mantri Krishi Sinchai | |
| Yojana (Per Drop More Crop) | |
| 2,700 | 4,000 |
| Market Intervention Scheme and | |
| Price Support Scheme (MIS-PSS) * | |
| 2,005 | 2,000 |
| Agriculture Infrastructure Fund | - |
| Formation and Promotion of 10,000 | |
| Farmer Producer Organisations | |
| - | 500 |
| Green Revolution | 9,895 |
| Rashtriya Krishi Vikas Yojana | 3,085 |
| National Mission on Horticulture | 1,331 |
| National Food Security Mission | 1,769 |
| Department | 94,252 |
*for procurement of pulses and oilseeds Sources: Demand no. 1, Expenditure Budget, Union Budget 2021-22; PRS.
| % change (annualised) | % change in RE |
|-----------------------------------|--------------------|
| 2020-21 over BE | in BE 2021-22 over |
| | |
| 2019-20 | |
| Actuals | |
| 2020-21 | |
| Budgeted | |
| 2020-21 | |
| Revised | |
| 2021-22 | |
| Budgeted | |
| 2020-21 | 2019-20 |
| ICAR headquarters | 4,869 |
| Crop sciences | 859 |
| Agricultural education | 688 |
| Central agricultural universities | 459 |
| Animal sciences | 452 |
| Department | 7,523 |
Sources: Demand no. 2, Expenditure Budget, Union Budget 2021-22; PRS.
## Consumption Of Fertilisers
| Year | Urea (N) | Phosphatic (P) | Potassic (K) | Total (N+P+K) |
|---------|-------------|-------------------|-----------------|------------------|
| 2006-07 | 137.7 | 55.4 | 23.3 | 216.5 |
| 2007-08 | 144.2 | 55.1 | 26.4 | 225.7 |
| 2008-09 | 150.9 | 65.1 | 33.1 | 249.1 |
| 2009-10 | 155.8 | 72.7 | 36.3 | 264.9 |
| 2010-11 | 165.6 | 80.5 | 35.1 | 281.2 |
| 2011-12 | 173 | 79.1 | 25.8 | 277.9 |
| 2012-13 | 168.2 | 66.5 | 20.6 | 255.4 |
| 2013-14 | 167.5 | 56.3 | 21 | 244.8 |
| 2014-15 | 169.4 | 60.9 | 25.3 | 255.8 |
| 2015-16 | 173.7 | 69.8 | 24 | 267.5 |
| 2016-17 | 167.4 | 67.1 | 25.1 | 259.5 |
| 2017-18 | 169.6 | 68.5 | 27.8 | 265.9 |
| 2018-19 | 176.3 | 69.7 | 27.8 | 273.8 |
Sources: Agricultural Statistics at a Glance 2019, Ministry of Agriculture and Farmers' Welfare; PRS.
## Demand For Grants: Road Transport And Highways
The Ministry of Road Transport and Highways formulates and administers policies for road transport, and transport research. It is also involved with the construction and maintenance of the National Highways (NHs) through the National Highways Authority of India (NHAI), and the National Highways and Infrastructure Development Corporation Limited (NHIDCL). It also deals with matters relating to road transport such as implementation of central legislation including the Motor Vehicles Act, 1988. This note looks at the proposed expenditure of the Ministry for the year 2021-22, its finances over the last few years, and issues with the same.
## Allocations In Union Budget 2021-22 Fund Allocation1
The total expenditure on the Ministry of Road Transport and Highways for 2021-22 is estimated at Rs 1,18,101 crore. This is an annual increase of 23% over the actual expenditure for 2019-20. In 2021-22, capital expenditure is estimated at Rs 1,08,230 crore while revenue expenditure is estimated at Rs 9,871 crore. Note that in 2014-15, the ratio between revenue and capital expenditure was 50:50. In 2015-16, this ratio changed, with the Ministry spending more funds on capital expenditureIn 2021-22, 90% of the Ministry's spending is estimated to be on capital expenditure.
Change
(Annualised)
2020-21
2021-22
2019-20
Actual
RE
BE
(Actuals
2019-20 to
BE 2021-22)
Revenue
9,875
9,770
9,871
0%
Capital
68,374
92,053
1,08,230
26%
Total
78,249
1,01,823
1,18,101
23%
Note: BE - Budget Estimate; RE - Revised Estimate.
Sources: Demands for Grants 2021-22, Ministry of Road Transport and Highways; PRS.
Overview of Finances Utilisation of funds In the past few years, the expenditure of the Ministry has seen a significant increase, with the maximum year-on-year increase at 42% seen in 2015-16.
## Policy Announcements In The Budget Speech2
In her budget speech, the Finance Minister made the following announcements regarding the roads sector:
-
A National Monetisation Pipeline of potential brownfield infrastructure assets will be launched. An Asset Monetisation dashboard will also be created for tracking the progress and to provide visibility to investors.
-
National Highways Authority of India has sponsored one InvIT that will attract international and domestic institutional investors. Five operational roads with an estimated enterprise value of Rs 5,000 crore are being transferred to the NHAI InvIT. Core infrastructure assets that will be rolled out under the Asset Monetisation Programme will include NHAI Operational Toll Roads.
-
By March 2022, another 8,500 km of highways will be awarded and an additional 11,000 km of national highway corridors will be completed.
-
New economic corridors to augment road infrastructure are being planned in Assam, Kerala, Tamil Nadu, and West Bengal.
Note: Figures for 2020-21 are revised estimates.
Sources: Ministry of Road Transport and Highways budget documents 2009-21; PRS.
However, typically the actual expenditure by the Ministry has been lower than the budget estimates (see Figure 2). As per the revised estimates of 2020-21, the Ministry is expected to exceed its budgeted expenditure by 11%. Before this, the Ministry had exceeded its budgeted expenditure by 9% in 2018-19. This was largely due to additional expenditure incurred on capital outlay towards roads and bridges.
Expenditure of the central government In 2021-22, of the total expenditure, the highest allocation is towards roads and bridges at Rs 60,261 crore (51%).1 This is followed by allocation towards NHAI at Rs 57,350 crore (48.6%).1
Change
(Annualised)
2020-21
2021-22
Major
head
2019-20
Actual
RE
BE
(Actuals
2019-20 to
BE 2021-22)
Roads and bridges
46,305
52,376
60,261
14%
NHAI
31,691
49,050
57,350
35%
148
231
336
51%
Road transport and safety Others
138
167
154
6%
Total
78,249
1,01,823
1,18,101
23%
Note: BE - Budget Estimate; RE - Revised Estimate. Total for 2019-20 includes actual recoveries of Rs 33 crore.
Sources: Demands for Grants 2021-22, Ministry of Road Transport and Highways; PRS.
Roads and bridges: Expenditure under roads and bridges includes development of NHs, projects related to expressways, increasing the number of lanes under various projects, and development of road connectivity in left-wing extremism affected areas. In 2021-22, the allocation towards roads and bridges is Rs 60,261 crore. This is an annual increase of 14% over 2019-20. Note that in 2017 and 2018, the actual allocation towards roads and bridges was lower than the budget estimate for that year by 9% and 8% respectively. However, as per the revised estimates of 2020-21, the allocation towards roads and bridges is estimated to exceed the budget estimate by 7%.
NHAI: The central government develops and maintains NHs through the NHAI. In 2021-22, NHAI has been allocated Rs 57,350 crore, which is an annual increase of 35% over 2019-20. Of the budgeted amount, 61% (Rs 34,700 crore) will be provided from the Central Road and Infrastructure Fund, 22% (Rs 12,650 crore) will be provided from the Permanent Bridge Fees Fund, and the remaining 17% (Rs 10,000 crore) will come from the monetisation of the National Highways.1 Note that the allocation towards NHAI has almost doubled from 2017-18 to 2020-21 (revised estimates). While the actual allocation in 2019-20 fell short of the budgeted estimate by 14%, the revised estimates for 2020-21 expect a 15% increase in the allocation from the budgeted stage.
## Nhai (In Rs Crore)
Sources: Ministry of Road Transport and Highways budget documents 2009-21; PRS.
Expenditure on the NHAI includes funding towards the umbrella highway scheme, Bharatmala Pariyojana. This scheme seeks to optimise the efficiency of freight and passenger movement by bridging critical infrastructure gaps. It also aims to increase the number of districts with NH linkages from 300 to 550.3 Under Phase I of Bharatmala Pariyojana, 34,800 km of roads will be developed over a period of five years. Phase I will also subsume 10,000 km of balance roadworks under the National Highway Development Programme. The estimated cost of Phase I is Rs 5,35,000 crore, spread over five years. Till January 2021, road projects with an aggregate length of about 13,521 km, and costing Rs 3.45 lakh crore have been approved under Bharatmala Pariyojana Phase-I.4 Of this, road length of 3,758 km has already been completed.5 As announced in the Budget Speech 2021-22, by March 2022, another 8,500 km of NH projects will be awarded and an additional 11,000 km of national highway corridors will be constructed.2
Funds managed by the Ministry The Ministry manages its expenditure through various funds. Their details are provided below.
Central Road and Infrastructure Fund (CRIF):
A majority of the Ministry's expenditure is managed through transfers from the CRIF. A portion of the cess collected on motor spirit and high-speed diesel is earmarked for the development of NHs and SHs, and the amount is transferred to the non-lapsable CRIF. This amount is eventually released to the NHAI, and to the state/UT governments for the development of road infrastructure (and other infrastructure projects such as railways) in the country.1 For 2021-22, the transfer from CRIF towards the Ministry is estimated at Rs 79,147 crore.1 This is a 20% annual increase from the actual transfer in 2019-20 (Rs 54,539 crore).
Permanent Bridge Fees Fund (PBFF): Funds transferred to the PBFF relate to the revenue collected by the government through: (i) fees levied for the use of certain permanent bridges on NHs by motor vehicles, (ii) toll on NHs, and (iii) revenue share received on some PPP projects. These funds are then released to the NHAI for the development of NHs entrusted to it.1 For 2021-22, the transfer to PBFF is estimated at Rs 12,670 crore. This is a 9% annual increase from the actual transfer in 2019-20 (Rs 10,610 crore).
National Investment Fund (NIF): The NIF was created in 2005, and is credited with proceeds from disinvestments of public sector enterprises. The Ministry finances the Special Accelerated Road Development Programme in North East (SARDP- NE) with funds from the NIF. For 2021-22, the transfer to NIF is estimated at Rs 7,500 crore. This is an 11% annual increase from the actual transfer in 2019-20 (Rs 6,070 crore).
National Highways Fund: In August 2016, the Union Cabinet had authorised NHAI to monetise certain public funded NH projects.6 Such monetisation includes transferring operations and maintenance of stretches of NHs to private contractors on a long-term basis. In 2021-22, Rs 10,000 crore is estimated to be generated through such monetisation. This is a 41% annual increase from the actual monetisation amount in 2019-20 (Rs
5,000 crore).
Change
(Annualised)
2020-21
2021-22
Funds
2019-20
Actual
RE
BE
(Actuals
2019-20 to
BE 2021-22)
CRIF
54,539
69,622
79,147
20%
PBFF
10,610
11,518
12,670
9%
5,000
10,250
10,000
41%
National Highways Fund
6,070
3,000
7,500
11%
National Investment Fund
Note: BE - Budget Estimate; RE - Revised Estimate. Sources: Demands for Grants 2021-22, Ministry of Road Transport and Highways; PRS.
Issues to consider India has about 64 lakh km of road length, second only to the United States which has about 66 lakh km of road length.7 This road length includes National Highways (NHs), Expressways, State Highways (SHs), district roads, PWD roads, and project roads. In India, road infrastructure is used to transport over 60% of total goods and 85% of total passenger traffic.8 NHs comprise about 2% of the road network but carry about 40% of the total road traffic.9 The Economic Survey (2020) also noted that road transport is the dominant mode of transportation in the country.7 The entire transport sector contributed to about 4.6% of the GVA in
2018-19, of which road transport contributed about
67%.7 The table below shows the details on road construction in India. As per the Economic Survey 2020-21, the decline in the construction of road per day in 2020-21 is mostly due to the shock of COVID-19.
Road
Award of
Construction
construction
Year
NHs/
Road
of NHs/
Road
projects
projects
per day
(in km)
2014–15
7,972
4,410
12
2015–16
10,098
6,061
17
2016–17
15,948
8,231
23
2017-18
17,054
9,829
27
2018-19
5,494
10,855
30
2019-20
8,900
10,200
28
2020-21
5,100
4,000
22
Note: Data for 2020-21 is as on September 30, 2020. Sources: Economic Survey 2020-21; PRS.
However, the roads sector has been facing several constraints such as: (i) lack of equity with developers, (ii) higher cost of financing, (iii) shortfall in funds for maintenance, (iv)
unavailability of land for the expansion of NHs, (v) significant increase in land acquisition cost, and (vi) bottlenecks and checkpoints on NHs which could adversely impact benefits of GST.10 The Standing Committee on Transport (2020) had also highlighted NHAI's increasing debt which could lead to severe financial issues in the future.11 We discuss some of these issues below.
## Issues With Financing
The figure below highlights the total investment in the roads sector, as highlighted by the Economic Survey 2020-21.7 The total investment in road sector has grown at a CAGR of 27% from 2014-15 to 2019-20. The share of borrowings in this investment has grown from 6% in 2014-15 to 43% in 2019-20. During the same time period the share of both budgetary support and private investment in the total investment has decreased from 57% to 44% and from 37% to 13% respectively.
Note: Figures for 2020-21 are up to September 30, 2020. Sources: Economic Survey 2020-21; PRS.
Budgetary support from central government The Standing Committee on Transport (2020) noted that increasing the gross budgetary support to the Ministry while the private sector investment is declining may not be a sustainable growth plan.11 The Committee had made similar observations in 2016 and 2018 and had suggested that the government should devise ways to mobilise funds from other sources and establish appropriate financial institutions and models to encourage the return of private investment to the road sector.12,13 The Committee (2016) had also noted that while the Ministry of Road Transport and Highways invests in the construction of roads, it does not have its own source of revenue other than budgetary support from the central government. It recommended that the RBI and Ministry of Finance may help the Ministry of Road Transport to set up its own dedicated financial institutions to generate funds for development of the road sector. It also recommended that the Ministry should monitor toll collection and channel any surplus funds towards stressed projects. The Ministry expects to raise Rs 86,182 crore up to 2024-25 to fund projects under the National Infrastructure Pipeline, by monetising its assets under the Toll-Operate-Transfer (TOT) model.11 The Standing Committee (2020) had observed that this might be a challenge for the Ministry since it has planned to raise Rs 10,000 crore in 2019-20 by monetising assets under various models including TOT but could raise only Rs 5,000 crore.11 In 2021- 22, the Ministry plans to raise Rs 10,000 crore through such monetisation.
In 2019-20, the actual capital outlay fell short of the budget estimates by 4%. Most of this shortage was due to shortage in budgetary support towards capital outlay (14% shortage).
## Borrowings
In 2021-22, NHAI estimates to borrow Rs 65,000 crore towards capital outlay. This amount is about Rs 10,000 crore lower than the actual borrowings for 2019-20 (reduction of 7% annualised over two years). Note that this borrowing is in addition to the Rs 57,350 crore of budgetary support. The Standing Committee on Transport (2020) had noted that NHAI's debt has been increasing and as of March 2020, the amount of debt NHAI had to repay was more than twice the annual budgetary allocation of the Ministry for 2020-21.11 The debt servicing cost of NHAI was estimated to rise to Rs 34,846 crore by 2021-22.11 In its Annual Report (2018), NHAI had noted that with the debt obligations increasing due to deferment of debt repayment, exposure of financial institutions that lend to the roads sector has increased significantly, reaching defined exposure norms for the sector.9 The Comptroller and Auditor General of India (2016) had also noted several procedural inefficiencies with NHAI.14 For example, NHAI could not realise toll on certain projects due to delays in approvals, toll operations, and other procedural lapses. NHAI did not adhere to the Ministry's guidelines on maintenance of project wise balance sheet and cash flow.14 Inefficient bidding processes for engaging toll collection agencies also led to the loss of revenue.14 The Committee on Public Undertakings (2017) had also noted several issues in the financial performance of NHAI such as: (i) insufficiency of funds, (ii) gap between the funds allocated to the Ministry, and released to NHAI, and (iii) underutilisation of funds.15 For example, funds that are left unspent at the end of a financial year is shown as 'opening balance' at the beginning of the next financial year. This opening balance was Rs 2,672 crore and Rs 6,740 crore for the years 2015-16 and
2016-17 respectively.15 This showed NHAI's inability to optimally utilise available funds. The Standing Committee on Transport (2020) had recommended that the Ministry should constitute an Advisory Committee to look into the increasing debt of NHAI, and the efficacy of the measures undertaken by the Ministry and NHAI to monetise their assets.11 Further, the Ministry may increase toll charges across the country and postpone certain projects, as the present financial health of NHAI is not sustainable in the long run and may create bigger issues in the roads sector in the future.
Committees have also suggested more due diligence on the part of NHAI. The Standing Committee on Transport (2019) recommended that NHAI should compare its project cost estimates with the actual costs incurred on road projects.16 If there is a substantial difference between the bid price offered by the concessionaire and the project cost estimates made by the government, NHAI should review its cost estimation methodologies. The Committee (2019) also suggested that the NHAI or central government should appoint a credit rating agency to assess the financial strength of private players and their ability to meet debt repayment obligations.16
## Private Financing And Contracts
In its Annual Report (2018), NHAI had noted that the recent economic slowdown has led to lower revenue realisation than expected. Several developers had significantly leveraged their balance sheets in anticipation of high revenue, and with lower revenue realisation they face issues with debt servicing.9 This also adds stress on the existing road infrastructure loan portfolios of financial institutions. It has been noted that private financing for the roads sector is a challenge.9,17 Several PPP road projects have not been able to attract bids.17 The major highway developers in the country are also facing financial capacity constraints. Further, there is a lack of debt products that are aligned with the revenue stream profile of highway projects (longterm projects where toll collection can begin only after the entire project is completed). This makes financing of such projects difficult, and has resulted in some projects getting stalled at the construction stage. This also discourages prospective bidders.17 The Committee on Revisiting & Revitalizing the PPP model of Infrastructure Development (Chair: Dr. Vijay Kelkar) had looked at issues with PPP projects in India, in November 2015.18 It had recommended setting up an independent regulator for the roads sector to help bring in and regulate private players in the sector. It had also noted that service delivery (such as constructing roads) to citizens is the government's responsibility and should not be evaded through PPPs.
NHAI has also noted that financing of large infrastructure projects is based on revenue streams spread over 20 to 30 years.9 If the debt for such projects spans over 10 to 15 years, it leads to sustainability issues and an asset liability mismatch.9 The Kelkar Committee (2015) had also observed that since infrastructure projects span over 20-30 years, a private developer may lose bargaining power because of abrupt changes in the economic or policy environment. It recommended that the private sector must be protected against such loss of bargaining power. This could be ensured by amending the terms of the concession agreement to allow for renegotiations. In order to resolve languishing projects the Ministry has taken some steps which include: (i) implementing an exit policy which allows private developers to take out their entire equity and exit operational Build-Operate-Transfer (BOT) projects two years from the start of operations irrespective of date of award; (ii) providing rationalised compensation to concessionaires for languishing NH projects in BOT mode for delays not attributable to concessionaires; and (iii) a one-time fund infusion by NHAI which enables revival and physical completion of languishing BOT projects that have achieved at least 50% physical progress, on a case to case basis, among others.19
Non-performing assets: The Standing Committee on Transport (2016) had observed that several longterm loans disbursed for the road sector are turning into non-performing assets (NPAs).12 Project bids are often made without proper study, and projects are awarded in a hurry. This results in stalling of projects, and concessionaires leave mid-way. Banks and other infrastructure lending institutions have also been reluctant to finance the highways sector.12 This has led to difficulties in debt servicing, putting additional stress on the road infrastructure portfolios. Besides increasing the cost of the project, delays also make it difficult to obtain additional debt.12 The Standing Committee on Transport (2016) recommended that banks should take due diligence while disbursing loans to concessionaires. It also suggested that the bank NPAs (related to the roads sector) may be supported by government allocation. Banks could be empowered to recover the bad debts. Further, in light of huge NPAs lying with a single bank, the Standing Committee (2019) recommended that guidelines prescribing a limit up to which a bank can lend to a single borrower be framed to minimise the risk involved in lending.19
The Standing Committee on Transport (2019) also suggested that NHAI should revisit the financial requirements for bidders to ensure their eligibility for the bidding process.19 While the onus of the feasibility of the bids made by the concessionaire lies mainly with the banks, NHAI should exercise due diligence while awarding projects to concessionaire with poor performance history.
## Project Delays And Increase In Project Costs
The Committee on Public Undertakings (2017) had noted that from 1995, till June 2016, out of the total 388 projects completed, only 55 projects were completed on or before time.15 Delays in the completion of the projects were mainly attributed to:
(i) the long time taken in land acquisition, and obtaining environment and forest clearances, (ii)
poor performance of concessionaires due to economic slowdown, (iii) cash flow problems, and (iv) law and order issues.15 The Ministry has also noted that recently projects have also been halted due to NCLT proceedings against the developer.20 Such delays increase project costs, eventually making certain projects unviable. As of December 2019, 773 NH projects with a total length of 28,432 km and costing Rs 2.72 lakh crore were delayed.21 The Standing Committee on Transport (2015) had recommended that a coordination mechanism at the central level with the Ministries of Finance, Environment and Forest and Defence will help speed up the process of clearances.17 The Standing Committee (2016) had also suggested that the Ministry of Road Transport and Highways should obtain all these clearances before awarding the projects to concessionaires.
## Increase In Land Acquisition Costs
From January 1, 2015, the compensation for land acquired by NHAI is determined as per the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013. The Committee on Public Undertakings (2017) had noted that due to higher compensation under the 2013 Act, the expenditure by the Ministry of Road Transport on land acquisition increased from Rs 9,097 crore in 2014-15 to Rs 21,933 crore in 2015-16.15 In 2017-18, NHAI spent more funds on land acquisition (41% of the expenses) as compared to project expenditure (39%).9 The Standing Committee on Transport (2020) noted that the average rate of land acquisition has increased significantly from about Rs 0.92 Crore/Ha in 2013- 14 to Rs 3.13 crore per Ha in 2019- 20 (an increase of 240%). The Committee on Public Undertakings (2017) also observed that farmers who were entitled to lesser compensation under the older law, have been approaching courts for increased compensation.15
This has further delayed the land acquisition process and added to the cost of projects.
## Investment In Maintenance Of Roads
In 2021-22 the Ministry has allocated Rs 2,680 crore towards the maintenance of roads and highways (including toll bridges). This is an annual increase of 26% over the actual expenditure on maintenance in 2019-20. However, note that in 2019-20, the actual expenditure on maintenance was 47% less than the budget estimate. The amount allocated towards maintenance, Rs 2,680 crore, is about 2% of the ministry's budget. This is for a total NH length of about 1.36 lakh km (as of December 2020).22 In comparison, in 2020-
21 the US government seeks to allocate $23.74
billion (about Rs 1.7 lakh crore, which is 51% of its total budget on highways) towards its National Highway Performance Program, to improve the condition and performance of their National Highway System (roughly 3.5 lakh km of length).23 The National Transport Development Policy Committee (2014) had noted that the amount spent on maintenance of roads is low.24 This results in roads with potholes, weak bridges, and poor pavements, and has safety consequences. Further, maintenance is carried out only when required, as opposed to being a part of preventive measures.24 The Standing Committee on Transport (2018, 2020) had also raised concerns that the entire amount allocated towards maintenance does not get fully utilised as well.11,13 Over the years, the Standing Committee has repeatedly noted that the entire length of NHs in the country cannot be maintained with this amount. NITI Aayog (2018) has noted that the amount allocated for maintenance is about 40%
of the amount required.25
Maintenance of roads should be given top priority as it increases the life span of roads. The Standing Committee (2020) has recommended that the budget for maintenance of NHs should be increased.11 NITI Aayog has suggested that 10% of the Ministry's annual budget should be earmarked for maintenance.25 The Standing Committee (2015) has suggested that an effective monitoring mechanism for repair and maintenance of roads should be put in place.17 Further, there should be penalties for contractors and engineers in case of poor quality repair, maintenance, and construction.
## Investment In Road Safety
In 2021-22, the Ministry has allocated Rs 336 crore towards road transport and safety. This is an annual increase of 51% over the actual expenditure on maintenance in 2019-20. However, note that in 2019-20, the actual expenditure on maintenance was 47% less than the budget estimate.
The allocation towards safety provides for various things such as road safety programmes, setting up of facilities on NHs, for extending relief to accident victims, strengthening of public transport, research and development, and training. The amount allocated towards road safety in 2021- 22 is about 0.3% of the Ministry's total budget. In comparison, in 2019 the US federal government spent about $2.7 billion on its Highway Safety Improvement Programme (6% of its total expenditure on highways).25 The Standing Committee on Transport (2020) suggested that the Ministry may seek higher fund allocation towards road safety, and driver training programmes.
In 2019, there were 4,49,002 road accidents in India, which killed about 1.5 lakh people and injured about
4.5 lakh people.26 As per the World Road Statistics, 2018, India ranks first in the number of road accident deaths (among 199 countries reported), followed by China and the US. As per the WHO Global Report on Road Safety 2018, about 11% of the accident-related deaths in the world occur in India.25 In 2019, Parliament passed the Motor Vehicles (Amendment) Bill, 2019 which seeks to address various issues around road safety. It increases the penalties for various offences under the Act, and provides for a Motor Vehicle Accident Fund which would be used for the treatment of persons injured in road accidents. It also provides for a National Road Safety Board, which would advise the central Transport and Highways, December 2, 2019. 6 "Cabinet authorized National Highways Authority of India to monetize public funded national highway projects", Press Information Bureau , Cabinet Committee on Economic Affairs (CCEA), August 3, 2016, http://pib.nic.in/newsite/PrintRelease.aspx?relid=148306. 7 Volume 2, Economic Survey 2020-21, January 29, 2021, https://www.indiabudget.gov.in/economicsurvey/. 8 Basic Road Statistics of India 2016-17, Ministry of Road Transport and Highways, http://morth.nic.in/showfile.asp?lid=4585. 9 Annual Report 2017-18, National Highways Authority of India, Ministry of Road Transport and Highways, https://nhai.gov.in/writereaddata/Portal/Images/pdf/CompressedN HAIAnnualReportEnglishcorrected.pdf. 10 Chapter 8: Industry and Infrastructure, Economic Survey 2016- 17, Volume 2, August 2017, http://www.indiabudget.gov.in/es2016-17/echapter_vol2.pdf. 11 "278th Report: Demands for Grants (2020-21) of Ministry of Road Transport and Highways", Standing Committee on Transport, Tourism and Culture, March 12, 2020, and state governments on all aspects of road safety and traffic management. The Ministry has notified several Rules to implement provisions of the Act, such as: (i) protection of Good Samaritans, (ii)
conditions for states to levy higher penalties than those in the Act, and (iii) amendments to obtaining driving licenses, among others.22
Connectivity in remote areas The Ministry also allocates funds towards the development of highways in areas with poor connectivity. Some of these projects include the Special Accelerated Road Development Programme in North East (SARDP-NE), Externally Aided Projects and Roads Projects in Left-Wing Extremism Affected Areas.
In 2021-22, Rs 9,590 crore has been allocated towards the SARDP-NE project, which includes Rs 2,090 from gross budgetary support. This is a 27% annual increase from the actual expenditure in 2019- 20. The Standing Committee on Transport has repeatedly (2018, 2020) noted underutilisation of funds and under-achievement of targets in SARDP- NE.11,13 The Standing Committee (2020) noted that projects in the north eastern region face a significant delay of almost a decade in completion. This causes inconvenience to the commuters, and also adds to the project cost.11 The Committee noted that the issues causing such delays are specific to the region and suggested that the Ministry consider these when projecting timelines and expenditure for projects in this region.
https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/127/278_2020_9_15.pdf. Standing Committee on Transport, Tourism and Culture, August 10, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C
ommittee%20on%20Transport,%20Tourism%20and%20Culture/ 236.pdf. 13 "259th Report: Demands for Grants (2018-19) of the Ministry of Road Transport and Highways", Standing Committee on Transport, Tourism and Culture, March 6, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/102/259_2018_6_17.pdf. 14 Chapter 12: Ministry of Road Transport and Highways, Report No. 9 of 2017, 2016, Compliance Audit Union Government Commercial, Comptroller and Auditor General of India, April 5, 2017, http://www.cag.gov.in/sites/default/files/audit_report_files/Execu tive_Summary_report_No_9_%20of_2017_on_compliance_audit _observations_union_government.pdf. 15 "19th Report, Committee on Public Undertaking: 'National Highways Authority of India'", Lok Sabha, August 2, 2017, http://164.100.47.193/lsscommittee/Public%20Undertakings/16_ Public_Undertakings_19.pdf. 16 "272nd Report: Action Taken by the Government on the Recommendations/Observations of the Committee contained in its Two Hundred and Thirty Sixth Report on 'Infrastructure Lending in Road Sector'", Standing Committee on Transport, Tourism and Culture, December 9, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/127/272_2020_9_12.pdf.
17 "220th Report: Demands for Grants (2015-16) of Ministry of Road Transport and Highways", Standing Committee on Transport, Tourism and Culture, April 28, 2015, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/
ReportFile/20/31/220_2016_7_17.pdf.
18 "Report of the Committee on Revisiting and Revitalising Public Private Partnership Model of Infrastructure", Department of Economic Affairs, Ministry of Finance, November 2015, https://www.pppinindia.gov.in/infrastructureindia/documents/101 84/0/kelkar+Pdf/0d6ffb64-4501-42ba-a083-ca3ce99cf999. 19 "272nd Report: Action Taken by the Government on the Recommendations/Observations of the Committee contained in its Two Hundred and Thirty Sixth Report on 'Infrastructure Lending in Road Sector", Standing Committee on Transport, Tourism and Culture, December 9, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/127/272_2019_12_15.pdf. 20 Lok Sabha Starred Question No. 249, Answered on 5th December, 2019, Ministry of Road Transport and Highways. .
21 Lok Sabha Unstarred Question No.2470, Answered on 5th March, 2020, Ministry of Road Transport and Highways. 22 "Year-end Review", Press Information Bureau, Ministry of Road Transport and Highways, December 30, 2020, https://pib.gov.in/PressReleasePage.aspx?PRID=1684574.
23 FHWA FY 2019 Budget, Federal Highway Administration, https://www.fhwa.dot.gov/cfo/fhwa-fy-2019-cj-final.pdf. 24 "Volume 3, Chapter 2, Roads and Road Transport", India Transport Report: Moving India to 2032, National Transport Development Policy Committee, June 17, 2014, http://planningcommission.nic.in/sectors/NTDPC/volume3_p1/ro ads_v3_p1.pdf. 25 Strategy for New India @ 75, NITI Aayog, November 2018, https://niti.gov.in/sites/default/files/2019- 01/Strategy_for_New_India_0.pdf. 26 Road Accidents in India 2019, Transport Research Wing, Ministry of Road Transport and Highways,
## Demand For Grants: Education
The Ministry of Education consists of two departments: (i) school education and literacy, and
(ii) higher education. The Department of School Education and Literacy is broadly responsible for education imparted between the ages of six to 18 years, i.e., school education. Under the Right to Education (RTE) Act, 2009 the government is mandated to provide elementary education to all children between 6-14 years of age. Secondary education is imparted between Class 9-12 for children between 14-18 years of age.
The **Department of Higher Education** is responsible for higher education, and training for students above 18 years of age. Higher education includes undergraduate and postgraduate courses, doctoral degrees, and certificates following the completion of 12 years of schooling or equivalent. This note looks at the proposed expenditure of the Ministry for 2021-22, trends in this expenditure and discusses some of the issues related to the education sector.
## Allocation In Union Budget 2021-22
In 2021-22, the Ministry has been allocated Rs 93,224 crore, the 8th highest allocation among all Ministries. The allocation constitutes 2.67% of the central government's estimated expenditure for 2021-22. The Economic Survey 2019-20 noted that the expenditure on education by the centre and the states as a proportion of the Gross Domestic Product (GDP) has been around 3% between 2014-15 to 2018-19.1 The National Policy on Education 1968 recommended the spending on Education to be 6% of GDP. National Education Policy, 2020 (NEP) reaffirms the recommendation of increasing public investment on education to 6% of GDP.
In 2021-22, the Department of School Education and Literacy has been allocated Rs
54,874 crore, accounting for 59% of the Ministry's total allocation. The Department of Higher Education has been allocated Rs 38,351
crore, accounting for 41% of the Ministry's total allocation.
## Overview Of Finances Budget Estimates 2021-22
The Ministry has been allocated Rs 93,224 crore in 2021-22, which is an annual increase of 2.1% over the actual expenditure in 2019-20.2
## Budget Speech Highlights 2021-223
-
The Higher Education Commission of India will be constituted as an umbrella body with four separate bodies for standard setting, accreditation, regulation, and funding.
-
Over 15,000 schools will be qualitatively strengthened to implement National Education Policy.
-
An umbrella structure will be created in nine cities each to facilitated better cooperation between various research institutes, universities, and colleges under the central government.
-
100 new Sainik Schools will be set up in partnership with non-government organisations, private schools, and states.
-
A central university will be set up in Leh for better accessibility to higher education in the region.
Annualised
2020-21
2021-22
Department
2019-20
Actuals
RE
BE
change
(Actuals
2019-20 to
BE 2021-22)
52,520
52,189
54,874
2.2%
School Education & Literacy Higher Education
36,916
32,900
38,351
1.9%
Total
89,437
85,089
93,224
2.1%
Note: BE - Budget Estimate; RE - Revised Estimates; Annualised change is from 2019-20 Actuals to 2021-22 BE. Sources: Expenditure Budget - Ministry of Education, 2021- 22; PRS.
In 2021-22, the highest expenditure (33%) is allocated towards Samagra Shiksha (Rs 31,050 crore), followed by: (i) autonomous bodies (12%) such as Kendriya Vidyalaya Sangathan (KVS), (ii) Mid-Day Meal Programme (12%), (iii) grants to central universities (8%), (iv) Indian Institutes of Technology (8%), and (v) statutory and regulatory bodies (University Grants Commission (UGC) and All India Council for Technical Education (AICTE)) (5%), among others. Table 1 shows the key heads under which the Ministry spends its funds (as a percentage of its total expenditure).
Allocation
(as % of
Expenditure head
total
expenditure)
Samagra Shiksha
33%
Autonomous Bodies
12%
Mid-Day Meal Programme
12%
Grants to Central Universities
8%
Indian Institutes of Technology
8%
UGC and AICTE
5%
National Institutes of Technology and IIEST
4%
Rashtriya Uchhatar Shiksha Abhiyan (RUSA)
3%
Student Financial Aid
3%
Others
10%
Total
100%
Note: Autonomous Bodies include Kendriya Vidyalaya Sangathan (KVS) and Navodaya Vidyalaya Samiti (NVS);
'Others' include schemes and programmes under the Ministry each with an allocation of less than 3% of the total expenditure. Sources: Expenditure Budget - Ministry of Education, 2021- 22; PRS.
## Key Highlights Related To Allocations In 2020-21
In 2020-21, the allocation for the Ministry of Education has reduced from Rs 99,312 crore at the budget stage to Rs 85,089 crore at the revised stage (a decrease of 14%). The schemes with a significant reduction in allocation at the revised stage include: (i) Higher Education Financing Agency (91% reduction), (ii) student financial aid (48% reduction), and (iii) Samagra Shiksha (48% reduction).
Some of the heads which observed an increase in their allocation at the revised stage are: (i) world class institutions (increased by 120%), (ii) Mid- Day Meal programme (increased by 17%), (iii) autonomous bodies such as Kendriya Vidyalaya Sangathan (KVS) (increased by 13%), and (iv) grants to Central Universities (increased by 13%). Refer Table 10 in the Annexure for a detailed breakup of the expenditures under the Ministry.
Financing education The Standing Committee on Human Resource Development (2020) noted that the Department of School Education and Literacy had been allocated 28% less than what the Ministry had proposed in 2020-21 (allocated Rs 59,845 crore against the proposed amount of Rs 82,570 crore).4 The Committee recommended additional funds for centrally sponsored schemes and central sector schemes under the department at the revised estimates stage. However, at the revised stage, the budget for centrally sponsored schemes was reduced from Rs 50,081 crore to Rs 41,400 crore and for the central sector schemes, the allocation was reduced from Rs 520 crore to Rs 354 crore.4 In 2020-21, the highest reduction in allocation at the revised stage among centrally sponsored schemes was for Samagra Shiksha (reduction of Rs 10,794 crore from the budget stage). Among central sector schemes, the highest reduction was for the National Scheme for Incentive to Girl Child for Secondary Education (reduced from Rs 110 crore at the budget stage to Rs One crore at the revised stage). Another Standing Committee on Human Resource Development (2020) noted that the allocation for Central Universities is inadequate as compared to their infrastructure, faculty and number of students enrolled.26 This affects the implementation of schemes. Thus, the Committee recommends increasing the budgetary allocations of the department of higher education. The NEP 2020 states that to achieve the target of public spending of 6% of GDP on education at the earliest, financial support will be provided to critical components of education. These components include: (i) adequate number of teachers and staff, (ii) teacher development, and (iii) development of learning resources. In the long-term, the policy recommends investments in key thrust areas of education such as: (i) teacher education and development, (ii) revamping colleges and universities, (iii) promotion of research, (iv) foundational literacy, and (v) quality early childhood care education. Further, the Policy recommends the efficient use of funds to avoid underutilisation of allocations. This will help in the timely achievements of targets under various schemes for education.
Department of School Education and Literacy
Allocation to the department has seen an annual growth of 7% between 2010-11 and 2021-22.
Note: Revised estimates have been used for 2020-21 and Budget estimates for 2021-22.
Sources: Expenditure Budget, 2010-22; PRS.
Annualised
Change
Major Head
19-20
Actuals
20-21
RE
21-22
BE
(Actuals 19- 20 to BE 21-
22)
32,377
28,078
31,300
-2%
National Education Mission -Samagra Shiksha
32,377
27,957
31,050
-2%
-
120
250
-
-Teachers Training and Adult Education Mid-Day Meal Programme#
9,699
12,900
11,500
9%
Autonomous bodies
10,077
10,395
11,192
5%
Scholarship Scheme*
331
350
350
3%
Others
36
467
532
91.3%
Total
52,520
52,189
54,874
5.9%
Note: Annualised Change is from 2019-20 Actuals to 2021-22 Budget Estimate; # Refers to National Programme of Mid-Day Meal in Schools; * Refers to National Means-cum-Merit Scholarship Scheme. Sources: Expenditure Budget, 2021-22; PRS.
Table 4 shows a trend of utilisation of funds allocated to the department between 2010-11 and 2020-21.
the actual expenditure (2010-21) (in Rs crore)
Year
Budget
Estimate
Actuals
Utilisation %
(Actuals/BE)
2010-11
33,214
36,433
110%
2011-12
41,451
40,641
98%
2012-13
48,781
45,631
94%
2013-14
52,701
46,856
89%
2014-15
55,115
45,722
83%
2015-16
42,220
41,800
99%
2016-17
43,554
42,989
99%
2017-18
46,356
46,600
101%
2018-19
50,000
48,441
97%
2019-20
56,537
52,520
93%
2020-21
59,845
52,189*
87%
Note: BE - Budget Estimate. *Revised Estimate Sources: Union Budgets, 2012-22; PRS.
National Education Mission: The NEM consists of two expenditure heads: (i) Samagra Shiksha, and (ii) Teachers Training and Adult Education. Allocation to the NEM accounts for 34% of the total budget of the Ministry of Education. In 2021-22, the NEM has been allocated Rs 31,300 crore, which is a 2% annual decrease as compared to 2019-20. Samagra Shiksha was launched in July 2018. It aims to ensure inclusive and equitable quality education at all levels of school education. It
subsumed three erstwhile centrally sponsored schemes: (i) Sarva Shiksha Abhiyan (SSA), (ii) Rashtriya Madhyamik Shiksha Abhiyan (RMSA), and (iii) Teacher Education (TE).
In 2021-22, Samagra Shiksha has been allocated Rs 31,050 crore (6.8% annual increase over 2019- 20). The allocation for Samagra Shiksha accounts for 57% of the total departmental allocation and 99% of the allocation for the National Education Mission. In 2020-21, Samagra Shiksha was allocated Rs 38,751 crore which was reduced to Rs 27,957 crore at the revised stage (a decline of 28%). Teacher Training and Adult Education has been allocated Rs 250 crore in 2021-22, which is 0.5% of the total departmental allocation. In 2020-21, teacher training and adult education had an allocation of Rs 110 crore at the budget stage, which was increased to Rs 120 crore at the revised stage (an increase of 9%).
National Programme of Mid-Day Meal in Schools: In 2021-22, the mid-day meal programme has been allocated Rs 11,500 crore (9% annual increase over 2019-20). In 2020-21, the programme was allocated Rs 11,000 crore at the budget stage which was increased by 17% to Rs 12,900 crore at the revised stage. The programme targets enhancement of enrolment, retention, attendance, and nutritional levels among children studying in Class 1 to 8 across India.
Autonomous bodies: These include: (i) Kendriya Vidyalaya Sangathan (KVS), (ii) Navodaya Vidyalaya Samiti (NVS), (iii) National Council of Educational Research and Training (NCERT), (iv) Central Tibetan School Administration (CTSA), and (v) National Bal Bhawan. In 2021-22, the allocation for autonomous bodies is Rs 11,192 crore (5% annual increase from 2019-20).
National Means-cum-Merit Scholarship Scheme: The scheme provides one lakh scholarships of Rs 6,000 per annum each to eligible meritorious students in Class 9. The scholarship is provided up to Class 12 to prevent students from dropping out due to financial constraints. In 2021-22, Rs 350 crore has been allocated for the scheme (3% annual increase over 2019-20). In 2020-21, the scheme was allocated Rs 372 crore at the budget stage, which was reduced to Rs 350 crore at the revised stage (6% decrease).
## Key Issues In School Education Enrolment, Transition, And Dropout Rates
Enrolment: Gross Enrolment Ratio (GER) is the student enrolment as a proportion of the corresponding eligible age group in a given year. In 2018-19, the GER in primary education was close to 100%.5 However, the GER reduces to 77% at the secondary level, and to 50% at the senior secondary level. This implies that curtailing dropouts in the education system remains a challenge. The GER for upper primary, secondary, and senior secondary level of education between 2010-11 and 2018-19 annually increased 1%, 2%, and 4% respectively. The GER for the primary level of education had an annual decline of 1% between this period. Figure 2, compares GER in India with other countries as in 2015-16.
Sources: Educational statistics at a Glance 2018; PRS.
India's enrolment rate in Class 1-5 and Class 6-8 is comparable to that of developed countries. However, it is significantly less (68%) than these countries for Class 9-12 (see Figure 3). The NEP 2020 notes that the decline in GER is higher for certain socio-economically disadvantaged groups, based on: (i) gender identities (female, transgender persons), (ii) socio-cultural identities (scheduled castes, scheduled tribes), (iii) geographical identities (students from small villages and small towns), (iv) socio-economic identities (migrant communities and low-income households), and (v) disabilities.6
Transition and dropouts: Transition rates reflect the dropout levels in the school education system. It is the percentage of pupils enrolled in the final grade of the current stage who proceed to the first grade of the next stage. Higher the transition rate, lower the dropout level. As of September 2016, the transition rate from primary to upper primary and from elementary to secondary was close to 90%, however, the transition rate from secondary to senior secondary was only 66% (Figure 3).7
Note that there is a difference in transition rate from elementary to secondary education (Class 8 to Class 9) between boys and girls. The transition rate for both genders is low for the transition from secondary to senior secondary (Class 10 to 11).
Sources: UDISE Flash Statistics 2016-17, MHRD; PRS.
According to the Ministry, the most prominent reason for dropping out in 2015-16 was the engagement in domestic activities (for girls) and engagement in economic activities (boys) (Table 5).8 To improve the retention of children in schools, the NEP 2020 recommends strengthening existing schemes and policies which are targeted at socio-economically disadvantaged groups. For instance, schemes for free bicycles for girls from socioeconomically disadvantaged groups or scholarships to tackle dropouts. Further, it recommends setting up special education zones in areas with a significant proportion of such disadvantaged groups. A gender inclusion fund should also be set up to assist female and transgender students in getting access to education. The Standing Committee on Human Resource Development (2020) suggested that vocational training be provided to students dropping out at the secondary level. This will help them get job opportunities at the earliest and continue their studies.4
1-12) for 2015-16
| Reason for dropping out | Male | Female |
|----------------------------|---------|-----------|
| Child not interested in | | |
| studies | | |
| 23.8% | 15.6% | |
| Financial Constraints | 23.7% | 15.2% |
| Engage in Domestic | | |
| Activities | | |
| 4.8% | 29.7% | |
| Engage in Economic | | |
| Activities | | |
| 31.0% | 4.9% | |
| School is far off | 0.5% | 3.4% |
| Unable to cope up with | | |
| studies | | |
| 5.4% | 4.6% | |
| Completed desired level/ | | |
| Grade | | |
| 5.7% | 6.5% | |
| Marriage | | |
| | | |
| 13.9% | | |
| Other reasons | 5.1% | 6.2% |
Note: Other reasons include: (i) timings of educational Institution not suitable, (ii) language/medium of Instruction used unfamiliar, (iii) inadequate number of teachers, (iv) quality of teachers not satisfactory, (v) unfriendly atmosphere at school. For girl students, other reasons also include: (i) non-availability of female teachers, (ii) non-availability of girl's toilet. Sources: Educational Statistics at Glance 2018, MHRD; PRS.
The Committee stated that Samagra Shiksha has the potential to revamp school education. Note that the utilisation of funds under Samagra Shiksha in 2019-20 was 89%. The Committee specified that such underutilisation and any reduction in funds may lead to an adverse impact on project implementation at the ground level.4 Further, the Committee noted that the development of infrastructure has been slow in elementary and secondary schools. This includes: (i) toilets for children with special needs in elementary schools (81% completed), (ii) toilets for girls in secondary schools (68%
completed), and (iii) drinking water facilities in secondary schools (83% completed). In addition, the Committee noted that, out of 26 lakh sanctioned posts of cook-cum-helpers under the Mid-Day Meal programme, 25 lakh posts have been engaged (4% vacancy). Moreover, out of 10 lakh kitchen-cum-stores sanctioned, 8.5 lakh kitchen-cum-stores have been created (92% complete). The Committee highlighted that delay in completion of infrastructure leads to cost overruns and students' dropouts in government schools.4
## Pupil-Teacher Ratio
Experts have identified various issues concerning the role of teachers to address the challenges confronting elementary education.10 These include: (i) low teacher accountability and appraisal, (ii) poor quality of the content of teacher-education and changes required in the curriculum of B. Ed and D. Ed courses, (iii) need for continuous in-service teacher training and upgradation of skill set, (iv) inadequate pupil-
## Impact Of Covid-19 On School Education
In March 2020, COVID-19 was declared a pandemic by
the World Health Organisation, and a nationwide lockdown
was imposed in India to contain the spread of the virus.
The lockdown shifted the teaching mode from offline mode
to online mode. In 2020-21, Rs 818 crore was shared by
the central government across states to promote online
learning, and Rs 268 crore was allocated for online
teacher training under Samagra Shiksha to ensure
professional development of teachers.9
The Economic Survey 2020-21 observes that, as of
October 2020, the percentage of students in government
and private schools owning a smartphone increased from
36.5% in 2018 to 61.8% in 2020 in rural India.
Further, to optimise the impact of COVID-19 pandemic on
school education, the central government launched
several initiatives. Some of these initiatives are as follows:
PM eVidya: The initiative was launched in May 2020
under the Aatma Nirbhar Bharat Abhiyaan. Under this
initiative all states were provided access to various e-
content through the web portal - DIKSHA. The e-content
included courses for teachers, and quizzes. In addition,
the initiative provided for Swayam Prabha channels, which
helped in telecasting educational programmes for students
who did not have internet access. The initiative also
included a channel for differently abled children.9
Swayam MOOCs: 92 online massive open online courses
were provided to open school students in Class 9-12. 9
National Repository of Open Educational Resources
(NROER): NROER was created with around 17,500 e-
contents for various school subjects in all classes.9
Manodarpan: This initiative was part of the Aatma Nirbhar
Abhiyaan. It aimed at providing psychological support to
students, parents, and teachers.9
teacher ratio and deployment of teachers for non-
educational purposes, (v) teacher vacancies, and
(vi) excessive recruitment of contract/para
teachers.
Over the last few years, the number of teachers in
the schooling system has increased (from nearly
82 lakh in 2013-14 to nearly 89 lakh in 2016-17).7
This has led to a decline in the Pupil-Teacher
Ratio (PTR) across school education (from 31.3 in
2013-14 to 28.4 in 2016-17).8 PTR is defined as
the number of students per teacher. According to
the RTE Act, 2009, the PTR should ideally be
lower than 30:1 at the primary level, and 35:1 at
the upper primary level. Amongst the states, only
Uttar Pradesh and Bihar do not meet the RTE
prescribed PTR at the primary level, with a PTR
of 39 and 36, respectively.
The Standing Committee on Human Resource
Development (2020) noted that 23% of total posts
of teachers (including elementary and secondary
levels) under Samagra Shiksha are vacant. The
states with comparatively higher vacancy include:
(i) Jharkhand (48%), (ii) Uttarakhand (39%), (iii)
Kerala (39%), and (iv) Karnataka (33%). The
Committee further highlighted that absence of teachers in government schools encourages parents to prefer private schools for their children.4
The NEP 2020 also observes that the quality of teacher education, recruitment, deployment, and service conditions are not up to desired standards. Further, it noted the significant teacher vacancies across India. It also adds that poor service conditions and culture, and lack of career progression amongst teachers affects their motivation and teaching quality.
## Quality Of Learning
The National Achievement Survey (NAS) 2017
observed that nearly 53% of Class 3 students have achieved grade proficiency levels.11 This means that they can solve problems using simple logic, apply simple rules, follow simple instructions, and are able to use simple language to express themselves. This proportion of students who are grade proficient drops to 47% in Class 5 and to a further 39% in Class 8. Note that NAS is conducted for Class 3, 5, and 8 and it measures learning level outcomes in language, mathematics, and environmental studies (for Class 3 and 5), and language, mathematics, sciences, and social sciences (for Class 8).11
Note: Below basic means learners at this level have not achieved the required learning for this grade. Sources: National Achievement Survey 2017, MHRD; PRS.
The Central Advisory Board on Education (CABE, 2014), National Achievement Survey (2012 and 2017), and the Economic Survey (2016-17) also observed declining learning levels in elementary education even after the implementation of the Right to Education Act, 2009.12,13,14,15 Under the RTE Act, children are enrolled in the Class that corresponds to their age, irrespective of their learning levels. This results in a situation where children may have different learning levels within the same Class, depending on when they are enrolled in the schooling system. To close the gap in learning levels, the NEP 2020 has made several recommendations such as reforms in curriculum and nature of assessments and improving foundational literacy and numeracy through incorporating early childhood care and education in the education system.6 The NEP 2020 also notes lack of foundational literacy and numeracy as a reason behind poor learning levels at subsequent stages of education. It observed that more than five crore students currently enrolled in elementary school (26% of students) have not attained foundational literacy and numeracy (the ability to read and understand basic text and carry out basic addition and subtraction). It recommends that every child should attain foundational literacy and numeracy by Class 3. Similarly, the National Achievement Survey (2015) for Class 10 indicate that 24% students were in the range of 0-35% score and 61% students were in the range of 36-50% score in English. Further, 35% students were in 0-35% scores, and 49% students were in the range of 36- 50% scores in Mathematics.16 No significant differences were observed in the scoring pattern on the basis of gender (boys and girls).
## Curriculum
The National Education Policy 2020 noted that the current curriculum system is based on rote learning. The Policy specifies reduction in the content of subjects to core essentials to enhance critical thinking, and inquiry-based, discussionbased, discovery-based, and analysis-based learning.6
The Policy recommends various reforms in the curriculum system to shift the system towards a character and skill-building system. The reforms include: (i) introduction of experiential learning (such as hands-on learning, arts/sports-integrated learning), (ii) eliminating significant separation among curricular, extracurricular, or co-curricular in certain streams, and (iv) promoting mother tongue as medium of instruction, preferably till Class 8 and beyond.6 Further, it recommended that the existing system of exams be reformed. Board examinations should test only core concepts and cover a range of subjects. Students should be able to choose their subjects and have the option to take the exams on up to two occasions during a given year. To track students' progress throughout their school experience, examinations will be conducted in Class 3, 5, and 8. The examination in Class 3 will test basic foundational literacy and numeracy, and its results will only be used for the improvement of the school education system. Further, a National Assessment Centre will be set up under the MHRD as a standard-setting body for student assessment and evaluation.6 Note that under the RTE Act, the Continuous and Comprehensive Evaluation (CCE) is the evaluation mechanism for elementary education. CCE (e.g., paper-pencil test, drawing and reading pictures, and expressing orally) does not mean an absence of an evaluation, but it means an evaluation of a different kind from the traditional system of examinations. It has been recommended that proper design of assessment and using this information can help improve the quality and innovation in terms of teaching and learning.17 However, the CABE (2014) noted that CCE has not been adequately implemented or monitored. It recommended that there is a need to proactively communicate the intent of CCE among teachers for its effective implementation.18
## Department Of Higher Education
In 2021-22, the Department of Higher Education has been allocated Rs 38,351 crore (2% annual increase over 2019-20). This is 41% of the total budget allocation to the Ministry of Education. In 2020-21, the allocation for the department was Rs 39,467 crore, which was reduced to Rs 32,900 crore at the revised stage (17% decrease). The allocation for the department has increased annually by 9% between 2010-11 and 2021-22. Figure 5 depicts the allocation to the Department of Higher Education from 2010-11 to 2021-22.
the actual expenditure (2010-21) (in Rs crore)
Year
Budget
Estimate
Actuals
Utilisation %
(Actuals/BE%)
2010-11
16,690
15,472
93%
2011-12
21,912
19,505
89%
2012-13
25,275
20,423
81%
2013-14
26,750
24,465
91%
2014-15
27,656
23,152
84%
2015-16
26,855
25,439
95%
2016-17
28,840
29,026
101%
2017-18
33,330
33,614
101%
2018-19
35,010
31,904
91%
2019-20
38,317
36,916
96%
2020-21
39,467
32,900*
83%
Note: BE - Budget Estimate. *Revised Estimate Sources: Union Budgets 2010-22; PRS.
The utilisation has been over 90% of the budget estimates in the last three years as seen in the table. In 2016-17 and 2017-18, the Department exceeded its budget estimates, i.e., crossed 100% utilisation. Allocation to World Class Institutions in 2021-22 is Rs 1,710 crore (176% annual increase over 2019-20). The government has granted the status of Institution of Eminence (IoE) to ten private institutions and eight public institutions. These institutions have greater autonomy in admitting foreign students, fixing fees, and recruiting foreign faculty. Further, each public institution declared as an Institute of Eminence gets financial assistance of up to Rs 1,000 crore over five years.
Table 7 provides the major heads of financial allocation under the Department for 2021-22. In 2021-22, the highest share in the departmental allocation is of grants to Central Universities and Indian Institutes of Technology (IITs) at 20%
each. Other expenditure heads with a high share of allocation among others are statutory and regulatory bodies (13%), and National Institutes of Technology, and the Indian Institute of Engineering Science and Technology (10%). Allocation to World Class Institutions in 2021-22 is Rs 1,710 crore (176% annual increase over 2019-20). The government has granted the status of Institution of Eminence (IoE) to ten private institutions and eight public institutions.19 These institutions have greater autonomy in admitting foreign students, fixing fees, and recruiting foreign faculty. Further, each public institution declared as an Institute of Eminence gets financial assistance of up to Rs 1,000 crore over five years.20
Annualised
Major Head
19-20
Actuals
20-21
RE
21-22
BE
Change
IITs
6,596
6,841
7,686
8%
Grants to Central Universities
7,989
8,634
7,643
-2%
4,872
4,860
5,109
2%
Statutory and regulatory bodies (UGC and AICTE)
3,487
3,265
3,935
6%
National Institutes of Technology and IIEST
1,278
166
3,000
53%
Rashtriya Uchhatar Shiksha Abhiyan (RUSA) Student Financial Aid
2,070
1,208
2,482
10%
World Class Institutions
224
1,101
1,710
176%
791
993
946
9%
Indian Institutes of Science, Education, and Research (IISERs) Digital India-elearning
458
305
646
19%
Indian Institute of Science (IISc)
596
605
622
2%
Indian Institutes of Management
481
465
476
-1%
328
339
393
9%
Indian Institutes of Information Technology (IIITs) Research and Innovation
257
284
237
-4%
Others
7,490
3,833
3,465
-32%
Grand Total
36,916
32,900
38,351
2%
Sources: Expenditure Budget 2021-22; PRS.
## Issues In The Higher Education Sector Enrolment
As of 2018-19, GER in higher education in India is 26.3%.21 A GER of 26.3% implies that 26.3% of people in the target age-group are enrolled in universities. The States/Union Territories with comparatively higher GER in 2018-19 include Sikkim (53.9%), Tamil Nadu (49%), Delhi (46%), and Himachal Pradesh (39.6%), among others.21
Sources: All India Survey on Higher Education, 2018-19;
The Standing Committee (2016) had noted that the Gross Enrolment Ratio (GER) in higher education in the country has increased due to the government of India's efforts of setting up new Central Universities in the country, including Indian Institutes of Information Technology (IIITs).22 The All-India Survey on Higher Education 2018- 19 report reveals that enrolment decreases as one goes further higher from undergraduate education.21 Out of the total number of students enrolled in higher education, the highest enrolment is at the undergraduate level (79.8%) followed by postgraduate (10.8%). With regard to the types of disciplines studied, most students at the undergraduate level are enrolled in the Arts stream (33%), followed by Science (16%), Commerce (14%), and Engineering & Technology (13%). The leading stream at the post-graduate level is social Science, followed by Management. At the Ph.D. level, the majority of the students chose Science in 2018-19. The NEP 2020 aims to increase the GER in higher education to 50% by 2035. This will be achieved by improvement in the capacity of existing higher education institutes by restructuring and expanding existing institutes.6 Further, NEP 2020 recommends that all institutes should aim to be large multidisciplinary institutes (with enrolments in thousands), and there should be one such institution in or near every district by 2030. Further, institutions should have the option to run open distance learning and online programmes to enhance the reach of higher education.6
## Regulation Of Higher Education
The NEP 2020 observes that higher education in India has been overly regulated with too little effect. It noted problems of concentration of power, conflict of interest, and a resulting lack of accountability in higher education regulation.
In India, higher education is regulated by multiple authorities. The University Grants Commission (UGC) regulates universities and colleges teaching general subjects. It is empowered with disbursing grants to universities for their maintenance and development, and with regulating fees charged by them. It also has powers regarding the recognition, functioning, and de-recognition of deemed universities. Failure to comply with UGC standards may result in withdrawal of grants or termination of affiliation of a college to a university if the college does not comply with fee structure and other regulations.23 The All-India Council for Technical Education (AICTE) regulates universities or colleges offering technical courses such as engineering and management. These institutions are required to comply with the academic standards and regulations set by AICTE.24 Additionally, institutions offering courses related to medical, legal, nursing, or architectural education are regulated by 15 professional councils such as the Medical Council and the Bar Council. These councils also conduct qualifying examinations for entering the profession. For setting quality standards and accreditation, there are, currently, two accrediting institutions: (i) the National Board of Accreditation (NBA) established by AICTE, and (ii) the National Assessment and Accreditation Council (NAAC)
established by UGC. The National Knowledge Commission (2009) had noted that only 10% of all institutions had been accredited.25 The Standing Committee on Human Resource Development (2016) noted that accreditation of higher educational institutions needs to be at the core of the regulatory arrangement in higher education.22 Further, the Committee recommends that credit rating agencies, reputed industry associations, and professional bodies should be encouraged to rate Indian universities and institutions. The Standing Committee on Human Resource Development (2020) noted higher education to be of global importance.26 The Committee recommended alignment of the higher education system in India with global standards by developing graduates with new skills, a broad knowledge base, and competencies. The Committee noted that this could be achieved by: (i) upgrading existing institutions, (ii) allocating more funds towards university-based research, and (iii) promoting collaborations among institutions. The NEP 2020 has recommended a complete overhaul of the higher education regulatory structure. It states that the distinct functions of regulation, accreditation, funding, and setting academic standards should be performed by separate, independent bodies to minimise the conflict of interest and eliminate the concentration of power.
The Finance Minister stated that the legislation, to set up the Higher Education Commission of India, will be introduced in 2021-22. The Commission will act as an umbrella body with four separate arms for: (i) standard-setting, (ii) accreditation, (iii) regulation, and (iv) funding.3
## Teacher Related Issues
As of September 2020, 6,210 teaching posts are vacant across 42 central universities which come within the purview of the Ministry of Education.27 The Standing Committee on Human Resource Development (2016) noted that this could be due to two reasons: (i) young students don't find the teaching profession attractive, or (ii) the recruitment process is long and involves too many procedural formalities.22 The Standing Committee on Education, Women, Children, Youth, and Sports (2021) noted that the current evaluation system of faculty recruitment is ineffective.28 The Committee recommends transforming the National Eligibility Test to align with the latest modes of teaching and research.
Further, the Committee observes a need for a mechanism to monitor faculty induction and development. The NEP 2020 states that National Professional Standards for Teachers will be developed by 2022. The standards will specify expectations from a teacher at different levels of expertise. These standards will be revised in 2030 and thereafter every ten years to ensure the efficacy of the system.
Department of School Education and Literacy, Standing Committee on Human Resource Development, March 5, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_Fil e/ReportFile/16/123/312_2020_3_12.pdf. 5 Static Reports, UDISE+ Dashboard, Ministry of Human Resource Development, accessed on February 9, 2021, http://dashboard.seshagun.gov.in/mhrdreports/#/reportDashboa rd/sReport. Resource Development,
https://www.education.gov.in/sites/upload_files/mhrd/files/NE P_Final_English_0.pdf. 7 UDISE Flash Statistics 2016-17, National Institute of Education Planning and Administration, http://udise.in/Downloads/Publications/Documents/Flash_Stati stics_on_School_Education-2016-17.pdf. 8 Educational Statistics at a Glance 2018, Ministry of Human Resource Development, https://www.education.gov.in/sites/upload_files/mhrd/files/stat istics-new/ESAG-2018.pdf. 9 Economic Survey 2020-21, https://www.indiabudget.gov.in/economicsurvey/. 10 "Vision of Teacher Education in India: Quality and Regulatory Perspective", Report of the High-Powered Commission on Teacher Education constituted by the Supreme Court of India, August 2012, Ministry of Human Resource Development. 11 National Achievement Survey-2017, Ministry of Human Resource Development, https://ncert.nic.in/pdf/NAS/WithReleaseDate_NPPTL.pdf. 12 "Report of CABE Sub Committee on Assessment on implementation of CCE and no detention provision", 2015, Ministry of Human Resource Development, http://mhrd.gov.in/sites/upload_files/mhrd/files/ document-reports/AssmntCCE.pdf. 13 A summary of India's National Achievement Survey, Class VIII, 2012, National Council of Educational Research and Training, http://mhrd.gov.in/sites/upload_files/mhrd/files/upload_docum ent/11-March-National-Summary-Report-NAS-Class-VIII.pdf. 14 National Achievement Survey 2017, Dashboard, http://nas.schooleduinfo.in/dashboard/nas_ncert#/. 15 Economic Survey, 2016-17, http://indiabudget.nic.in/es2016-17/echapter_vol2.pdf. 16 National Achievement Survey (2015), Class X, National Council of Educational Research and Training, http://www.ncert.nic.in/departments/nie/esd/pdf/NASSummary .pdf. 17 World Development Report, 2018, World Bank, http://www.worldbank.org/en/publication/wdr2018.
18 "Report of CABE Sub Committee on Assessment on implementation of CCE and no detention provision", Ministry of Human Resource Development, 2014, http://mhrd.gov.in/sites/upload_files/mhrd/files/documentreports/AssmntCCE.pdf.
19 20 Institution recommended for status of 'Institutions of Eminence', Press Information Bureau, Ministry of Human Resource Development, August 2, 2019. 20 Lok Sabha, Unstarred Q No. 44, Ministry of Human Resource Development, Answered on November 18, 2019, http://loksabhaph.nic.in/Questions/QResult15.aspx?qref=6362 &lsno=17. 21 All India Survey on Higher Education, 2018-19, Ministry of Human Resource and Development, Department of Higher Education, http://aishe.nic.in/aishe/viewDocument.action?documentId=26 2. 22 Report No. 284 - Issues and Challenges before Higher Education Sector in India, Standing Committee on Human Resource Development, December 14, 2016, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_Fil e/ReportFile/16/16/284_2017_4_11.pdf 23 University Grants Commission Act, 1956, https://www.ugc.ac.in/oldpdf/ugc_act.pdf. 24 All India Council for Technical Education Act, 1987, http://legislative.gov.in/sites/default/files/A1987-52.pdf. 25 "Report to the Nation: 2006-2009", National Knowledge Commission, March 2009, http://www.aicteindia.org/downloads/nkc.pdf. 26 Report No. 313 - Demand for Grants 2020-21 of the Department of Higher Education, Standing Committee on Human Resource Development, March 5, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_Fil e/ReportFile/16/144/313_2021_1_16.pdf. 27 Lok Sabha, Unstarred Question No. 202, Vacant teachers and other staff posts, Ministry of Education, September 14, 2020. 28 Report No. 322, Standing Committee on Education, Women, Children, Youth and Sports, February 2, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_Fil e/ReportFile/16/144/322_2021_2_17.pdf.
Annualised
change
% Change from 2020-21 Budget
Major Heads
2019-20 Actuals
2020-21
Budget
2020-21
Revised
2021-22
Budgeted
to 2020-21
Revised
from 2019-
20 Actuals
to 2021-22
Budget
Department of School Education and Literacy
52,520
59,845
52,189
-13%
54,874
2%
Autonomous bodies
10,077
9,205
10,395
13%
11,192
5%
National Education Mission
32,377
38,861
28,078
-28%
31,300
-2%
-Samagra Shiksha
32,377
38,751
27,957
-28%
31,050
-2%
-Teachers Training and Adult Education
-
110
120
9%
250
-
National Programme of Mid-Day Meal in Schools
9,699
11,000
12,900
17%
11,500
9%
National Means cum Merit Scholarship Scheme
331
373
350
-6%
350
3%
Others
36
407
467
15%
532
282%
Department of Higher Education
36,916
39,467
32,900
-17%
38,351
2%
Student Financial Aid
2,070
2,316
1,208
-48%
2,482
10%
Digital India-e-learning
458
444
305
-31%
646
19%
Research and Innovation
257
307
284
-8%
237
-4%
Statutory and regulatory bodies (UGC and AICTE)
4,872
5,109
4,860
-5%
5,109
2%
Grants to Central Universities
7,989
7,643
8,634
13%
7,643
-2%
Indian Institutes of Technology
6,596
7,332
6,841
-7%
7,686
8%
Indian Institutes of Management
481
476
465
-2%
476
-1%
National Institutes of Technology and IIEST
3,487
3,885
3,265
-16%
3,935
6%
Indian Institute of Science, Education and Research (IISERs)
791
896
993
11%
946
9%
Indian Institute of Science (IISc)
596
592
605
2%
622
2%
Indian Institutes of Information Technology (IIITs)
328
393
339
-14%
393
9%
World Class Institutions
224
500
1,101
120%
1,710
176%
Rashtriya Uchhatar Shiksha Abhiyan (RUSA)
1,278
300
166
-45%
3,000
53%
Improvement in Salary Scale of University and College Teachers
1800
1,900
348.51
-82%
10
-93%
Higher Education Financing Agency (HEFA)
2,100
2,200
200
-91%
1
-98%
Others
3,590
5,172
3,284
-36%
3,454
-2%
Total
89,437
99,312
85,089
-14%
93,224
2%
Sources: Expenditure Budget 2021-22; PRS.
Indicators on school and higher education
GER in Secondary
GER in Elementary Education
GER in Higher
(Class 1-8)
Education
(Class 9-12)
State/ UT
Education
Total
(Beyond Class 12)
Primary
Upper
Primary
Elementary
Secondary
Higher
Secondary
Andhra Pradesh
82.8
82.1
82.5
76.3
60.6
32.4
Arunachal Pradesh
106.2
119.9
110.4
85.9
51.2
29.7
Assam
107.4
96.7
103.7
78.6
39.7
18.7
Bihar
98.1
103.9
99.9
76.7
28.8
13.6
Chhattisgarh
97.1
100.8
98.5
87.7
54.5
18.6
Goa
101.3
97.1
99.7
99.3
78.7
30.1
Gujarat
95.0
97.2
95.8
74.5
43.2
20.4
Haryana
93.9
94.4
94.1
86.3
60.8
29.2
Himachal Pradesh
97.9
103.0
99.8
103.9
92.0
39.6
Jammu & Kashmir
77.1
66.2
73.0
61.7
52.9
30.9
Jharkhand
96.6
91.8
95.0
63.5
37.1
19.1
Karnataka
103.7
92.9
99.7
84.4
41.9
28.8
Kerala
95.1
93.6
94.6
99.4
79.4
37.0
Madhya Pradesh
92.1
89.7
91.3
80.2
47.1
21.5
Manipur
120.6
119.3
120.2
86.5
64.4
33.7
Maharashtra
97.5
98.7
97.9
91.7
70.7
32.0
Meghalaya
129.1
128.0
128.8
83.3
40.6
25.8
Mizoram
115.7
127.5
119.3
95.9
54.6
25.7
Nagaland
81.7
90.4
84.4
61.8
36.3
18.7
Odisha
100.2
94.6
98.1
79.9
40.1
22.1
Punjab
99.3
97.7
98.7
87.1
72.2
29.5
Rajasthan
97.8
92.0
95.8
76.6
60.3
23.0
Sikkim
92.0
136.8
106.9
112.0
64.2
53.9
Tamil Nadu
102.0
93.4
98.6
93.9
83.7
49.0
Telangana
98.6
86.9
94.1
81.8
50.6
36.2
Tripura
102.4
126.4
110.0
112.3
41.9
19.2
Uttar Pradesh
87.2
72.7
82.1
67.8
59.0
25.8
Uttarakhand
96.4
86.7
92.7
84.4
77.1
39.1
West Bengal
96.3
96.3
96.3
78.6
50.9
19.3
Andaman & Nicobar Islands
86.9
83.1
85.4
84.1
72.8
23.2
Chandigarh
80.1
95.6
85.8
89.7
83.2
50.6
Dadra & Nagar Haveli
82.9
91.6
86.0
91.2
51.8
9.3
Daman & Diu
84.0
81.1
82.9
73.3
34.6
5.5
Delhi
109.2
129.0
115.9
114.4
74.2
46.3
Lakshadweep
70.0
81.4
79.8
105.7
97.9
7.4
Puducherry
85.6
84.8
85.3
87.5
74.2
46.4
India
95.1
90.7
93.6
79.4
55.4
26.3
Note: Enrolment rate can exceed 100% due to early or late school entrance and grade repetition, or for example, children not in the 6-14 age group still being enrolled in elementary school. Data for higher education is of 2018. Sources: Flash Statistics, UDISE 2016-17; AISHE 2018-19, Ministry of Human Resource Development; PRS.
## Demand For Grants: Health And Family Welfare
The Ministry of Health and Family Welfare has two departments: (i) the Department of Health and Family Welfare, and (ii) the Department of Health Research. The Department of Health and Family Welfare is responsible for functions including: (i) implementing health schemes, and (ii) regulating medical education and training. The Department of Health Research is broadly responsible for conducting medical research. This note analyses the financial allocation trends and key issues concerning the health sector.
## Budget Speech Highlights 2021-22
The Finance Minister, Ms. Nirmala Sitharaman stated that
health and well-being is one of the key pillars for the budget.
Key highlights in the budget regarding health and well-being
include:
-
Urban Swacch Bharat Mission 2.0 will be implemented with a capital outlay of Rs 1.4 lakh crores over five years (2021-26). The objectives of the Mission include: (i) complete faecal sludge management, (ii) reduction in single use plastic, (iii) source segregation of garbage, and (iv) reduction in air pollution.
-
A new central scheme PM AtmaNirbhar Swasth Bharat Yojana will be launched with an outlay of Rs 64,180 crore over six years. The scheme will be focused on: (i) developing primary, secondary, and tertiary healthcare systems, (ii) strengthening existing national institutions, and (iii) creating new institutions for detection and cure of new diseases.
-
Rs 35,000 crore has been allocated for COVID-19 vaccine under the Ministry of Finance.
Apart from the budget allocation to the Ministry of Health and Family Welfare: (i) Rs 13,192 crore has been allocated as finance commission grant for health, (ii) Rs 36,022 crore has been allocated as finance commission grant for water and
sanitation.
## Overview Of Finances
Overall, India's public health expenditure has increased from 0.9% of GDP in 2015-16 to 1.1% of GDP in 2020-21.1,2,3,4 The Economic Survey 2020- 21 observed that India ranks 179th among 189 countries in prioritising healthcare in the government budget. Note that the National Health Policy, 2017 aims to increase public health expenditure to 2.5% of the GDP by 2025. In 2021-22, the Ministry has an allocation of Rs 73,932 crore (an annualised growth of 7% over the actual expenditure in 2019-20).5 Under the Ministry, the Department of Health and Family Welfare accounts for 96% of the Ministry's allocation at Rs 71,269 crore whereas the Department of Health Research has been allocated Rs 2,663 crore (4% of the allocation).
## Health And Family Welfare (In Rs Crore)
Annualised
2020-21
2021-22
Item
2019-20 Actuals
RE
BE
Change
(Actuals
2019-20 to
BE 2021-22)
62,397
78,866
71,269
7%
Health & Family Welfare Health Research
1,861
4,062
2,663
20%
Total
64,258
82,928
73,932
7%
Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Expenditure Budget 2021-22; PRS.
The revised estimate in 2020-21 (Rs 82,928 crore) includes Rs 14,217 crore for COVID-19 emergency response and health system preparedness package, and COVID-19 vaccination for healthcare and frontline workers. Table 2 details the main heads of expenditure under the Ministry allocated for the year 2021-22.
Annualised
Change
2020-21
2021-22
Major Heads
2019-20 Actuals
RE
BE
(Actuals 19- 20 to BE 21-
22)
National Health Mission (total)
34,660
35,144
36,576
3%
Autonomous Bodies
9,601
9,882
10,924
7%
PMJAY
3,200
3,100
6,400
41%
PMSSY
4,683
7,517
7,000
22%
2,813
2,900
2,900
2%
National AIDS & STD Control Programme Family Welfare Schemes
489
496
387
-11%
RSBY
57
29
1
-87%
Others
8,755
23,860*
9,744
5%
Total
64,258
82,928
73,932
7%
Note: * Includes Rs 14,217 crore for COVID-19 emergency response and vaccination of healthcare and frontline workers; BE - Budget Estimate; RE - Revised Estimates; PMJAY: Pradhan Mantri Jan Arogya Yojana; PMSSY- Pradhan Mantri Swasthya Suraksha Yojana; RSBY: Rashtriya Swasthya Bima Yojna; Autonomous Bodies include AIIMS, and ICMR. Sources: Expenditure Budget 2021-22; PRS.
## Covid-19 Vaccine
On January 3, 2020 DCGI approved two vaccines (Covishield and COVAXIN) for restricted use in emergency situation. 6 Restricted use in emergency situation refers to approving the use of vaccines only for people who are in urgent need considering their vulnerability to the virus.
| Company | Name | Clinical Stage |
|------------------------------------------|--------------|-------------------------------------------|
| Bharat Biotech | COVAXIN | |
| Phase 3 ongoing (received restricted use | | |
| authorisation) | | |
| Serum Institute of India/ICMR | | |
| Covishield (AstraZeneca/ | | |
| Oxford) | | |
| Zydus Cadilla | ZyCoV-D | Phase 2 ongoing; Phase 3 approval granted |
| Dr Reddy's Laboratories and Sputnik LLC | Sputnik | Phase 2 ongoing |
| Biological E | Biological E | Phase 1 / 2 ongoing |
Notes: *ICMR: Indian Council for Medical Research. Sources: COVID-19 Vaccines undertrial in India, Indian Council for Medical Research, Ministry of Health and Family Welfare.
Note that some countries such as United States of America issued emergency use authorisation for COVID-19 vaccines.7 Emergency Use Authorisation (EUA) refers to approving the use of unapproved medical products, or unapproved uses of approved medical products during public health emergencies (such as COVID-19 pandemic). The Standing Committee on Home Affairs (2020) noted that in India no EUA has been given in the past by CDSCO. The Committee recommended that proper consideration and caution should be taken in case of issuing any EUA. The Committee added that the provision of EUA should be used in the rarest of rare cases.8 Development and financing: In 2020-21, the Ministry of Health and Family Welfare supported the development of approximately 30 COVID-19 vaccine candidates.9 In 2020-21, ICMR was allocated Rs 25 crore for studies and research on the development of a vaccine, and the Department of Biotechnology spent Rs 75 crore to support eight proposals for vaccine development by private industries and academia. In November 2020, the Department of Biotechnology received a grant of Rs 900 crore in form of a stimulus package (Mission COVID Suraksha) from the Ministry of Science and Technology. The Department of Science and Technology supported three projects (committed expenditure: Rs 3.2 crore; sanctioned expenditure: Rs 22.3 lakh), under Intensified Research in High Priority Areas (IRHPA), on COVID-19 vaccine. Further, an expenditure of Rs 2,475 crore was approved by the central government under the World Bank funded India Covid-19 Emergency Response and Health System Preparedness Package for procurement of various components such as testing kits, testing machines, and reagents for COVID-19.10 In 2020-21, it is estimated that overall, the Ministry of Health and Family Welfare will spend Rs 13,857 crore on COVID-19 Emergency Response and Health System Preparedness Package and Rs 360 crore on COVID-19 vaccination for healthcare workers and frontline workers. Distribution: The central government, in coordination with the state governments, identified the priority group for vaccination.11 The priority group comprised of two groups: (i) first group of one crore healthcare workers and two crore frontline workers, and (ii) second group 27 crore adults over 50 years of age and persons below 50 years of age with comorbidities.12 The Standing Committee on Health and Family Welfare (2020) had noted that an approach of smart vaccination may be opted for immediate control of pandemic provided the entire population is vaccinated eventually.28 Smart vaccination refers to a strategy in which the people of India are divided into three groups: (i) core group, (ii) bridge group, and (iii) general population. Once the core group is vaccinated, with all preventive measures such as wearing masks the pandemic may be contained without vaccinating the entire population of the country.28
## Trends In Allocation And Expenditure
In the last 16 years, the allocation to the Department of Health and Family Welfare has increased from Rs 11,366 crore in 2006-07 (revised estimate) to Rs 71,269 crore in 2021-22 (budget estimate). Over the period 2006-22, the Compound Annual Growth Rate (CAGR) has been 13%. CAGR is the annual growth rate over a certain period of time. The utilisation has been over 100% in the last five years, i.e., the Department exceeded its budget estimates. In 2020-21 (revised estimates), the Department is expected to exceed the budget
Phase 3 completed (received restricted use authorisation)
estimate by 21%. Overall, the Ministry is expected to have an additional spending of Rs 15,817 crore at the revised stage in 2020-21. Out of this, Rs 14,217 crore will be spent for COVID-19
emergency response and health system preparedness package, and COVID-19 vaccination for healthcare and frontline workers.
Note: Revised Estimate has been 2020-21; For 2021-22, % change in allocation is 2021-22 BE over 2020-21 RE; BE -
Budget Estimate; RE - Revised Estimate.
Sources: Union Budgets, 2006-07 to 2021-22; PRS.
| Year | BE | Actuals |
|---------------|---------|------------|
| % Utilisation | | |
| (Actuals/BE) | | |
| 2010-11 | 23,530 | 22,765 |
| 2011-12 | | |
| 26,897 | 24,355 | 91% |
| 2012-13 | | |
| 30,702 | 25,133 | 82% |
| 2013-14 | 33,278 | 27,145 |
| 2014-15 | 35,163 | 30,626 |
| 2015-16 | | |
| 29,653 | 33,121 | 112% |
| 2016-17 | | |
| 37,062 | 37,671 | 102% |
| 2017--18 | 47,353 | 51,382 |
| 2018-19 | 52,800 | 52,954 |
| 2019-20 | 62,659 | 62,397 |
| 2020-21 | | |
| 65,012 | 78,866* | 121% |
Note: BE - Budget Estimates; *Revised Estimate.
Sources: Union Budgets, 2010-21; PRS.
Major schemes and issues
## National Health Mission
The National Health Mission (NHM) consists of two sub missions, the National Rural Health Mission (NRHM) (focused on rural areas) and the National Urban Health Mission (NUHM) (focused on urban areas). NHM aims at strengthening public health systems and healthcare delivery. The various components under NHM include: (i) reproductive, maternal, newborn and child health services (RCH Flexi Pool), (ii) NRHM Flexi Pool for strengthening health resource systems, innovations, and information, (iii) immunisation including the Pulse Polio Programme, (iv)
infrastructure maintenance, and (v) National Disease Control Programme. The allocation for NHM in 2021-22 (Rs 36,576 crore) is 4% higher than the revised estimates of
2020-21. Under the NHM, the rural component, i.e., the National Rural Health Mission has been allocated Rs 30,100 crore, (0.2% annual increase over 2019-20). The allocation for National Urban Health Mission is Rs 1,000 crore in 2021-22 (8% annual increase over 2019-20). Note that, significant funding for NHM is done through flexible pools, such as RCH flexible pool, and flexible pool for communicable diseases. The rationale for creating of the flexible pool is to allow more financial flexibility in allocation of funds among RCH services and efficient distribution of funds to obtain desired health outcomes. In 2021- 22, Rs 8,451 crore was allocated towards the flexible pools, which is 8% annual decrease over
2019-20.
The Phase-I results of National Family Health Survey-5 indicate certain improvements as compared to those in National Family Health Survey-4. These include: (i) expeditious increase in full immunization coverage, (ii) increase in households with improved sanitation facility and clean cooking fuel across 22 states, and (iii) increase in institutional births.13
Annualised
Major Heads
19-20
Actuals
20-21
RE
21-22
BE
Change
(Actuals
2019-20 to
BE 2021-22)
3,357
2,110
2,178
-19%
Flexible Pool for Communicable Diseases
675
404
-
-100%
Flexible Pool for Non- Communicable RCH Flexible Pool
5,902
-
6,273
3%
Total
9,934
2,514
8,451
-8%
Note: RCH flexible pool includes Routine Immunization Programme, Pulse Polio Immunization Programme and National Iodine Deficiency Disorders Control Programme. Sources: Expenditure Budget 2021-22; PRS.
Table 6 shows the status of some key targets under the NHM framework.
| Targets (2012-20) | Latest Status |
|----------------------------------|---------------------------------|
| Reduce IMR to 25 | IMR has reduced to 32 in 2018. |
| Reduce MMR to | |
| 100/1,00,000 live births | |
| MMR has reduced to 113 in | |
| 2016-18. | |
| Reduce TFR to 2.1 | TFR has reduced to 2.2 in 2018. |
| Annual Malaria Incidence | |
| to be < .001 | |
| Annual Malaria Incidence is 0.02 | |
| in 2019. | |
| Less than 1 % microfilaria | |
| prevalence in all districts | |
| Out of 256 endemic districts, 99 | |
| have reported incidence less | |
| than 1% till 2018. | |
| Reduce annual prevalence | |
| and mortality from | |
| Tuberculosis by half | |
| Incidence reduced from 300 per | |
| lakh in 1990 to 204 per lakh in | |
| 2017. | |
Note: IMR-Infant Mortality Rate; MMR-Maternal Mortality Rate; TFR-Total Fertility Rate. Source: Health and Family Welfare Statistics 2019-20; Special Bulletin on maternal Mortality in India 2016-18; National Family Health Survey-4 (2015-16); Unstarred Question No. 4335, Ministry of Health and Family Welfare, Lok Sabha, December 13, 2019; PRS.
Health infrastructure and enhancing service delivery by training human resources in healthcare are crucial for achieving objectives of the National Health Mission. Healthcare infrastructure in India can be categorised into *physical infrastructure* and human resources who provide medical services.
## Physical Infrastructure
Depending on the level of care required, healthcare in India is broadly classified into three types. This classification includes primary care (provided at primary health centres), secondary care (provided at district hospitals), and tertiary care institutions (provided at specialised hospitals like AIIMS). Primary health care infrastructure provides the first level of contact between health professionals and the population.14 Broadly, based on the population served and the type of services provided, primary health infrastructure in rural areas consists of a three-tier system. This includes Sub-Centres (SCs), Primary Health Centres (PHCs), and Community Health Centres (CHCs).15 The High Level Group on Health Sector (2019) and the report of 15th Finance Commission on Ayushman Bharat have observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level.17,20 It recommended that the focus of healthcare provision in the country should be towards providing primary healthcare. The Finance Minister announced that PM AtmaNirbhar Swasth Bharat Yojana will be launched with an outlay of Rs 64,180 crore over six years. The scheme will be focused at: (i) developing primary, secondary, and tertiary healthcare systems, (ii) strengthening existing national institutions, and (iii) creating new institutions for detection and cure of new diseases. The number of SCs, PHCs, and CHCs in 2005 and 2019 respectively across rural and urban areas are given in Figure 2.
Note: PHC - Primary Health Centre; CHC: Community Health Centre. Source: Comparative Statement, Rural Health Statistics 2017-
19; PRS. The government plans to transform 1.5 lakh sub healthcare centres, primary health centres and urban primary health centres into Health Wellness Centres (HWCs) by 2022. HWCs will provide various range of services beyond maternal and child healthcare services. These services will include: (i) care for non -communicable diseases, (ii) rehabilitative care, (iii) mental health services, (iv) first level care for emergencies and trauma, and (v) free essential drugs and diagnostic services.16 Further, the High Level Group noted that India has 1 bed per 1,000 people, which is significantly less than the global average of 2.9 beds.17,18 The National Health Policy, 2017 plans to increase this to 2 beds per 1,000 people.17 This could be achieved by creating 3,000 to 5,000 hospitals with 200 beds each by 2025.17
## Human Resources In Health
The Economic Survey 2020-21 observed that the aggregate density of health workers is 23 per 10,000 population, which is significantly lower than that recommended by World Health Organisation (WHO) (44.5 health workers per 10,000 population) to achieve the Sustainable Development Goals (SDG) targets by 2030.4 As of 2019, there is 1 doctor per 1,511 people and 1 nurse per 670 people, which is lower than the WHO standard of 1 doctor per 1,000 people and 1 nurse per 300 people.17 Note that despite the increase in total number of health workers, there is shortfall of doctors, specialists, and surgeons. For example, the number of health workers (female) (including auxiliary nurse midwives) has increased from 1,33,194 in 2005 to 2,19,326 in 2018.15 As of 2018, 11% positions of doctors are vacant in primary health centres, and only 60% of total required specialists have been approved for appointment in primary health centres.15
## Pradhan Mantri Jan Arogya Yojana (Pmjay)
The Ayushman Bharat programme - PMJAY was launched in September 2018.19 It aims to provide an insurance cover of Rs five lakh per family per year to 10.7 crore poor families.19 The scheme subsumed two centrally sponsored schemes, namely, Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme.
Benefits: The scheme provides insurance coverage for secondary and tertiary healthcare. The scheme provides 1,350 medical packages such as surgery, cost of medicines, day care treatments, and diagnostics. In addition, the scheme provides for pre- and post-hospitalisation expenses.
Allocation: In 2021-22, PMJAY has been allocated Rs 6,400 crore, which is double the actual spend two years ago (Rs 3,200 crore in 2019-20). A study report by the 15th Finance Commission on Ayushman Bharat (2019) estimated the demand and expenditure on PMJAY for the next five years. It stated that the total costs (centre and states) of PMJAY for 2019 could range from Rs 28,000 crore to Rs 74,000 crore.20 This estimate considers: (i) the assumption that all targeted beneficiaries will be covered (approximately 50 crore people), (ii) hospitalisation rates over time, and (iii) average expenditure on hospitalisation. Further, it noted that these costs could go up to between Rs 66,000 crore and Rs 1,60,089 crore in 2023 (accounting for inflation).
Implementation: The Economic Survey 2020-21
notes that PMJAY enhanced health insurance coverage. The proportion of health insured households increased by 54% in states that implemented PMJAY and decreased by 10% for states which did not implement it. The infant mortality rate also decreased by 20% in states with implementation whereas in states without implementation the mortality rate declined by 12%. Table 7 shows details regarding the implementation of the Ayushman Bharat programme which includes PMJAY and Health and Wellness Centres.
| Indicators | All India |
|-------------------------------------------------|--------------|
| Beneficiary families covered (in crore) | 13.13 |
| Funds disbursed to states/UTs for | |
| implementation (in crore) | |
| 5,474 | |
| Total hospital admissions authorised (in crore) | over 1.24 |
| # | |
| | |
| Health and Wellness Centres | 59,307* |
Note: #Includes 5.13 lakh hospital admissions for testing and treatment of COVID-19; *As on February 10, 2021. Sources: Press Information Bureau (September 23, 2020) Ministry of Health and Family Welfare; Lok Sabha Unstarred Question No. 2081, Ministry of Health and Family Welfare, answered on September 23, 2020; HWC Portal, Ayushman Bharat; PRS.
Note that, the Standing Committee on Health
(2018) and a study report of the 15th Finance Commission (2019) had noted that PMJAY is just an extension of RSBY which provided for coverage of up to Rs 30,000 per family per annum.20,21 Hence, to ensure proper implementation of the scheme, an analysis of the failures and inadequacies of RSBY should be done. This would look at whether: (i) RSBY covered all potential beneficiaries, (ii) hospitalisation rates increased under the scheme, and (iii) insurance companies were profitable under the scheme. The key challenges identified in the implementation of RSBY include: (i) low rate of enrolment of beneficiaries, (ii) increase in out-of-pocket expenditure, and (iii) issues in empanelment of healthcare service providers.22 The Standing Committee on Health and Family Welfare (2020) noted that PMJAY faces various implementation challenges. These challenges include issues in: (i) identification of beneficiaries, (ii) non-inclusion of numerous eligible people, (iii) empanelment of healthcare providers, and (iv)
hospital transaction system.23
Out-of-pocket expenditure: While PMJAY
provides coverage for secondary and tertiary levels of healthcare, most of the out-of-pocket expenditure made by the consumers is on pharmacies (47%), private general hospitals (31%), government general hospitals (8%), medical and diagnostics (7%), and towards patient transport and emergency rescue (7%) (See Figure 3).24
Sources: NITI Aayog (May 1, 2020); PRS.
Out-of-pocket expenditure is the payment made directly by individuals at the point of service where the entire cost of the health service is not covered under any financial protection scheme. The Economic Survey 2020-21 observes that the overall out-of-pocket expenses in India on healthcare are 60% of the total expense on public health (which is one of the highest in the world). The survey highlights that increasing the spending on public health from 1% of the GDP to 2.5-3% of GDP will help in reducing the out-of-pocket expenses from 60% to 30%.4
## Pradhan Mantri Swasthya Suraksha Yojana
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was introduced in 2003 with objective of: (i) correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, and (ii) augmenting facilities for quality medical education in the country. This includes establishing AIIMS like institutions and upgrading certain state government hospitals. Over the years, the scheme has been expanded to cover 20 new AIIMS and 71 state government hospitals. In 2018, the Comptroller and Auditor General (CAG) noted that all new AIIMs overshot their completion time by almost five years.25 There were similar delays observed in the upgradation of state government hospitals. Further, it was found that the Ministry had estimated the capital cost for setting up six new AIIMS in Phase 1 to be Rs 332 crore per institute. After four years, this cost was revised to Rs 820 crore per institute, on account of shortcomings in planning and assessment of requirements. The Standing Committee on Health and Family Welfare (2017 and 2018) noted that this indicates poor assessment of time and cost which have left the allocated funds unused.21,26
Notes: Values for 2020-21 and 2021-22 are revised estimate and budget estimate respectively
Sources: Union Budget 2010-11 to 2021-22; PRS. In 2021-22, the allocation to PMSSY has been decreased by 7% over the revised estimates of
2020-21 at Rs 7,000 crore. Allocation towards PMSSY increased from Rs 654 crore in 2010-11 to Rs 6,020 crore in 2020-21 (24% annual increase). In 2020-21, the revised estimate for PMSSY (Rs 7,517 crore) was 25% higher than the budget estimate (Rs 6,020 crore). This was due to the capital allocation (Rs 2,448 crore) for PMSSY at the revised stage.
## Health Research
In 2021-22, the Department of Health Research has been allocated Rs 2,663 crore (20% annual increase over 2019-20). The revised estimate in 2020-21 is 93% higher than the budget estimate for the year (Rs 2,100 crore). The Standing Committee on Health and Family Welfare (March 2020) noted that the allocation to Department of Health Research is low compared to the requirement of funds needed for health research. The Committee recommended that at least 10% of the budget for the Ministry of Health and Family Welfare should be allocated towards health research.27 The Standing Committee on Health and Family Welfare (November 2020) noted that the budgetary allocation of Department of Health Research has been one of the lowest in 2019-20 (Rs 1,900 crore) as compared to the budgetary allocation of other departments involved in scientific research.28 The Committee reiterated its recommendations to increase the budgetary outcomes of the Department of Health Research. The Committee noted that shortfall of funds may adversely impact the establishment of new Viral Research & Diagnostic Laboratories; Multi-Disciplinary Research Units in Medical Colleges (MRUs), and Model Rural Health Research Units (MRHRUs) in states.28 Further, the Committee noted that there is inadequate investment on public health research, as India invests only 0.65% of GDP on overall research and development activities in the country across various sectors. The Committee recommends that the Ministry of Health and Family Welfare should at least increase its spending on health research to the world average of 1.72% of GDP within two years.28
The Standing Committee on Health and Family Welfare (2018) had noted the huge, persistent, and recurring mismatch between the projected demand for funds and actual allocation to the Department of Health Research.29,30 The Committee also noted that the Department had reported shortfall of funds for implementation of projects and on the other hand, there was underutilisation of funds released. This mismatch between demand and allocation has led to impact in terms of restrictions in the sanctioning of new labs, providing recurring grants to the ongoing projects, and upgradation of health research infrastructure.29 This also led to repercussions in the medical research output. For example, in two years i.e., 2015 and 2016, only 1,685 research papers have been published by the Indian Council of Medical Research and three patents have been granted against the 45 patents filed.29
## The National Medical Commission Act, 2019 (Nmc Act) Parliament Passed The Nmc Act In 2019 To Replace The Medical Council Of India (Mci). The Nmc Will Oversee Medical Education And Practice In India.
Functions of the NMC include: (i) framing policies for
regulating medical institutions and medical professionals, (ii)
assessing the requirements of healthcare related human
resources and infrastructure, (iii) ensuring compliance by
the State Medical Councils of the regulations made under
the Act, (iv) framing guidelines for determination of fees for
up to 50% of the seats in private medical institutions and
deemed universities which are regulated under the Act.
## Regulation Of Healthcare Sector
The Economic Survey 2020-21 noted that information asymmetry is one of the key reasons which exposes the healthcare sector to market failures. It noted that patients in India rarely know the value of information they receive in the healthcare sector. For example, in case of certain medical services such as preventive care or mental health, patients may never know about the quality of the services they received. The Survey recommends setting up a sectoral regulator (specifically in private healthcare): (i) for supervision and regulation of the healthcare sector, and (ii) to prevent information asymmetry in the sector. Further, the Survey noted that mitigating information asymmetry in the healthcare sector will help in achieving lower insurance premiums and better welfare of people.
## Drug Regulation
In India, the import and manufacture of new drugs (including vaccines) is regulated under: (i) the Drugs and Cosmetics Act, 1940, (ii) Drugs and Cosmetics Rules, 1945, and (ii) New Drugs and Clinical Trials Rules, 2019.31,32,33 The 1940 Act provides for the regulation of import, manufacture, sale, and distribution of drugs. Although the DCA is a central legislation, it is implemented by the states. The 2019 Rules provide for testing and approval for new drugs (including vaccines) in India. The Mashelkar Committee Report (2003) highlighted the following challenges of the drug regulatory system: (i) inadequacy of trained and skilled personnel at the central and state levels, (ii)
lack of uniformity in the implementation of regulatory requirements and variations in regulatory enforcement, and (iii) inadequate or weak drug control infrastructure at the state and central level.34 Expert committees have recommended several steps to address these concerns regarding drug regulation in the country.34,35,36 They include: (i) a new independent and professionally run regulatory body, Central Drug Administration, reporting directly to Ministry of Health and Family Welfare, (ii) categorising the states in terms of scale of industry (manufacturing and sale) and investment in their regulation accordingly, (iii) the revision and imposition of higher fees for drug applications, clinical trials, and registration of imported drugs and foreign manufacturers, and (iv) establishment of technical expert committees for new drug approvals. Currently, the Central Drugs and Standards Control Organisation (CDSCO), which is headed by the Drugs Controller General of India (DCGI), regulates the approval of new drugs (including vaccines) that are introduced in the country, grants permission to conduct clinical trials, and registers and controls the quality of imported vaccines.33 It also approves licenses for the manufacture of new drugs (including vaccines) and coordinates these activities with states across India.37 In 2015, the Ministry of Health and Family Welfare constituted 25 panels of experts under the CDSCO in various medical areas such as vaccine, cardiology, and antiviral. These Subject Expert Committees evaluate the application of clinical trials, new drugs, and medical devices in their areas of expertise.38 They are composed of 8 medical experts each. For example, the evaluation process for emergency authorization of a COVID-19 vaccine is being conducted by the Subject Expert Committee examining COVID-19 drugs and vaccines.39
## Quality Of Drugs
The Standing Committee Report (2013) found that in India the prevalence of not-of-standard drugs is 7-8 % and the prevalence of spurious drugs is
0.5%.40 A not-of-standard drug refers to drug which do not meet Indian pharmacopoeia standards. The specifications under these standards include: (i) name of pharmacopoeia, (ii) quality of bonding agent, (ii) quality of colouring agent, and (iii) dissolution time. A drug is deemed to be 'spurious' if: (i) it is manufactured under a name which belongs to another drug, (ii) if it is an imitation of another drug, or (iii) if it has been substituted wholly or partly by another drug, or (iv) if it wrongly claims to be the product of another manufacturer.41 The extent of 'non-standard quality' drugs in the National Drug Survey between 2014 and 2016 was 3.2%.42 The extent of 'spurious' drugs during the same period was 0.02%.42 With regard to quality of drugs, the Mashelkar Committee recommended that: (i) states should take more samples to check the quality of drugs manufactured and sold in the market, (ii) states should also monitor the source of purchase and quality of drugs stocked by registered medical practitioners, and (iii) number of drug inspectors
##
5 Demand Nos. 44 & 45, Ministry of Health and Family Welfare, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/allsbe.pdf. 6 Press Statement by the Drugs Controller General of India (DCGI) on Restricted Emergency approval of COVID-19 virus vaccine, Press Information Bureau, Ministry of Health and Family Welfare, January 3, 2020. 7 FDA Takes Key Action in Fight Against COVID-19 By Issuing Emergency Use Authorization for First COVID-19 Vaccine, U.S. Food and Drug Administration, December 11, 2020, https://www.fda.gov/news-events/pressannouncements/fda-takes-key-action-fight-against-covid-19- issuing-emergency-use-authorization-first-covid-19. 8 Report No. 229: Management of Covid-19 Pandemic and Related Issues, Department-Related Parliamentary Standing Committee On Home Affairs, Rajya Sabha, December 21, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/15/143/229_2020_12_18.pdf. 9 Unstarred Question No. 285, September 15, 2020, Ministry of Health and Family Welfare, Rajya Sabha, https://pqars.nic.in/annex/252/AU285.pdf 10 Report No. 124 - Action taken on 119th Report, Standing Committee on Health and Family Welfare, November 2020, and their skills must be upgraded according to the load of work of inspections and monitoring.34
Drug pricing The National Pharmaceutical Pricing Authority (NPPA) monitors the availability and pricing of drugs in the country. NPPA fixes the prices of drugs/devices included in Schedule I of Drugs (Prices Control) Order (DPCO), 2013 after their notification under National List of Essential Medicines (NLEM). NLEM, 2015 consists of 3,754 medicines in total. Wherever instances of manufacturers/ importers charging prices higher than the prices fixed by the NPPA are reported, these cases are examined in detail. Since the inception of NPPA in 1995 till 2019, 2,038 demand notices have been issued to pharmaceutical companies for having overcharged patients on the sale of formulations at prices above the ceiling prices notified by NPPA.43 An amount of Rs 5,477 crore is still remaining to be paid and an amount of Rs 4,033 crore is under litigation.43 In January 2019, the Standing Committee on Affordable Medicines and Health Products (SCAMHP) was constituted.44 The Committee acts as a recommending body to NPPA regarding prices of drugs and health products. In addition, the Committee is authorised to examine a matter, suomoto or on request of NPPA or Department of Health and Family Welfare.44
https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/142/124_2020_11_18.pdf.
13 National Family Health Survey-5, Press Information Bureau, Ministry of Health and Family Welfare, December 15, 2020. 14 Chapter VIII: Public Health Care System, Planning Commission of India, http://planningcommission.nic.in/aboutus/committee/strgrp/stgp _fmlywel/sgfw_ch8.pdf. 15 Rural Health Statistics 2018, https://nrhmmis.nic.in/Pages/RHS2018.aspx?RootFolder=%2FRURAL%20 HEALTH%20STATISTICS%2F%28A%29%20RHS%20- %202018&FolderCTID=0x01200057278FD1EC909F429B03E 86C7A7C3F31&View=%7B09DDD7F4-80D0-42E3-8969- 2307C0D97DDB%7D. 16 About HWC, Ayushman Bharat - Health and Wellness Centres, Ministry of Health and Family Welfare, https://abhwc.nhp.gov.in/#about. 17 A Report of High-Level Expert Group on Health Sector, 2019, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ StudyReports/High%20Level%20group%20of%20Health%20S ector.pdf. 18 Hospital beds (per 1,000 people), Work Bank Database, last accessed on February 4, 2021, https://data.worldbank.org/indicator/SH.MED.BEDS.ZS. 19 "Ayushman Bharat –Pradhan Mantri Jan AarogyaYojana (AB-PMJAY) to be launched by Prime Minister Shri Narendra
Modi in Ranchi, Jharkahnd on September 23, 2018", Press Information Bureau, Ministry of Health and Family Welfare, September 22, 2018, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1546948.
20 'Ayushman Bharat: Costs and Finances of the Prime Minister Jan Arogya Yojana', Institute of Economic Growth, Study Report for the 15th Finance Commission, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ StudyReports/Ayushman%20Bharat%20Costs%20and%20Fina nces.pdf. 21 "Report no. 106: Demands for Grants 2018-10 (Demand No. 42) of the Department of Health and Family Welfare", Standing Committee on Health and Family Welfare, March 8, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/100/106_2019_7_10.pdf. 22 Report No. 112, Standing Committee on Health and Family Welfare, December 28, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/113/112_2019_7_16.pdf. 23 "Report No. 118: Demands for Grants 2020-21 (Demand No. 42) of the Department of Health and Family Welfare", Standing Committee on Health and Family Welfare, March 3, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/121/118_2020_3_15.pdf. 24 Household Health Expenditures in India (2013-14), December 2016, Ministry of Health and Family Welfare, http://www.mohfw.nic.in/sites/default/files/3830041175148956 2625.pdf 25 Report No. 10, Performance Audit on Pradhan Mantri Swasthya Suraksha Yojana, August 7, 2018, https://cag.gov.in/content/report-no10-2018-performance-auditpradhan-mantri-swasthya-suraksha-yojana-ministry-health. 26 26 "Report no. 99: Demands for Grants 2017-18 (Demand No.
42) of the Department of Health and Family Welfare", Standing Committee on Health and Family Welfare, March 20, 2017, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Health%20and%20Family%20Welfare/99. pdf 27 Report No. 119 - Demand for Grants of the Department of Health Research, Standing Committee on Health and Family Welfare, March 3, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/121/119_2020_3_15.pdf. 28 Report No. 123: The Outbreak of Pandemic Covid-19 and its Management, Department-Related Parliamentary Standing Committee on Health and Family Welfare, Rajya Sabha, November 21, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/142/123_2020_11_15.pdf. 29 "Report no. 100: Demands for Grants 2017-18 (Demand No.43) of the Department of Health Research", Standing Committee on Health and Family Welfare, March 20, 2017, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Health%20and%20Family%20Welfare/100 .pdf. 30 Report No. 107, Demand for Grants 2018-19 (Demand No. 43) of the Department of Health Research, Standing Committee on Health and Family Welfare, March 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/100/107_2018_6_16.pdf, 45.pdf.
Health and Family Welfare, https://cdsco.gov.in/opencms/opencms/system/modules/CDSCO .WEB/elements/download_file_division.jsp?numid=NjUwMA == 33 G.S.R. 227 (E): New Drugs and Clinical Trial Rules, 2019, Ministry of Health and Family Welfare, March 19, 2019, https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdfdocuments/NewDrugs_CTRules_2019.pdf 34 Report of the Expert Committee on "A Comprehensive Examination of Drug Regulatory Issues, including the problem of Spurious Drugs", Ministry of Health and Family Welfare, November, 2003, http://pharmaceuticals.gov.in/sites/default/files/MashelkarCom mitteeReport.pdf. 35 "Report no.59: The Functioning of the Central Drugs Standards Control Organisation (CDSCO)", Standing Committee on Health and Family Welfare, Ministry of Health and Family Welfare, May 8, 2012, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Health%20and%20Family%20Welfare/59. pdf. 36 Report of the (late)Prof. Ranjit Roy Chaudhury Expert Committee to "Formulate Policy and Guidelines for Approval of New Drugs, Clinical Trials and Banning of Drugs", July, 2013, http://www.cdsco.nic.in/writereaddata/Report_of_Dr_Ranjit_Ro y.pdf. 37 Functions of CDSCO, Central Drugs Standard Control Organization, Ministry of Health & Family Welfare, https://cdsco.gov.in/opencms/opencms/en/About-us/Functions/. 38 Order F. No. 12-01/14-DC (Pt. 20), Ministry of Health and Family Welfare, January 5, 2015, https://www.iscr.org/wpcontent/uploads/2019/05/2015-01-05-DCGI-office-orderregarding-Subject-Expert-Committee-functioning.pdf. 39 Recommendation of the SEC meeting to examine COVID-19 related proposal under accelerated approval process made in its 131st meeting, Central Drugs Standard Control Organization, Ministry of Health & Family Welfare, December 17-18, 2020, https://cdsco.gov.in/opencms/opencms/system/modules/CDSCO .WEB/elements/common_download.jsp?numid_pk=MTI4Mw == 40 "Report no.59: The Functioning of the Central Drugs Standards Control Organisation (CDSCO)", Standing Committee on Health and Family Welfare, Ministry of Health and Family Welfare, May 8, 2012, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Health%20and%20Family%20Welfare/59. pdf.
41 Drugs and Cosmetics Act 2008, Ministry of Health and Family Welfare, December 5, 2008, http://www.cdsco.nic.in/writereaddata/D&C_ACT_AMENDME NT_2008_file.pdf 42 National Drug Survey 2014-16, Ministry of Health and Family Welfare, https://mohfw.gov.in/sites/default/files/Chapter10SurveyResluta ndAnalysis.pdf. 43 Year-wise Summary of Overcharging as of June 2019, National Pharmaceutical Pricing Authority, Department of Pharmaceuticals, Ministry of Chemical and Fertilizers, http://www.nppaindia.nic.in/en/utilities/overchargingstatus/year-2019/. 44 Constitution of Standing Committee on Affordable Medicines and Health Products (SCAMHP), Ministry of Chemicals & Fertilizers, January 21, 2019, https://pharmaceuticals.gov.in/sites/default/files/Constitution%2 0of%20Standing%20Committee%20on%20Affordable%20Med icines.pdf.
## Annexure
| 2020-21 | 2020-21 | 2021-22 |
|------------------------------------------------------------------------------------------------|-------------|-------------|
| Annualised Change | | |
| from 2019-20 Actuals | Major Heads | |
| 2019-20 | | |
| Actuals | BE | RE |
| to 2021-22 BE | | |
| Department of Health and Family Welfare | 62,397 | 65,012 |
| Department of Health Research | 1,861 | 2,100 |
| Pradhan Mantri Swasthya Suraksha Yojana | | |
| (PMSSY) | | |
| 4,683 | 6,020 | 7,517 |
| Family Welfare Schemes | 489 | 600 |
| National AIDS and STD Control Programme | 2,813 | 2,900 |
| National Health Mission | 34,660 | 33,400 |
| -National Rural Health Mission | 29,987 | 27,039 |
| -National Urban Health Mission | 850 | 950 |
| -Tertiary Care Programs | 241 | 550 |
| -Strengthening of State Drug Regulatory | | |
| System | | |
| 206 | 175 | 130 |
| -Human Resources for Health and Medical | | |
| Education | | |
| 3,376 | 4,686 | 5,386 |
| Infrastructure Development for Health | | |
| Research | | |
| 148 | 170 | 169 |
| Rashtriya Swasthya Bima Yojna (RSBY) | 57 | 29 |
| Ayushman Bharat - Pradhan Mantri Jan | | |
| Arogya Yojana (PMJAY) | | |
| 3,200 | 6,400 | 3,100 |
| Autonomous Bodies | 9,601 | 9,616 |
| Others | 8,607 | 7,976 |
| COVID-19 Emergency Response and Health | | |
| System Preparedness Package | | |
| - | - | 13,857 |
| COVID-19 vaccination for healthcare workers | | |
| and frontline workers | | |
| - | - | 360 |
| Total | 64,258 | 67,112 |
| Sources: Demand for Grants, Ministry of Health and Family Welfare, Union Budget, 2021-22; PRS. | | |
| | | |
State-wise numbers on the health sector
| | Infant | Life |
|-------------------|-------------|------------|
| Population | Crude | Expectancy |
| Under 5 | | |
| mortality | | |
| Maternal | | |
| Mortality | | |
| (Million) | Birth Rate | |
| Underweight | | |
| children (%) | | |
| rate, | | |
| 2011 | 2017 | |
| Mortality | | |
| Rate (per | | |
| 1000 live | 2015-16 | |
| Total | | |
| Fertility | | |
| Rate, | | |
| 2018 | 2010-15 | |
| Ratio | | |
| 2016-18 | | |
| Births) 2018 | | |
| at Birth | | |
| (Years) | | |
| 2014-18 | | |
| State | | |
| No. of infants | | |
| | | |
| % Children | | |
| below 5 years | | |
| who die | | |
| before | | |
| No. of | | |
| maternal | | |
| deaths, | | |
| | of age who | |
| No. of | | |
| children | | |
| born to a | | |
| woman in | per | |
| are | | |
| No. of live | | |
| births per | | |
| 1,000 in a | | |
| population. | her | |
| reaching one, | | |
| per 1,000 live | | |
| Death | | |
| between | | |
| 0-5 years, | | |
| per 1,000 | | |
| live births | underweight | |
| lifetime | births | |
| How long a | | |
| new-born | | |
| can expect | | |
| to live, on | | |
| existing | | |
| death rate | | |
| 1,00,000 | | |
| live births | | |
| Andhra Pradesh | 49 | 16 |
| Assam | 31 | 21 |
| Bihar | 104 | 26 |
| Chhattisgarh | 26 | 23 |
| Gujarat | 60 | 20 |
| Haryana | 25 | 21 |
| Jharkhand | 33 | 23 |
| Karnataka | 61 | 17 |
| Kerala | 33 | 14 |
| Madhya Pradesh | 73 | 25 |
| Maharashtra | 112 | 16 |
| Odisha | 42 | 18 |
| Punjab | 28 | 15 |
| Rajasthan | 69 | 24 |
| Tamil Nadu | 72 | 15 |
| Telangana | 35 | 17 |
| Uttar Pradesh | 200 | 26 |
| West Bengal | 91 | 15 |
| Arunachal Pradesh | 1 | 18 |
| Delhi | 17 | 15 |
| Goa | 1 | 13 |
| Himachal Pradesh | 7 | 16 |
| Jammu & Kashmir | 13 | 15 |
| Manipur | 3 | 15 |
| Meghalaya | 3 | 23 |
| Mizoram | 1 | 15 |
| Nagaland | 2 | 14 |
| Sikkim | 1 | 16 |
| Tripura | 4 | 13 |
| Uttarakhand | 10 | 17 |
| Andaman & Nicobar | | |
| Islands | | |
| 0 | 11 | |
| Chandigarh | 1 | 14 |
| Dadra & Nagar | | |
| Haveli | | |
| 0 | 24 | |
| Daman & Diu | 0 | 20 |
| Lakshadweep | 0 | 15 |
| Puducherry | 1 | 13 |
| All India | 1,211 | 20 |
Sources: Census Data 2011; Sample Registration System 2019; Health and Family Welfare Statistics 2017; Special Bulletin on maternal Mortality in India 2016-18; National Family Health Survey-4 (2015-16); PRS.
## Demand For Grants: Jal Shakti
The Ministry of Jal Shakti is responsible for the development, maintenance, and efficient use of water resources in the country and coordination of drinking water and sanitation programs in rural areas. The Ministry was created in 2019 by integrating the Ministries of: (i) Water Resources, River Development, and Ganga Rejuvenation, and (ii) Drinking Water and Sanitation. In this note we discuss the overview of finances of the Department of Drinking Water and Sanitation, and the Department of Water Resources separately, and then discuss broader issues in the sectors.
## Allocations In Union Budget 2021-22
In 2021-22, the Ministry of Jal Shakti received an allocation of Rs 69,053 crore which is a 64% annual increase over the actual expenditure in 2019-20. The focus of the increased expenditure is on drinking water, which is line with the government's agenda to provide functional tap water connections to all households by 2024.1 Further, the Economic Survey (2020-21) noted that a strong emphasis on sanitation and drinking water is required to prevent communicable diseases.2 Table 1 provides details on allocations to the two departments under the Ministry.
Jal Shakti (in Rs crore)
Annualised
Budgeted
Change
Department
Actuals
(19-20)
Revised
(20-21)
(21-22)
(Actuals 19-20
to BE 21-22)
Drinking Water and
Sanitation
18,264
17,024
60,030
81%
Water Resources
7,419
7,262
9,023
10%
Total
25,683
24,286
69,053
64%
Note: BE is budget estimate. Sources: Demands for Grants 2021-22, Ministry of Jal Shakti; PRS.
## Policy Proposals In Union Budget 2021-22
- The Jal Jeevan Mission (Urban) will be launched to enable
universal water supply and liquid waste management in urban areas.
- The Urban Swachh Bharat Mission 2.0 will be implemented.
It will focus on sludge and waste water management.
## Overview Of Finances Department Of Drinking Water And Sanitation
The Department of Drinking Water and Sanitation administers programs for safe drinking water and sanitation in rural areas. It is responsible for the two programs: the Jal Jeevan Mission with an aim to provide functional household tap connection to every rural household, and the Swachh Bharat Mission-Gramin for sanitation.3
The Department has an allocation of Rs 60,030
crore, accounting for 87% of the Ministry's allocation. This is an 81% annual increase compared to the actual expenditure in 2019-20. Over the past 10 years, the expenditure by the Department increased at an average annual growth rate of 3% (excluding 2021-22). Table 2 below shows the trends in expenditure by the Department in the last decade. The allocation for the Department increased by 253% in 2021-22 (over the revised estimates for 2020-21).
Year
Expenditure
(in Rs crore)
% Change in
expenditure
2012-13
12,968
29.7%
2013-14
11,941
-7.9%
2014-15
12,091
1.3%
2015-16
11,081
-8.4%
2016-17
16,476
48.7%
2017-18
23,939
45.3%
2018-19
18,412
-23.1%
2019-20
18,264
-0.8%
2020-21
17,024
-7%
2021-22
60,030
253%
Note: Values for 2020-21 are revised estimates and 2021-22 are budget estimates. Allocations before 2019-20 were towards the erstwhile Ministry of Drinking Water and Sanitation. Sources: Union Budgets 2014-15 to 2021-22; PRS.
As can be seen in Figure 1, from 2011-12 to 2014-
15, the Department's expenditure was focused on drinking water. With the introduction of the Swachh Bharat Mission, between 2015-19, the focus of expenditure was on rural sanitation. However, since 2019-20 the expenditure focus has shifted back towards drinking water.
Between 2011-15, the actual expenditure by the Department of Drinking Water and Sanitation was lower than the budgeted expenditure. However, during 2015-18, the Department spent more than the allocated amount. The actual expenditure in 2015-16 was 77% higher than the budgeted expenditure for the year. This may be due to the lack of adequate budgeting and planning in the implementation of the scheme.
Sources: Union Budgets 2011-12 to 2021-22; PRS.
## Schemes Under The Department Of Drinking Water And Sanitation
Expenditure by the Department of Drinking Water and Sanitation is primarily towards the two major schemes, the Jal Jeevan Mission (JJM) and the Swachh Bharat Mission-Gramin (SBM-G). Table 3 provides details on allocation towards these schemes over the past three years.
Annualised Change
Budgeted
Major head Actuals
(Actuals 19-20 to
(19-20)
Revised
(20-21)
(21-22)
BE 21-22)
JJM
10,030
11,000
50,011
123%
SBM-G
8,213
6,000
9,994
10%
Others
21
24
25
10%
Total
18,264
17,024
60,030
81%
Note: BE is budget estimate. Sources: Demands for Grants 2021-22, Department of Drinking Water and Sanitation; PRS.
JJM has been allocated Rs 50,011 crore in 2021-22 (123% annual increase over 2019-20). This increase may be owing to the government's aim to provide functional tap water connections to all households by 2024.1 SBM-G has been allocated Rs 9,994 crore in 2020-21 (10% annual increase over 2019-20). The 15th Finance Commission noted that the COVID-19 pandemic has highlighted the importance of drinking water and sanitation.14 It recommended greater emphasis on availability of safe drinking water and sanitation services to protect human health during infectious disease outbreaks.14 Further, it recommended that 60% (Rs 1,42,084 crore) of the total grants for rural local bodies be spent on these sectors during 2021-26.14
## Swachh Bharat Mission - Gramin
In 2014, the Swachh Bharat Mission (Gramin) was launched by restructuring the Nirmal Bharat Abhiyan.4 The Mission aimed to achieve universal sanitation coverage, improve cleanliness, and eliminate open defecation by October, 2019.5
The expenditure towards rural sanitation schemes saw a steady increase from 2011-12 (Rs 1,500
crore) to 2017-18 (Rs 16,888 crore), and a decrease in the subsequent years. Table 4 shows the trends in budget allocation and actual expenditure on rural sanitation in the past 10 years.
sanitation (in Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2011-12
1,650
1,500
91%
2012-13
3,500
2,474
71%
2013-14
3,834
2,244
59%
2014-15
4,260
2,841
67%
2015-16
3,625
6,703
185%
2016-17
9,000
10,484
116%
2017-18
13,948
16,888
121%
2018-19
15,343
12,913
84%
2019-20
9,994
8,213
82%
2020-21
9,994
6,000
60%
Note: The 'actuals' figure for 2020-21 is the revised estimate. Sources: Union Budgets 2010-11 to 2021-22; PRS.
The increased spending from 2015-16 to 2017-18 was due to the focus on improving sanitation, after the launch of SBM-G. Note that the allocation towards the scheme has been the same since 2019-
20 (Rs 9,994 crore). Further, there has been underutilisation of the allocated amount since 2018-19.
Construction of Individual Household Latrines
(IHHLs): The cost for constructing a household toilet was increased from Rs 10,000 to Rs 12,000 in September 2014 when the Nirmal Bharat Abhiyan was restructured into SBM-G.6 This cost for constructing toilets is shared between the centre and the state in the ratio of 60:40. Table 5 gives the number of household toilets constructed since the inception of the scheme.
| Year | Toilets Constructed |
|---------|------------------------|
| 2014-15 | 48,10,142 |
| 2015-16 | 1,23,98,184 |
| 2016-17 | 2,15,10,893 |
| 2017-18 | 2,92,57,956 |
| 2018-19 | 2,18,50,623 |
| 2019-20 | 1,77,02,842 |
| Total | 10,75,30,640 |
Sources: SBM Dashboard, Ministry of Jal Shakti; PRS.
As per the Department, 43.4% of the rural households had access to toilets in 2014-15, which has increased to 100% in February 2021.7 Figure 3 illustrates the total coverage of household toilets since the inception of the SBM programme.
Sources: Management Information System Reports of SBM, Ministry of Jal Shakti; PRS.
The Economic Survey (2020-21) noted that sanitation access improved for all states during 2012 to 2018.2 However, inter-state differences in access to sanitation are still large, especially in rural areas. For example, access to sanitation is below 75% in states such as Odisha, Jharkhand, Uttar Pradesh, and West Bengal.2
Open Defecation Free (ODF) villages: Under SBM-G, a village is declared as ODF when: (i) there are no visible faeces in the village, and (ii) every household as well as public institution uses safe technology options for faecal disposal.8 After a village declares itself as ODF, state governments are required to verify the ODF status
of such a village. Such verification must include indicators such as access to a toilet facility and its usage, and safe disposal of faecal matter through septic tanks.
The guidelines for ODF state that since it is not a one-time process, at least two verifications must be carried out.9 The first verification must be carried out within three months of ODF declaration. The second verification must be carried out around six months after the first verification. As per the Ministry of Jal Shakti, a total of 6,03,142 villages across 711 districts and 35 states and union territories have been declared as ODF as of February 2021.10 Of these, 5,99,953 villages
(99.5%) have been verified by state governments as ODF under the first level of verification.10
1,79,945 villages (30%) have been verified as ODF under the second level of verification.11 State-wise details on the number of villages declared and verified ODF are presented in the Annexure. The 15th Finance Commission recommended that an independent survey be instituted to estimate the prevalence of open defecation in the country.14 Further, the 15th Finance Commission noted that the practice of open defecation is still prevalent, despite access to toilets and highlighted that there is a need to sustain behavioural change of people for using toilets.14 In March 2020, the Department launched Phase II of SBM (G) which will focus on ODF Plus and will be implemented from 2020-21 to 2024-25 with an outlay of Rs 1,40,881 crore.12,13 ODF Plus includes ODF sustainability and solid and liquid waste management.14 The 15th Finance Commission also noted that the scheme only provides financial incentives to construct latrines to households below poverty line
(BPL) and selected households above poverty line.14 It highlighted that there are considerable exclusion errors in finding BPL households and recommended the universalisation of the scheme to achieve 100% ODF status.14
## Jal Jeevan Mission
The Jal Jeevan Mission was launched in 2019 with the aim to provide functional household tap connection to every rural household by 2024.1 It subsumed the National Rural Drinking Water Programme. The total estimated cost of JJM is Rs 3.6 lakh crore over 2019 to 2024.1 In 2021-22, it has been allocated Rs 50,011 crore, which is a 123% annual increase over the actual expenditure in 2019-20. After a reduction in expenditure on the scheme from 2015-16 to 2018- 19, the expenditure on the scheme was increased from 2019-20 onwards (Figure 4).
Sources: Union Budgets 2012-13 to 2021-22; PRS.
Target versus achievements: The coverage of the National Rural Drinking Water Programme
(NRDWP) was monitored in terms of habitations having provision of minimum 40 Litres Per Capita Per Day (LPCD) of potable drinking water sources at a reasonable distance. As of September 2019, 1% of rural households have been fully covered under the scheme with 40 LPCD of water supply and 16% households have been partially covered.14 JJM (which subsumed NRDWP) aims to provide functional household tap connections to every household. However, the coverage of piped-watersupply remains low. As of September 2020, only 28.7% of rural households have functional pipedwater supply connections.15 Further, the 15th Finance Commission noted that though the Planning Commission had recommended increasing drinking water supply levels in rural areas from 40 LPCD to 55 LPCD, the Department is yet to incorporate this target in JJM.14 The Standing Committee on Drinking Water and Sanitation (2020-21) noted certain weaknesses in the implementation of the scheme including: (i)
lack of participatory approach, (ii) inadequate financial resources, (iii) non-availability of technical human resources, and (iv) poor operation and maintenance of completed schemes.16 It recommended a speedy increase in the provision of piped water supply and effective strategies to monitor accomplished work.16
## Department Of Water Resources
The Department is responsible for: (i) planning and coordination of water resources in the country, (ii) monitoring of irrigation and flood control projects, (iii) supporting state level activities for ground water development, and (iv) reduction of pollution and rejuvenation of rivers.17 In 2021-22, the Department has an allocation of Rs 9,023 crore, accounting for 13% of the Ministry's allocation. This is a 10% annual increase over the actual expenditure in 2019-20.
Note: Values for 2020-21 and 2021-22 are revised estimates and budget estimates respectively.
Sources: Union Budgets 2015-16 to 2021-22; PRS.
## Major Schemes
In 2021-22, 62% of the Department's expenditure is estimated to be on the Pradhan Mantri Krishi Sinchai Yojna. This is followed by the National River Conservation Plan (10.5%), Water Resources Management (8.1%), and Namami Gange (6.7%).
Change
Budgeted
(Annualised)
(Actuals 19-20
Major Head
Actuals
(19-20)
Revised
(20-21)
(21-22)
to
BE 21-22)
PM Krishi Sinchai Yojna
4,033
4,391
5,588
17.7%
National River Conservation
1,336
900
950
-15.7%
Water Resources Management
626
449
729
7.9%
Namami Gange
353
500
600
30.3%
Central Water Commission
391
361
389
-0.2%
Central Ground Water Board
236
235
238
0.4%
Others
444
427
528
9.0%
Total
7,419
7,262
9,023
10.3%
Note: BE is budget estimate. Others include central sector projects such as river basin management, and major irrigation projects. Sources: Demands for Grants 2021-22, Department of Water Resources, River Development, and Ganga Rejuvenation; PRS.
## Issues To Consider Irrigation
The Economic Survey (2016-17) highlighted that 52% of the total net sown area in India is unirrigated and depends on rainfall for cultivation.18 It noted that when rainfall is significantly less than usual, the unirrigated areas face higher adverse effects than the irrigated areas. Therefore, it recommended that irrigation coverage in the country needs to be increased.18 The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) was launched during 2015-16.19 The scheme seeks to: (i) expand coverage of irrigation, (ii) improve water use efficiency on farms, and (iii) introduce sustainable water conservation practices.20 The Jal Shakti Ministry implements certain components of the scheme, such as PMKSY - Har Khet Ko Pani, Flood Management, and Borders Area Programme.19 Other components of the scheme (such as Per Drop More Crop and Watershed Management) are implemented by the Ministry of Agriculture and Farmers' Welfare and the Ministry of Rural Development. Figure 6 shows the expenditure on the scheme from 2016-17 to 2021-22. The scheme has been allocated Rs 5,588 crore in 2021-22. Its share in the Department's expenditure is estimated to increase from 35% in 2016-17 to 62% in 2021-22.
Har Khet ko Pani: This scheme's objectives include: (i) creation of new water sources, (ii) restoration and repair of traditional water bodies, (iii) command area development, and (iv) strengthening of distribution network from irrigation sources to the farm.21,22 Some components of the scheme are: Accelerated Irrigation Benefit Programme (AIBP): Under this scheme, financial assistance is being provided for faster completion of irrigation projects. As of February 2021, 44 projects (42%) out of the 106 projects selected under the scheme have been completed.23 Further, 22 projects (20%) projects are facing constraints such as land acquisition, legal, and contractual issues.23
Command Area Development and Water Management Programme: The objective of the programme is to enhance utilisation of irrigation potential created. This is achieved through activities such as construction of field channels, land levelling, and reclamation of waterlogged area.24 As of February 2021, there are 88 projects under the programme, of which only 18 (21%) have achieved more than 50% physical progress.25
## Flood Management
The National Water Policy (2012) noted that climate change has deepened incidences of water related disasters such as floods, increased erosion, and increased frequency of droughts.26 The central government supports states by providing financial assistance for undertaking flood management works in critical areas through the Flood Management and Border Areas Programme. From 2017-18 to 2019-20, central assistance of Rs 2,022 crore has been released under the scheme.27 Under flood management component of the scheme, 14 projects of the 83 sanctioned projects had been completed as of March 2020.28 Major issues faced while implementing the scheme include acquisition of land for the project, legal problems, non-release of state share, and inadequate budget allocation.29 The Standing Committee on Water Resources (2020-21) noted the delay in completion of projects and recommended that the Department resolve the underlying factors for such delay.28
## Conservation And Rejuvenation Of Rivers
The Ministry of Jal Shakti implements the Namami Gange Mission with the objective of rejuvenation of river Ganga and its tributaries through municipal sewage and industrial effluents treatment, river surface cleaning, and rural sanitation.30 As of February 2021, 142 (43%) of the 334 projects sanctioned under the Mission have been completed.31 The scheme was launched in 2014 with a budget outlay of Rs 20,000 crore for the period 2015- 2020.32 During the period 2015-16 to 2020-21, only Rs 4,016 crore (20%) has been spent on the programme.32 In 2021-22, the scheme has been allocated Rs 600 crore, which is 30% annual increase over the actual expenditure in 2019-20. Table 7 shows the trends in budget allocation and actual expenditure on Namami Gange from 2015- 16. Note that the utilisation under the scheme has remained less than 65% since the scheme started.
## Namami Gange (In Rs Crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2015-16 | - | 100 | - |
| 2016-17 | - | 1,675 | - |
| 2017-18 | 2,300 | 700 | 30% |
| 2018-19 | 2,300 | 688 | 30% |
| 2019-20 | 750 | 353 | 47% |
| 2020-21 | 800 | 500 | 62% |
Note: The 'actuals' figure for 2020-21 is the revised estimate. Sources: Union Budgets 2015-16 to 2021-22; PRS.
The Standing Committee on Water Resources (2020-21) noted that the implementation of the program does not match the targets.28 Some key bottlenecks affecting the implementation of projects include: (i) delay in tendering process, (ii) non-availability of land for sewage treatment plants leading to delay in execution of projects, and (iii)
underutilisation of sewage treatment plants'
capacities due to inadequate house sewer connections in cities, among others.33 Further, in response to the Committee's observations, the Ministry of Jal Shakti responded (February 2021) that the COVID-19 pandemic and consequent lockdown had slowed the progress of the projects due to insufficient labor.34
## Ground Water Depletion
Currently, 63% of the net annual ground water available (393 billion cubic meter) is being utilised.35 However, note that ground water development is not uniform across states in India. It has exceeded 100% in some states such as Delhi (120%), Haryana (137%), Rajasthan (140%), and Punjab (166%).35 This implies that the annual ground water utilisation in these states is higher than the net annual ground water availability. The status of ground water development ratio across states is provided in the Annexure. Experts have noted that India is fast moving towards a ground water crisis and nearly 60% of all districts in the country have issues related to either availability of ground water, or quality of ground water, or both.36 The ground water management and regulation scheme was launched in 2008 with the aim to regulate and control the development of ground water resources of the country.37 Further, the Atal Bhujal Yojana was launched in April 2020 for sustainable management of ground water resources through a strong ground water database and community participation in the sector.38
Figure 7 shows the trend in expenditure on ground water schemes and the Central Ground Water Board over the past ten years. The expenditure on ground water schemes has increased substantially only in 2017-18 and 2021-22.
Note: Values for 2019-20 are revised estimates and 2020-21 are budget estimates. Sources: Union Budgets 2011-12 to 2020-21; PRS.
Over the years, ground water usage has increased in areas where the resource was readily available due to its near universal availability, dependability, and low capital cost. Agriculture sector is the major consumer of ground water resources with about 89% of the total annual ground water extraction being used for irrigation (remaining 11% for domestic and industrial use).39 Government incentives such as credit for irrigation and subsidies for electricity supply have further increased the dependency of agriculture on ground water.40 NITI Aayog in its Composite Water Management Index (2019) emphasised that agriculture policies that limit MSPs and subsidies for water-intensive crops (such as sugarcane, wheat, and rice) in regions with declining water tables, can significantly bring down water demand from the agriculture sector.41 Further, providing better price support for crops such as pulses and oilseeds (which require less water) would incentivise the production of these crops.42 The 15th Finance Commission noted that under the Jal Jeevan Mission, 63% of rural habitations are being provided piped water supply from ground water sources.14 It highlighted that this will become unsustainable, given the highly depleted water table in the country.14 The Commission recommended the following to reduce the dependence on ground water: (i) fixing price on water on graded basis, where higher consumption entails higher charges, (ii) greater reliance on surface water for schemes such as Jal Jeevan Mission, and (iii) incentivising creation of rainwater harvesting structures (including stricter implementation of laws) and reuse of greywater.14
## Ground Water Contamination
Ground water contamination is the presence of certain pollutants in ground water that are in excess of the limits prescribed for drinking water.43 The Central Ground Water Board (2018) noted that concentration of contaminants such as fluoride, arsenic, nitrate, and iron in ground water beyond the permissible limits can lead to environmental issues and health problems. Table 8 shows the number of states and districts affected by select geogenic contaminants as of 2020.
Number of
Geogenic
contaminants
Number of
affected
states/UTs
affected
districts
Arsenic (> 0.01 mg/l)
21
152
Fluoride (> 1.5 mg/l)
23
370
Nitrate (> 45 mg/l)
23
423
Iron (> 1mg/l)
27
341
Source: Unstarred Question 1944, Lok Sabha, Ministry of Jal Shakti, September 22, 2020; PRS.
Further, as of February 2020, 3% (51,952) of the total habitations (17,24,423) in India were affected by contamination of ground water.14 The 15th Finance Commission noted that the number of quality-affected habitations may rise as deeper drilling for drinking water sources may lead to chemical contamination of ground water.14 The National Water Quality Sub-Mission was launched in March 2017 to provide safe drinking water to 27,544 arsenic/fluoride affected rural
https://jalshakti-ddws.gov.in/sites/default/files/JJM_note.pdf. r/echap05_vol1.pdf. 3 Annual Report 2017-18, Ministry of Drinking Water and Sanitation, https://jalshaktiddws.gov.in/sites/default/files/Annual_Report_2017- 18_English.pdf. 4 Review of Sanitation Programme in Rural Areas, 8th Report, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 5 About SBM, Swachh Bharat Mission-Gramin, http://swachhbharatmission.gov.in/SBMCMS/about-us.htm. 6 Review of Sanitation Programme in Rural Areas, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 7 Swachh Bharat Mission- Gramin, Ministry of Jal Shakti, last accessed on February 4, 2021, http://sbm.gov.in/sbmdashboard/IHHL.aspx. 8 Open Defecation Free (ODF) Sustainability Guidelines, Ministry of Drinking Water and Sanitation, http://swachhbharatmission.gov.in/sbmcms/writereaddata/image s/pdf/guidelines/Guidelines-ODF-sustainability.pdf. 9 Swachh Bharat Mission- Gramin Guidelines, Ministry of Jal Shakti, last accessed on February 4, 2021, https://jalshaktiddws.gov.in/sites/default/files/SBM%28G%29_Guidelines.pdf 10 Swachh Bharat Mission- Gramin Dashboard, last accessed on February 4, 2021, https://sbm.gov.in/sbmdashboard/ODF.aspx. 11 Status of Declared and Verified villages, Swachh Bharat Mission- Gramin Dashboard, Ministry of Jal Shakti, last accessed on February 4, 2021, https://sbm.gov.in/sbmReport/Report/Physical/SBM_VillageOD FMarkStatus.aspx. 12 "Cabinet approves Swachh Bharat Mission (Grameen) Phase- II", Press Information Bureau, Cabinet, February 19, 2020. 13 'Shri Gajendra Singh Shekhawat launches Swachh Bharat Mission (Grameen) Phase-II', Press Information Bureau, Ministry of Jal Shakti, March 4, 2020. 14 Finance Commission Report (2021-26), Volume III, February 1, 2021, file:///C:/Users/Prs/Downloads/XVFC%20Complete_Report.pdf 15 Lok Sabha Unstarred Question No. 891, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, answered on September 17, 2020, http://164.100.24.220/loksabhaquestions/annex/174/AU891.pdf. 16 Standing Committee on Demand for Grants (2020-21), Department of Drinking Water and Sanitation, Ministry of Jal Shakti, March 5, 2020, http://164.100.47.193/lsscommittee/Water%20Resources/17_W
habitations in the country, over a span of four years.29 The Standing Committee on Drinking Water and Sanitation (2019-20) observed that out of these habitations, 11,884 habitations (43%) have been covered under the scheme. 4,100 habitations (15%) have seen an improvement in quality on retesting or have been covered under a state plan.29
18 Climate, Climate Change and Agriculture, Economic Survey 2016-17, https://mofapp.nic.in/economicsurvey/economicsurvey/pdf/082- 101_Chapter_06_ENGLISH_Vol_01_2017-18.pdf. 19 Lok Sabha Unstarred Question No.2045, Ministry of Jal Shakti, July 4, 2019, http://164.100.24.220/loksabhaquestions/annex/171/AU2054.pd f. 20 Website, Pradhan Mantri Krishi Sinchayi Yojna, last accessed on February 4, 2021, https://pmksy.gov.in/. 21 Demand no. 61, Department of Water Resources, River Development and Ganga Rejuvenation, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/sbe61.pdf. 22 "Implementation of PMKSY", Press Information Bureau, Ministry of Agriculture and Farmer Welfare, May 2016, https://pib.gov.in/newsite/PrintRelease.aspx?relid=145004. 23 Dashboard, Pradhan Mantri Krishi Sinchayi Yojna - Accelerated Irrigation Benefit Programme, Ministry of Jal Shakti, last accessed on February 5, 2021, http://pmksymowr.nic.in/aibp/. 24 Salient features, Pradhan Mantri Krishi Sinchayi Yojna, Ministry of Jal Shakti, http://mowr.gov.in/programmes/salientfeatures. 25 Dashboard, Common Area Development Programme, Ministry of Jal Shakti, last accessed on February 5, 2021, http://cadwm.gov.in/cadwm-dashboard/. 26 National Water Policy (2012), Ministry of Water Resources, http://mowr.gov.in/sites/default/files/NWP2012Eng6495132651 _1.pdf. 27 Lok Sabha Unstarred Question No.2052, Ministry of Jal Shakti, September 22, 2020, http://164.100.24.220/loksabhaquestions/annex/174/AU2052.pd f. 28 Standing Committee on Demand for Grant (2020-21), Department of Water Resources, River Development and Ganga Rejuvenation, March 5, 2020, http://164.100.47.193/lsscommittee/Water%20Resources/17_W ater_Resources_3.pdf. 29 "Standing Committee on Water Resources (2019-20)", Ministry of Jal Shakti - Department of Drinking Water and Sanitation, Demand for Grants (2019-20), http://164.100.47.193/lsscommittee/Water%20Resources/17_W ater_Resources_2.pdf. 30 Lok Sabha Unstarred Question No.2837, Ministry of Jal Shakti, December 5, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AU2837.pd f. 31 Targets and Achievements, National Mission for Clean Ganga, last accessed on February 4, 2021, http://35.154.100.225/nmcg/nmcgpmtmain.aspx. 32 Sustainable development and climate change, Volume 2, Economic Survey 2018-19. https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapte r/echap05_vol2.pdf.
http://164.100.47.193/lsscommittee/Water%20Resources/16_W ater_Resources_20.pdf. 34 "Action Taken by the Government on the Observations / Recommendations contained in the Third Report on Demands for Grants (2020-21)", Ministry of Water Resources, River Development and Ganga Rejuvenation, February 9, 2021, http://164.100.47.193/lsscommittee/Water%20Resources/17_W ater_Resources_8.pdf. 35 Water and Related Statistics, October 2019, Central Water Commission, http://www.indiaenvironmentportal.org.in/files/file/water-andrelated-statistics-2019.pdf. 36 12th Five Year Plan, Planning Commission, 2013 http://planningcommission.gov.in/plans/planrel/fiveyr/12th/pdf/ 12fyp_vol1.pdf. 37 Lok Sabha Unstarred Question No.737, Ministry of Jal Shakti, November 21, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AU737.pdf. 38 Lok Sabha Unstarred Question No. 1914, Ministry of Jal Shakti, answered on September 22, 2020, http://164.100.24.220/loksabhaquestions/annex/174/AU1914.pd f.
39 Ground water year book, 2018-19, https://indiawris.gov.in/downloads/GW%20Year%20Book_201 8-19_JAN%208.pdf 40 Report of the Export Group on Ground Water Management and Ownership, Planning Commission, September 2007, http://planningcommission.nic.in/reports/genrep/rep_grndwat.pd f. 41 Composite Water Management Index 2019, NITI Aayog, August 2019, https://niti.gov.in/sites/default/files/2019- 08/CWMI-2.0-latest.pdf. 42 Report of the High-Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://www.fci.gov.in/app/webroot/upload/News/Report%20of% 20the%20High%20Level%20Committee%20on%20Reorienting %20the%20Role%20and%20Restructuring%20of%20FCI_Engl ish_1.pdf. 43 Lok Sabha Unstarred Question No. 2157, Ministry of Water Resource, River Development and Ganga Rejuvenation, answered on March 10, 2015, http://164.100.47.132/LssNew/psearch/QResult16.aspx?qref=14 305. .
| State | Total Villages | Total declared | Total Verified |
|-----------------------------|-------------------|-------------------|-------------------|
| Total Verified | | | |
| % Verified | | | |
| 2nd level | | | |
| (2nd level) | | | |
| Andaman and Nicobar Islands | 192 | 192 | 192 |
| Andhra Pradesh | 18,841 | 18,841 | 18,841 |
| Arunachal Pradesh | 5,389 | 5,389 | 5,389 |
| Assam | 25,503 | 25,503 | 25,503 |
| Bihar | 38,691 | 38,691 | 37,317 |
| Chandigarh | 13 | 13 | 13 |
| Chhattisgarh | 18,769 | 18,769 | 18,769 |
| Dadar and Nagar Haveli and | | | |
| Daman and Diu | | | |
| 95 | 95 | 95 | 95 |
| Goa | 365 | 365 | 18 |
| Gujarat | 18,261 | 18,261 | 18,261 |
| Haryana | 6,908 | 6,908 | 6,908 |
| Himachal Pradesh | 15,921 | 15,921 | 15,921 |
| Jammu and Kashmir | 7,263 | 7,263 | 7,195 |
| Jharkhand | 29,564 | 29,564 | 29,333 |
| Karnataka | 27,044 | 27,044 | 26,900 |
| Kerala | 2,027 | 2,027 | 2,027 |
| Ladakh | 302 | 302 | 302 |
| Lakshadweep | 9 | 9 | 9 |
| Madhya Pradesh | 50,228 | 50,228 | 50,228 |
| Maharashtra | 40,533 | 40,511 | 40,505 |
| Manipur | 2,556 | 2,556 | 2,556 |
| Meghalaya | 6,028 | 6,028 | 6,028 |
| Mizoram | 696 | 696 | 696 |
| Nagaland | 1,451 | 1,451 | 1,142 |
| Odisha | 46,785 | 46,785 | 46,785 |
| Puducherry | 265 | 265 | 265 |
| Punjab | 13,726 | 13,726 | 13,700 |
| Rajasthan | 42,860 | 42,860 | 42,860 |
| Sikkim | 403 | 403 | 403 |
| Tamil Nadu | 12,525 | 12,524 | 12,524 |
| Telangana | 14,200 | 14,200 | 14,149 |
| Tripura | 1,178 | 1,178 | 646 |
| Uttar Pradesh | 97,640 | 97,640 | 97,623 |
| Uttarakhand | 15,473 | 15,473 | 15,473 |
| West Bengal | 41,461 | 41,461 | 41,377 |
| Total | 6,03,165 | 6,03,142 | 5,99,953 |
Sources: Management Information System Reports of SBM; PRS.
| State | |
|-------------------|------|
| Andhra Pradesh | 44 |
| Arunachal Pradesh | 0 |
| Assam | 11 |
| Bihar | 46 |
| Chhattisgarh | 44 |
| Delhi | 120 |
| Goa | 34 |
| Gujarat | 64 |
| Haryana | 137 |
| Himachal Pradesh | 86 |
| Jammu & Kashmir | 29 |
| Jharkhand | 28 |
| Karnataka | 70 |
| Kerala | 51 |
| Madhya Pradesh | 55 |
| Maharashtra | 55 |
| Manipur | 1 |
| Meghalaya | 2 |
| Mizoram | 4 |
| Nagaland | 1 |
| Odisha | 42 |
| Puducherry | 74 |
| Punjab | 166 |
| Rajasthan | 140 |
| Sikkim | 0 |
| Tamil Nadu | 81 |
| Telangana | 65 |
| Tripura | 8 |
| Uttar Pradesh | 70 |
| Uttarakhand | 57 |
| West Bengal | 45 |
| Total | 63 |
Note: Total includes union territories; Data as of 2017. Sources: Dynamic Ground Water Resources of India, 2017, Central Ground Water Board; PRS
## Demand For Grants: Telecommunications
Department of Telecommunications under the Ministry of Communications is responsible for policy, licensing, monitoring, regulation, research and international co-operation in the field of telecommunications. The Department administers several Public Sector Undertakings involved in providing telecommunication services, consultancy, and equipment manufacturing. This note presents the allocation to the Department in 2021-22, and trends in expenditure over the last few years and discusses some of the issues in the sector.
## Overview Of Finances Expenditure1,2
In 2021-22, the Department has been allocated Rs 58,737 crore, which is a 44% annual increase over the actual expenditure in 2019-20. One of the key reasons for the increase in the allocation to the Department is the revival plan for BSNL and MTNL that was approved by the Union Cabinet in October 2019.3 The revival plan provides for: (i) capital infusion for allotment of 4G spectrum and (ii) costs to be incurred towards voluntary retirement scheme. Consequently, allocation to the department saw a significant increase at the budget stage in 2020-21. However, at the revised stage, the allocation towards a majority of the components of the revival plan has been cut and instead shifted in the budget for 2021-22. This is the key reason for: (i) the 44% annual increase in allocation for 2021-22 as compared to 2019-20, and (ii) the 38% decrease in allocation in 2020-21 from the budget to the revised stage.
| | 2019- | 2020- | 2020- | 2021- |
|-----------|---------|---------|---------|---------|
| 20 | | | | |
| CAGR | | | | |
| (19-20 to | 21 | | | |
| BE | | | | |
| 21 | | | | |
| RE | | | | |
| 22 | | | | |
| BE | | 21-22) | | |
| Revenue | 23,466 | 40,757 | 36,749 | 32,803 |
| Capital | 4,929 | 25,675 | 4,360 | 25,934 |
| Total | | 28,395 | 66,432 | 41,109 |
Note: RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Budget; Union Budget 2021-22; PRS.
The capital component of the revival plan comprises capital infusion worth Rs 20,410 crore for 4G spectrum. No allocation has been made towards this in 2020-21 at the revised stage. Instead, the same amount has been allocated in 2021-22 at the budget stage. As a result, there is a substantial decrease in the allocation towards capital expenditure in 2020-21 at the revised stage and a significant increase in 2021-22.
BSNL and MTNL (Rs crore)
| 2020-21 | 2021-22 |
|-------------------------|------------|
| Particular | |
| 2020-21 | |
| BE | RE |
| Capital infusion for 4G | |
| spectrum- BSNL | |
| 14,115 | 0 |
| Capital infusion for 4G | |
| spectrum-MTNL | |
| 6,295 | 0 |
| Implementation of VRS | |
| (BSNL/MTNL) | |
| 3,295 | 2,160 |
| 9,899 | 11,206 |
| Ex-gratia payment to | |
| voluntarily retiring | |
| employees | |
| (BSNL/MTNL) | |
| Grants for payment of | |
| GST-BSNL | |
| 2,541 | 0 |
| Grants for payment of | |
| GST-MTNL | |
| 1,133 | 0 |
| Total | 37,278 |
Note: RE: Revised Estimates; BE: Budget Estimates. Sources: Expenditure Budget; Union Budget 2021-22; PRS.
Figure 1 depicts the trend in the expenditure during the 2011-22 period. During this period, the expenditure has grown at a CAGR of 15%. The higher increase in expenditure since 2015-16 as compared to previous years is due to allocation towards Bharatnet (a scheme to connect all gram panchayats through optical fibre) and Optical Fibre Network for Defence Services schemes. The increase in 2020-21 and 2021-22 is mainly due to expenditure towards revival plan for BSNL and MTNL.
used for 2021-22. Sources: Expenditure Budget; Union Budget Documents; PRS.
Over the last 10 years, the actual expenditure by the Department has varied significantly as compared to the budget estimates (Figure 2). In 2015-16 and 2016-17, actual expenditure exceeded budget estimates by 52% and 29% respectively. In 2019- 20, actual expenditure was 4% higher than the budgeted expenditure. As per the revised estimates of 2020-21, expenditure is estimated to be 38% less than the budget estimates.
Note: Revised Estimates used for 2020-21. Sources: Expenditure Budget; Union Budget Documents; PRS.
## Major Expenditure Heads
In 2021-22, the allocation towards support to Public Sector Undertakings (PSUs) is 47% of the total allocation for the department (Rs 27,547 crore). Of this, Rs 26,244 crore (95%) has been allocated towards the revival plan for BSNL and MTNL (details in Table 2). The next highest allocation is towards pension (26%), followed by Bharatnet (12%), and network for defence services scheme (9%). Allocation towards Bharatnet in 2021-22 is almost four times the allocation in 2019- 20.
| 2020- | 2021- |
|---------------|---------|
| Expenditure | |
| Head | |
| 2019-20 | |
| Actuals | |
| 21 | |
| RE | |
| 22 | |
| BE | |
| CAGR | |
| (2019- | |
| 20 to | |
| 2021- | |
| 22) | |
| Total support | |
| to PSUs | |
| 6,083 | 13,941 |
| Pension | 13,451 |
| Bharatnet | 1,729 |
| 4,705 | 4,000 |
| Network for | |
| defence | |
| services | |
| Compensation | |
| to TSPs | |
| 1,196 | 1,700 |
| Others | 1,231 |
| Total | 28,395 |
Note: BE - Budget Estimate; RE - Revised Estimate; TSP: Telecom Service Providers. Sources: Expenditure Budget; Union Budget 2021-22; PRS.
Note: TSP - Telecom Service Providers Sources: Expenditure Budget; Union Budget 2021-22; PRS.
## Universal Service Obligation Fund
The Universal Service Obligation Fund (USOF) has been established to provide widespread, nondiscriminatory, and affordable access to quality Information and Communication Technology services to people in rural and remote areas. The resources for the fund are raised through a Universal Access Levy (UAL) which is 5% of the Adjusted Gross Revenue (AGR) earned by all the operators under various licenses currently.4 Adjusted Gross Revenue is the value of gross revenue after deduction of taxes and roaming/PSTN charges from Gross Revenue. UAL is first credited to the Consolidated Fund of India and then disbursed to the USOF as per the budgetary proposal of the Department of Telecommunications. The schemes being funded through USOF include: (i) Bharatnet, (ii) setting up of towers in left-wing extremism affected areas, and (iii) comprehensive telecom development plan for the north-east region. A total expenditure of Rs 9,000 crore from this fund has been allocated for 2021-22. This is an annual increase of 75% over 2019-20. In recent years, actual expenditure from USOF has been considerably less than the budget estimates. In 2019-20, actual expenditure from USOF was 65% less than the budget estimate. The corresponding figure for 2017-18 and 2018-19 was 52% and 40%, respectively.
## Balance Of Funds Under Usof
In its audit report of the Ministry of Communications for the FY 2017-18, the Comptroller and Auditor General of India (CAG) observed that a large amount earned as UAL is yet to be transferred to the USOF.5 As of December 2020, a total of Rs 55,217 crore is yet to be transferred to the USOF by the central government.6 Disbursal to the USOF has been a small fraction of UAL over the years. A total of Rs 81,540 crore has been earned as UAL during the 2010-21 period, out of which only Rs 40,112 crore has been disbursed (49%).6 The gap between disbursal and UAL has been high over the years, which has led to a rise in balance (Figure 5). Note that in January 2015, the Telecom Regulatory Authority of India (TRAI) had observed that the Department has not been able to devise enough schemes to utilise the earnings of UAL.7 It also recommended reducing UAL from 5% to 3%.7 The Standing Committee on Information Technology (2018) noted that with increasing outlay on schemes including Bharatnet, Mobile Towers in Left Wing Extremism Affected Areas Phase-II and Comprehensive Telecom Development Plan for the North-East, the utilisation of USOF funds will improve.4
Note: UAL: Universal Access Levy; Disbursal: Amount transferred to USOF; Balance: Balance at the end of that Financial Year. Sources: USOF Website as accessed on February 13, 2021; PRS.
## Bharatnet
Bharatnet aims to create a network to connect all the Gram Panchayats (approx. 2.5 lakh GPs) by broadband by laying around 6.5 lakh km of optical fibre. It seeks to provide all telecom service providers with non-discriminatory access to the network. These service providers include mobile operators, Internet Service Providers (ISPs), Cable TV operators, content providers. Bharat Broadband Network Limited (BBNL) is a special purpose vehicle to create, operate, maintain, and manage the BharatNet infrastructure. The project is financed through the USOF. The estimated total cost of the project is Rs 42,068 crore.4
BharatNet is divided into three phases. Phase-I to connect 1.2 lakh GPs was completed in December 2017. Phase-II to connect the remaining GPs is underway. Phase-III is earmarked for future purposes. The scheme also aims to provide lastmile connectivity through Wi-Fi by creating five access points per GP (12.5 lakh Wi-Fi hotspots).8
Note: Revised Estimates used for 2020-21. Sources: Expenditure Budget; Union Budget Documents; PRS.
In 2021-22, Rs 7,000 crore has been allocated towards Bharatnet, an annual increase of 101% over 2019-20. Between 2017-18 and 2019-20, the actual expenditure under the scheme was much lower as compared to the budget estimates. In 2020-21, the expenditure is estimated to be 8% lower than the budget estimates (Figure 6).
## Delay In Completion
The Standing Committee on Information Technology (2018) noted that although approved in 2011, the initial target of BharatNet had to be revised in 2014 due to inadequate planning and design, and unpreparedness to address the issues.9 Under the revised deadline, the phase-I was due by March 2017 but could be completed by December 2017.9 The phase-II which was to be initially completed by March 2019, the target was then revised to March 2020.9, 10 As of February 2021, the project has not been completed. The Standing Committee on Information Technology (2020) noted that the project is now estimated to be completed by August 2021.11 Thus, the estimated delay in the completion of phase-II is about 2 years and 4 months. Table 4 shows the status of BharatNet as of February 2020.12,13
| Parameter | Target | Achievement |
|--------------------|-----------|----------------|
| Achievement | | |
| in % | | |
| Length of OFC | | |
| laid* | | |
| 6.5 lakh | | |
| km | | |
| 5.0 lakh km | 77% | |
| 2.5 lakh | 1.65 lakh | 66% |
| Number of | | |
| panchayats where | | |
| OFC laid* | | |
| 2.5 lakh | 1.53 lakh | 61% |
| Number of | | |
| panchayats which | | |
| are service-ready* | | |
| 2.5 lakh | 1.05 lakh | 42% |
| Number of | | |
| panchayats where | | |
| Wi-Fi installed | | |
| # | | |
| 2.5 lakh | 0.64 lakh | 26% |
| Number of | | |
| panchayats where | | |
| Wi-Fi operational | | |
| # | | |
Note: *as of February 12, 2021, #as of February 15, 2021.
Sources: Website of BBNL as accessed on February 17, 2021; PRS.
## Network For Defence Services
The Network for Defence Services project aims to provide a dedicated pan-India optical fibre cablebased network for use by defence services. The original total sanctioned cost of the project was Rs 13,334 crore.4 In May 2018, the central government announced that the budget of the project has been increased to Rs 24,664 crore.14 BSNL is the implementing agency for the project. A total of 60,000 km of the optical fibre network is to be laid under this project. In 2021-22, Rs 5,200 crore has been allocated towards this project, an annual increase of 5% over 2019-20. Under this scheme, in 2018-19, only 43% of the allotted fund was utilised. In 2020-21, the expenditure is estimated to be 20% less than the budget estimates (Figure 7).
Note: Revised Estimates used for 2020-21. Sources: Expenditure Budget; Union Budget Documents; PRS.
## Delay In Completion
The network for defence services project was to be completed by July 2015.4 The revised deadline for completion was set for May 2020, however, the target was subsequently revised to December 2020.14 The Standing Committee on Information Technology (2018) had observed that the delay has resulted in massive cost overrun from the initial estimation of Rs 8,098 crore in 2009 to Rs.24,664 crore in 2018 (205% increase).4
## Non-Tax Revenue From Communication Services15, 16
Communication services are one of the major sources of non-tax revenue of the central government. In 2016-17, non-tax revenue from communication services was the largest contributor to the overall non-tax revenue of the central government, accounting for 26% of the total.17 This includes receipts from spectrum auctions, onetime fee from new operators and recurring license fees and spectrum charges from telecom service providers which is a percentage share of the Adjusted Gross Revenue (AGR) of the operators. In 2021-22, non-tax revenue from communication services is estimated to be Rs 53,987 crore, an annual decrease of 12% over 2019-20. In 2020-21, at the budget stage, non-tax revenue from communication services was projected to be Rs 1,33,027 crore. However, as per the revised estimates, this revenue is estimated to be Rs 33,737 crore, 75% less than the budget estimate.
| 2020-21 | 2020-21 | 2021-22 | 2019-20 |
|------------|------------|------------|------------|
| Actuals | BE | RE | BE |
| CAGR | | | |
| (19-20 to | | | |
| 21-22) | | | |
| 69,846 | 1,33,027 | 33,737 | 53,987 |
Note: RE: Revised Estimates; BE: Budget Estimates. Source: Receipt Budget; Union Budget 2021-22; PRS.
Although budget documents do not provide clarity, the significant increase in 2020-21 at the budget stage could be due to: (i) anticipated recovery of past dues from the service providers as per the Supreme Court decision in October 2019 on the definition of gross revenue, and (ii) spectrum auction planned during the financial year.18 Note that process for auction of the certain spectrum has been initiated in January 2021 and the auction is likely to be conducted on March 1, 2021.19 In November 2019, the Union Cabinet had approved deferred payment of spectrum auction instalments due for years 2020-21 and 2021-22 to provide relief to telecom service providers.20
Note: Revised Estimates used for 2020-21. Budget Estimates used for 2021-22. Sources: Union Budgets, 2011-21; PRS.
At the end of 2019-20, the arrears of non-tax revenue from communication services is 34% of the total arrears of non-tax revenue of the central government. Of the non-tax revenue overdue by more than five years, the arrears of communication services comprise a significant portion of the total arrears (42%).
of reporting the year 2018-19)
| Duration | Arrear- | %Share* |
|-------------|----------------|------------|
| (Year) | Communications | |
| Arrear- | | |
| Overall | | |
| 0-1 | 2,263 | 20,374 |
| 1-2 | 2,687 | 23,329 |
| 2-3 | 9,661 | 31,730 |
| 3-5 | 9,630 | 41,457 |
| >5 | 89,638 | 2,15,539 |
| Total | 1,13,879 | 3,32,429 |
Note: * % share indicates the share of non-tax revenue from communication services in the total arrears of non-tax revenue of the central government. Source: Receipt Budget; Union Budget 2021-22; PRS.
## Issues For Consideration Digital Divide
COVID-19 has brought focus on access to communication services. During the nation-wide lockdown, internet access became crucial for adults to work from home and children to access education. However, notable gaps exist in India with regard to access to telecom services and use of internet. International Telecommunications Union (ITU, 2019) notes that barriers are often related to age, gender, socioeconomic status, and geography.21 The Department of Telecommunications (2020) had noted that India has become the global leader in monthly data consumption.22 The Department also noted that the cost of data has reduced substantially thereby enabling affordable internet access.22 Following trends were observed with regard to the use of internet services in India before the onset of COVID-19 pandemic:
Regional Divide: The number of internet subscribers per 100 inhabitants for the country on aggregate was 55.1 as of March 2020. This was lower than the global average for developing countries in 2020 as per ITU (65.1).23 A substantial inter-state variation is seen on this parameter (Figure 10). This number was much lower for the service areas of Bihar-Jharkhand (30.4) and Uttar Pradesh-Uttarakhand (38.6). In comparison, services areas in Punjab (83.5), Himachal (81.6), and Kerala (75) performed considerably better than the national average on this parameter.
Gujarat
Haryana
Andhra Pradesh & Telangana
Karnataka
Tamil Nadu
Maharashtra & Goa
Kerala
Himachal Pradesh
83.45
81.62
75.01
74.69
69.06
66.53
65.15
64.77
59.01
56.43
54.24
51.99
51.10
43.95
43.26
41.06
38.58
30.35
Punjab
Delhi
Note: Maharashtra & Goa includes Mumbai circle. Tamil Nadu includes Chennai circle. West Bengal & Sikkim includes Kolkata circle. Uttar Pradesh & Uttarakhand comprises UP East and UP West circles. North-East comprises Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura. Service area also includes adjoining union territories. Sources: Performance Indicator Reports-March 2020, TRAI; PRS.
Rural-Urban Divide: As of March 2020, while the number of internet subscribers per 100 inhabitants in urban areas was 99.1, the corresponding number for rural areas was 32.2, almost two-thirds less (Figure 9). The Standing Committee on Information Technology (2020) had observed that as of March 2020, there were 7,789 villages in the country without telecom connectivity.11
Gender gap: The first phase of the 5th round of the National Family Health Survey (2019-20) measured the proportion of men and women who have ever used internet across 22 states and union territories.24 Across all states, the proportion of men who had used the internet was higher than women, with the difference being higher than 25% point in states such as Telangana, Gujarat, and Andhra Pradesh. In states such as Andhra Pradesh, Bihar, and Tripura, less than 25% of the surveyed women had ever used internet. Across states, the gap between proportion of men and women was wider in rural areas as compared to urban areas.
Source: Phase-I of Fifth Round of National Family Health Survey; PRS.
## Access To Broadband
Communication can be classified among broadband and narrowband based on the bandwidth required for communication. The broadband communication uses a higher bandwidth and provides better speed. Telecom Regulatory Authority of India (2020) had observed that in the post-COVID-19 pandemic era, there will be an increasing reliance on the broadband connectivity and demand for these services is likely to grow much faster.25 TRAI observed that India needs to improve in terms of access to fixed broadband as well as the speed of broadband. At the end of March 2020, only 7.6 out of 100 households had access to fixed broadband.25
TRAI noted that as per a June 2020 report by a private firm (Ookla), India experiences download speeds of 12 Mbps in case of mobile broadband and around 38 Mbps in case of fixed broadband.25 The corresponding global averages are 35 Mbps and 78 Mbps, respectively.25 India ranked 129th among 138 nations in mobile broadband speed and 75th among 174 countries in fixed broadband speed according to the report by Ookla.25 TRAI observed that India's broadband speed is the lowest among the BRICS countries (Figure 12).25 Note that the National Digital Communications Policy 2018 seeks to provide broadband connectivity at 50 Mbps to every citizen by 2022.25 In India, as of March 2020, 92% of internet subscribers in India use a broadband connection.25 However, a broadband connection in India is defined to have a minimum download speed of 512 kbps (kilo bits per second) to an individual subscriber. In other countries, this threshold is defined at a higher level. In USA, UK, and China, it is defined to be 25 Mbps (mega bits per second), 24 Mbps, and 20 Mbps, respectively.25
## India'S Preparedness For 5G
5G is the next technology frontier in the telecom sector. According to the High-Level Forum of the Department on 5G, 5G is predicted to create a cumulative economic impact of USD one trillion in India by 2035.26 As of January 2021, 118 operators in 59 countries have deployed 5G network.27 Mostly, 5G has been launched partially in these countries. In India, commercial rollout of 5G is yet to happen. The Standing Committee on Information Technology (2021) examined India's preparedness for 5G.27 The Committee noted that sufficient preparatory work has not been undertaken for the launch of 5G services in India. It highlighted: (i) inadequate availability of spectrum, (ii) high spectrum prices, (iii) poor development of use cases for 5G, (iv) low status of fiberisation, and (v) deficient backhaul capacity, as some of the key concerns.27 It noted that as of January 2021, 5G trials have not been permitted by the department.27
| Technology | World | India |
|---------------|----------|----------|
| 2G | 1991 | 1995 |
| 3G | 1998 | 2008 |
| 4G | 2008 | 2015 |
| 5G | 2019 | - |
Source: "21st Report: India's preparedness for 5G", February 2021, Standing Committee on Information Technology; PRS.
## Allocation Of 5G Spectrum
Allocation of new bands of the spectrum is crucial for the rollout of 5G. However, the auction of 5G spectrum is still pending. The Committee noted the concerns of the telecom companies that the reserve price set by TRAI (Rs 492 crore per MHz) for the 5G spectrum is exorbitantly high.27 It observed that considering the financial stress in the sector and that 5G ecosystem is yet to be developed, high reserve price may have an adverse impact on the abilities of service providers to roll out 5G.27 The Committee further noted that based on the current availability of spectrum, approximately 50 MHz spectrum per operator can be ensured. This is substantially lower than the global average (about 100 MHz).27 It noted that in case of 4G too, the average spectrum per operator in India is around one-fourth of the global average.27 The Committee observed that there is an urgent need for audit of all allocated spectrum for detecting under-utilisation and subsequently rationalising the allocation of spectrum.27
## Spectrum Fees And Taxes
The Economic Survey of India (2017-18) noted that the telecom sector is facing an issue of higher spectrum charges.28 It observed that lower spectrum charges will augment the spread of telecommunication services and will help in socioeconomic transformation.28 TRAI (2015) had observed that the total effective rate of the license-related levy has gone up significantly in the recent past and that spectrum prices in the country are amongst the highest in the world.7 The total taxes and levies are as high as 30% of the revenue of an operator.7 This adversely impacts the need to continue a low tariff regime in the country. It had recommended that the license fee should be reduced from 8% to 6% by reducing Universal Access Levy from 5% to 3%.7
As of January 2021, the license fee is 8%.27 In 2017, TRAI, as well as the Department of Telecommunications, had recommended lowering General Service Tax (GST) from 18% to 5% and 12% respectively for the telecom sector.29 The Standing Committee on Information Technology (2021) also recommended that the central government should consider rationalisation of levies and duties on the telecom sector.27
## Promotion Of Domestic Manufacturing Of Telecom Equipment
The Standing Committee on Information Technology (2019) had observed that India is highly dependent on the import of telecom equipment.30 During 2017-18 and 2018-19, India imported telecom equipment worth Rs 1.4 lakh crore and 1.2 lakh crore, respectively.30 The Committee observed that this indicates a lack of requisite ecosystem for the promotion of domestic manufacturing.30 Some of the reasons for the dependence on import are: (i) import of telecom equipment at zero duty as per existing tariff obligations under international treaties, (ii) low investment in research and development and creation of intellectual property rights, and (iii) lack of market access for indigenous manufacturers.30 The Committee noted that imports are likely to increase substantially with the introduction of newer technology such as 5G.30 The Standing Committee on Information Technology (2021) also stressed on the importance of enhancing domestic manufacturing capabilities in view of the adoption of 5G. It observed that the ecosystem should be developed for complete manufacturing rather than just assembly, as manufacturing gives higher value addition. The Committee also highlighted the importance of promotion of research and development for the success of telecom manufacturing.27 The Committee noted that in 2018, TRAI had proposed the creation of a Telecom Research and Development Fund with an initial corpus of Rs 1,000 crore for promoting research, innovation, and manufacturing of indigenous telecommunications equipment. It recommended that this fund should be created at the earliest.27
## Essential Services Status For Telecom
The Standing Committee on Information Technology (2021) recommended that telecommunications should be accorded the status of essential service and telecom infrastructure should be designated as a critical infrastructure of the country.27
1 Demand No. 13, Demand for Grants, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/dg13.pdf. 2 Expenditure Budget, Department of Telecommunications, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe13.pdf.
3 "Union Cabinet approves revival plan of BSNL and MTNL and in-principle merger of the two", Cabinet, Press Information Bureau, , October 23, 2019, https://pib.gov.in/PressReleseDetail.aspx?PRID=1588848. 4 "47th Report: Demands for Grants (2018-19) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, March 13, 2018, http://164.100.47.193/lsscommittee/Information%20Technology /16_Information_Technology_47.pdf. 5 "Report No 21 of 2018, Compliance and Performance Audit of Ministry of Communications and Ministry of Electronics &
Information Technology", CAG, 2018, https://www.cag.gov.in/sites/default/files/audit_report_files/Rep ort_No_21_of_2018_Compliance_and_Performance_Audit_of_ Union_Government_Ministry_of_Communications_.pdf. 6 "Statement showing the balance of UAL amount available as potential fund under USO as on 31.12.2020", Universal Service Obligation Fund, Department of Telecommunications, website as accessed on February 13, 2021, http://www.usof.gov.in/usofcms/usof-fund-status-table.jsp. 7 "Recommendations on Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges", TRAI, January 6, 2015, https://main.trai.gov.in/sites/default/files/Reco-AGR-Final- 06.01.2015_0.pdf. 8 "Telecom at a Glance", Department of Telecommunications Website as accessed on July 1, 2019, http://dot.gov.in/sites/default/files/Telecom%20at%20a%20Glan ce.pdf?download=1. 9 "50th Report: Progress of Implementation of BharatNet", Standing Committee on Information Technology, August 2018, http://164.100.47.193/lsscommittee/Information%20Technology /16_Information_Technology_50.pdf. 10 Unstarred Question No 621, Rajya Sabha, Ministry of Communications, June 27, 2019, https://164.100.158.235/question/annex/249/Au621.pdf. 11 "6th Report: Demand for Grants (2020-21) of Department of Communications (Ministry of Communications), Standing Committee on Information Technology, March 2020, http://164.100.47.193/lsscommittee/Information%20Technology /17_Information_Technology_6.pdf.
12 "BharatNet Status as on January 31, 2020", Website of BBNL as accessed on February 7,2020, http://bbnl.nic.in/BharatNet.pdf. 13 "BharatNet Usage Statistics as on 03.02.2020", Website of BBNL as accessed on February 7, 2020, http://www.bbnl.nic.in/usage2.pdf. 14 "Cabinet approves enhancement of budget for implementation of Network for Spectrum for Defence Services", Cabinet, Press Information Bureau, May 16, 2018, http://www.pib.nic.in/PressReleseDetail.aspx?PRID=1532262. 15 Non-Tax Revenue, Union Budget, 2021-22, https://www.indiabudget.gov.in/doc/rec/ntr.pdf.
16 Arrears of Non-Tax Revenue, Union Budget, 2021-22, https://www.indiabudget.gov.in/doc/rec/annex6.pdf. 17 "Annual Report 2017-18", Department of Telecommunications,
http://dot.gov.in/sites/default/files/Telecommunications%20Ann
ual%20Report%202018%20ENGLISH_0.pdf. 18 Starred Question No 329, Lok Sabha, Ministry of Communications, December 11, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AS329.pdf. 19 "Auction to commence online from March 1, 2021", Press Information Bureau, Ministry of Communications, https://pib.gov.in/PressReleasePage.aspx?PRID=1686571. 20 "Cabinet approves proposal for Mitigating financial stress
being faced by the Telecom Services Sector", Cabinet, Press
Information Bureau, November 20, 2019, https://pib.gov.in/PressReleseDetail.aspx?PRID=1592553. 21 Website of International Telecommunications Union as accessed on February 16, 2021, https://www.itu.int/en/ITU- D/Statistics/Pages/stat/default.aspx. 22 Annual Report 2019-20, Department of Telecommunications, April 6, 2020, https://dot.gov.in/sites/default/files/Annual%20Report-2019- 20%28%20English%29.pdf. 23 Website of International Telecommunications Union as accessed on February 16, 2021, 24 Key Indicators-22 States/UTs from Phase-I, 5th Round of National Family Health Survey, http://rchiips.org/NFHS/NFHS- 5_FCTS/NFHS- 5%20State%20Factsheet%20Compendium_Phase-I.pdf. 25 "Consultation Paper on Roadmap to Promote Broadband Connectivity and Enhanced Broadband Speed", Telecom Regulatory Authority of India, August 20, 2020, https://trai.gov.in/sites/default/files/Broadband_CP_20082020_0 .pdf. 26 "Making India 5G Ready", Report of the 5G High Level Forum Prepared by Steering Committee, Department of Telecommunications, August 23, 2018, http://dot.gov.in/sites/default/files/5G%20Steering%20Committ ee%20report%20v%2026.pdf. 27 "21st Report: India's preparedness for 5G", Standing Committee on Information Technology, February 2021, http://164.100.47.193/lsscommittee/Information%20Technology /17_Information_Technology_21.pdf. 28 Economic Survey of India 2017-18, Volume 1, http://www.indiabudget.gov.in/economicsurvey/doc/echapter.pd f.
29 Unstarred Question No 1509, Lok Sabha, Ministry of Communications, June 27,2017, https://eparlib.nic.in/bitstream/123456789/765718/1/AU1509_1 3_16.pdf. 30 "First Report: Demands for Grants (2019-20) of Department
of Telecommunications (Ministry of Communications)",
Standing Committee on Information Technology, December 2019, http://164.100.47.193/lsscommittee/Information%20Technology /17_Information_Technology_1.pdf.
## Demand For Grants: Housing And Urban Affairs
The Ministry of Housing and Urban Affairs formulates policies, coordinates activities of various agencies (at the state and municipal level), and monitors programmes in the area of urban development. It also provides states and urban local bodies (ULBs) with financial assistance through various centrally supported schemes. In 2017, the Ministry of Housing and Poverty Alleviation, and the Ministry of Urban Development were combined to form the Ministry of Housing and Urban Affairs.
This note looks at the expenditure incurred by the Ministry, the status of the various schemes implemented by it, and the issues faced with investment required for urban planning.
## Overview Of Finances Allocation In Budget 2021-22
The total expenditure on the Ministry of Housing and Urban Affairs for 2021-22 is estimated at Rs 54,581 crore.1 This is an annual increase of 14% over the actual expenditure for 2019-20. In 2021- 22, the revenue expenditure of the Ministry is estimated at Rs 28,822 crore (53% of the total expenditure) and the capital expenditure is estimated at Rs 25,759 crore (47% of the total budget). Since 2014-15, the Ministry's revenue expenditure has been higher than its capital expenditure. This may indicate that the Ministry is spending less on creation of assets.
Change
(Annualised)
2020-21
2021-22
2019-20 Actuals
RE
BE
(Actuals
2019-20 to
BE 2021-22)
Revenue
22,749
36,482
28,822
13%
Capital
19,305
10,309
25,759
16%
Total
42,054
46,791
54,581
14%
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Demand No. 59, Ministry of Housing and Urban Affairs Union Budget 2021-22; PRS.
## Expenditure Trends
Between 2011 and 2021, the expenditure of the Ministry has increased at an average annual rate of 19% (Figure 1).
## Key Highlights From Budget Speech 2021-22
In the budget speech, the Finance Minister made the following announcements regarding the housing and urban development sector:
-
The Jal Jeevan Mission (Urban) will be launched to ensure universal water supply in all 4,378 urban local bodies in India and enable liquid waste management in 500 cities under the AMRUT scheme. The Mission has an outlay of Rs 2.8 lakh crore for 2021-26.
-
Urban Swachh Bharat Mission 2.0 will focus on: (i) sludge management, (ii) waste water treatment, (iii) source segregation of garbage, (iv) reduction in singleuse plastics, (v) control of air pollution by waste management in construction, demolition and bioremediation dump sites. The Mission will have an outlay of Rs 1.41 lakh crore between 2021-26.
-
Metro rail networks will be expanded by using new technologies in Tier-1 and Tier-2 cities. Central funding of Rs 88,059 crore will be provided to four projects.
-
Public bus transport services will be augmented by deploying public-private partnerships to finance and maintain over 20,000 buses. The scheme has been allocated Rs 18,000 crore.
-
Affordable housing projects can avail a tax holiday until March 31, 2022. Eligibility for tax deductions for affordable housing announced in the 2019-20 budget has also been extended till March, 2022. This tax deduction can be of up to 1.5 lakh rupees and will be
Note: For the years 2011-12 till 2015-16, the figures are a combination of the erstwhile Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development. Values for 2020-21 and 2021-22 are revised and budget estimates respectively. All other figures are actuals. Sources: Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development budgets 2011-12 to 2015-16. Ministry of Housing and Urban Affairs budget documents 2015-16 to 2021-22; PRS.
The Standing Committee on Urban Development, (2020) had noted that the budgetary allocations to the Ministry were lower than the Ministry's demand between 2018-21.2 This has also been observed in earlier budget allocations. For instance, in 2017-18, while the erstwhile Ministry of Urban Development projected an expenditure of Rs 68,410 crore, it was allocated Rs 34,212 crore in that year's budget.3 The Committee further suggested that with the implementation of schemes picking momentum, the allocation towards them should be increased for better implementation.2 This would also supplement efforts of state governments to develop and maintain urban infrastructure.2
The Standing Committee on Urban Development (2019) noted that extra budgetary resources have been used to reduce the gap between the demand and the budgetary allocations.4 However, the actual expenditure by the Ministry has been lower than the budget estimates since 2016-17 (Figure 2). The Standing Committee (2020) has recommended the Ministry to avoid such under-utilisation of funds.2
Note: For the years 2011-12 till 2015-16, the figures are a combination of the erstwhile Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development. Values for 2020-21 are revised estimates. All other figures are actuals.
Sources: Union Budget 2011-12 to 2021-22; PRS.
## Major Schemes And Issues
The Ministry implements several centrally sponsored schemes, and a few central sector schemes. These include: (i) Pradhan mantri Awas Yojana - Urban (PMAY-U), (ii) Atal Mission for Rejuvenation and Urban Transformation (AMRUT), (iii) 100 Smart Cities Mission, (iv) Swachh Bharat Mission - Urban (SBM-U), and (v) Deendayal Antyodaya Yojana-National Urban Livelihood Mission (DAY-NULM). The Ministry also develops and manages metro rail projects across the country.
Of the expenditure allocated to the Ministry in 2021-22, the highest allocation is towards metro projects at 43% of the total budget. The allocation towards the key schemes is shown in Table 2 and Figure 3.
Change
(Annualised)
2020-21
2021-22
2019-20
Actual
RE
BE
(Actuals
2019-20 to
BE 2021-22)
Metro
18,908
9,000
23,500
11%
PMAY (Urban)
6,848
21,000
8,000
8%
AMRUT
6,392
6,450
7,300
7%
Smart Cities
3,207
3,400
6,450
42%
SBM (Urban)
1,256
1,000
2,300
35%
DAY-NULM
732
795
795
4%
363
125
120
-42%
Projects in North-Eastern Region Others
-
142
200
Total
4,349
4,879
5,916
17%
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Expenditure Budget 2021-22; PRS.
## Metro Rail Projects
The Ministry of Housing and Urban Affairs is responsible for urban transport which includes metro rail projects. Investments in these projects are made in various forms including grants, equity investments, debt, and pass-through assistance (grants given to the government which can be awarded to other organisations) for externally aided projects. As of February 2021, metro rail systems are operational and under construction in 27 cities.5
702 km of metro lines are operational, while 1,016 km are under implementation.5 These have been set up as a 50:50 joint venture between the central government and the respective state and union territory governments. Allocation towards metro projects includes allocation towards the National Capital Region Transport Corporation of Delhi (the implementing agency for the Regional Rapid Transit System in the National Capital Region). In 2021-22, Rs 23,500 crore has been allocated towards metro projects. This is an annual increase of 24% increase over the actual expenditure in 2019-20. In
2020, the allocation towards metro projects was decreased by 55% in the revised estimates. The table below shows the trends in allocations and expenditure towards metro projects.
Rs crore)
| Year | Budgeted | Actuals | % utilised |
|----------|-------------|------------|---------------|
| 2014-15 | 8,026 | 5,998 | 75% |
| 2015-16 | 8,260 | 9,300 | 113% |
| 2016-17 | 10,000 | 15,327 | 153% |
| 2017-18 | 18,000 | 13,978 | 78% |
| 2018-19 | 15,000 | 14,470 | 96% |
| 2019-20 | 19,152 | 18,908 | 99% |
| 2020-21* | 20,000 | 9,000 | 45% |
| 2021-22 | 23,500 | - | - |
Note: *Actuals for 2020-21 indicate Revised Estimates. Sources: Ministry of Housing and Urban Affairs Budget documents 2014-15 to 2021-22; PRS.
High allocation: In 2021-22, the capital expenditure on metro projects is estimated to be
90% of the Ministry's total capital expenditure.
The Standing Committee on Urban Development (2017) noted that a high allocation towards metro projects leads to inadequate funds for other projects such as the PMAY(Urban) scheme.3 The Standing Committee (2019) had recommended that state/UT governments must be consulted to find ways to reduce the huge outlay on metro works to enable adequate funding for other schemes.4 The Standing Committee (2020) while reviewing measures to reduce the cost of projects observed that with increased standardisation and use of newer technologies like MetroLite, the cost of projects had decreased.6
Planning of metro systems: The National Transport Development Policy Committee (NTDPC) report had observed that high speed mass transit systems such as metro rail do not always reduce door-to-door travel time. Door-to-door travel time is seen as the most relevant indicator for users.7 Underground or elevated transport systems do not save time as compared to cars or twowheelers, when trip distances are short, because time is lost in walking from ground level to the platform level. Metro rail systems are efficient only when the average trip distance is greater than 12 km. Indian cities, because of their mixed land use patterns and higher density development, have shorter trip lengths, and hence are better suited for non-motorised travel. The NTDPC had recommended that the decision to implement metro rail projects should also consider the high-cost factor. Rail-based metro systems should be considered after examining the opportunity cost of investing in expensive fixed infrastructure.7
The NTDPC had recommended that metro rail projects should initially be limited to cities with population more than five million. Further, the cities should be able to cover all costs through user charges or fiscal costs. The NTDPC had also recommended that Indian cities should focus on improving their existing bus systems, adding bus rapid transit (BRT) systems, and improving nonmotorised transport.
Last mile connectivity: The Standing Committee on Urban Development (2019) highlighted the need to promote door-to-door connectivity of the Delhi Metro. It had suggested that cab aggregator services could employ auto rickshaws and cycle rickshaws to remedy this.4 The Ministry has stated that as of September, 2020, there are 800 e-rickshaws are operational from 20 metro stations. Further, 124 feeder buses are run on 32 routes connecting 69 stations. E-scooter services are operational in four stations and cycle sharing services are provided in 16 metro stations.2
In September 2020, the Committee observed that steps taken to promote last mile connectivity were inadequate in view of rising ridership or in formulative stages of implementation.2
## Pradhan Mantri Awas Yojana - Urban (Pmay-U)
The housing shortage is expected to reach two crore by 2022.8 It was estimated that about 56% of this shortage falls in the Economically Weaker Sections (EWS), 40% in the Lower Income Group (LIG) category, and the rest 4% in the middle and higher income groups. The Ministry estimates the demand for housing at around one crore.9 PMAY-U is an affordable housing scheme being implemented from 2015 to 2022. It seeks to achieve the 'housing for all target' by 2022. The scheme comprises four components: (i) in-situ rehabilitation of existing slum dwellers (using the existing land under slums to provide houses to slum dwellers) through private participation, (ii) credit linked subsidy scheme (CLSS) for Economically Weaker Sections, Lower Income Groups, and middle-income group (MIG), (iii) affordable housing in partnership, and (iv) subsidy for beneficiary-led individual house construction. The Ministry provides central assistance to ULBs for the implementation of the scheme through the respective state governments. So far 4,424 cities have been covered under PMAY-U.10 As of February, 2021, 1.1 crore houses have been sanctioned as part of the scheme.
Allocation: The budgetary allocation towards the scheme for 2021-22 is Rs 8,000 crore. This is an 8% increase over the actual expenditure in 2019-20
(Rs 6,848 crore). In 2020-21, revised estimates increased by 163% in comparison to budgeted allocation for the year. This can be attributed to the Affordable Rental Housing Complexes (ARHC) scheme implemented under the Aatma Nirbhar Bharat Scheme. The ARHC scheme seeks to convert government-owned projects and housing stock (projects available with the central government) to affordable housing through publicprivate partnerships and encourage development on private land by giving special incentives including streamlining of permits and credit. Funding towards the scheme comes from the Central Road and Infrastructure Fund (comprises of a cess imposed along with excise duty on petrol and diesel). In 2021-22, from the total allocation for PMAY-U, the maximum (59%) is estimated to go towards interest payment against loans raised through extra budgetary sources (EBR) for the scheme.
Change
(Annualised)
2020-21
2021-22
2019-20
Actual
RE
BE
(Actuals
2019-20 to
BE 2021-22)
3,069
4,148
4,720
24%
Interest Payment against loan raised through EBR Central assistance to states/ UTs
2,633
9,803
1,542
-23%
CLSS-I for EWS/LIG
600
3,750
1,000
29%
CLSS-II for MIG
400
3,000
0.1
-98%
Others
146
299
738
125%
Total
6,848 21,000
8,000
8%
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Expenditure Budget 2021-22; PRS.
The credit linked subsidy scheme component will receive 13%, and 19% will be provided to states and UTs as central assistance.
There has been a decline in allocation to some components of the scheme in 2021-22 in comparison to revised estimates for 2020-21. Allocation to central assistance declined by 84%, CLSS has lowered by 73% in 2021-22 allocation in comparison to revised estimates for 2020-21.
House construction: Between the launch of the scheme in 2015 and February 8, 2020, 110 lakh houses have been approved.11 Of this, 36% houses have been constructed. Note that these numbers also include some houses sanctioned under the earlier scheme, Jawaharlal Nehru National Urban Renewal Mission. The aim of the Mission is to encourage reforms and fast track planned development of identified cities (like cities with more than 10 lakhs population as per the 2001 census).
House construction (in lakhs)
Houses sanctioned
110
Under construction
73
64% of the approved houses
Completed
43
36% of the approved houses
Central assistance (in Rs crore)
Central assistance sanctioned
1,77,410
Of which central assistance released
85,247
48% of the sanctioned assistance
Note: The total houses approved includes some houses that were sanctioned under the earlier Jawaharlal Nehru National Urban Renewal Mission.
Sources: PMAY-U MIS; as of February 12, 2021, PRS.
With the target of the scheme at 100 lakh houses by 2022, and 42.2 lakh houses been constructed so far, it is unclear how the central government will construct the remaining houses (almost 64% of the target) in two years. The Standing Committee on Urban Development (2019) had noted that the estimated demand for housing projects under PMAY-U was Rs 1,80,000 crore, as on October 28, 2019.4 The total central assistance sanctioned was Rs 1,42,000 crore, out of which Rs 57,896 crore had been released. It recommended ensuring timely release of funds to achieve the goal of 'Housing for All' by 2022.6 The government stated that funds are released to states in stages based on compliance by states and utilisation of earlier funds. In 2020-21, as of February, 2021, 80% of the funds sanctioned to states was utilised.6 The Standing Committee on Urban Development (2020) recommended establishing a system to incentivise better performing states under the scheme.2
Lending by housing finance companies: Both housing finance companies (HFCs), and public sector banks offer low-cost funding for housing. HFCs have an 80% share in the implementation of the CLSS component of PMAY-U.13 However, banks and financing companies face constraints such as inability to access long term funds.13 The Union Cabinet had approved the creation of a National Urban Housing Fund (NUHF) worth Rs 60,000 crore in February 2018.12 The NUHF aims to raise funds till 2022 to ensure a sustained flow of central release under PMAY-U to enable construction of houses.
Rental housing: As per the 2011 census, 27.5% of urban residents lived in rented houses. According to the Report of the Group of Secretaries (2017), a rental housing scheme could further complement PMAY-U in achieving the housing target.13 The Ministry proposed a Draft National Urban Housing Policy in October 2015.14 It seeks to promote the sustainable development of house ownership with a view to ensuring an equitable supply of rental housing at affordable prices. The Ministry also released the Draft Model Tenancy Acts in 2015, 2019, and 2020 to provide for the regulation and speedy adjudication of matters related to rental housing, and repeal the existing state rent control laws.15,16
## Urban Rejuvenation Mission: Amrut And Smart Cities Mission
The Atal Mission for Rejuvenation of Urban Transformation (AMRUT) Mission was launched in June 2015.17 It seeks to provide basic services (such as water supply, sewerage, and urban transport) in cities, especially to the poorer households. In 2021-22, the AMRUT Mission has been allocated Rs 7,300 crore. This is a 7% annualised increase in the actual expenditure for 2019-20. It is a Centrally Sponsored Scheme and was allocated a total central assistance of Rs 50,000 crore between 2015-20. In 2020, the scheme timeline was extended till 2022.6 The government had proposed that the outlay of Rs 50,000 be spent by 2020. However, from 2015-16 to 2021-22, the Ministry has allocated Rs 40,899 crore (82% of the proposed amount), and spent Rs 31,526 crore (63% of the proposed amount).2 Table 6 compares the actual expenditure against the allocation towards AMRUT.
expenditure (Rs crore)
| Year | Allocated Actual |
|-------------------|---------------------|
| % utilisation | |
| (actuals/ budget) | |
| 2015-16 | 3,919 |
| 2016-17 | 4,080 |
| 2017-18 | 5,000 |
| 2018-19 | 6,000 |
| 2019-20 | 7,300 |
| 2020-21 | 7,300 |
| 2021-22 | 7,300 |
| | |
| | |
| Total | 40,899 |
Note: *Revised Estimate. Sources: Ministry of Housing and Urban Affairs Demand for Grants for the years 2015-16 to 2021-22; PRS.
The Standing Committee on Urban Development (2020) has highlighted implementation and performance under the scheme to be below target.2 For instance, 92% of funds under AMRUT were allocated for water supply and sewerage.6 However, against the target of 139 lakh, only 71 lakh connections (51% of the target) had been established. Of the target of 145 lakh sewerage connections, only 43 lakh (30% of the target) had been provided.2
The Smart Cities Mission aims to develop cities that provide core infrastructure and apply 'smart'
solutions to give its citizens a decent quality of life to its citizens, and a sustainable environment.18 100 cities have been selected under the Mission, which were selected based on a Smart City challenge. The cities were evaluated based on their Smart City Plans which consisted of a pan city development strategy and an area-based development strategy.
The mission is being operated as a Centrally Sponsored Scheme. The central government provides financial assistance of up to Rs 48,000 crore over five years (2015-20).18 The states and ULBs will have to contribute an equal amount, and generate the additional amount as required through other sources such as borrowings, and municipal bonds.18 The Smart Cities Mission has been allocated Rs 6,450 crore in 2021-22, which is an annual increase of 42% over the actual expenditure for 2019-20. Between 2015-16 and 2021-22, 71% of the proposed allocation has been allocated at the budget stage. Between 2015-16 and 2020-21, 48% of the proposed allocation has been spent.
Table 7: Allocation towards Smart Cities Mission (in Rs crore)
Year
Budgeted
Actuals
% utilised
2015-16
2,020
1,484
73%
2016-17
3,215
4,412
137%
2017-18
4,000
4,526
113%
2018-19
6,169
5,902
96%
2019-20
6,450
3,135
49%
2020-21
6,136
3,384*
55%
2021-22
6,118
Total
34,108
22,843
67%
*Revised estimates. Sources: Budget documents 2015-16 to 2021-22; PRS.
The Standing Committee on Urban Development (2020) stated that the significant reduction of allocation towards the mission in the revised stages for 2019-20 and 2020-21 was undesirable.2 It stated that funds allocated must be utilised adequately.2 So far, all the 100 selected Smart cities have formed their Special Purpose Vehicles (SPVs) and appointed Project Management Consultants (PMCs).19 Table 8 provides the status of the smart city projects.20
January, 2021) (in Rs crore)
| % of | Project |
|-------------|------------|
| status | |
| No. of | |
| projects | projects |
| Cost | |
| % of | |
| cost | |
| Total | |
| Proposed | |
| 5,151 | - |
| Tendered | 788 |
| Work orders | |
| issued | |
| 2,441 | 47% |
| Completed | 2,187 |
Sources: Unstarred Question No. 1020, Ministry of Housing and Urban Affairs, Rajya Sabha, February 10, 2021; PRS.
The Standing Committee on Urban Development (2020) has also observed that progress under the mission has been uneven, since states such as Andhra Pradesh, Gujarat and Uttar Pradesh have performed well, while states such as Bihar and Tamil Nadu are lagging behind.6 The Committee recommended strengthening existing monitoring mechanisms across states to ensure faster implementation.6
## Swachh Bharat Mission - Urban (Sbm-U)
Swachh Bharat Mission (SBM), launched in October 2014, aims to eliminate open defecation and achieve scientific management of municipal solid waste in all statutory towns by 2019.21,22 38.7% of districts in India were free from open defecation in 2014, when the Swachh Bharat Mission was launched.23 100% of districts were declared to be free from open defecation in October, 2020 by the central government. Of these, 98% have been verified by the Ministry to be free from open defecation.24 As of February 2021,
62.39 lakh household toilets have been built in urban areas under the Mission, (105% of the target 59.57 lakh toilets set for 2020).24 Table 9 shows the number of toilets constructed as on February 8, 2021, as compared to the targets set for October 2019.
## Table 9: Achievements Under Sbm- Urban (As On February 11, 2020)
| | Target | Completed |
|------------|-----------|--------------|
| 62,39,742 | 59,57,471 | 105% |
| Individual | | |
| Household | | |
| Latrines | | |
| 6,01,556 | 5,07,589 | 119% |
| Community | | |
| and Public | | |
| Toilets | | |
Sources: Swachh Bharat Mission Urban - Dashboard; PRS.
The Standing Committee on Urban Development (2020) has highlighted that toilets built under the scheme in areas including East Delhi have very poor quality and do not have adequate maintenance.6 Further, only 1,304 (30%) of the 4,320 cities declared to be open defecation free have toilets with water, maintenance and hygiene.2 The total estimated cost of implementation of SBM-U is Rs 62,009 crore. Of this, the share of the central government is Rs 14,623 crore, and states' assistance will amount to Rs 4,874 crore.
The remainder is to be financed via various sources such as the private sector, Swachh Bharat Kosh, market borrowing, and external assistance.25 In 2021-22, Rs 2,300 crore has been allocated towards the scheme. This is an annual increase of
35% over actual expenditure for 2019-20. Further, in her budget speech, the Finance Minister announced that the Urban Swachh Bharat Mission 2.0 will be launched. The Mission will have an outlay of Rs 1.41 lakh crore between 2021-26.5 The mission will focus on outcomes including:
Certifications for statutory towns: The Mission aims to ensure that: (i) all statutory towns be certified as ODF+, and (ii) statutory towns with less than one lakh residents be certified as ODF++. A town is certified as ODF+ when no cases of open defecation are recorded and all public toilets are maintained and function. A town certified as ODF++ is one where all sewage is safely managed and treated with no dumping of untreated sewage in water bodies or open areas.26 As of February 15, 2021, there are 1,742 towns certified as ODF+ and 538 certified as ODF++.27
Garbage free cities: All statutory towns will be at least three-star garbage free rated as per the Ministry's Star Rating Protocol for Garbage Free cities.26 The protocol is a framework where each ward in each city is graded across 25 parameters to measure solid waste management. 1,435 cities have applied for certification under the protocol.28 As of February 2021, 72 towns have been awarded three stars and six towns have been given a fivestar rating based on the protocol.29 Besides these, the Mission seeks to ensure bioremediation of all legacy dumpsites. Under the mission, 50% of all statutory towns with less than one lakh residents will also be certified as Water+.26 All wastewater in such a town must be treated before being released into the environment.30
## Other Issues To Consider Additional Investment Required
The pace of urbanisation is increasing in the country. As per the 2011 census, around 31% of the country's population resided in urban areas. By 2031, around 600 million (43%) people are expected to live in urban areas, an increase of over 200 million in 20 years. 31 Given the pace of urbanisation, large capital investment is needed for infrastructure projects which would require support from central and state governments in the form of capital grants. With the current rate of urbanisation, the High- Powered Expert Committee (HPEC) for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period from 2012-2031.32 As per their framework, the investment in urban infrastructure should increase from 0.7% of GDP in 2011-12 to 1.1% of GDP by 2031-32. In 2021-22, the estimated expenditure by the Ministry of Housing and Urban Affairs is 0.4% of the GDP.33 The Ministry of Finance (2017) had noted that budgetary outlays alone will not be enough to service the growing demands on local governments for improving their infrastructure.34 Alternate sources of financing are required to meet the funding gap.34 The flagship schemes of the Ministry (such as Smart Cities Mission, Swachh Bharat Mission) seek to meet their financing requirements through a mix of sources such as borrowings, municipal bond financing, and PPPs. The Standing Committee on Urban Development (2020) noted that as of March 2020, municipal bonds worth Rs 3,390 crore had been issued in eight cities including Ahmedabad and Pune for the implementation of AMRUT scheme.6
## Financial Capacity Of Cities
The Constitution (74th Amendment) Act, 1992
devolved certain functions relating to urban development to ULBs, including the power to collect certain taxes. These functions include urban planning, planning for economic and social development, and urban poverty alleviation. The new schemes under the Ministry, seek to decentralise the planning process to the city and state level, by giving them more decision-making powers. This implies that a significant share of the funding needs to be raised by the cities themselves. However, there is an imbalance between the functions and finances of ULBs.35 The ULBs in India are amongst the weakest in the world both in terms of capacity to raise resources and financial autonomy.32 Municipal revenue in India accounts for only one percent of the GDP (2017-18).36 The share of own revenue for ULBs has declined from 63% in 2002-03 to 53% in 2007-08, and to 44% in 2015-16.37,38 Several states have not devolved enough taxation powers to local bodies. Further, local governments collect only a small fraction of their potential tax revenue.32 While the central and state governments provide the ULBs with funds, these devolved funds are largely tied in nature, to either specific sectors or schemes. This constrains the spending flexibility of ULBs. PPPs have been an important instrument to finance and develop infrastructure projects. However, projects in many sectors such as water-supply and urban transportation require support from ULBs in the form of additional financial resources. The Ministry of Finance has observed that an inability to service such funding requirements constrains project implementation.34 In such cases, ULBs can access capital markets through issuance of municipal bonds. Municipal bonds are marketable debt instruments issued by ULBs, the funds raised may be used for capital projects, refinancing of existing loans, and meeting working capital requirements. The Securities and Exchange Board of India regulations (2015) regarding municipal bonds provide that, to issue such bonds, municipalities must: (i) not have negative net worth in any of the three preceding financial years, and (ii) not have defaulted in any loan repayments in the last one year.39 Therefore, a city's performance in the bond market depends on its fiscal performance. To improve the finances of the ULBs, the HPEC had recommended that state governments share a pre-specified percentage of their revenues from all taxes on goods and services with ULBs.32 It had recommended mandating this constitutionally. Further, ULBs should be provided with formulabased transfers, and grants-in-aid.32 The ULBs could raise their own revenue by tapping into landbased financing sources, and improving non-tax revenues (such as water and sewerage charges, and parking fee).32 The Second Administrative Commission (2007) had recommended that the central government provide additional funds and facilitate additional funding mechanisms for ULBs to strengthen their finances.40 The 15th Finance Commission (2021) has recommended that Rs 1.2 lakh crore be allocated to urban local bodies as grants.41
2 "4th Report of the Standing Committee on Urban Development on Action taken by the Government on the Observations/ Recommendations contained in the Second Report on Demands for Grants (2020-21) of the Ministry of Housing and Urban Affairs", September 11, 2020, http://164.100.47.193/lsscommittee/Urban%20Development/17_ Urban_Development_4.pdf. 3 15th report, Standing Committee on Urban development, March 2017, http://164.100.47.193/lsscommittee/Urban%20Development/16_ Urban_Development_15.pdf. 4 "1st Report of the Standing Committee on Urban Development (2019-20) on Demands for Grants (2019-20) of the Ministry of Housing and Urban Affairs, December 11, 2019, http://164.100.47.193/lsscommittee/Urban%20Development/17_ Urban_Development_1.pdf.
5 Union Budget Speech 2021-21, February 1, 2021, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 6 "2nd Report of the Standing Committee on Urban Development (2020-21) on Demands for Grants (2020-21) of the Ministry of Housing and Urban Affairs, December 3, 2020, http://164.100.47.193/lsscommittee/Urban%20Development/17_ Urban_Development_2.pdf. 7 "India Transport Report: Moving India to 2032", National Transport Development Policy Committee, June 17, 2014, http://planningcommission.nic.in/sectors/index.php?sectors=Nat ional%20Transport%20Development%20Policy%20Committee %20(NTDPC). 8 "6th Report: Demands for Grants (2015-16) of Ministry of Housing and Urban Poverty Alleviation", Standing Committee on Urban Development, April 27, 2015. 9 Unstarred Question No.1439, Ministry of Housing and Urban
## Technical Capacity Of The Ulbs
It has been observed in the urban sector that the allocation of funds from the central government did not play a role in the implementation of the projects.32 On the other hand, while ULBs and states implemented the projects, they did not raise the funds. The new schemes seek to empower ULBs to raise their own revenue. Both the national missions, AMRUT and Smart Cities, have a component for capacity building of ULBs. The HPEC (2011) had observed that municipal administration has suffered due to (i) presence of untrained and unskilled manpower, and (ii)
shortage of qualified technical staff and managerial supervisors.32 It had recommended improving the technical capacity of ULBs. This can be achieved by providing technical assistance to state governments, and ULBs in planning, financing, monitoring, and operation of urban programs.
Sanitation and Urban Development, January 2017, ectoral_group_of_secretaries_on_health_sanitation_urban_devel opment.pdf. 14 Draft National Urban Housing Policy, Ministry of Housing and Urban Affairs website, October, 2015, http://mohua.gov.in/upload/uploadfiles/files/National_Urban_Re ntal_Housing_Policy_Draft_2015.pdf. 15 The Model Tenancy Act, 2019, Ministry of Housing and Urban Affairs, July 10, 2019, http://mohua.gov.in/upload/whatsnew/5d25fb70671ebdraft%20 Model%20Tenancy%20Act,%202019.pdf. 16 Background Note on Model Tenancy Act, Ministry of Housing and Urban Affairs, 2020, http://mohua.gov.in/upload/uploadfiles/files/1%20Background% 20Note%20on%20MTA%20(English).pdf. 17 Mission Statement and Guidelines, Atal Mission for Rejuvenation and Urban Transformation, Ministry of Urban Development, June 2015, http://amrut.gov.in/writereaddata/AMRUT%20Guidelines%20.p df. 18 Mission Statement & Guidelines, Smart Cities, Ministry of Urban Development, June 2015, http://smartcities.gov.in/upload/uploadfiles/files/SmartCityGuid elines(1).pdf. 19 Unstarred Question no. 1526, Ministry of Housing and Urban Affairs, Lok Sabha, February 12, 2019, http://164.100.24.220/loksabhaquestions/annex/17/AU1526.pdf. 20 Unstarred Question No. 1020, Ministry of Housing and Urban Affairs, Rajya Sabha, February 10, 2021, https://pqars.nic.in/annex/253/AU1020.pdf. 21 "1,789 Cities have been declared ODF conference on PPP
model for waste to energy projects", Ministry of Housing and Urban Affairs, Press Information Bureau, November 30, 2017, http://pib.nic.in/newsite/PrintRelease.aspx?relid=173995. 22 "PM launches Swachh Bharat Abhiyaan", Prime Minister's Office, Press Information Bureau, October 2, 2014, http://pib.nic.in/newsite/PrintRelease.aspx?relid=110247.
##
23. Swachh Bharat Mission (Grameen) Dashboard, Department of Drinking Water and Sanitation, last accessed on January 18,
2021, https://sbm.gov.in/sbmdashboard/IHHL.aspx.
24 Dashboard, Swachch Bharat Mission (Urban), Ministry of Housing and Urban Affairs, last accessed on February 13, 2021, http://swachhbharaturban.gov.in/dashboard/ 25 Swachh Bharat Mission Urban - Financial Progress, Ministry of Housing and Urban Affairs, last accessed on February 11, 2021, http://swachhbharaturban.gov.in/writereaddata/financial_progres s.pdf?id=5mw5jzzbj3sabgx4. 26 "Swachh Bharat Mission (URBAN) 2.0 Announced For Next
5 Years", Press Information Bureau, Ministry of Housing and Urban Affairs, February 2, 2021. 27 Swachh Bharat Mission Urban - Dashboard, Ministry of Housing and Urban Affairs, last accessed on February 11, 2021, http://swachhbharaturban.gov.in/dashboard/?id=5mw5jzzbj3sab gx4. 28 "6 Cities rated 5 Star, 65 Cities rated 3 Star and 70 Cities rated 1 Star", Press Information Bureau, Ministry of Housing and Urban Affairs, May 19, 2020. 29 Garbage Free City Star Rating, Ministry of Housing and Urban Affairs, last accessed on February 18, 2021, http://gfcstarrating.org/User/GFCStarResult. 30 Water Plus Protocol and Toolkit, Swachh Bharat Mission (Urban), Ministry of Housing and Urban Affairs, https://sbmurban.org/water-plus. 31 Challenge of Urbanisation, Approach to the 12th five year plan, Planning Commission, October 2011, http://planningcommission.gov.in/plans/planrel/12appdrft/appra och_12plan.pdf. 32 "Report on Indian Infrastructure and Services", High Powered Expert Committee for estimating the investment requirement for urban infrastructure services, March 2011, http://icrier.org/pdf/FinalReport-hpec.pdf. 33 Press Note on First Advance Estimates of National Income 2020-21, Press Information Bureau, Ministry of Finance, January 7, 2020, https://static.pib.gov.in/WriteReadData/userfiles/Presss%20note %20for%20FAE-2020-21.pdf.
34 "Guidance on use of Municipal Bond Financing for Infrastructure projects", Department of Economic Affairs, Ministry of Finance, September 2017, https://www.pppinindia.gov.in/documents/20181/33749/Guidan ce+on+use+of+Municipal+Bonds+for+PPP+projects.pdf/037cb
143-8305-4c57-8f3c-32e5a329297f. 35 "Report of the sub-committee on financing urban infrastructure in the 12th Plan, Ministry of Urban Development, March 2012, http://mohua.gov.in/upload/uploadfiles/files/Report%20of%20th e%20Sub- Committee%20on%20Financing%20Urban%20Infrastructure% 20in%20the%2012th%20Plan%20_0.pdf. 36 State of Municipal Finances, Fifteenth Finance Commission, March, 2019, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ StudyReports/State%20of%20Municipal%20Finances%20in%2 0India.pdf. 37 Report of the Steering Committee on Urbanisation, Planning Commission, Government of India, November 2012, https://smartnet.niua.org/content/d5ce7e1d-04fd-45c4-af11- b9e6a25e4ea8. 38 Economic Survey 2018-19, Ministry of Finance, January 29, 2018. 39 Securities and Exchange Board of India (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015, Securities and Exchange Board of India, July 15, 2015, http://www.sebi.gov.in/sebi_data/attachdocs/1436964571 729.pdf. 40 Sixth Report, Second Administrative Reforms Commission, Ministry of Personnel, Public Grievances and Pensions, 2007, https://darpg.gov.in/sites/default/files/local_governance6.pdf. 41 Report for 2021-21, 15th Finance Commission, February, 2021, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC%20Complete_Report.pdf.
## Demand For Grants: Petroleum And Natural Gas
The Ministry of Petroleum and Natural Gas is concerned with exploration and production of oil and natural gas, as well as refining, distribution and marketing, import and export, and conservation of petroleum products. This note analyses budgetary allocation of the Ministry, the share of expenditure on subsidies, and high import dependence for energy consumption.
## Overview Of Finances
The Ministry has been allocated Rs 15,944 crore in 2021-22. The allocation to the Ministry has decreased by an annual average rate of 39% over 2019-20. Given the impact due to COVID-19, in this note, the budget estimates for 2021-22 have been compared to the actual expenditure for 2019- 20. Table 1 details the main heads of expenditure for the Ministry.
CAGR
Actual
Major
Heads
2019-2020
Revised
2020-21
Budget
2021-22
2019-20 to
2021-22
LPG subsidy
34,086
36,072
14,073
-36%
Kerosene subsidy
4,443
2,982
0
-
SPR
120
2,728
396
82%
PDH pipeline
1,552
728
250
-60%
Others
2,611
390
1,224
-32%
Total
42,812
42,901
15,944
-39%
Notes: CAGR is compounded annual growth rate. It gives the average annual change between any two points of time. SPR = Strategic Petroleum Reserves. Others includes: (i) Indradhanush Gas Grid Limited (North-East Natural Gas Pipeline Grid, (ii) National Seismic Programme, (iii) PM JI- VAN Yojana, among others. Sources: Union Budget Documents 2021-22; PRS.
LPG subsidy: The Ministry provides subsidy for
(i) LPG cylinders to beneficiaries under the PAHAL scheme, and (ii) LPG connections to poor households under the Pradhan Mantri Ujjwala Yojana (PMUY), among others.1 In 2021-22, the Ministry is estimated to spend Rs 14,073 crore on LPG subsidy, which is an annualised decline of 36% than the actual expenditure in 2019-20. Of this, the allocation for the PAHAL scheme of Rs 12,480 crore is estimated to decline by 35% over 2019-20.
## 2021-22 Budget Speech Highlights For Petroleum And Natural Gas2
- Pradhan Mantri Ujjwala Yojana to be extended to cover
one crore more households.
- 100 more districts to be added to the City Gas
Distribution network in three years.
- Gas pipeline project for Jammu and Kashmir. - Independent Gas Transport System Operator to be set
up for facilitation and coordination of open access natural gas pipelines.
- Introduction of the Agriculture Infrastructure and
Development Cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel.
There is no allocation for PMUY for 2021-22. Note that in her Budget speech, Finance Minister announced expansion of the PMUY scheme to cover an additional one crore beneficiaries.2
Kerosene subsidy: The Ministry provides subsidised kerosene through the Public Distribution System (PDS). In 2021-22, the Ministry has not allocated any funds for the kerosene subsidy. In 2020-21, as per the revised estimates, spending on the kerosene subsidy of Rs 2,982 crore was 33% lower than 2019-20.
Strategic Petroleum Reserves: Strategic Petroleum Reserves (SPR) are underground caverns to store excess crude oil. SPRs are essential to energy security of the country which serves as a cushion during any supply disruptions in global crude oil.3 In 2021-22, Rs 396 crore has been allocated towards SPR, an annual average increase of 82% over 2019-20, but lower than the spending of Rs 2,728 crore in 2020-21.
PDH Pipeline: The Phulpur-Dhamra-Haldia
(PDH) Pipeline is being developed by GAIL India to transport natural gas. The project connects five states to the National Gas Grid. In 2021-22, Rs 250 crore has been allocated for the project, which is 34% lower than the revised estimate for 2020- 21. The allocation for the pipeline was lower in 2020-21 than in 2019-20. The Standing Committee (2020) noted that this was due to the scheme coming to an end in 2020-21. 4 The expenditure allocated was for work already committed towards the pipeline.
Increase in excise duty on petroleum products In Budget 2021-22, it was announced that an Agriculture Infrastructure and Development Cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel would be levied, with equivalent cuts made to basic excise duty and to special additional excise duty.2 Table 2 below compares the change in tax and cess levied on petrol and diesel over the last four years. The share of cess for both petrol and diesel has increased sharply in this period.
Excise Duty
(Rs per litre)
Petrol
Diesel
Apr 2017
Feb 2021
Apr 2017
Feb 2021
Tax
9.48
1.4
11.33
1.8
Cess
12
31.5
6
30
Total
21.48
32.9
17.33
31.8
Cess as % of Total Duty
56%
96%
35%
94%
Sources: Union Budget documents (multiple years); PRS.
Union excise duty includes (i) tax receipts from basic excise duty, and (ii) cess receipts from special additional duty on motor spirit, the Road and Infrastructure Cess, and the Agriculture Infrastructure and Development Cess. While the central government is constitutionally required to share a part of its tax revenue with states as per the recommendations of the Finance Commission, it is not required to share with states the revenue it gets from cess and surcharge. Thus, an increase in cess with corresponding decrease in excise has the following effects: (a) there is no impact on the consumer, and (b) the centre gets higher revenue with corresponding lower amount going to states.
## Impact Of Crude Oil Price
Historically, the Ministry's expenditure has followed the trend in crude oil prices. Expenditure was highest in 2012-13 when price of crude oil was more than $100 per barrel. Price of crude oil has declined since and remained under $70 per barrel. Between 2011-12 and 2021-22, expenditure has declined at an annual average rate of 14%. Figure 1 compares the trend in expenditure of the Ministry to the trend in weighted average price of crude oil for the years 2011-12 to 2019-20.
Note: Price of crude oil is the price per barrel of the Indian Sources: Petroleum Planning and Analysis Cell; Union Budget 2021-22; PRS.
Rise in crude oil prices usually also leads to rise in under-recoveries. Under-recovery refers to the difference in the cost of producing petroleum products, and the price at which they are delivered to consumers. It indicates the loss incurred by oil marketing companies while supplying these products. The central government compensates the oil marketing companies by sharing some of this incurred loss through a burden sharing mechanism. Figure 2 shows the trend of underrecoveries with the price of global crude oil. In 2020-21, global crude oil prices fell to $20 per barrel in April and remained under $50 per barrel till December 2020. In the first half of 2020-21
(April to September), under-recoveries decreased to zero.
Strategic Petroleum Reserves: The decline in crude oil price in 2020-21 also enabled the government to purchase for the Strategic Petroleum Reserves. In April and May 2020, 16.7 million barrels of crude oil were bought at an average cost of $19 per barrel. 5 In January 2020, the price of crude oil was $60 per barrel.
## Lpg And Kerosene Subsidy
Subsidies form the largest component of the Ministry's expenditure, with 88% of its total budget allocated to it. Historically, subsidies have occupied between 75% to 99% of the budget. The Ministry (usually) provides subsidies under three major heads: (i) Direct Benefit Transfer (DBT- PAHAL scheme), and (ii) Pradhan Mantri Ujjwala Yojana (PMUY) for LPG, and (iii) kerosene subsidy (see Table 3).
CAGR
Major Head
Actual
2019-20
Revised
2020-21
Budget
2021-22
2019-20 to
2021-22
DBT-PAHAL
29,628
25,521
12,480
-35%
PMUY
3,724
9,690
0
-
Kerosene subsidy
4,443
2,982
0
-
Total
37,795
38,193
12,480
-43%
## Lpg Subsidy
For 2021-22, the budget allocation for LPG subsidy (Rs 14,073 crore) has decreased at an annual average rate of 36% over 2019-20. In
2020-21, Rs 36,072 crore was spent on the LPG
subsidy as per the revised estimate. Spending on DBT-PAHAL is estimated to be Rs 12,480 crore. In 2020-21, the budget allocation for DBT-PAHAL was Rs 35,605 crore while the revised estimate for spending is Rs 25,521 crore (decline of 28%). Note that expenditure on subsidy is dependent on the difference between the subsidised and non-subsidised price for LPG. The non-subsidised price is in turn dependent on the price of crude oil, which fell in 2020 due to the impact of COVID-19. There is no allocation for PMUY in spite of an announcement to increase coverage under the scheme.2 In 2020-21 the budget allocation for PMUY was Rs 1,118 crore while the revised estimate was Rs 9,690 crore (767% higher). The scheme had met its target of providing LPG connections to 8 crore households in September 2019. The budget allocation for 2020-21 was for clearance of past dues of the government to oil marketing companies implementing the PMUY
scheme.4 However, in March 2020, the Finance Minister announced the provision of up to three free LPG refills for eight crore poor families under the Pradhan Mantri Garib Kalyan Yojana. 6 The cost of free refills availed between April to August 2020 was Rs 9,670 crore for 13 crore refills. 7 The remaining allocation under the LPG subsidy is for: (i) implementation of the Assam Gas Cracker project (for production of ethylene), and (ii) subsidy to oil companies for supply of LPG to the North East.
## Kerosene Subsidy
Over the last few years, the Ministry's expenditure on providing subsidy for kerosene has reduced from Rs 7,339 crore in 2015-16, to an estimated zero in 2021-22 (see Figure 3). The Standing Committee on Petroleum and Natural Gas (2017) had recommended that the Ministry should reduce the expenditure on this subsidy and work towards the eventual withdrawal of the subsidy.8
The Standing Committee on Petroleum and Natural Gas (2020) observed that an increase in the coverage of LPG beneficiaries is necessary to reduce dependence on kerosene.4 This will result in the usage of cleaner fuel, and promote the health of users. However, large segments of the population are still dependent upon kerosene and only three states have become kerosene free.4 Figure 4 compares the trend in consumption of kerosene and LPG.
Note: TMT is Thousand Metric Tons. Sources: Petroleum Planning and Analysis Cell; PRS.
Key issues and analysis
## Pradhan Mantri Ujjwala Yojana
The PMUY scheme was launched in May 2016 with the objective of providing LPG connections to women from below poverty line households with a support of Rs1,600 per connection.9 The scheme initially had a target to provide connections to five crore households, which was later revised to eight crore households by 2020.10 The ambit of the scheme was also expanded to cover all SC/ST households, beneficiaries of Pradhan Mantri Awas Yojana (Gramin), forest dwellers, backward classes, in addition to households identified under the Socio Economic and Caste Census (SECC).10 According to the Ministry, a total of 8.01 crore PMUY connections have been released as of January 2021. 11 In 2020, the government informed the Standing Committee on Petroleum and Natural Gas that the PMUY scheme would be closed since the target of 8 crore beneficiaries had been met.4 The Committee recommended the scheme be extended to cover poor households among the general category in urban and semiurban slum areas which do not have LPG access.4 According to the National Sample Survey, in
2011-12 more than 67% of the rural households in the country used firewood as the primary source of energy for cooking.12 LPG was used by 15% of households. When the survey was repeated in 2018, share of rural households using firewood was 45%, while the share LPG was 48%.13 The National Family Health Survey, 2019-20 (NFHS-5) also showed improvement in access to clean fuel since NFHS-4 which was conducted in 2015-16. So far, NFHS-5 results are only available for 22 states/UTs. Table 4 compares the percentage of rural households in major states with access to clean fuel.
Table 4: Rural households with access to clean fuel (in %)
State
NFHS-4
NFHS-5
Andhra Pradesh
50
78
Bihar
11
30
Gujarat
27
41
Karnataka
32
69
Kerala
51
66
Maharashtra
34
65
Telangana
48
88
West Bengal
11
21
Sources: National Family Health Survey-4; National Family Health Survey-5; PRS.
An assessment report by the Petroleum Planning and Analysis Cell (2016) pointed out the key barriers for not applying for LPG connection are: (i) high initial cost, including security deposit / price of gas stove, (ii) high recurring cost of the cylinder, and (iii) easy availability of firewood. 14
Refill of cylinders: The Comptroller and Auditor General (CAG) submitted a performance audit report on the PMUY scheme in December 2019.15 The Report raised concerns related to lack of sustained usage of cylinders released under the scheme. 75% of consumers opted for a refill under the scheme and 57% opted for three or more refills (from date of getting the connection till December 2018). The CAG performance audit report noted that the average annual refill rate for PMUY beneficiaries is low compared to the refill rate for non-PMUY beneficiaries (shown in Figure 5). 15
Sources: CAG Performance Audit, December 2019; Standing Committee on Petroleum and Natural Gas (2020); PRS. The Standing Committee on Petroleum and Natural Gas (2020) also highlighted the disparity in the average refill of cylinders for regular LPG consumers (6.3 cylinders) and the average refill of cylinders by PMUY beneficiaries (3.2 cylinders).4 It suggested the Ministry should take measures, including provision of additional monetary incentives, to encourage PMUY beneficiaries to use LPG cylinders on a regular basis. The Ministry noted certain efforts by oil marketing companies to improve refill consumption such as: (i) increase in LPG distributors to improve last mile connectivity, and (ii) facility to swap 14.2 kg (standard) cylinder refill with a 5 kg refill.4 However, till September 2020, only 7.15 lakh PMUY beneficiaries have swapped the 14.2 kg refill for the 5 kg refill.16 In March 2020, beneficiaries under PMUY were allowed up to three free refills to be availed up to September.17 In the five months between April to August 2020, 13 crore refills were delivered to beneficiaries.7 This is nearly half the total refills (28.8 crore) delivered between May 2016 and December 2018. 18 Note that as of March 2020 there were over 8 crore beneficiaries under PMUY, whereas as on December 2018, there were 5.9 crore beneficiaries.
## Pratyaksha Hastaantarit Laabh (Pahal)
PAHAL scheme was launched in 2014 (54 districts in first phase) and rolled out to rest of the country in 2015.19 Under the scheme, a consumer (with annual income up to Rs 10 lakh) can avail Direct Benefit Transfer (DBT) cash-subsidy for a LPG cylinder. The beneficiaries buy LPG cylinders at market rate and subsequently receive subsidy directly in their bank accounts. Price of LPG and the extent of subsidy change every month. Figure 6 provides the monthly nonsubsidised price of an LPG cylinder and the amount of subsidy per cylinder between April 2016 and February 2021. In 2020-21, the average price of a non-subsidised LPG was Rs 636.6 between April 2020 and February 2021, while the subsidy has been zero from May 2020 onwards. 20
Note: Prices are at New Delhi. Sources: Indian Oil Corporation; Petroleum Planning and Analysis Cell; PRS.
As of September 2020, there were 26.35 crore beneficiaries under the PAHAL scheme. 21 The CAG (2019) noted that the coverage of LPG in the country has increased from 62% in May 2016 to 94.3% in March 2019.15 As of January 2021, LPG coverage is 99.5%.11 LPG coverage is defined as the ratio of active consumers to total households. 15
## Dependence On Imports Crude Oil And Petroleum Products
India's import of crude oil has increased from
1,71,729 TMT (Thousand Metric Tons) in 2011- 12 to 2,26,955 TMT in 2019-20, at an average annual growth rate of 4%.22 Crude oil is refined in oil refineries to transform oil into useful petroleum products such as high speed diesel, LPG and kerosene. These petroleum products are used as raw materials in various sectors and industries such as transport (fuel) and petrochemicals. Further, they may also be used in factories to operate machinery or fuel generator sets. India exports petroleum products to countries such as Singapore, the Netherlands, and the United Arab Emirates. 23 In 2019-20, India's total export of petroleum products was 65,685 TMT. Further, India's production of crude oil and condensate has fallen from 38,082 TMT in 2011- 12 to 32,169 TMT in 2019-20, an annual average decline of 2%.22 Production as a percentage of imports of crude oil declined from 22% to 14%
during this period. The Ministry attributed the decline to the natural ageing of oil fields. 24 Table 5 shows the total import of crude oil and petroleum products, consumption of petroleum products in the country and India's exports of petroleum products for the last 10 years. India's net import (total imports - exports) as a fraction of consumption has risen from 86% in 2011-12 to 95% in 2020-21.
Crude
Year
Oil
Petroleum
products
Petroleum
products
imports
Petroleum
products
import
export
consumption
2011-12 1,71,729
15,849
60,837
1,48,132
2012-13 1,84,795
16,354
63,408
1,57,057
2013-14 1,89,238
16,697
67,864
1,58,407
2014-15 1,89,435
21,301
63,932
1,65,520
2015-16 2,02,850
29,456
60,539
1,84,674
2016-17 2,13,932
36,287
65,513
1,94,597
2017-18 2,20,433
35,461
66,833
2,06,166
2018-19 2,26,498
33,348
61,096
2,13,216
2019-20 2,26,955
43,788
65,685
2,14,127
2020-21* 1,43,232
32,050
42,108
1,40,617
Note: *Data for 2020-21 is till December 2020. Sources: Petroleum Planning and Analysis Cell; PRS.
The Standing Committee on Petroleum and Natural Gas (2019) noted that the Middle East accounts for more than two-thirds of India's crude oil imports, and urged the government to continue its crude oil import diversification efforts. 25
## Natural Gas
Total imports of natural gas as a percentage of consumption (production plus import) has risen from 28% in 2011-12 to 53% in 2019-20. Figure
7 shows the total production and imports of natural gas, and the share of imports in the total.
Notes: MMSCM = Million Metric Standard Cubic Meters. Data for 2020-21 is till December 2020.
Sources: Petroleum Planning and Analysis Cell; PRS.
Between 2011-12 and 2019-20, import of natural gas increased from 17,997 MMSCM (Million Metric Standard Cubic Meters) to 33,867 MMSCM, at an average rate of 8%. Whereas the production of natural gas has fallen from 46,453 MMSCM to 30,257 MMSCM. In 2015, the Prime Minister had envisioned reduction in import in the energy sector (oil, gas, and petroleum products) from 77% to 67% by 2021-22. 26 The Standing Committee on Petroleum and Natural Gas (2018) had noted that it does not find any concrete action taken by the ministry and a clear strategy with stipulated timelines to achieve this target.27
## Increase In Share Of Natural Gas In Energy Mix
The Report of the Roadmap for Reduction in Import Dependency in the Hydrocarbon Sector by 2030 (2014) had called from an increase in share of natural gas in the energy consumption mix from 10% to at least 20% to 25% by 2025. 28 A necessary precondition to achieve this is to increase the gas pipeline infrastructure. In 2012, India had 13,000 km of natural gas transmission pipeline. As of September 2020, the total authorised length of natural gas pipelines is 32,559 km of which 15,543 km is under construction.29 Budget 2020-21 and 2021-22 contained announcements to increase the use of natural gas including: (i) expansion of the national gas grid from 16,200 km to 27,000 km (Budget 2020-21), http://www.isprlindia.com/aboutus.asp. 4 2nd Report of the Standing Committee on Petroleum and Natural Gas on the Demands for Grants (2020-21), March 2020, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natur al%20Gas/17_Petroleum_And_Natural_Gas_2.pdf. 5 Unstarred Question No. 180, Lok Sabha, Ministry of Petroleum and Natural Gas, Answered on September 14, 2020, http://164.100.24.220/loksabhaquestions/annex/174/AU180.pdf . 6 "Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus", Press Information Bureau, Ministry of Finance, March 26, 2020. 7 Unstarred Question No. 459, Rajya Sabha, Ministry of Petroleum and Natural Gas, Answered on September 16, 2020, https://pqars.nic.in/annex/252/AU459.pdf. 8 18th Report of the Standing Committee on Petroleum and Natural Gas on the Demands for Grants (2017-18), March 2017, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natur al%20Gas/16_Petroleum_And_Natural_Gas_18.pdf.
(ii) addition of 100 districts to the city gas distribution network, and (iii) setting up an independent gas transport system operator to facilitate booking of common carrier capacity in natural gas pipelines.30,2 Natural gas pipeline is a mode of bulk transportation and is a natural monopoly since it is impractical to have multiple pipelines in the same route. Common carrier arrangements allow the pipeline to be utilised by any entity on a nondiscriminatory basis which leads to competition in the natural gas market. This is currently regulated by the Petroleum and Natural Gas Regulatory Board.31
## Promotion Of Alternate Fuels
The strategy of import reduction includes increasing production of domestic petroleum and natural gas, and promoting alternate fuels.4 The Pradhan Mantri Jaiv Indhan-Vatavaran Anukul Fasal Awashesh Nivaran (PM JI-VAN) Yojana was launched in 2019 to provide financial support for setting up bio-ethanol projects using biomass and other renewable feedstock. 32 The scheme has been allocated Rs 233 crore for 2021-22. Note that in 2019-20, the government did not spend any part of the budgeted allocation of Rs 38 crore, and in 2020-21, Rs 32 crore was spent (60% of the budget allocation). The Standing Committee (2020) observed that this scheme could help reduce import dependence by substituting fossil fuels with bio-fuels.4
10 'Cabinet approves enhancement of target under Pradhan Mantri Ujjwala Yojana', Press Information Bureau, Cabinet Committee on Economic Affairs, February 7, 2018. 11 Unstarred Question No. 936, Lok Sabha, Ministry of Petroleum and Natural Gas, Answered on February 8, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU936.pdf
. 12 Energy Sources of Indian Households for Cooking and Lighting, 2011-12, NSS 68th Round, July 2011-June 2012, Ministry of Statistics and Programme Implementation, http://mospi.nic.in/sites/default/files/publication_reports/nss_re port_567.pdf. 13 Drinking Water Sanitation, Hygiene and Housing Condition in India, NSS 76th Round, July 2018-December 2018, Ministry of Statistics and Programme Implementation, http://mospi.nic.in/sites/default/files/NSS7612dws/Report_584 _final.pdf. 14 Assessment report: Primary survey on household cooking fuel usage and willingness to convert to LPG, Petroleum Planning & Analysis Cell, Ministry of Petroleum and Natural Gas, June 2016, http://ppac.org.in/WriteReadData/Reports/2017103104493425 12219PrimarySurveyReportPPAC.pdf.
##
16 Unstarred Question No. 1248, Rajya Sabha, Ministry of Petroleum and Natural Gas, Answered on September 21, 2020, https://pqars.nic.in/annex/252/AU1248.pdf. 17 'Cabinet approves extension of time limit for availing the benefits of "Pradhan Mantri Garib Kalyan Yojana" for Ujjwala beneficiaries by three months w.e.f. 01.07.2020', Press Information Bureau, Ministry of Petroleum and Natural Gas, July 8, 2020. 18 Refill Data, Pradhan Mantri Ujjwala Yojana, accessed on February 6, 2020, https://pmuy.gov.in/registereduser.html. 19 PAHAL-Direct Benefits Transfer for LPG(DBTL) Consumers Scheme, Ministry of Petroleum and Natural Gas, http://petroleum.nic.in/dbt/whatisdbtl.html. 20 Petroleum Price and Under-Recoveries, Petroleum Planning and Analysis Cell, https://www.ppac.gov.in/WriteReadData/userfiles/file/PP_7_b_ PS_oil_prices(H).pdf. 21 Direct Benefit Transfer portal, https://dbtbharat.gov.in/data/documents/Schemes%20wise%20 Beneficiaries%20reported%20on%20DBT%20Bharat%202020 -21%20as%20on%2015.09.2020.pdf. 22 Petroleum Planning and Analysis Cell. 23 Export Import Data Bank, Ministry of Commerce and Industry. 24 Unstarred Question No. 1140, Lok Sabha, Ministry of Petroleum and Natural Gas, Answered on February 8, 2021, http://164.100.24.220/loksabhaquestions/annex/175/AU1140.p df. 25 1st Report of the Standing Committee on Petroleum and Natural Gas on the Demands for Grants (2019-20), December
2019, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natur al%20Gas/17_Petroleum_And_Natural_Gas_1.pdf. 26 Unstarred Question No. 2524, Lok Sabha, Ministry of Petroleum and Natural Gas, Answered on August 1, 2016, http://164.100.24.220/loksabhaquestions/annex/9/AU2524.pdf.
27 25th Report of the Standing Committee on Petroleum and Natural Gas, August 2018, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natur al%20Gas/16_Petroleum_And_Natural_Gas_25.pdf. 28 Report of the Roadmap for Reduction in Import Dependency in the Hydrocarbon Sector by 2030, Ministry of Petroleum and Natural Gas, September 2014, https://www.pngrb.gov.in/OurRegulation/NGP-GSR273.html. 29 Natural Gas Pipelines Network in India- As on 30.09.2020, Petroleum and Natural Gas Regulatory Board of India, https://www.pngrb.gov.in/databank/NGPLReports30092020.pdf . 30 Budget speech, Union Budget 2020-21, https://www.indiabudget.gov.in/budget2020- 21/doc/Budget_Speech.pdf. 31 Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring or Authorizing Natural Gas Pipeline as Common Carrier or Contract Carrier) Regulations, 2009, Petroleum and Natural Gas Regulatory Board of India, April 21, 2009, https://www.pngrb.gov.in/OurRegulation/NGP- GSR273.html. 32 'Cabinet approves Pradhan Mantri JI-VAN Yojana', Press Information Bureau, Cabinet Committee on Economic Affairs, February 28, 2019.
## Demand For Grants: Science And Technology
The Ministry of Science and Technology has three departments: (i) Department of Science and Technology (DST), (ii) Department of Scientific and Industrial Research (DSIR), and (iii) Department of Biotechnology (DBT). DST is responsible for promoting new areas of science and technology, coordinating, and integrating areas of science and technology having cross-sectoral linkages. It formulates and implements policies for the promotion of science, technology, research, and innovation in the country. DSIR is responsible for promotion, development, and transfer of indigenous technology. The Council for Scientific and Industrial Research (CSIR) is an autonomous body under DSIR which undertakes research and development in diverse areas. DBT is entrusted with the promotion and development of biotechnology. This note examines the expenditure by the three Departments and discusses key issues in the sector.
Overview of Finances1,2,3
## Expenditure
In 2021-22, the Ministry of Science and Technology has been allocated Rs 14,794 crore. This comprises: (i) Rs 6,067 crore to DST (41%), (ii) Rs 5,224 crore to DSIR (35%), and (iii) Rs 3,502 crore to DBT (24%). This is an annual increase of 8% over 2019- 20. Allocation to DBT (22% annual increase over 2019-20) has increased at a higher rate as compared to DST (6%) and DSIR (4%).
%
Dept 2019-20 **2020-**
CAGR
(19-20
21 BE
2020-
21 RE
2021-
22 BE
change
in 20-21
(BE to
to 21-22)
RE)
DST
5,407 6,302 5,000
-21% 6,067
6%
DSIR
4,872 5,385 4,252
-21% 5,224
4%
DBT
2,359 2,787 2,300
-17% 3,502
22%
Total 12,637 14,473 11,552
-20% 14,794
8%
Note: BE: Budget Estimates; RE: Revised Estimates. CAGR:
Compounded Annual Growth Rate.
Source: Expenditure Budget; PRS.
Almost all the expenditure under the Ministry is revenue expenditure (99.7% on average). In 2020-21, all three departments have seen a notable cut in the allocation at the revised stage as compared to the budget estimate (20% on aggregate). In comparison, the overall revenue expenditure of the central government in 2020-21 increased by 14.5% from the budget stage to the revised stage. However, note that there have been significant variations in the allocation to individual ministries in 2020-21 at the revised stage. This may be due to a change in expenditure priorities during the year due to COVID-19 and national lockdown. In 2020-21, the amount allocated at the budget stage to the DSIR was about Rs 1,000 crore less than the initial demand by the department.4 While examining this allocation, the Standing Committee on Technology (2020) had suggested that an additional amount of Rs 440 crore should be allocated to the DSIR at the revised stage.4 This was to be utilised for meeting its bare minimum expenses on the fellowship to researchers and salary to the staffs of the department, and certain schemes.4 However, as mentioned earlier, in 2020-21, allocation to DSIR has further reduced by Rs 1,133 crore at the revised stage.
## Growth In Expenditure
The growth in the expenditure of the Ministry has been variable during the last decade (Figure 1 and 2). The year-on-year growth in expenditure was relatively higher during the 2015-18 period. During the 2018-21 period, the growth has slowed down. In 2018-19, the expenditure by the Ministry was only 3% higher than the previous year. In 2018-19, actual expenditure by DSIR registered a negative growth as compared to the previous year (-2%). Similarly, expenditure by DBT in 2019-20 was 1% less than the previous year. In 2020-21, all three departments are estimated to register a decline in expenditure as compared to the previous year. During the 2015-20 period, the compounded annual growth rate in expenditure is: (i) 9% for DST, (ii) 5% for DSIR, and
(iii) 11% for DBT.
Note: Expenditure for 2020-21 is as per revised estimates.
Source: Expenditure Budget; PRS. Regarding the expenditure of DST, the Standing Committee on Science and Technology (2020) had observed that there is a need for enhancement in the medium-term expenditure framework (MTEF) allocation to the DST.5 MTEF provides a three-year rolling target for the expenditure of a department.6
The Committee recommended that DST should pursue the Ministry of Finance for revision of the MTEF to a higher base level. This will help DST in carrying out its new initiatives and future plans.5
Note: Expenditure for 2020-21 is as per revised estimates. Source: Expenditure Budget; PRS.
Fund Utilisation During the 2016-20 period (four years), on average, DST spent 4% less than the budget estimates (Figure 3). The corresponding figures for DSIR and DBT are 1% and 2%, respectively. In 2019-20, DBT spent 9% less than the budget estimates.
Source: Expenditure Budget; PRS.
Major allocation heads
## Department Of Science And Technology (Dst)
In 2021-22, Rs 1,488 crore has been allocated towards Assistance to Autonomous Bodies (Table 2). Allocation towards Autonomous Bodies is the highest within the Department (25%), followed by allocation towards Institutional and Human Capacity Building (18%), and Innovation, Technology Development and Deployment (16%). The Innovation, Technology Development and Deployment head includes allocation for technology development programme, programmes for socio-economic development, and drugs and pharmaceutical research. About 16% of the total allocation in 2021-22 is towards Statutory and Regulatory Bodies (fourth-highest). Allocation towards these bodies in 2021-22 is estimated to decrease at CAGR of 5% over 2019-20. In 2020-21, allocation towards the Department is estimated to decrease by 21% from the budget stage to the revised stage. Within the Department, heads that have seen a higher cut at the revised stage include: (i) Research and Development (44%), and (ii) Innovation, Technology Development, and Deployment (38%), and (iii) Statutory and Regulatory Bodies (32%). Research and Development head includes allocation for international cooperation, mega facilities for basic research, technology fusion, and applications research.
Particular
19-20
Actuals
20-21
RE
21-22
BE
CAGR
(19-20 to
21-22)
Assistance to Autonomous Bodies
1,218
1,375
1,488
11%
1,069
911
1,100
1%
Institutional & Human Capacity Building
812
656
952
8%
Innovation, Technology Development & Deployment Statutory & Regulatory Bodies of which
1,055
752
950
-5%
(i) SERB
957
742
900
-3%
(ii) TDB
98
10
50
-29%
Research and Development
584
403
594
1%
Survey of India
434
444
531
11%
Mission on ICPS
123
271
270
48%
Total
5,407
5,000
6,067
6%
Note: SERB: Science and Engineering Research Board; TDB: Technology Development Board; ICPS: Interdisciplinary Cyber Physical Systems. RE: Revised Estimates; BE: Budget Estimates.
Source: Expenditure Budget; PRS.
Department of Scientific and Industrial Research
In 2021-22, almost 98% of the total allocation under DSIR is towards the Council of Scientific and Industrial Research (CSIR). In 2020-21, the allocation to the National Laboratories under CSIR is estimated to decrease by 22% at the revised stage.
Table 3: Major Allocation Heads-DSIR (in Rs crore)
| Particular | 19-20 |
|------------------------|----------|
| 20-21 | |
| RE | |
| 21-22 | |
| BE | |
| CAGR | |
| (19-20 | |
| to 21- | |
| 22) | |
| CSIR of which | 4,832 |
| (i) National | |
| Laboratories | |
| 4,532 | 3,808 |
| 300 | 400 |
| (ii) Capacity Building | |
| and Human Resource | |
| Development | |
| Industrial Research | |
| and Development | |
| 7 | 13 |
| Total | 4,872 |
Note: RE: Revised Estimates; BE: Budget Estimates. Source: Expenditure Budget; PRS.
Although, allocation towards the Industrial Research and Development head was small (Rs 31 crore at the budget stage in 2020-21), this was cut to Rs 13 crore at the revised stage (by 59%). Expenditure under this head include schemes for: (i) promoting innovations through individual, startups, and small scale industries, (ii) patent acquisition, and (iii) research facilities.
## Department Of Biotechnology (Dbt)
In 2021-22, the highest allocation within this Department is towards Biotechnology Research and Development (Rs 1,660 crore, 47% of the total). This is followed by allocation towards Industrial and Entrepreneurship Development (27%) and Assistance to Autonomous Institutions (23%). Allocation towards Industrial and Entrepreneurship Development in 2021-22 is about four times the actual allocation in 2019-20. Under the Industrial and Entrepreneurship Development, assistance is given for public-private partnership programmes, bioclusters, and biotech parks. In 2020-21, a higher cut is estimated in the allocation to Research and Development (16%) and Assistance to Autonomous Institutions (29%) at the revised stage.
| Particular | 19-20 |
|------------------|----------|
| 20-21 | |
| RE | |
| 21-22 | |
| BE | |
| CAGR | |
| (19-20 to | |
| 21-22) | |
| 1,305 | 1,323 |
| Biotechnology | |
| Research and | |
| Development | |
| 231 | 344 |
| Industrial and | |
| Entrepreneurship | |
| Development | |
| 762 | 577 |
| Assistance to | |
| Autonomous | |
| Institutions | |
| Total | 2,359 |
Note: RE: Revised Estimates; BE: Budget Estimates. Source: Expenditure Budget; PRS.
For the majority of the allocation heads across all three departments, fund utilisation was above 90% during the 2016-20 period. Following are some heads with lower fund utilisation during this period:
## Research And Development Under Dst
Under this head, funds are allocated towards: (i) international co-operation, (ii) National Mission for Nano Science & Nano Technology, (iii) Mega Facilities for Basic Research, (iv) alliance and R&D mission (climate change program), (v) supercomputing facility and capacity building, and (vi) technology fusion and applications research. Expenditure under this head at Rs 594 crore comprises 10% of the total expenditure of the department in 2021-22. During 2016-20 period, on average, the actual expenditure was 15% less than the budget estimate.
## Industrial Research And Development Under Dsir
Under this head, funds are allocated towards: (i) Promoting Innovations in Individuals, Startups & MSMEs (PRISM), (ii) Patent Acquisition and Collaborative Research & Technology Development
(PACE), (iii) Building Industrial R&D and Common Research Facilities (BIRD) and (iv) Access to Knowledge for Technology Development & Dissemination (A2K plus) programmes of the Department. Expenditure under this head at Rs 21 crore comprises less than 1% of the total expenditure under DSIR in 2021-22. The actual expenditure under this head has been substantially lower than the budget estimates in all four years between 2016-17 and 2019-20 (49% on average).
| 2016-17 | 2017-18 | 2018-19 | 2019-20 |
|-----------|-----------|-----------|-----------|
Source: Expenditure Budget; PRS.
Issues for consideration
## National Expenditure On Research And Development At Its Lowest Level Since 2004-05
The Science, Technology, and Innovation Policy, 2013 had observed that increasing gross expenditure in research and development (GERD) to 2% of GDP has been a national goal for quite some time.7 This Policy is administered by the Ministry of Science and Technology. GERD includes expenditure on research and development by business enterprises, higher education institutions, governments, and private nonprofit organisations. The 2013 Policy had observed that the target for GERD could be achieved by 2018- 19 if the private sector at least matches the expenditure level of the public sector.7 However, as can be seen in Figure 6, the GERD in 2018-19 was estimated to be 0.65% of GDP.8 Between 2004-05 and 2018-19, GERD reached its highest in 2008-09. However, since then, GERD in terms of % of GDP has been declining. GERD in 2018-19 was the lowest since 2004-05.
Contribution of the private sector The 2013 Policy had stressed that the expenditure on research and development (R&D) by the private sector needs to go up. It had observed that an increase in private investment is necessary for translating R&D outputs into commercial outcomes. However, the expenditure on R&D by the private sector has decreased from 0.27% of GDP in 2012-13 to 0.24% of GDP in 2018-19 (Figure 7). NITI Aayog (2018) noted that low investment by the private sector in R&D is a key challenge in the development of the innovation ecosystem in the country.9 Note that the Draft Science, Technology, and Innovation Policy, 2020 seeks to double the GERD and the private sector contribution to GERD in five years.10 Since October 2019, companies have been allowed to use corporate social responsibility funds (CSR) for contributions towards research.11 They can spend CSR funds as contributions to public-funded incubators, research organisations and universities engaged in research in science, technology, engineering, and medicine.
Source: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS.
## Contribution Of Public Sector
The 2013 Policy had observed that the public sector has led the expenditure on R&D in the country. This includes expenditure by: (i) all central government ministries, (ii) public sector units, (iii) state governments, and (iv) higher education institutes. Expenditure by the public sector has also been declining since 2008-09 (Figure 8). In 2018-19, expenditure by the public sector towards R&D in the country (0.41% of GDP) was the lowest since 2004- 05.
Further, the public sector industries (such as National Thermal Power Corporation Limited (NTPC) and Steel Authority of India Limited (SAIL)) spend a lesser portion of their sales turnover on R&D as compared to the private sector industries (Figure 9). In 2017-18, private sector companies spent 1.48% of their sales turnover on R&D. The corresponding percentage for the public sector industries was 0.29%.
Note: Data for public sector refers to 103 industrial R&D units. Data for private sector refers to 2,007 industrial R&D units excluding scientific and industrial research organisations. The public sector contributed 48% of the total sales turnover of the considered units in 2017-18. Source: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS.
## International Comparison
If we compare globally, as of 2017, India's GERD was substantially lower than countries such as Germany, USA, China, South Africa, and Brazil (Figure 10).12 However, India's GERD is higher than the average for lower-middle-income group countries.12
The Economic Survey (2017-18) had observed that:
-
In countries such as the USA, China, Germany,
and Japan, the share of the private sector in the overall spending in research and development is significantly higher (Figure 11).13
-
In most countries, the private sector carries out the bulk of research and development even if the government plays an important role in funding. However, in India, the government is the primary source as well as the primary user of funds for
R&D.13 The Standing Committee on Science and
Technology (2020) had recommended that the Department of Science and Technology should consider a higher direct allocation to the private sector from its funds for R&D related activities.5
-
The Economic Survey (2017-18) observed that the government expenditure on R&D is undertaken almost entirely by the central government. There is a need for greater state government spending (Figure 12).13
Source: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS.
-
The Survey took note of an analysis by a private organisation (Forbes, 2017). According to this analysis, India had 26 firms in the list of top 2,500 global R&D spenders as compared to 301 Chinese companies. 19 of these 26 firms were in three sectors: (i) pharmaceuticals, (ii) automobiles, and (iii) software. India had no firms in five of the top ten R&D sectors as opposed to China, which has a presence in each one of them.13
-
The Survey observed that in several countries, universities play a critical role in both creating the talent pool for research as well as generating high-quality research output. However, publicly funded research in India is concentrated in specialised research institutes under different government departments.13 This leaves universities to largely play a teaching role. Hence, universities play a relatively small role in research activities. The Economic Survey
recommended linking national laboratories to
universities for improvement in the knowledge ecosystem.13
## Share In Global Scientific Publications Increased But Target Set In The 2013 Policy Likely To Be Missed
The Economic Survey (2017-18) noted that looking at scientific publications can help in assessing the productivity and quality of research.13 The Science, Technology, and Innovation Policy 2013 observed that India's share in the global scientific publications had increased from 1.8% in 2001 to 3.5% in 2011.7 The Policy had set a target of doubling the global share in the scientific publications by 2020.13 By 2016, India increased its share in the global scientific publication to 4.1% (latest data available).8 The compounded annual growth rate (CAGR) for scientific publications during the 2011-2016 period for India has been 6.4% as against the CAGR of 3.7% for the world.8 If the publication output were to grow at the same rate, India's share in 2020 will be about
4.5%. This will be lower than the target set by the
2013 Policy for 2020 (7% share in the global scientific publications).
Source: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS.
The Economic Survey (2017-18) also observed that in addition to increasing publications, India needs to improve in terms of high-quality research output (measured as highly cited articles).13 It noted that India lags considerably on this parameter when compared to other large countries such as USA and China.13
## Low Number Of Researchers Per Million People
India has a significantly low number of researchers per million people (253 in 2018) when compared to countries such as USA and China.14 It is also less than the average for lower-middle-income group countries (288 in 2015).14 In comparison, USA and China had 4,412 (2017) and 1,306 (2018) researchers per million people.14 The Economic survey (2020- 21) observed that among the top 10 economies, the government's contribution to total R&D personnel and researchers was the highest in India.15 Against an average of 9%, the government's contribution to total R&D personnel and researchers in India was 36% and 34%, respectively.15 Among the top 10 economies, the contribution of the business sector in R&D
personnel and researchers was the second-lowest in India.15 Against an average of above 50%, the business sector's contribution to R&D personnel and researchers in India was 30% and 34%, respectively.15
Note: Data belongs to different years. For Germany, China, Russia, and India, the data is as of 2018. For USA, South Africa, and OECD countries, the data is as of 2017. For middle-income, and lowermiddle-income countries, the data is as of 2015.
## India'S Performance On The Global Innovation Index
The Economic Survey (2020-21) observed that:
-
Since the inception of the Global Innovation Index in 2007, India entered the top 50 innovating countries for the first time in 2020.15 Its ranking improved from 81 in 2015 to 48 in 2020. The Global Innovation Index provides detailed metrics about the innovation performance of 131 economies around the world.16 It assesses political, regulatory, and business environment, education, infrastructure, and market and business sophistication. Sophistication refers to how conducive market/firms are to innovation. For instance, business sophistication includes indicators such as GERD performed and financed by business, knowledgeintensive employment, and research collaboration between industry and universities.
-
India has performed above expectation on innovation with respect to its level of development.15 However, India seems to be underperforming in innovation with respect to the size of its GDP. India lags behind most other large economies (top 10) on most indicators of innovation.15 India is currently the fifth-largest economy in terms of GDP.
-
India must focus on improving its performance on: (i) institutions (political, regulatory, and business
environment), and (ii) business sophistication.15
Note that India's gross enrolment ratio (GER) in higher education itself is low as compared to these countries. In 2018, India's GER in higher education was 26.3%.17 In comparison, the GER in higher education in countries such as USA, China, and Germany was 88%, 49%, and 70%, respectively.18 The National Education Policy 2020 recommends increasing GER in higher education to 50% by 2035.17 The Economic Survey (2017-18) observed that considerable improvement in mathematics and cognitive skills is required at the primary and secondary education level to enable the R&D
ecosystem in the country.13 The National Education Policy 2020 also aims to improve foundational literacy and numeracy and cognitive capacities of students.17 NITI Aayog (2018) had observed that the link between research, higher education, and the industry is weak and nascent in India.9 It further observed that so far the education system has not focussed on cultivating scientific temperament at an early age.9 Even in the later stages, the lack of career opportunities in basic sciences leads to the diversion of potential researchers to other rewarding sectors.9 It had recommended that once the Higher Education Commission is set up, the Commission may consider giving credits for innovation and startups.9 The Commission should also consider setting up online entrepreneurial development courses in colleges and universities.9 The Higher Education Commission is proposed to replace the existing regulatory institutions for higher education.
The Economic Survey (2017-18) also noted that more than one lakh people with PhDs, who were born in India, live and work outside India.13 In USA alone, the number of immigrant scientists and engineers from India increased from five lakh in 2003 to 9.5 lakh in 2013.13 It noted that government programs such as Ramanujan Fellowship Scheme, INSPIRE Faculty Scheme, and Ramalingaswami Re-Entry Fellowships provide opportunities to Indian researchers residing in foreign countries to work in Indian universities. However, the number of people returning has been modest (243 during 2007-12 and 649 during 2012-17).13 The Survey recommended enhancing the scope of these schemes to also provide additional support for good research instead of just financial incentive. The additional support should include: (i) laboratory resources, and (ii) ability to hire post-docs.13
## Resident Share In Patent Applications Needs To Increase
The Economic Survey (2017-18) had observed that patents reflect a country's standing in technology.13 During the 2007-18 period, the patent applications filed in India grew at a CAGR of 3%.12 As can be seen in Figure 15, a larger number of patent applications in India are filed by non-residents (64% in 2019) as compared to countries such as China (11%) and USA (54%).15 However, the share of residents in patent applications has been steadily increasing (Figure 16).8 The Economic Survey (2020-21) had observed that resident share in the patent applications needs to rise further for India to become an innovation nation.15
Source: Research and Development Statistics 2019-20; Ministry of Science and Technology; PRS.
## Foreign Direct Investment In R&D Remains Low
The Office of the Principal Scientific Advisor noted that Foreign Direct Investment (FDI) is one of the key factors for enhancing R&D exports.19 India's share in global R&D exports was about 2.8% in 2019.19 R&D exports include: (i) licensing of intellectual property, (ii) technology embodied in exported intermediate goods, (iii) technology transfer through FDI, and (iv) outflow of technical services. India has a trade surplus in R&D services.19 During 2011-20, India's R&D exports grew at a CAGR of 26.6%, the highest growth among the top 10 exporting countries in R&D.19 However, R&D accounts for only a tiny share of FDI inflows into India (0.25% in 2018-19).20 Further, it is mostly concentrated in four sectors -
Information and Communication Technology, Natural Sciences and Engineering, Pharmaceuticals, and Clinical Research (more than 80%).20 The Economic Advisory Council to the Prime Minister suggested a goal of increasing yearly FDI inflow into R&D to USD 300 million by 2022.21 However, FDI in R&D has been on a decline since 2015-16 (Table 5).20
| Year | R&D | Total | % Share |
|---------|--------|----------|------------|
| 2015-16 | 235 | 40,001 | 0.59% |
| 2016-17 | 84 | 43,478 | 0.19% |
| 2017-18 | 107 | 44,857 | 0.24% |
| 2018-19 | 110 | 44,366 | 0.25% |
| 2019-20 | 67 | 49,977 | 0.13% |
Source: Note titled "FDI into R&D: Current Status and Way Forward" by the Office of the Principal Scientific Advisor; PRS.
## Adoption Of Technologies Developed By Publicfunded Research Organisations Is Low
NITI Aayog (2018) had observed that the rate of transfer of technology developed by public-funded institutions such as the Council of Scientific and Industrial Research (CSIR) is relatively low.9 It highlighted poor marketing skills and information dissemination as key reasons for this.9 It suggested the following measures to enhance technology commercialisation by public-funded institutions:
-
Value addition centres may be set up in these institutions for: (i) upscaling technologies and improving technology readiness level, (ii) coordinating with investors to incubate entrepreneurs, (ii) enabling commercialisation and marketing, and (iii) providing technology support during production.
-
A National Technology Data Bank should be created by the Department of Science and Technology which will act as the central database for technologies that are ready for deployment or under development.
-
Public funded research institutions should focus on the development and deployment of socially relevant technologies in areas such as clean drinking water, sanitation, energy, healthcare,
and organic farming. These technologies have a large potential for commercialisation.
## Tax Incentives For R&D To The Private Sector Have Been Reduced
India used to allow a weighted tax deduction of 200% of expenditure towards in-house research and development to corporations.15 This was reduced to 150% from April 2018.15 This is going to be reduced further to 100% from April 2021.15 The Standing Committee on Science and Technology (2020) was informed that withdrawal of tax incentive on R&D as well as exemptions on funds spent in acquiring patents by the private sector, has negatively affected the R&D investment in the private sector.5 The Committee observed that the tax incentive had stimulated R&D spending by the private sector. It recommended that the Department of Science and Technology should conduct an impact assessment in this regard.5
## Public Procurement Does Not Encourage New And Innovative Technologies
NITI Aayog (2018) had observed that public procurement is biased in favour of experienced and established products and technologies.9 This discourages new and innovative technologies offered
2 Demand No 89, Department of Biotechnology, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe89.pdf. 3 Demand No 90, Department of Scientific and Industrial Research, Union Budget 2021-22, https://www.indiabudget.gov.in/doc/eb/sbe89.pdf. 4 Report No 328: Demand for Grants (2020-2021) of the Department of Scientific and Industrial Research, Departmentally Related Parliamentary Standing Committee on Science and Technology, Environment, Forests, and Climate Change, March 6, 2020,
https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Re portFile/19/126/329_2020_12_15.pdf. 5 Report No 329: Demand for Grants (2020-2021) of the Department of Science and Technology, Departmentally Related Parliamentary Standing Committee on Science and Technology, Environment, Forests, and Climate Change, March 6, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Re portFile/19/126/329_2020_12_15.pdf. 6 Medium-term Expenditure Framework Statement laid before parliament, August 2018, https://dea.gov.in/sites/default/files/MTEF%20Statement%20%28e nglish%29%202018.pdf. 7 The Science, Technology, and Innovation Policy 2013, Ministry of Science and Technology, http://dst.gov.in/sites/default/files/STI%20Policy%202013- English.pdf.
by startups.9 It recommended that:
-
international competitive bidding should be resorted to only when Indian manufacturers are unable to supply products or services of
comparable international quality;
-
to adopt innovative technologies, experts or scientific practitioners should be mandatorily included on committees related to public procurement; and
-
Indian startups should be given preference in the technical evaluation for public procurement.
Following incentives are available to startups recognised by the Department for Promotion of Industry and Internal Trade: (i) relaxation in prior turnover and prior experience requirements, subject to meeting of quality and technical specifications (notified in March 2016), (ii) relaxation in bid security deposit requirements (notified in July 2017).22,23,24 Startups can also get the opportunity to work on trial orders with the government.22 The recognised startups are allowed to offer their products and services for procurement on government's emarketplace platform.25 This is aimed at helping startups to introduce unique innovations to government and public sector unit buyers.25
11 G.S.R. 776 (E), Ministry of Corporate Affairs, October 11, 2019, http://egazette.nic.in/WriteReadData/2019/213151.pdf. 12 "Research and development expenditure (% of GDP)", Data Bank, World Bank, as accessed on February 10, 2021, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS. 13 Chapter 8: Transforming Science and Technology in India, Volume I, Economic Survey 2017-18, https://www.thehinducentre.com/resources/article10057766.ece. 14 "Researchers in R&D (per million people)", Data Bank, World Bank, as accessed on February 10, 2021, https://data.worldbank.org/indicator/SP.POP.SCIE.RD.P6. 15 Chapter 8: Innovation: Trending Up but needs thrust, especially from the Private Sector, Volume I, Economic Survey 2020-21, https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapter/e chap08_vol1.pdf. 16 The Global Innovation Index (GII) Conceptual Framework, World Intellectual Property Organization, https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017- annex1.pdf. 17 National Education Policy 2020, Ministry of Human Resource Development, https://www.education.gov.in/sites/upload_files/mhrd/files/NEP_Fi nal_English_0.pdf. 18 "National Monitoring : Gross enrolment ratio by level of education", Website of UNSECO Institute for Statistics as accessed on February 11, 2021, http://data.uis.unesco.org/. 19 Note on R&D Exports, Office of the Principal Scientific Advisor to the Government of India, December 10, 2020, https://www.psa.gov.in/psaprod/publication/R%26D%20Exports.pdf. 20 Note on FDI into R&D, Office of the Principal Scientific Advisor to the Government of India, November 10, 2020, https://www.psa.gov.in/psaprod/publication/FDI%20in%20R%26D.pdf. 21 "R&D Expenditure Ecosystem: Current Status and Way Forward", Economic Advisory Council to the Prime Minister of
India, July 2019, https://www.psa.gov.in/psa-prod/publication/RD- book-for-WEB.pdf. 22 "Procurement by Government", Website of Startup India as accessed on February 14, 2021, https://www.startupindia.gov.in/content/sih/en/public_procurement
.html. india/Templates/public/notification/Relaxed_Norms_of_Public_Pr ocurement_for_Startups/1.%20Relaxed_Norms_of_Public_Procure ment_for_Startups.pdf. 24 No.F.20/2/2014-PPD(Pt.), Department of Expenditure, Ministry of Finance, July 25, 2017, https://www.startupindia.gov.in/content/dam/investindia/Templates/public/notification/Relaxed_Norms_of_Public_Pr ocurement_for_Startups/2.%20Notification_EMDExemption.pdf. 25 "Easing Public Procurement", Website of Startup India as accessed on February 14, 2021, https://www.startupindia.gov.in/content/sih/en/compendium_of_go od_practices/easing_public_procurement.html.
## Annexure
Table 6 and 7 provide details on the achievements of the Department of Science and Technology and the Department of Biotechnology on key performance indicators as per their respective dashboards.
| Indicator | 2018-19 | 2019-20 | 2020-21 (up to Dec 31, 2020) |
|----------------------------------------|------------|------------|---------------------------------|
| Human Capacity Building | | | |
| Fellowships provided | 1,16,854 | 92,869 | 1,030 |
| Number of people trained | 20,381 | 2,805 | 61,390 |
| Number of conferences | 640 | 389 | 463 |
| Research and Development | | | |
| New R&D Projects | 3,658 | 691 | 545 |
| Ongoing Projects | 7,982 | 10,479 | 2,946 |
| Institutional Capacity Building | | | |
| New R&D Infra | 251 | 102 | 156 |
| Innovation and Startups | | | |
| Number of Innovations | 468 | 658 | 617 |
| Startups | 898 | 791 | 610 |
| International Cooperation | | | |
| International Collaborative Visits | 3,302 | 774 | 1 |
| Ongoing Projects | 478 | 2,931 | 1,829 |
| Fellowships | 66 | 144 | 37 |
| Number of Manpower Trained | 1,221 | 569 | 99 |
| Science and Engineering Research Board | | | |
| Number of Ongoing Projects | 6,033 | 26,664 | 22,283 |
| Number of New R&D Projects | 2,492 | 2,076 | 1,189 |
| Human Resource Development | 2,912 | 2,049 | 464 |
| Development Activities | 2,212 | 1,868 | 0 |
| Autonomous Institutions | | | |
| Number of Publications | 2,336 | 2,624 | 2,453 |
| Number of PhDs Produced | 221 | 296 | 150 |
| Number of Manpower Trained | 1,896 | 5,452 | 2,747 |
| Number of Patents Granted | 38 | 98 | 91 |
Source: Dashboard of the Department of Science and Technology as accessed on February 14, 2021; PRS.
| Indicator | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21* |
|----------------------------------------------|------------|------------|------------|------------|------------|------------|-------------|
| Ongoing Projects | 2,212 | 1,955 | 1,893 | 2,165 | 2,460 | 2,405 | 2,004 |
| Projects Sanctioned | 656 | 415 | 552 | 831 | 847 | 594 | 227 |
| Ongoing International Collaborative Projects | 42 | 66 | 79 | 101 | 139 | 96 | 69 |
| Scientists Supported (PI/CoPI) | 4,801 | 4,493 | 4,569 | 5,121 | 5,553 | 4,521 | 2,364 |
| Research Personnel (JRF+SRF+RA) | 5,766 | 6,076 | 6,180 | 6,195 | 6,221 | 6,312 | - |
| CTEP-Proposals Sanctioned | | | | | | | |
| | | | | | | | |
| Conferences | - | - | 161 | 92 | 83 | 96 | - |
| Travels | - | - | 522 | 421 | 314 | 317 | - |
| Exhibitions | - | - | 9 | 8 | 9 | 17 | - |
| Popular Lectures | - | - | 6 | 13 | 10 | 28 | - |
| Technologies Generated | 117 | 90 | 136 | 75 | 82 | 119 | - |
| Publications | 2,482 | 2,494 | 2,654 | 1,904 | 3,478 | 3,758 | - |
| Patents Filed | 186 | 160 | 181 | 102 | 93 | 76 | - |
Note: *as of February 14, 2021. PI: Principal Investigator; CoPI: Co-Principal Investigator; JRF: Junior Research Fellowship; SRF: Senior Research Fellow; RA: Research Assistant. CTEP: Conference, Travel, Exhibition, and Popular Lectures. Source: Dashboard of the Department of Biotechnology as accessed on February 14, 2021; PRS
## Demand For Grants: Environment, Forests And Climate Change
The Ministry of Environment, Forests and Climate Change is responsible for the planning, promotion, co-ordination of, and overseeing the implementation of India's environmental and forestry policies and programmes. This note presents the budgetary allocations to the Ministry for 2021-22, and analyses various issues related to the sector.
## Budget Speech Highlights 2021-221
Key highlights in the budget regarding environment include:
-
Rs 2,217 crore will be allocated for 42 urban centres with population more than one million for tackling the problem of air pollution.
-
A voluntary scrapping policy will be introduced to phase out old and unfit vehicles. Vehicles will undergo a fitness test after: (i) 20 years (personal vehicles), and (ii) 15 years (commercial vehicles). This seeks to encourage environment friendly vehicles and fuel efficiency and reduce vehicular pollution and expense on oil import.
-
Urban Swacch Bharat Mission 2.0 will be implemented with a capital outlay of Rs 1.4 lakh crores over five years (2021-26). The objectives of the Mission include: (i) complete faecal sludge management, (ii) reduction in single use plastic, (iii) source segregation of garbage, and (iv) reduction in air pollution.
## Allocation In Union Budget 2021-22
In 2021-22, the Ministry of Environment, Forests and Climate Change has been allocated Rs 2,870 crore, which is an annual increase of 6% over the actual expenditure in 2019-20. The allocation to the Ministry is 0.1% of the estimated expenditure of the union government for 2021-22.
Annualised
Actuals
19-20
BE
20-21
RE
20-21
BE
21-22
change
(Actuals
19-20 to
BE 21-22)
Total
2,538
3,100
2,015
2,870
6%
Note: BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2021-22; PRS.
In 2021- 22, 27% of the Ministry's allocation (Rs 766 crore) is estimated to be on centrally sponsored schemes on environment, forests and wildlife such as National Mission for Green India and Integrated Development of Wildlife Habitats. 16% of the allocation of the Ministry is towards pollution control and about 5% is towards environment protection, management, and sustainable
development. Establishment expenditure, i.e., spending on the secretariat and offices accounts for 22% of the total expenditure. Table 2 represents the budgetary allocation for major heads under the Ministry.
Annualised
2020-21
2021-22
Heads
2019-20 Actuals
RE
BE
change
(Actuals
19-20 to
BE 2021-22)
Environment, Forestry and Wildlife
768
556
766
-0.2%
521
477
634
10%
Establishment Expenditure of the Centre Control of Pollution
409
284
470
7%
Autonomous Bodies
326
340
289
-3%
National Coastal Mission
91
68
200
48%
Statutory and Regulatory Bodies
135
108
161
9%
118
108
136
7%
Environment Protection, Management and Sustainable Development
109
84
117
Decision support System for Environmental Awareness, Policy, Planning and Outcome Evaluation
86
40
70
-10%
Environmental Knowledge and Capacity Building (such as Eco- Task Force) Total
2,538
2,015
2,870
6%
Note: BE is budget estimate and RE is revised estimate; Establishment Expenditure of the Centre includes Secretariat and subordinate offices; Autonomous Bodies include Indian Council of Forestry Research and Education, and Indian Institute of Forest Management; Environment Protection, Management and Sustainable Development includes Climate Change Action Plan, National Adaptation Fund, and National Mission on Himalayan Studies; Decision support System for Environmental Awareness, Policy, Planning, and Outcome Evaluation include environmental education, awareness and training, and environment information systems. Sources: Demands for Grants 2021-22; PRS.
## Overview Of The Financial Allocation
Figure 1 shows the trend of expenditure of the Ministry between 2010-11 and 2021-22. The expenditure of the Ministry has seen an annual average growth of 2% during this period.
Sources: Union Budgets 2010-11 to 2021-22; PRS.
| Year | BE | Actuals |
|-------------|-------|------------|
| Over/Under | | |
| Utilisation | | |
| 2010-11 | 2,351 | 2,372 |
| 2011-12 | 2,492 | 1,982 |
| -20% | | |
| 2012-13 | 2,629 | 1,753 |
| -33% | | |
| 2013-14 | 2,630 | 1,890 |
| -28% | | |
| 2014-15 | 2,256 | 1,599 |
| -29% | | |
| 2015-16 | 1,682 | 1,521 |
| -10% | | |
| 2016-17 | 2,250 | 2,278 |
| 1% | | |
| 2017-18 | 2,675 | 2,627 |
| -2% | | |
| 2018-19 | 2,675 | 2,586 |
| -3% | | |
| 2019-20 | 2,955 | 2,538 |
| -14% | | |
| 2020-21 | 3,100 | 2,015* |
| -35% | | |
Note: BE - Budget Estimate; *Revised Estimate; (+) indicates over-utilisation; (-) indicates under-utilisation. Sources: Union Budgets from 2010-11 to 2021-22; PRS.
Between 2010-11 and 2020-21, on average the actual expenditure of the Ministry has been less than the budget estimates for the year. However, the Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2020) stated that the utilisation of funds by the Ministry in 2017-18 and 2018-19 is satisfactory.2 In 2020-21, the Ministry was allocated Rs 3,100 crore, which decreased by Rs 1,085 crore (35%) at the revised estimates stage. This includes reduction in funds towards: (i) Environment, Forestry and Wildlife (reduced by Rs 370 crore), (ii) Establishment Expenditure of the Centre (reduced by Rs 194 crore), and (iii) Control of Pollution (reduced by Rs 176 crore), among others. This may be due to the impact of the COVID-19 pandemic, and a change in spending priorities of the government over the year.
## Key Issues For Consideration
Some of the key issues in the environment sector include: (i) global warming, (ii) air pollution, and
(iii) declining forest cover.2,3,4 In this section, we discuss some of these issues.
Climate Change
Climate change refers to a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere.5 Studies indicate that the amount of greenhouse gases including carbon dioxide, methane, and nitrous oxide in the atmosphere have increased rapidly over the last few centuries as a result of human activities.6,7 The increased concentration of greenhouse gases in the atmosphere has led to a rise in global temperatures leading to other changes in global climate, such as erratic rains, floods, and cyclones.6,7
According to the Intergovernmental Panel on Climate Change (IPCC), the average global temperature is estimated to have increased by 0.85°Celsius (°C) between 1880 and 2012.7 At the end of the 21st century, the increase in global temperature is likely to exceed 1.5°C as compared to pre-industrial levels (1850 to 1900).7 This could lead to a reduction of the snow cover, increase in heat waves, extreme precipitation, intensification of tropical cyclones and increase in sea levels.
## Current Emission Levels
The total carbon dioxide (CO2) emissions across the world in 2018 were 33,513 million tonnes.
Table 4 compares India's CO2 emissions from fuel combustion to that in other countries.
## (2018)
CO2 emissions
from fuel
Country
Per capita
emissions
combustion
% of world
emissions
(tonnes CO2)
(million tonnes)
China
9,571
29%
6.8
US
4,921
15%
15.0
EU
3,151
9%
6.1
India
2,308
7%
1.6
Russia
1,587
5%
1.7
Japan
1,081
3%
8.5
World
33,513
4.4
Note: EU is European Union; US is United States if America.
Sources: CO2 Emissions from Fuel Combustion 2018, International Energy Agency (2020); PRS.
China was the largest contributor to the world's CO2 emissions (29%). On a per capita basis, the United States had the highest per capita emissions.
India amounts for 7% of the total global CO2
emissions, and is well below the average global emissions per capita.8 The 15th Finance Commission observed India's dependence on thermal energy and the consequent effect on emission levels.9 It noted that about 60% of the country's installed capacity is thermal based (coal based thermal power accounting for the largest share). Further, it noted that while the share of renewables in total power generation has increased from 6% in 2014-15 to 10% in 2018-19, substantial investment is required in renewable energy.9 It recommended that a comprehensive energy policy should be framed. It also noted that the prices of coal, natural gas, and kerosene in India are below environmentally efficient levels (which can partly be due to subsidies given for LPG and kerosene to select consumers). It recommended bringing the prices of these fuels closer to environmentally efficient levels, while providing targeted assistance to potentially affected vulnerable households.9 The projected changes in climate change pose a major threat for India in particular, given that the national economy is closely tied to climate sensitive sectors such as agriculture and forestry.10
The National Action Plan on Climate Change (NAPCP) was launched in June 2008 to deal with issues related to climate change.11 The NAPCP has eight missions: (i) the National Solar Mission, (ii) the National Mission on Enhanced Energy Efficiency, (iii) the National Water Mission, (iv) the National Mission for Green India, (v) National Mission on Sustainable Habitat, (vi) National Mission for Sustainable Agriculture, (vii) National Mission for Sustaining the Himalayan Ecosystem, and (viii) National Mission on Strategic Knowledge for Climate Change. NITI Aayog in its report on Strategy for New India (2018) recommended that all eight national missions under the NAPCP should be revised in light of new scientific information and technological advances.12 Further, new national missions on wind energy, waste-to-energy, and coastal areas should be developed.12 In addition, NITI Aayog in its report recommended the following to maintain a clean, green, and healthy environment:12
-
Changes to regulatory framework: Stringent
civil penalties should be introduced to strengthen enforcement of environment-related Acts. Further, Rules related to waste management should be revised and strictly implemented. These include: (i) Plastic Waste (Management and Handling) Rules, (ii) Bio- Medical Waste (Management and Handling) Rules, (iii) E-Waste (Management) Rules, and (iv) Hazardous and Construction & Demolition Waste Management Rules.
-
Funds: National Adaptation Fund for Climate
Change and other global funds for strengthening resilience against climate change in sectors such as agriculture, forestry, and infrastructure should be utilised. Further, scientific and analytical capacity for climate change related assessments should be strengthened.
The Estimates Committee (2018) had reviewed the implementation of the NAPCP and made specific recommendations on some of the Missions. These recommendations include:11
-
National Mission on Sustainable Habitat:
The Committee observed that the emphasis of the Mission is limited to urban habitats only and does not take into account the requirements of the rural habitats. It recommended that the Mission introduce a comprehensive and integrated plan encompassing the needs of both rural as well as urban habitats.
-
National Mission for Sustainable
Agriculture: The Committee noted that
although the Mission focuses on different
aspects of agriculture, it does not include income security of farmers. It observed that crop insurance schemes and the MSP scheme have not made farming remunerative. It recommended the government to consider these elements of the Mission.
In 2015, the Paris Agreement was adopted by the Conference of Parties with the consensus of 197
parties to the convention (including India).13 The Paris Agreement aims to reduce greenhouse gas emissions globally and limit the increase in the global average temperature to a level between 1.5oC to 2oC above pre-industrial levels.
## India'S Nationally Determined Contributions (Ndc)
India submitted its Nationally Determined Contributions to
the United Nations Framework Convention on Climate
Change on October 2, 2015. India's commitments include
achieving the following targets by 2030:
- Reducing greenhouse gas emissions per unit of GDP by
33-35% from 2005 levels.
- Achieving 40% of installed electric power capacity from
non-fuel-based energy sources (such as solar, wind, hydropower) with help of transfer of technology and lowcost international finance.
- Increasing forest and tree cover by creating additional
carbon storage and absorption capacity for 2.5-3 billion tonnes of carbon dioxide.
- Enhancing investments in development programmes in
sectors vulnerable to climate change, including agriculture, water resources, health, disaster management, and Himalayan and coastal regions.
- Mobilising funds domestically and from developed
countries to implement mitigation and adaptation actions.
In December 2020, the Ministry of Environment, Forest and Climate Change constituted a high-level inter-ministerial Apex Committee for Implementation of Paris agreement.14 The Committee will be the national regulatory authority for carbon markets in India. Its functions include: (i) developing policies and programmes to make India's domestic climate change compliant to international obligations, (ii) coordinating communications of nationally determined contributions, and (iii) defining responsibilities of concerned ministries for achieving India's nationally determined contribution goals.14
## Climate Change Financing
The Economic Survey (2020-21) observed that India is relying on domestic resources to implement adaptation and mitigation action for climate change.15 It noted that the financing considerations will remain critical as the country had increased its targets substantially. Preliminary estimates provided by the NDC indicate that India's climate change actions till 2030 will require financial resource of USD 2.5 trillion (at 2014-15 prices).15
It recommended a clearer assessment of the financial requirement for implementing the NDC for appropriate allocation of resources. Further, the possible sources for meeting these requirements should also be devised.15 The Survey noted that availability of adequate financial resources for implementing the NDC goals is a major challenge.15 It recommended that additional financial resources and technological support to the developing countries (as was committed by the developed countries under the Paris Agreement) should be implemented.15
## Environment Impact Assessment And Clearance
Environment Impact Assessment is a planning tool to integrate environmental concerns into the developmental process from the initial stage of planning.16 The Ministry of Environment, Forests and Climate Change has made Environmental Clearance (EC) for certain development projects mandatory such as certain building, construction, and area development projects.16 The Comptroller and Auditor General of India (CAG) (2016) noted certain issues with the environmental clearance process. Its observations and recommendations include:16
-
Delay in process: The CAG noted a delay in
the process of EC (including grant of Terms of Reference, public consultation, and grant of EC by the Ministry). For example, (i) out of 216 projects examined, the Terms of Reference was granted within the prescribed time limit (60 days) to only 14% of the projects, and (ii) the EC was granted within the prescribed time limit (105 days) in only 11% of the cases. It recommended the Ministry to increase transparency in the grant of EC, streamline the processes, and adhere to the timelines given
under the EIA Notification.
## Draft Environment Impact Assessment Notification, 2020
The Draft Notification seeks to replace the EIA Notification, 2006.
It proposes certain conditions and thresholds on undertaking new
infrastructure projects, and on expansion or modernisation of
existing infrastructure projects. These projects include dams,
mines, airports, and highways.
The draft notification was released by the Ministry of
Environment, Forest and Climate Change in March, 2020.17
Initially, the Ministry invited comments on the Notification by June
10, 2020, which was later extended to June 30, 2020 in wake of
the COVID-19 pandemic.18 Further, Delhi High Court and
Karnataka High Court extended the deadline to August 11, 2020
considering limited advertisement of the notification in regional
languages.19,20 Currently, the notification has not been issued as
the consideration of suggestions is ongoing.21
Key features of the draft EIA notification, 2020 include:
Validity of prior-environment clearance increased: The draft
notification proposes to increase the validity of prior environment
clearance and prior environment permission for all projects. For
example, it seeks to increase the validity for: (i) mining projects
from 30 years to 50 years, (ii) river valley projects from 10 years
to 15 years, and (iii) all other projects from five years to 10 years.
Exemptions from public consultation: The 2006 notification
exempts certain infrastructure projects from conducting public
consultation. These include industrial parks and complexes,
special economic zones, irrigation projects, and construction
projects, among others. The draft notification adds several other
projects under the list of projects exempted from public
consultation. These include: (i) development projects in border
areas, (ii) highways, expressways, (iii) metallurgical industries,
and (iv) pesticide industries.22 Further, the draft notification
makes certain changes to the public consultation timeline,
compared to the 2006 notification.
Allotted time as
per 2020
Activity
Allotted time
as per 2006
notification
notification
7 days from date of receipt
of application
10 days from date of receipt of
application
Finalisation of date, time, and venue for public
hearing
No mention
Advertising the details of public
hearing
5 days from getting consent of the concerned
Pollution Board
30 days
20 days
Minimum notice period to public for submitting
responses
8 days
5 days
Sending public hearing proceedings to the regulatory
authority
Total
At least 45
days
Up to 40 days
Source: EIA Notification, 2006; Draft EIA Notification, 2020; PRS.
-
Cumulative impact studies: The CAG noted
that such studies before preparing the Environment Impact Assessment reports was not a mandatory requirement. Due to this, the impact of a number of projects was not known.
-
National Regulator: It noted that the Ministry
has not appointed a national level regulator to carry out an independent, objective, and transparent appraisal and approval for ECs of projects and to monitor the implementation of the conditions laid down under ECs.
-
Uniformity in terms and conditions: It noted
that there was non-uniformity in the terms and conditions of the EC for similar kind of
projects. It recommended the Ministry to
make conditions of ECs compatible with the
nature and type of project to avoid nonuniformity for similar projects.
-
Compliance to Conditions of Environment
Clearance: The CAG noted non-compliance in
the 216 sampled projects (ranging from 4% to 56%), in respect of 13 general Environmental Clearance conditions. It recommended the Ministry to grant fresh EC only after verifying the compliance to the earlier EC conditions. Further, it recommended the Ministry to mandate certain other conditions for an EC, including installation of monitoring stations and frequency of monitoring of various environment parameters for air, surface water, ground water, and noise pollution.
## Air Pollution
Air pollution is the presence of any air pollutant in the atmosphere.23 An air pollutant is any solid, liquid, or gaseous substance in the atmosphere in such concentration which may be injurious to human beings, other living creatures, or property.
Among the risk factors of diseases in India, air pollution ranks the second highest (after malnutrition), accounting for 10% of the disease burden, and thus, is one of the leading causes for premature death and disabilities.24 According to estimates published by the India Disease Burden Initiative, in 2017, 12.4 lakh deaths, i.e., 12.5% of the deaths in India, were attributable to air pollution.25 The Central Pollution Control Board (CPCB) notified the National Ambient Air Quality Standards (NAAQS) in 2009.26 The programme enables CPCB to identify non-attainment cities, i.e., cities that do not comply with the NAAQS. It identified 102 non-attainment cities where the ambient air quality crossed the prescribed standards continuously during the period 2011-15.27
Figure 2 compares the annual average PM10 levels in different states during 2013 and 2018. It also highlights the WHO standards (20 µg/m3) and the NAAQS (60 µg/m3) for the pollutant. As of 2018, states with comparatively higher PM10 levels include: (i) Delhi (225 µg/m3), (ii) Uttar Pradesh (203 µg/m3), and (iii) Gujarat (199 µg/m3), among others.
Note: Data for Andhra Pradesh, Bihar and Telangana for 2014.
Sources: CPCB; PRS.
National Clean Air Programme (NCAP): The Ministry of Environment, Forest and Climate Change launched the NCAP in January 2019.28 It receives funding under the budget head Control of Pollution. The programme sets a national level target of 20% to 30% reduction of PM2.5 and PM10 concentration levels by 2024, with 2017 as base for concentration levels.28 City specific action plans are to be formulated for the 102 nonattainment cities identified by CPCB.27 NCAP aims to: (i) prepare comprehensive mitigation actions for prevention, control and abatement of air pollution, and (ii) augment the air quality monitoring network and strengthen awareness activities.
## Financing For Air Pollution
In 2021-22, Control of Pollution has been allocated Rs 470 crore, a 16% annual increase over the actual expenditure in 2019-20. In 2020-21, the allocation for Control of Pollution was reduced by 30% (from Rs 660 to Rs 460 crore) at the revised estimates stage. The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2020) noted that the NCAP is a programme of utmost importance in the presentday context and controlling air pollution must be given the topmost priority.2 It recommended that the Ministry must be provided the requisite allocation as sought by it with respect to Control of Pollution at the revised stage.2 In the 2020-21 Union Budget Speech, it was announced that Rs 4,400 crore will be allocated towards clean air for large cities (population more than one million) through the Ministry of Housing and Urban Affairs.2 In 2021-22, it was announced that Rs 2,217 crore will be allocated for 42 urban centres having population more than one million.3 However, no such allocation has been specified in this Ministry's Demand for Grants in either years. The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2020) noted that the announced allocation in the Budget Speech (Rs 4,400 crore) for clean air for large cities in 2020-21 through the Ministry of Housing and Urban Affairs was higher than the entire budget allocation for the Ministry of Environment, Forests, and Climate Change (Rs 3,100 crore) for the year.2 The Ministry of Environment, Forests, and Climate Change has identified 102 non-attainment cities for utilising this fund under the NCAP. These are cities which do not meet NAAQS for a period of five years.2 The Committee noted that there are 46 cities (with population more than one million), which may be kept out of the non-attainment category.2 This will help the Ministry of Environment, Forests, and Climate Change to reduce the shortfall of funds for the schemes of pollution control. The 15th Finance Commission recommended the Ministry of Housing and Urban Affairs be made the nodal ministry for grants to cities with population more than one million to take steps to check air pollution.9 The Ministry of Environment, Forests and Climate Change may be given a separate grant for installation of systems to monitor air quality.9
## Air Pollution In Ncr
Since the past few years, the National Capital Region (NCR) continues to see particulate matter levels reach the severe category at several locations, especially during the winter season. The CPCB identified the season as critical due to the meteorological conditions, i.e., lower mixing height, higher humidity, fall of ambient air temperature coupled with lower temperature difference between maximum and minimum, and low wind speed.29 Further, the burning of crop residue by farmers in the NCR and adjoining areas is also one of the key reasons for pollution in the region.
## Supreme Court'S Directions For Pollution Control In Ncr
On October 18, 2019, the Environment Pollution
(Prevention and Control) Authority (EPCA) (established for
the prevention and abatement of environmental pollution in
NCR) submitted a report to the Supreme Court on the
situation of pollution in NCR and sought urgent directions to
improve enforcement of pollution control measures. On
November 4 and 6, 2019, the Court gave various directions
to the governments of Delhi, Punjab, Haryana, and Uttar
Pradesh. Some of these are:30,31
-
Chief secretaries, district collectors, and police officers of concerned areas of Punjab, Haryana, and Uttar Pradesh must ensure cessation of stubble burning.
-
No demolition, construction activities and garbage burning should take place in Delhi and NCR region.
-
Delhi government and concerned municipal corporations should remove open garbage and waste, and ensure no open dumping takes place.
-
Ensure that coal-based industries are not operating.
-
Pollution control boards of Punjab, Haryana, and Uttar Pradesh and Delhi government must ensure that polluting activities against norms are stopped.
## Ordinance To Set Up A Commission For Air Quality Management In Ncr
The Commission for Air Quality Management in National Capital Region and Adjoining Areas Ordinance, 2020 was promulgated in October 2020.32 The Ordinance establishes a Commission for better co-ordination, research, identification, and resolution of problems related to air quality in the NCR and adjoining areas. Adjoining areas refers to areas in Haryana, Punjab, Rajasthan, and Uttar Pradesh where any source of pollution may cause adverse impact on air quality in the NCR. The key provisions of the Ordinance include:
-
Functions: Functions of the Commission
include: (i) coordinating actions taken under the Ordinance by the concerned state governments (Delhi, Haryana, Punjab, Rajasthan, and Uttar Pradesh), (ii) planning and executing plans to prevent and control air pollution in the region, and (iii) preparing various action plans such as increasing plantation and addressing stubble burning.
-
Penalties: Non-compliance with or violation
of the Ordinance, and orders and directions of the Commission is punishable with imprisonment of up to five years or fine of up to one crore rupees or both. All appeals against the orders of the Commission will be heard by the National Green Tribunal.
Other measures being implemented by the Ministry to reduce air pollution include:33
-
introduction of cleaner/alternate fuels, such as gaseous fuels (CNG and LPG) and fuels blended with ethanol;
-
shifting from BS-IV to BS-VI fuel standards by April 2020 for the entire country;
-
promotion of public transport and improvements in roads, and building of more bridges to ease congestion on roads;
-
revision of emission standards for industrial sectors from time to time;
-
banning of burning of biomass;
-
deployment of increased number of
mechanised road sweeping machines; and
-
development of a mechanism for redressal of public complaints regarding air pollution issues in Delhi and NCR, among others.
NITI Aayog in its report on Strategy for New India (2018) noted certain challenges to reduce the problem of air pollution, including:12 (i) convincing farmers to discontinue the practice of burning crop residue by providing alternative methods, (ii) lack of awareness of the ill effects of pollution, thereby making it difficult to bring about behavioural change in people, and (iii) ineffective implementation of 'polluters should pay for the pollution' principle (costs of pollution be borne by those who cause it). It recommended the following:12
-
Funds: A "Clean Air Impact Fund" should be
created to provide viability gap funding for long-term projects aimed at reducing air
pollution (such as bio-power or bio-ethanol
projects).
-
Reward and monitoring at the local level: A
reward scheme for village panchayats with zero burning may be instituted, and a mechanism to monitor farm fires should be devised.
-
Industry Emissions: Emission and effluent
standards for industries should be revised and effectively implemented. Further, a task force should be set up to study and implement measures to control pollution from brick kilns.
## Forestry
In India, forests are considered as a part of the natural and cultural heritage. They provide variety of ecosystem services including: (i) absorption of greenhouse gases, (ii) prevention of soil erosion, and (ii) habitat to wildlife. One of the critical challenges faced by forests in the country is degradation of forest cover.34
## Green India Mission
Green India Mission (erstwhile National Afforestation Programme) was launched in February 2014. Its objectives includ: (i) increasing forest cover by up to 5 million hectare and improving quality of forest cover on additional 5 million hectare of land, (ii) enhancing eco-system services such as capturing and storing atmospheric carbon to reduce global warming, and (iii) increasing forest-based livelihood income of about 3 million households.3 NITI Aayog, in its report on Strategy for New India (2018), identified increasing the forest cover to 33.3% of the geographical area between 2021-23 as one of the key objectives for a clean, and healthy environment in India.12 Between 2017 and 2019, the forest cover across India increased by 0.6% (0.4 million hectares).35 As of 2019, total forest cover in India accounts for 22% of the total geographical area (71 million hectare out of 329 million hectare).36 The states with comparatively higher forest cover as share of their geographical area include: (i) Lakshadweep (90%), (ii) Mizoram (85%), (iii) Andaman and Nicobar Islands (82%), (iv) Meghalaya (76%), and (v) Manipur (75%), among others.4 Note that, the 14th Finance Commission assigned 7.5% weightage to "forest cover" in its calculation of states' share in the central taxes.37 The 15th Finance Commission (2020) replaced this by a weightage of 10% to "forest and ecology".38 This was done to reward states for the ecological services from the forest cover, and to compensate them for constraints arising from the dense forests in the state.38 NITI Aayog recommended promoting afforestation through peoples' participation and the involvement of the private sector, with priority to restoration of degraded forests.12 Further, it recommended that the public land along railway tracks, highways, and canals should be used for tree plantation.12 The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2018) had noted that despite the overall increase in the forest cover in India, some of the North-Eastern states observed a decline in the forest cover in 2017.3 These states include Manipur, Arunachal Pradesh, and Mizoram.3,4 The Standing Committee on Science &
Technology, Environment & Forests on the 'Status of Forests in India' (2019) also expressed concerns about the decline in the forest cover in the North- Eastern States, which constitute 65.34% of their geographical area in comparison to the national forest cover of 21.54%.34 It recommended that the concerned state governments and the Ministry of Environment, Forests and Climate Change must take all necessary steps to ensure that the decline in forest cover in these states is stopped at the earliest.34 In addition, the Committee noted that no action plan has been prepared by the Ministry for controlling illegal cutting of trees in forests. It recommended the Ministry to take cognizance of the illegal felling of trees in different parts of the country and prepare an action plan for tackling this menace, in coordination with state governments.34
Financing afforestation: In 2021-22, the Green India Mission has been allocated Rs 250 crore (an annual increase of 14% over the actual expenditure in 2019-20). The Standing Committee on Science &
Technology, Environment & Forests on the 'Status of Forests in India' (2019) had noted that the budget allocation to National Afforestation Programme has been insufficient. This has affected the achievement of the annual targeted area of afforestation during the last few years. The Committee recommended the Ministry to ensure adequate allocation to the National Afforestation Programme to achieve the targets under the Programme. The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2020) noted that the Green India Mission is an important programme.2 However, there has been under-utilisation of funds in the Mission. In 2020-21, up to the revised stage, 61% of the funds allocated to the Mission has been utilised.2
Evaluation: The Standing Committee on Science
& Technology, Environment & Forests on the 'Status of Forests in India' (2019) noted that the mid-term evaluation study on National Afforestation Programme conducted by the Indian Council of Forestry Research and Education
(ICFRE) in 2008 had highlighted the successful implementation of the programme.34 However, the Committee observed that more than ten years have ReportFile/19/126/331_2020_12_16.pdf. 3 Report No. 313, Standing Committee on Science and Technology, Environment, Forests, and Climate Change, March 13, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/19/103/313_2019_1_14.pdf. 4 Chapter 2 - Forest Cover, India State of Forest Report 2019, Ministry of Environment, Forests, and Climate Change, https://fsi.nic.in/isfr19/vol1/cover-page.pdf. 5 Article 1, United Nations Framework Convention on Climate Change, 1992. 6 IPCC Fourth Assessment Report: Climate Change 2007, Intergovernmental Panel on Climate Change, 2007, http://www.ipcc.ch/publications_and_data/ar4/wg1/en/contents.
passed since the previous ICFRE evaluation and recommended the Ministry to undertake a new study. This will help in assessing the actual impact of the Green India Mission on the forest cover and formulate strategies accordingly.34
The Committee also recommended the Ministry to take necessary action for determining the availability of total land for afforestation in the country. This will help state governments in formulating strategies for taking up the afforestation activities at their level.
## Compensatory Afforestation Management And Planning Authority (Campa) Funds
The CAMPA funds were established under Compensatory Afforestation Fund Act, 2016 in August 2016.39 The Act requires an entity, diverting a forest land towards non-forest purposes (such as mining), to pay for planting forest over an equal area of non-forest land or over twice the area of the degraded forest land. The purposes for utilisation of the fund include: (i) artificial plantations, (ii) wildlife and forest protection, and (iii) forest related infrastructure development. The Standing Committee on Science and Technology, Environment, Forests, and Climate Change (2020) noted that the CAMPA fund has a huge corpus of Rs 54,394 crore. The funds have accumulated due to deforestation. However, the current guidelines on the utilisation of fund restrict its utilisation for other schemes with similar objectives (such as Green India Mission) under the Ministry.2 The Committee recommended the Ministry to explore possibilities of utilisation of fund for schemes with objectives like those defined for utilisation of CAMPA fund. It specified that amendment to CAMPA Act and rules should be also considered for enabling utilisation of the fund for schemes with similar objectives.2
8 CO2 Emissions from Fuel Combustion 2015, International Energy Agency, 2015, http://www.iea.org/publications/freepublications/publication/CO 2EmissionsFromFuelCombustionHighlights2015.pdf. 9 The Report of the 15th Finance Commission (2021-26), Volume III, The Union, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC-Vol%20III-Union.pdf. 10 National Action Plan on Climate Change, Prime Minister's Council on Climate Change, June 2008, http://www.moef.nic.in/sites/default/files/Pg01-52_2.pdf. 11 "Thirtieth Report: Performance of the National Action Plan on Climate Change", Estimates Committee, Lok Sabha, December 13, 2018, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_30. pdf.
##
12 Strategy for New India @ 75, NITI Aayog, November, 2018, https://niti.gov.in/sites/default/files/2019- 01/Strategy_for_New_India_0.pdf. 13 Paris Agreement, 2015, United Nations Framework Convention on Climate Change, http://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf; Paris Climate Change Conference, United Nations Framework Convention on Climate Change, November 2015, http://unfccc.int/meetings/paris_nov_2015/meeting/8926.php. 14 Government constitutes High-level Ministerial Committee for implementation of Paris Agreement, Press Information Bureau, Ministry of Environment, Forest and Climate Change, December 2, 2020. 15 Sustainable Development and 06 Climate Change, Chapter 6, Economic Survey (2020-21), https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapte r/echap06_vol2.pdf. 16 Report of the Comptroller and Auditor General of India on Environmental Clearance and Post Clearance Monitoring, 2016, https://cag.gov.in/uploads/download_audit_report/2016/Union_ Government_Report_39_of_2016_PA.pdf. 17 Draft Environment Impact Assessment Notification, 2020, March, 2020, Ministry of Environment, Forest and Climate Change http://moef.gov.in/wpcontent/uploads/2020/03/Draft_EIA2020.pdf. 18 S. O. 1429(E), Ministry of Environment, Forest and Climate Change, http://moef.gov.in/wp-content/uploads/2020/05/EIA- 2020_extn-of-period.pdf 19 Vikrant Tongad vs Union of India (Ministry of Environment, Forest and Climate Change), W.P.(C) 3747/2020 & CM Appl. 13426/2020, June 30, 2020. 20 "Karnataka HC restrains Centre from publishing final notification based on draft EIA", The New Indian Express, August 5, 2020, https://www.newindianexpress.com/states/karnataka/2020/aug/0 5/karnataka-hc-restrains-centre-from-publishing-finalnotification-based-on-draft-eia-2179450.html. 21 Unstarred Question No. 843, Ministry of Environment, Forests and Climate Change, February 5, 2021, Lok Sabha. 22 S.O. 1533: Environment Impact Assessment Notification, 2006, September 14, 2006, Ministry of Environment and Forests, http://moef.gov.in/wpcontent/uploads/2018/03/so1533.pdf. 23 Air (Prevention and Control of Pollution) Act, 1981, Ministry of Environment and Forests. 24 India: Health of the Nation's States, The India State-Level Disease Burden Initiative, Indian Council of Medical Research, Public Health Foundation of India, and Institute for Health Metrics and Evaluation, November 2017, https://phfi.org/wpcontent/uploads/2018/05/2017-India-State-Level-Disease- Burden-Initiative-Full-Report.pdf.
25 The impact of air pollution on deaths, disease burden, and life expectancy across the states of India: The Global Burden of Disease Study 2017, Lancet Planet Health 2018, December 2018, https://www.thelancet.com/action/showPdf?pii=S2542- 5196%2818%2930261-4. 26 No. B-29016/20/90/PCI-I, Gazette of India, Ministry of Environment and Forests, November 18, 2009, http://www.egazette.nic.in/WriteReadData/2009/E_217_2010_0 05.pdf. 27 Unstarred Question No. 1181, Ministry of Environment, Forests and Climate Change, June 28, 2019, Lok Sabha. 28 "Government launches National Clean Air Programme
(NCAP)", Press Information Bureau, Ministry of Environment, Forests and Climate Change, January 10, 2019. 29 Unstarred Question No. 219, Ministry of Environment, Forests and Climate Change, February 5, 2018, Rajya Sabha. 30 M.C Mehta vs Union of India and Ors., Supreme Court, Writ Petition (Civil) No. 13029/1985 of 2019, http://www.epca.org.in/court_orders/SC-ordee-dated4-11- 19.pdf. 31 M.C Mehta vs Union of India and Ors., Supreme Court, Writ Petition (Civil) No. 13029/1985 of 2019, http://www.epca.org.in/court_orders/SC-order-dated6-11- 19.pdf. 32 The Commission for Air Quality Management in National Capital Region and Adjoining Areas Ordinance, 2020, Ministry of Law and Justice, October 28, 2020, http://www.egazette.nic.in/WriteReadData/2020/222804.pdf. 33 Unstarred Question No. 103, Ministry of Environment, Forests and Climate Change, June 21, 2019, Lok Sabha. 34 Report No. 324 - Status of Forests in India, Standing Committee on Science and Technology, Environment, Forests, and Climate Change, February 12, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/19/108/324_2019_9_12.pdf. 35 India State of Forest Report, 2019, Forest Survey of India, Ministry of Environment, Forests and Climate Change, December 30, 2019, http://www.fsi.nic.in/forest-report-2019. 36 Chapter 2 - Forest Cover, India State of Forest Report 2019, Ministry of Environment, Forests, and Climate Change, https://fsi.nic.in/isfr19/vol1/cover-page.pdf. 37 14th finance commission: Report of 14th Finance Commission, https://fincomindia.nic.in/writereaddata/html_en_files/oldcommi ssion_html/fincom14/others/14thFCReport.pdf.
38 15th finance commission: Volume I - Main Report, 15th Finance Commission, October 2020, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/ Reports/XVFC%20VOL%20I%20Main%20Report.pdf. 39 The Compensatory Afforestation Fund Act, 2016, https://legislative.gov.in/sites/default/files/A2016-38_1.pdf.
## Prs Legislative Research
Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya,
212, Deen Dayal Upadhyaya Marg, New Delhi-110002
Tel: (011) 4343-4035, 2323-4801
www.prsindia.org |
65c43cfe57bc5671070682c2 | budget_reports |
## Demand For Grants 2018-19 Analysis Drinking Water And Sanitation
The Ministry of Drinking Water and Sanitation is the nodal agency responsible for policy planning, funding and coordination of programs for safe drinking water and sanitation in rural areas. The Ministry was previously a department under the Ministry of Rural Development, and was made an independent Ministry in 2011.
## Overview Of Finances
In Union Budget 2018-19, the Ministry has been allocated Rs 22, 357 crore. This is a decrease of Rs 1,654 crore (7%) over the revised estimates of 2017-18.
Note: Values for 2017-18 are revised estimates and 2018-19 are budget estimates. Sources: Union Budgets 2009-10 to 2018-19; PRS.
Over the past ten years, the allocation to the Ministry of Drinking Water and Sanitation has seen an annual average increase of 9%. The Ministry saw the highest increase of 49% in 2016-17, over the previous year. This year the estimated expenditure has seen a decrease of 7%, over the revised expenditure estimates of 2017-18. Figure 1 shows these trends. Table 1 provides the budgetary allocation trends to the two major schemes, the National Rural Drinking Water Program (NRDWP), and the Swachh Bharat Mission-Gramin (SBM-G) of the Ministry of Drinking Water and Sanitation in the last three years. SBM-G has seen a decrease 9.5% in its allocation in 2018-19, over the revised estimates of 2017-18. NRDWP has seen a decrease of 0.7% in its allocation in 2018-19, over the revised estimates of 2017-18. The total budget of the Ministry has seen a decrease of 7% this year.
Roopal Suhag [email protected] Tel: (011) 43434035-36, 23234801-02 www.prsindia.org
Drinking Water and Sanitation ( Rs crore)
| Revised | Budgeted | % | Major |
|-------------|-------------|--------|----------|
| head | | | |
| Actual | | | |
| 16-17 | 17-18 | 18-19 | change |
| SBM-G | 10,484 | 16,948 | 15,343 |
| NRDWP | 5,980 | 7,050 | 7,000 |
| Secretariat | 12 | 13 | 14 |
| Total | 16,476 | 24,011 | 22,357 |
Sources: Demands for Grants 2018-19, Ministry of Drinking Water and Sanitation; PRS.
Figure 2 represents the key expenditure heads of the Ministry. In 2018-19, 69% of the Ministry's expenditure is estimated to be spent on SBM-G and 31% on NRDWP.
Water and Sanitation; PRS.
In the last ten years, the allocation to rural sanitation and drinking water programs under the Ministry's budget has seen a shift. While the allocation to drinking water has reduced from 87%
in 2009-10 to 31% in 2018-19, the allocation to rural sanitation has increased from 13% in 2009-10 to 69% in 2018-19.
Note: Values for 2017-18 are revised estimates and 2018-19 are budget estimates. Sources: Union Budgets 2009-10 to 2018-19; PRS.
February 26, 2018
## Financial Allocations To Outcomes
In this section, we discuss issues regarding the implementation of the SBM-G and NRDWP.
## Swachh Bharat Mission- Gramin
The Swachh Bharat Mission was launched on October 2, 2014 with an aim to achieve universal sanitation coverage, improve cleanliness and eliminate open defecation in the country by October 2, 2019. The Swachh Bharat Mission- Gramin (SBM-G) is the rural component of the program. SBM-G was previously referred to as the Nirmal Bharat Abhiyan or the Total Sanitation Campaign. In 2018-19, it has been allocated Rs 15,343 crore, which is a decrease of 9.5% from the revised estimates of 2017-18. In 2017-18, the scheme was allocated Rs 13,948 crore, which was increased to Rs 16,948 crore at the revised estimates stage. This implies that the revised estimates overshot the budget estimates. Figure 3 shows the expenditure on rural sanitation by the Ministry over the years.
Note: Values for 2017-18 and 2018-19 are revised estimates and budget estimates respectively. Sources: Union Budgets 2009-10 to 2018-19; PRS.
Allocation to SBM-G has seen an increase over the years. The rural and urban component of the scheme together got the seventh highest allocation among all the centrally sponsored schemes in Union Budget 2018-19. However, while the allocation to the rural component witnessed a decline of 9.5%, the urban component saw an increase of 9%. Note that the total funds allocated to the scheme is low, when compared to other centrally sponsored schemes. Allocation to some other schemes in 2018-19 such as Mahatma Gandhi National Rural Employment Guarantee Scheme is Rs 55,000 crore,
National Health Mission is Rs 30,634 and Sarva Shiksha Abhiyan is Rs 26,129 crore. The required central government allocation to SBM-G for the five year period from 2014-15 to
2018-19 is Rs 1,00,447 crore.1 Of this, so far Rs
52,166 (52%) has been allocated to the scheme. This implies that 48% of the funds are still left to be released before October 2019.
Budget estimates versus actual expenditure:
Table 2 shows the trends in allocation and actual expenditure on rural sanitation over the past ten years.
Table 2: Budgeted versus actual expenditure on rural sanitation (Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2007-08
954
954
100%
2008-09
1,080
1,080
100%
2009-10
1,080
1,200
111%
2010-11
1,580
1,580
100%
2011-12
1,650
1,500
91%
2012-13
3,500
2,474
71%
2013-14
3,834
2,244
59%
2014-15
4,260
2,841
67%
2015-16
3,625
6,703
185%
2016-17
9,000
10,484
116%
2017-18
13,948
16,948
122%
Note: The 'utilised' figure for 2017-18 is the revised estimate. Sources: Union Budgets 2007-08 to 2017-18; PRS.
Note that in the past three years, actual expenditure on SBM-G has overshot the budget estimates significantly. In 2016-17, it was 116% and is expected to be 122% in 2017-18. This implies lack of adequate budgeting and planning in implementation of the scheme.
Construction of Individual Household Latrines
(IHHLs): For construction of IHHLs, the funds are shared between the centre and the state in the ratio of 60:40. Under SBM-G, the cost for constructing a household toilet has been increased from Rs 10,000 to Rs 12,000. Construction of IHHLs account for the largest share of total expenditure under the scheme. In 2014-15, it was 91%, and has been increased to 97% and 98% in 2015-16 and 2016-17, respectively. In 2017-18, 98% of total expenditure has been on construction of IHHLs. Table 3 shows the construction of IHHLs since the inception of the scheme. Although the number of toilets constructed each year has increased, a yearly % change indicates that the pace of construction of toilets has come down. The increase in constructed toilets was 156% in 2015-16 over the previous year. However, this reduced to 4% in 2017-18.
of the scheme
| Year | Toilets Constructed | Yearly % change |
|---------|------------------------|--------------------|
| 2014-15 | 49,00,425 | - |
| 2015-16 | 1,25,64,312 | 156% |
| 2016-17 | 2,18,27,531 | 74% |
| 2017-18 | 2,26,92,777 | 4% |
Note: Data for 2017-18 is updated till February 19, 2018. Sources: Management Information System Reports of SBM; PRS.
As on February 2018, 78.8% of households in India have a toilet.2 This implies that in the next 20 months (till October 2019), 21.2% of houses will have to be provided with toilets.
Open Defecation Free (ODF) villages: Under SBM-G, a village is ODF when: (i) there are no visible faeces in the village, and (ii) every household as well as public/community institution uses safe technology options for faecal disposal.3 After a village declares itself ODF, states are required to carry out verification of the ODF status of such a village. Since sanitation is a state subject, the Ministry has set some broad guidelines for ODF verification. This includes indicators that are in accordance with the ODF verification definition, such as access to a toilet facility and its usage, and safe disposal of faecal matter through septic tanks.3 Note that according to the National Family Health Survey-4, only 37% of households in rural areas are using improved sanitation facility.4 Such a facility implies that toilets have a faecal disposal system that could include flush to piped sewer system, or flush to septic tank, or flush to pit latrine, and is not shared with any other household. Table 4 presents data on the differences between villages that have declared themselves ODF free and that are verified ODF.
| Verified | Verified ODF |
|--------------|------------------|
| Year | |
| Declared | |
| ODF | ODF |
| 2015-16 | 47,101 |
| 2016-17 | 1,84,082 |
| 2017-18 | 3,22,546 |
| Total | 5,53,729 |
| Verified | |
| - | ODF |
| Verified ODF | |
| villages (%) | |
| Total | |
| villages | |
| (2011) | villages |
| 5,93,731 | |
Note: Data for 2017-18 is updated till February 19, 2018. Total villages is from Census 2011. Sources: Management Information System Reports of SBM; PRS.
Note that in 2017-18, number of villages verified as ODF has substantially come down.
## Information, Education And Communication (Iec) Activities: 8% Of Funds Earmarked For
SBM-G in a year are to be utilised for IEC activities.5 These activities primarily aim to mobilise behavioural change towards the use of toilets among people. However, this has not been met. In 2014-15, Rs 157 crore was spent on such activities, accounting for 4% of the total scheme expenditure. This decreased to 1% in 2015-16 and 2016-17. In 2017-18, Rs 229 crore has been spent, amounting to 2% of total expenditure. Table 5 highlights these trends.
## (Rs Crore)
| Year | SBM-G funds spent on |
|----------------|-------------------------|
| IEC activities | |
| SBM-G funds | |
| spent on IEC | |
| activities (%) | |
| 2014-15 | 157 (4%) |
| 2015-16 | 147 (1%) |
| 2016-17 | 124 (1%) |
| 2017-18 | 229 (2%) |
Note: Data for 2017-18 is updated till February 19, 2018. Sources: Management Information System Reports of SBM; PRS.
## National Rural Drinking Water Programme
The National Rural Drinking Water Programme (NRDWP) aims at assisting states in providing adequate and safe drinking water to the rural population in the country.6 Rural drinking water programs have existed in various forms since 1972- 73, starting with the Accelerated Rural Water Supply Programme, followed by a Technology Mission in 1986. Subsequently, the Sector Reform Project was initiated in 1999-2000, with an aim to involve the rural community in planning, implementation and management of drinking water schemes. From 2009, it has been renamed as the National Rural Drinking Water Programme.
Fund sharing pattern: Rural water supply is a state subject. The centre-state fund sharing pattern within the scheme for the components of coverage of habitations, quality of water and operation and maintenance of projects is: (i) 50:50 for all states, and (ii) 90:10 for north-east and Himalayan states. For the components of monitoring and surveillance of water quality, sustainability of water sources, and support activities like awareness generation, the centre-state fund sharing pattern within the scheme is: (i) 60:40 for all states, and (ii) 90:10 for north-east and Himalayan states. The centre funds the scheme entirely for union territories. NRDWP accounts for 31% of the Ministry's finances this year. In 2018-19 it has been allocated Rs 7,000 crore, which is a decrease of 0.7% from the revised estimates of 2017-18. In 2017-18, the scheme was allocated Rs 6,050 crore, which was increased to Rs 7,050 crore at the revised estimates stage. This implies that the revised estimates overshot the budget estimates. Figure 4 shows the expenditure on NRDWP by the Ministry over the years.
As can be noted from the figure above, from 2009- 10 to 2013-14, the expenditure on NRDWP accounted for about 80%-90% of the Ministry's budget. However, from 2015-16 onwards, the allocation to the scheme has been reduced significantly.
Budgeted versus actual expenditure: Table 6
shows the trends in allocation and actual expenditure on NRDWP over the past ten years. The actual expenditure saw a decline in 2014-15, which could be a reason for the reduction of funds at the budget estimates stage in 2015-16. However, the actual expenditure in 2015-16 was 167% more than the budget estimates. Note that in the past three years, actual expenditure on NRDWP has overshot the budget estimates significantly.
NRDWP (Rs crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2007-08 | 6,606 | 6,506 | 98% |
| 2008-09 | 7,420 | 7,420 | 100% |
| 2009-10 | 8,120 | 7,996 | 98% |
| 2010-11 | 9,000 | 8,985 | 100% |
| 2011-12 | 9,350 | 8,493 | 91% |
| 2012-13 | 10,500 | 10,489 | 100% |
| 2013-14 | 11,426 | 9,691 | 85% |
| 2014-15 | 11,000 | 9,243 | 84% |
| 2015-16 | 2,611 | 4,369 | 167% |
| 2016-17 | 5,000 | 5,980 | 120% |
| 2017-18 | 6,050 | 7,050 | 117% |
Note: The 'utilised' figure for 2017-18 is the revised estimate. Sources: Union Budgets 2007-08 to 2017-18; PRS.
The Standing Committee examining the scheme had observed that reduction in budget for NRDWP
will affect the coverage and tackling of water quality problems in rural areas.7,8
Target versus achievements: In 2011, the Ministry came out with a strategic plan for the period from 2011-22.9 It set out a goal that by
2022, every person in rural areas in the country will have access to 70 Litres Per Capita Per Day (LPCD) of water within their household premises or at a distance of not more than 50 metres. It identified three standards of service:
i.
Piped water supply with all metered, household connections (designed for 70 LPCD);
ii.
Basic piped water supply with a mix of household connections, public taps and handpumps (designed for 55 LPCD); and
iii.
Handpumps, protected open wells, protected ponds, etc. (designed for 40 LPCD).
The revised guidelines of the NRDWP in 2015 raised the drinking water supply norms from 40 LPCD to 55 LPCD.10 Table 7 and Table 8 highlights the targets and achievements under the scheme for the past five years. As of August 2017, 96% of rural habitations have access to safe drinking water11. However, in term of coverage, 74% habitations are fully covered, and 22% habitations are partially covered.12 The Ministry aims to cover 90% rural households with piped water supply and 80% of rural households with household tap connections by 2022. However, the Estimates Committee in its report in 2015 observed that piped water supply was available to only 47% of rural habitations, out of which only 15% had household tap connections.13
| | | Number of partially covered habitations |
|---------|--------------|--------------------------------------------|
| | Target | Achievement |
| 2009-10 | 1,10,721 | 99,312 (90%) |
| 2010-11 | 1,10,231 | 90,116 (82%) |
| 2011-12 | 94,257 | 83,713 (89%) |
| 2012-13 | 91,750 | 77,388 (84%) |
| 2013-14 | 83,805 | 91,496 (109%) |
| 2014-15 | 89,581 | 94,020 (105%) |
| 2015-16 | 52,061 | 64,487 (124%) |
| 2016-17 | 40,391 | 43,813 (108%) |
| 2017-18 | | |
| 27,414 | 24,417 (89%) | |
Note: Habitations where water supply systems provide less than 55 LPCD to the population are treated as partially covered. Data pertain to habitations getting less than 55 LPCD of basic piped water supply with a mix of household connections, public taps and handpumps. Data for 2017-18 is updated till February 19, 2018.
Souces: Integrated Management Information System Reports 2009-10 to 2017-18, National Rural Drinking Water Programme; PRS.
## Habitations Fully Covered Under Nrdwp Number Of Fully Covered Habitations
| | Target | Achievement |
|---------|--------------|----------------|
| 2009-10 | 51,106 | 49,567 (97%) |
| 2010-11 | 33,247 | 29,267 (88%) |
| 2011-12 | 36,837 | 32,533 (88%) |
| 2012-13 | 38,403 | 58,916 (153%) |
| 2013-14 | 38,454 | 45,277(118%) |
| 2014-15 | 25,112 | 26,507 (106%) |
| 2015-16 | 12,081 | 13,276 (110%) |
| 2016-17 | 10,002 | 12,102 (121%) |
| 2017-18 | | |
| 5,275 | 7,853 (149%) | |
Note: Data pertain to habitations getting 55 LPCD of basic piped water supply with a mix of household connections, public taps and handpumps. Data for 2017-18 is updated till February 19, 2018. Souces: Integrated Management Information System Reports 2009-10 to 2017-18, National Rural Drinking Water Programme; PRS.
Contamination of drinking water: It has been noted that NRDWP is over-dependant on ground
1 Review of Sanitation Programme in Rural Areas, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 2 Swachh Bharat Mission- Gramin, http://sbm.gov.in/sbmdashboard/IHHL.aspx. 3 Guidelines for ODF Verification, Ministry of Drinking Water and Sanitation, http://www.mdws.gov.in/sites/default/files/R_274_1441280478 318.pdf. 4 India Fact Sheet, National Family Health Survey - 4, 2015-16, Ministry of Health and Family Welfare, http://rchiips.org/NFHS/pdf/NFHS4/India.pdf. 5 Swachh Bharat Mission- Gramin Guidelines http://www.mdws.gov.in/sites/default/files/SwachBharatGuidlin es.pdf. 6 National Rural Drinking Water Programme, Ministry of Drinking Water and Sanitation, http://indiawater.gov.in/IMISReports/MenuItems/AboutSite.asp x. 7 Demand for Grants 2016-17, Ministry of Drinking Water and Sanitation, Standing Committee on Rural Development 2015- 16, http://164.100.47.193/lsscommittee/Rural%20Development/16_ Rural_Development_23.pdf. 8 Demand for Grants 2017-18, Ministry of Drinking Water and Sanitation, Standing Committee on Rural Development 2016- 17, http://164.100.47.193/lsscommittee/Rural%20Development/16_ Rural_Development_35.pdf.
water.13 However, ground water is affected by high arsenic contamination in 68 districts in 10 states.13 These states are Haryana, Punjab, Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, West Bengal, Assam, Manipur and Karnataka. Table 9 shows the number of states and districts where ground water is affected by various contaminants.
## Contamination In Groundwater
| Contaminants | Number of | Number of affected |
|-----------------|--------------|-----------------------|
| affected | districts | |
| states | | |
| Arsenic | 10 | 68 |
| Fluoride | 20 | 276 |
| Nitrate | 21 | 387 |
| Iron | 24 | 297 |
Sources: Central Ground Water Board; PRS.
Chemical contamnation of ground water has also been reported due to deeper drilling for drinking water sources. It has been recommended that out of the total funds for NRDWP, allocation for water quality monitoring and surveillance should not be less than 5%.13 Presently, it is 3% of the total funds.10 It has also been suggested that water quality laboratories for water testing should be set up throughout the country.13
9 "Ensuring Drinking Water Security in Rural India", Strategic Plan 2011-12, Department of Drinking Water and Sanitation, Ministry of Rural Development, http://mdws.gov.in/sites/default/files/StrategicPlan_2011_22_W ater.pdf. 10 National Rural Drinking Water Programme Guidelines 2013, http://www.mdws.gov.in/sites/default/files/NRDWP_Guidelines _2013_0.pdf. 11 Lok Sabha Unstarred Question No. 3016, Ministry of Drinking Water and Sanitation, Answered on August 3, 2017, http://164.100.47.190/loksabhaquestions/annex/12/AU3016.pdf. 12 Rajya Sabha Unstarred Question No. 1477, Ministry of Drinking Water and Sanitation, Answered on January 1, 2018. 13 Evaluation of Rural Drinking Water Programmes, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_2.p df. DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c43cfe57bc5671070682a9 | budget_reports | # Union Budget 2020-21 Analysis Of Expenditure By Ministries
February 2020
Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya
212, Deen Dayal Upadhyaya Marg New Delhi - 110 002 Tel: (011) 4343-4035, 2323-4801 www.prsindia.org Contributors:
Mandira Kala Anurag Vaishnav Anya Bharat Ram Gayatri Mann Manish Kanadje Prachee Mishra Prachi Kaur Rohin Garg Roshni Sinha Saket Surya Suyash Tiwari
## Table Of Contents
Overview .......................................................................................................................................... 1
Budget at a Glance 2020-21 ............................................................................................................ 3
Receipts Highlights ................................................................................................................................... 7 Expenditure Highlights .............................................................................................................................. 8
Defence ......................................................................................................................................... 12 Home Affairs .................................................................................................................................. 21
Agriculture and Farmer's Welfare .................................................................................................. 30 Food and Public Distribution .......................................................................................................... 41 Rural Development ........................................................................................................................ 55 Human Resource Development ..................................................................................................... 63 Road Transport and Highways....................................................................................................... 75 Telecommunications ...................................................................................................................... 81 Railways ........................................................................................................................................ 89 Health and Family Welfare ............................................................................................................. 97 Housing and Urban Affairs ........................................................................................................... 107 Petroleum and Natural Gas ......................................................................................................... 114 Jal Shakti ..................................................................................................................................... 124
## Overview
The central government's expenditure is authorised through the Union Budget every year. The Constitution requires all expenditure (other than charged expenditure) to be submitted to Lok Sabha in the form of ministry-wise Demand for Grants.
These Demand for Grants are referred to the respective Departmentally Related Standing Committees for detailed examination. They are then discussed in the House and approved. After Lok Sabha authorises these demands, an appropriation Bill is introduced and passed to permit this expenditure out of the Consolidated Fund of India. The Union Budget 2020-21 which was presented on February 1, 2020 proposes an expenditure of Rs 30,42,230 (net of devolution of taxes to states) for the year. This amount will be funded through receipts (excluding borrowings) of Rs 22,45,893 crore and borrowings of Rs 7,96,337 crore. While fiscal deficit is budgeted at 3.5% of GDP compared to 3.8% this year, the target for revenue deficit is 2.7%, higher than the estimate of 2.4% for this year. This implies a reduction in net capital outlay. Devolution to states from centre's tax revenue is estimated to be Rs 7,84,181 crore in 2020-21. In 2019-20, the devolution to states reduced by 19% from an estimate of Rs 8,09,133 crore at the budgeted stage to Rs 6,56,046 crore at the revised stage. This could adversely impact the expenditure by states, where the taxes devolved from the centre forms a significant share. Besides the overall financial outlay, the budget also provides details of tax proposals in the Finance Bill. In this budget, a new option of lower tax rates has been proposed. Other proposals include changes to the payment of the dividend distribution tax, introduction of a ceiling on deductions for social security constributions, and a change in the determination of residence within the country. This document contains a short analysis of the Union Budget, and a close look at the allocations made by 13 large ministries. These ministries together account for 53% of the estimated total expenditure in 2020-21. Further, we analyse the allocation trends over the years, and the extent of their utilisation. We also examine the implementation of various schemes and policies and their resulting outcomes. Allocations to the top 15 schemes account for 13% of the budget allocation. PM-KISAN scheme (income support to farmers) has the highest allocation in 2020-21 at Rs 75,000 crore. This is followed by the allocation to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at Rs 61,500 crore. The issues discussed in the analysis of each ministry include the following.
Defence: The Ministry of Defence has been allocated Rs 4,71,378 crore. This constitutes 15.5% of the central government's budget and 2.1% of India's estimated GDP for 2020-21. Expenditure on salaries forms the largest portion of the defence budget (30% of the defence budget), followed by pensions (28%) and expenditure on capital outlay (23%). The remaining amount is spent on maintenance of equipment and other administrative expenses. Note that in 2020-21, army pensions are expected to exceed salaries. Additionally, the budget for capital expenditure has been lower than budget for committed liabilities for the last few years.
Home Affairs: The Ministry of Home Affairs has been allocated Rs 1,67,250 crore, which is an increase of 20% over the revised estimates in 2019-20. 63% of the Ministry's expenditure is on police (includes the central armed police forces and Delhi Police), and 32% is on grants made to Union Territories (UTs). The increase in 2020-21 budget is mainly due to accounting reasons. After their reconstitution as UTs, the devolution to Jammu and Kashmir and Ladakh now happens through the Ministry's budget. There is also a marginal increase of 2% in the budget for central armed police forces, despite a 11% vacancy.
Agriculture: The Ministry has been allocated Rs 1,42,762 crore in 2020-21, which is 30% higher than the revised estimate for 2019-20. This increase is primarily due to a higher allocation of Rs 75,000 crore to the PM-KISAN scheme. This scheme that aims to provide Rs 6,000/year as direct cash transfer to small farmers. The revised estimate for 2019- 20 is Rs 54,370 crore, down from the Rs 75,000 crore in the budget. The scheme was targeted to cover 14.5 crore beneficiaries this year, and has covered 8.9 crore till now.
Consumer Affairs, Food and Public Distribution: The Ministry has two departments: (i) Food and Public Distribution, which has been allocated Rs 1,22,235 crore (98% of the Ministry's allocation), and (ii) Consumer Affairs, which has been allocated Rs 2,300 crore. Food subsidy is the largest component of the Food and Public Distribution Department's expenditure (95% of the allocation). The revised estimate for food subsidy is Rs 1,08,688 crore, which is 41% less than the Rs 1,84,220 crore budgeted. This is because FCI has not been paid for the subsidy and has been asked to borrow the funds. This trend is set to continue as the budget for the next year is estimated at Rs 1,15,570 crore.
Rural Development: Expenditure by the Ministry of Rural Development is estimated at Rs 1,22,398 crore. This Ministry
administers some large schemes such as MGNREGS, PMAY-G (rural housing) and PMGSY (rural roads). About 51% of the Ministry's allocation is towards MGNREGS. The allocation for MGNREGS is estimated to be 13% lower next year, while that for PMGSY is up by 39%.
Human Resource Development: In 2020-21, the HRD Ministry has been allocated Rs 99,312 crore. Allocation to the
Department of School Education and Literacy is estimated at Rs 59,845 crore (60% of the Ministry's total allocation). The Department of Higher Education has been allocated Rs 39,467 crore. Among schemes, the highest expenditure by the Ministry is on Samagra Shiksha (elementary and secondary education), and Mid-Day meals. Data from NSSO indicates a drop in attendance in higher classes. Gross enrollment rate has improved in secondary and higher secondary levels, as well as in higher education.
Road Transport and Highways: Allocation to this Ministry is estimated at Rs 91,823 crore, which is 11% higher than the revised estimates for 2019-20. Since 2015-16, the Ministry has started spending more on capital expenditure as compared to revenue expenditure. The largest expenditure items are for building roads and bridges, and towards NHAI. There has been a consistent shortfall in the target for construction of national highways. For example, 10,855 km was constructed in 2018-19, compared to the targeted 15,000 km.
Telecommunications: The Department of Telecommunications has been allocated Rs 66,432 crore, which is an 184% increase over the revised estimates of 2019-20. This significant increase is to provide for the revival plan for BSNL and MTNL. The non-tax revenue for 2020-21 from communication services is projected at Rs 1,33,027 crore, 126% higher than the revised estimates of 2019-20. This could be due to anticipated recovery of the AGR arrears from the service providers as per a recent Supreme Court decision, or from spectrum auction in the coming financial year. Further, note that the USO Fund has collected Rs 70,000 crore in the last 10 years but utilised only Rs 32,000 crore.
Railways: Railways' revenue is estimated at Rs 2,25,913 crore which is a 10% increase from the revised estimates of 2019-20. Revenue expenditure by Railways is projected at Rs 2,19,413 crore which is an 8% increase from the revised estimates of 2019-20. The Operating ratio is estimated to be 97.4%. In the past few years, borrowings towards capital outlay has been increasing, while there has been a decline in revenue earning traffic. Overdependence on a few bulk freight items such as coal (30% of total revenue) is also a risk factor. Further, salaries and pensions constitute 66% of the costs, with the pension bill set to rise.
Health: In 2020-21, the Ministry's estimated expenditure is Rs 67,112 crore. In the last decade, India's public health expenditure (central and state spending) has remained between 1.2% to 1.6% of GDP. This is much lower as compared to other countries such as China (3.2%), USA (8.5%), and Germany (9.4%). The largest programmes implemented by the Ministry are the National Health Mission and Ayushman Bharat. While there have been significant improvements in indicators such as infant mortality rate and maternal mortality rate, they haven't reached the targets set under NHM.
Housing and Urban Affairs: Expenditure by the Ministry is estimated at Rs 50,040 crore. Of this, Rs 20,000 crore (40%) is for metro projects. AMRUT and Smart Cities together get a further 27% of the budget, and PMAY-U (urban housing)
gets 16%. As on November 2019, only 25% of the 5,151 proposed Smart City projects have been completed, and 31% of the houses approved under PMAY-U have been constructed.
Petroleum and Natural Gas: The Ministry has been allocated Rs 42,901 crore for 2020-21, which is the same as the revised estimates for the year 2019-20. About 87% of the ministry's budget is towards LPG subsidy. As expected, the subsidy bill has followed the trends in global crude oil prices.
Jal Shakti: The Ministry was created in 2019 by integrating the Ministries of: (i) Water Resources, River Development, and Ganga Rejuvenation, and (ii) Drinking Water and Sanitation. These now form individual departments within the Ministry. The Ministry estimates an expenditure of Rs 30,478 crore in 2020-21. The Department of Drinking Water and Sanitation receives 71% of this allocation. Major schemes implemented by the Ministry are Jal Jeevan Mission, which aims to provide adequate and safe drinking water to the rural population, and Swachh Bharat Mission (Gramin), which targets universal sanitation coverage and cleanliness across the country.
## Budget At A Glance 2020-21 Budget Highlights
Expenditure: The government proposes to spend Rs 30,42,230 crore in 2020-21, which is 12.7% higher than the
revised estimate of 2019-20.
Receipts: The receipts (other than net borrowings) are expected to increase by 16.3% to Rs 22,45,893 crore, owing
to higher estimated revenue from disinvestments.
GDP growth: The government has assumed a nominal GDP growth rate of 10% (i.e., real growth plus inflation) in
2020-21. The nominal growth estimate for 2019-20 was 12%.
Deficits: Revenue deficit is targeted at 2.7% of GDP, which is higher than the revised estimate of 2.4% in 2019-20.
Fiscal deficit is targeted at 3.5% of GDP, lower than the revised estimate of 3.8% in 2019-20. Note that the government is estimated to breach its budgeted target for fiscal deficit (3.3%) in 2019-20 and the medium term fiscal target of 3% in 2020-21. This does not include off-budget borrowings (0.9% of GDP in 2020-21).
Ministry allocations: Among the top 13 ministries with the highest allocations, the highest percentage increase is
observed in the Ministry of Communications (129%), followed by the Ministry of Agriculture and Farmers' Welfare (30%) and the Ministry of Home Affairs (20%).
## Tax Proposals In The Finance Bill
In addition to changes in tax laws, the Finance Bill, 2020 also proposes certain non-tax changes to the Prohibition of Benami Properties Transactions Act, 1988.
Change in income tax rates: The income tax rates have been changed. Table 1 below compares the current tax rates
with the proposed tax rates. Note that the new personal tax rates are optional and may only be availed if the person satisfies certain conditions, such as if they do not claim certain exemptions or deductions. These include standard deductions, leave travel allowance, house rent allowance, interest payment on housing loan, and deductions under Chapter VI-A (investments in provident fund, insurance premium, donations to charities, etc.). Once the option is exercised, it will be applicable for all subsequent years.
| Income | Current tax rate | Proposed tax rate |
|-------------------------------------|---------------------|----------------------|
| Up to Rs 5 lakh | Nil | Nil |
| Between Rs 5 lakh and Rs 7.5 lakh | 10% | |
| 20% | | |
| Between Rs 7.5 lakh and Rs 10 lakh | 15% | |
| Between Rs 10 lakh and Rs 12.5 lakh | 20% | |
| Between Rs 12.5 lakh and Rs 15 lakh | 25% | 30% |
| Above Rs 15 lakh | 30% | |
Option for lower tax rates: The Income Tax Act was recently amended to give an option to domestic companies to
avail of 22% tax rate if they did not claim certain deductions. The list has been expanded to include other deductions, such as those under Section 80G (donations to charities). Also, a similar facility has been provided to co-operatives.
Dividend Distribution Tax: Currently, companies have to pay a tax of 15% on dividends distributed by it to
shareholders. This has been removed, and the dividend income will now be taxable in the hands of the recipient.
Limit on deductions for social security contributions: Currently, there is no combined limit for the purpose of
deductions on the amount of contribution made by an employer towards a recognised provident fund, an approved superannuation fund and the National Pension Scheme. A combined ceiling of Rs 7.5 lakh is being introduced on deductions which may be claimed towards such contributions.
Residence in India: The Income Tax Act, 1961 specifies various conditions for determining the resident status of an
Indian citizen or a person of Indian origin. A person will be considered a resident, i.e. their global income is taxable in India, if they are in India for more than 182 days. This has been reduced to 120 days. In addition, any Indian citizen who is not liable to tax in any other country or territory by reason of domicile or residence shall be deemed to be a resident of India.
Tax on foreign remittances and overseas tour packages: Under the Liberalised Remmittance Scheme of RBI
(LRS), residents are allowed to freely remit up to USD 2,50,000 in a financial year, except for remittances on certain prohibited items (e.g., on lottery tickets). A tax of 5% has been introduced which will be collected at source by: (i)
authorised dealers who receive an aggregate amount of seven lakh rupees or more in a financial year for remittances out of India under the LRS, and (ii) by sellers of overseas tour program packages. A tax of 10% will be collected in
non-PAN/Aadhaar cases.
Benefits to corporates: Currently, domestic manufacturing companies have an option to pay income tax at the rate of
15% if they do not claim certain deductions under the Act. This benefit has been extended to domestic companies engaged in electricity generation.
TDS on e-commerce transactions: TDS of 1% will be levied on e-commerce transactions.
Housing incentives: Currently, an exemption is provided on profits or gains arising out of building affordable houses
if the project was approved by March 31, 2020. Further, an additional tax deduction of up to Rs 1,50,000 is provided on interest paid on loans for self-occupied house owners if the loan was sanctioned by March 31, 2020. The deadline in both cases has been extended to March 31, 2021.
Tax changes for start-ups: Start-ups are allowed to get a full tax waiver on profits for any three consecutive years out
of their first seven years, if they are incorporated between April 1, 2016 and March 31, 2021, and their turnover does not exceed Rs 25 crore. The waiver has been extended to start-ups for any three years out of their first ten years. In addition, the turnover threshold has been increased from Rs 25 crore to Rs 100 crore.
Further, the tax on ESOPs (stock options) held by employees of start-ups will be payable only on the earliest of the following events: (i) expiry of 4 years from the end of the assessment year, (ii) sale of the options, or (iii) till the employee leaves the company.
Excise: The rate of central excise duty on certain tobacco products such as cigarettes, chewing tobacco, and tobacco
extracts has been increased. For example, the rate of duty on chewing tobacco has been increased from 10% to 25% per kg. Further, crude petroleum has been included at a rate of duty of Rs 50 per tonne.
Customs: Customs duty has been raised on some items such as tableware and kitchenware, footwear, fans, and toys.
Health cess on customs: A health cess will be levied (in addition to customs duty) on certain medical devices, such as
X-ray machines, imported into India. This cess may be utilised for the financing of health infrastructure and services.
Obligations on charities: Charitable organisations get an exemption from taxation under Section 12AA, and
donations to them get exemptions under Sections 10(23C), 35, and 80G. From now, the approvals under these sections will be valid for a maximum of five years. Any entity having these approvals has to get them re-issued.
Commodities Transaction Tax: Currently, the commodities transaction tax on commodity derivatives is 0.01%. The
Bill creates three tax rates: (i) 0.01% payable by the seller on sale of commodity derivatives based on its price or price index, (ii) 0.0001% payable by the buyer on the sale of an option in goods resulting in the delivery of the goods, and
(iii) 0.125% payable by the buyer on the sale of an option in goods resulting in cash payment.
Indian Stamp Act, 1899: Stamp duty will not be charged in the case of transactions in stock exchanges and
depositories established in international financial centres set up under the Special Economic Zones Act, 2005.
Sovereign wealth funds: Income arising out of investments made by the Abu Dhabi Investment Authority and other
notified sovereign wealth funds in certain infrastructure facilities will be exempt from tax. This exemption is available if the investment was made before March 31, 2024, and with a minimum lock-in period of three years.
The Prohibition of Benami Property Transactions Act, 1988: The Act constitutes an adjudicating authority on
issues related to benami properties. The qualifications for the chairperson and members of the authority are that they must have been: (i) a member of the Indian Revenue Service as Commissioner of Income-tax or equivalent, or (ii) a member of the Indian Legal Service as Joint Secretary or equivalent. The Bill states that an individual qualified for the
position of District Judge may also be the chairperson or a member of the authority.
Removal of tax exemptions on certain allowances: Certain exemptions on facilities to current and former members
of the Union Public Service Commission and the Election Commission such as rent-free residence, conveyance allowance, and medical facilities are exempt from tax. This exemption has been removed.
## Policy Highlights
**Legislative Changes**: The Banking Regulation Act, 1949 will be amended for better governance of cooperative banks.
The limit for NBFCs to be eligible for debt recovery under the SARFAESI Act, 2002 will be reduced. The asset size will be reduced from Rs 500 crore to Rs 100 crore, and loan size will be reduced from one crore rupees to Rs 50 lakh. The Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage for
a depositor, which will now be one lakh to five lakh rupees, per depositor. The Factor Regulation Act, 2011 will be amended to enable NBFCs to extend invoice financing to MSMEs. The PFRDA Act will be amended to separate NPS trust for government employees for PFRDAI. Laws where there is criminal liability for acts that are civil in nature will be examined and amended. Contracts Act will be strengthened to ensure that contracts are honoured.
**GST Compensation**: GST compensation balances for 2016-17 and 2017-18 will be paid in two instalments. From
now, transfer to GST Compensation Fund will be only through the compensation cess.
**Disinvestment**: The government will sell a part of its holding in LIC through an Initial Public Offer. The government
also plans to sell the balance of its holding in IDBI Bank.
**Investment**: Certain specified categories of government securities will be opened fully for non-resident investors. The
limit for Foreign Portfolio Investment in corporate bonds will be increased from 9% to 15% of the outstanding stock of
corporate bonds. It has been proposed to set up an Investment Clearance Cell which will provide "end to end"
facilitation and support, such as pre-investment advisory at the central and state level.
**Commerce and Industry**: A scheme focused on encouraging manufacturing of mobile phones, electronic equipment,
and semi-conductor packaging has been proposed. The National Technical Textiles Mission will be implemented from 2020-21 to 2023-24 with an outlay of Rs 1,480 crore. A scheme will be launched for the refund of duties and taxes on exported products, which are not getting exempted under any other existing mechanism.
**Infrastructure and Urban Development**: The government will build 6,500 projects under the National Infrastructure
Pipeline. These projects will include housing, safe drinking water, and healthcare, among others. A National Logistics Policy will be released which will clarify the roles of the central government, state governments, and key regulators. Further, it will create a single window e-logistics market. Five new smart cities will be developed in collaboration with states in public-private partnership mode.
**Transport and Energy**: Four railway station re-development projects and operation of 150 passenger trains will be
done through public-private partnership mode. The government will encourage states to replace conventional energy meters with prepaid smart meters by 2023. It has been proposed to expand the national gas grid from 16,200 km to 27,000 km.
**Agriculture and allied activities**: The government will expand the Pradhan Mantri Kisan Urja Suraksha evam Utthan
Mahabhiyan scheme to help 20 lakh farmers in setting up stand-alone solar pumps. Viability gap funding will be provided for setting up warehouses at the block level. All eligible beneficiaries of Pradhan Mantri Kisan Samman Nidhi will be covered under the Kisan Credit Card scheme. The government will propose comprehensive measures for 100 water stressed districts.
**Technology**: A policy will be introduced to enable private sector to build data centre parks. Fibre to the Home
connections through Bharatnet will link one lakh gram panchayats in 2020. A new National Policy on Official Statistics has been proposed which will use latest technology including Artificial Intelligence. An outlay of Rs 8,000 crore has been proposed for the National Mission on Quantum Technologies and Applications, over a period of five years.
**Education**: The new National Education Policy will be announced. Steps will be taken to enable sourcing of External
Commercial Borrowings and Foreign Direct Investment for education. Degree level online education programme will be started by institutions who rank within top 100 in the National Institutional Ranking framework.
**Health**: Jan Aushadhi Kendra scheme will be expanded to all districts and 2,000 medicines and 300 surgical items will
be offered by 2024. Viability gap funding window has been proposed for setting up hospitals in the public-private partnership mode.
**Social Justice**: Legislative and institutional changes will be made to ensure that there is no manual cleaning of sewer
systems or septic tanks. Rs 28,600 crore has been allocated for programs specific to women.
**National Recruitment Agency**: National Recruitment Agency will be set up for recruitment of non-gazetted posts in
government and public sector banks.
## Budget Estimates Of 2020-21 As Compared To Revised Estimates Of 2019-20
Total Expenditure: The government is estimated to spend Rs 30,42,230 crore during 2020-21. This is 12.7% more than
the revised estimate of 2019-20. Out of the total expenditure, revenue expenditure is estimated to be Rs 26,30,145 crore
(11.9% growth) and capital expenditure is estimated to be Rs 4,12,085 crore (18.1% growth).
Total Receipts: The government receipts (excluding borrowings) are estimated to be Rs 22,45,893 crore, an increase of
16.3% over the revised estimates of 2019-20. The gap between these receipts and the expenditure will be plugged by borrowings, budgeted to be Rs 7,96,337 crore, an increase of 3.8% over the revised estimate of 2019-20.
Transfer to states: The central government will transfer Rs 13,90,666 crore to states and union territories in 2020-21.
This is an increase of 17.1% over the revised estimates of 2019-20 and includes devolution of (i) Rs 7,84,181 crore to states, out of the centre's share of taxes, and (ii) Rs 6,06,485 crore in the form of grants and loans.
Deficits: Revenue deficit is targeted at 2.7% of GDP, and fiscal deficit is targeted at 3.5% of GDP in 2020-21. The target
for primary deficit (which is fiscal deficit excluding interest payments) is 0.4% of GDP.
GDP growth estimate: The nominal GDP is estimated to grow at a rate of 10% in 2020-21. The estimated nominal GDP
growth rate for 2019-20 was 12%.
% change
Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
(RE 2019-20 to BE 2020-21)
Revenue Expenditure
20,07,399
24,47,780
23,49,645
26,30,145
11.9%
Capital Expenditure
3,07,714
3,38,569
3,48,907
4,12,085
18.1%
Total Expenditure
23,15,113
27,86,349
26,98,552
30,42,230
12.7%
Revenue Receipts
15,52,916
19,62,761
18,50,101
20,20,926
9.2%
Capital Receipts
1,12,779
1,19,828
81,605
2,24,967
175.7%
of which:
Recoveries of Loans
18,052
14,828
16,605
14,967
-9.9%
Other receipts (including disinvestments)
94,727
1,05,000
65,000
2,10,000
223.1%
Total Receipts (without borrowings)
16,65,695
20,82,589
19,31,706
22,45,893
16.3%
Revenue Deficit
4,54,483
4,85,019
4,99,544
6,09,219
22.0%
% of GDP
2.4
2.3
2.4
2.7
Fiscal Deficit
6,49,418
7,03,760
7,66,846
7,96,337
3.8%
% of GDP
3.4
3.3
3.8
3.5
Primary Deficit
66,770
43,289
1,41,741
88,134
-37.8%
% of GDP
0.4
0.2
0.7
0.4
Note: Budgeted estimates (BE) are budget allocations announced at the beginning of each financial year. Revised Estimates (RE) are estimates of projected amounts of receipts and expenditure until the end of the financial year. Actual amounts are audited accounts of expenditure and receipts in a year. Sources: Budget at a Glance, Union Budget Documents 2020-21; PRS.
Expenses which bring a change to the government's assets or
liabilities (such as construction of roads or recovery of loans) are capital expenses, and all other expenses are revenue expenses (such as payment of salaries or interest payments).
In 2020-21, **capital expenditure** is expected to increase by
18.1 % over the revised estimates of 2019-20, to Rs 4,12,085
crore. On the other hand, **revenue expenditure** is expected to
increase by 11.9% over the revised estimates of 2019-20 to Rs 26,30,145 crore.
From 2010-11 to 2020-21, capital expenditure had an annual average growth of 10.2%, while revenue expenditure had an annual average growth of 9.7%.
Note: Figures for 2019-20 are revised estimates. Sources: Receipts Budget, Union Budget Documents 2020-21; PRS.
Disinvestment is the government selling its stakes in Public
Sector Undertakings (PSUs). In 2019-20, the government is estimated to meet 62% of its disinvestment target. The disinvestment target for 2020-21 has been set at Rs 2,10,000 crore.
## Receipts Highlights For 2020-21
Total receipts (including borrowings) in 2020-21 are estimated to be Rs 30,42,230 crore and net receipts (excluding
borrowings) to be Rs 22,45,893 crore. Receipts (without borrowings) are estimated to increase by 16.3% over the revised estimates of 2019-20.
Gross tax revenue is budgeted to increase by 12% over the revised estimates of 2019-20, which is higher than the
estimated nominal GDP growth of 10% in 2020-21. The net tax revenue of the central government (excluding states' share in taxes) is estimated to be Rs 16,35,909 crore in 2020-21.
Devolution to states from centre's tax revenue is estimated to be Rs 7,84,181 crore in 2020-21. In 2019-20, the
devolution to states reduced by 19% from an estimate of Rs 8,09,133 crore at the budgeted stage to Rs 6,56,046 crore at
the revised stage.
Non-tax revenue is expected to be Rs 3,85,017 crore in 2020-21. This is 11.4% higher than the revised estimate of
2019-20.
Capital receipts (without borrowings) are budgeted to increase by 175.7% over the revised estimates of 2019-20. This
is on account of disinvestments, which are expected to be Rs 2,10,000 crore in 2020-21, as compared to Rs 65,000 crore as per the revised estimates of 2019-20.
% change
Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
(RE 2019-20 to BE 2020-21)
Gross Tax Revenue
20,80,465
24,61,195
21,63,423
24,23,020
12.0%
of which:
Corporation Tax
6,63,572
7,66,000
6,10,500
6,81,000
11.5%
Taxes on Income
4,73,003
5,69,000
5,59,500
6,38,000
14.0%
Goods and Services Tax
5,81,560
6,63,343
6,12,327
6,90,500
12.8%
Customs
1,17,813
1,55,904
1,25,000
1,38,000
10.4%
Union Excise Duties
2,31,982
3,00,000
2,48,012
2,67,000
7.7%
Service Tax
6,904
-
1,200
1,020
-
A. Centre's Net Tax Revenue
13,17,211
16,49,582
15,04,587
16,35,909
-0.8%
Devolution to States
7,61,454
8,09,133
6,56,046
7,84,181
19.5%
B. Non Tax Revenue
2,35,704
3,13,179
3,45,513
3,85,017
11.4%
of which:
Interest Receipts
12,145
13,711
11,027
11,042
0.1%
Dividend and Profits
1,13,420
1,63,528
1,99,893
1,55,395
-22.3%
Other Non-Tax Revenue
1,10,139
1,35,940
1,34,593
2,18,580
62.4%
C. Capital Receipts (without borrowings)
1,12,779
1,19,828
81,605
2,24,967
175.7%
of which:
Disinvestment
94,727
1,05,000
65,000
2,10,000
223.1%
Receipts (without borrowings) (A+B+C)
16,65,694
20,82,589
19,31,705
22,45,893
16.3%
Borrowings
6,49,418
7,03,760
7,66,846
7,96,337
3.8%
Total Receipts (including borrowings)
23,15,113
27,86,349
26,98,552 30,42,230
12.7%
Sources: Receipts Budget, Union Budget Documents 2020-21; PRS.
Indirect taxes: The total indirect tax collections are estimated to be Rs 10,96,520 crore in 2020-21. Of this, the
government has estimated to raise Rs 6,90,500 crore from GST. Out of the total tax collections under GST, 84% is expected to come from central GST (Rs 5,80,000 crore), and 16% (Rs 1,10,500 crore) from GST compensation cess.
Corporation tax: The collections from taxes on companies are expected to increase by 11.5% in 2020-21 to Rs
6,81,000 crore. The revised estimates of 2019-20 indicate a 20.3% shortfall in collections from corporation tax over the budget estimates of 2019-20. This shortfall may be due to a cut in the corporate tax rates made earlier during the financial year.
Income tax: The collections from income tax are expected to increase by 14% in 2020-21 to Rs 6,38,000 crore. The
14% growth is despite a reduction in tax rates. That is, income tax is estimated to grow at 21%, if not for the Rs 40,000 crore revenue foregone due to the reduction in tax rates.
Non-tax receipts: Non-tax revenue consists of interest receipts on loans given by the centre, dividends and profits,
external grants, and receipts from general, economic, and social services, among others. Non-tax revenue is expected
to increase by 11.4% over the revised estimates of 2019-20 to Rs 3,85,017 crore.
Disinvestment target: The disinvestment target for 2020-21 is Rs 2,10,000 crore. This target is 223.1% higher than
the revised estimate of 2019-20 (Rs 65,000 crore).
## Expenditure Highlights For 2020-21
Total expenditure in 2020-21 is expected to be Rs 30,42,230 crore, which is 12.7% higher than the revised
estimate of 2019-20. Out of this, (i) Rs 8,31,825 crore is proposed to be spent on central sector schemes (7.6% increase over the revised estimate of 2019-20), and (ii) Rs 3,39,894 crore is proposed to be spent on centrally
sponsored schemes (7.3% increase over the revised estimate of 2019-20).
The government is expected to spend Rs 2,10,682 crore on pensions in 2020-21, which is 14.4% higher than the revised estimate of 2019-20. In addition, expenditure on interest payments in 2020-21 is expected to be Rs 7,08,203 crore, which is 23% of the government's expenditure.
% change
(RE 2019-20 to BE
Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
2020-21)
Central Expenditure
Establishment Expenditure of Centre
5,21,247
5,46,296
5,67,133
6,09,585
7.5%
Central Sector Schemes
6,38,495
8,70,794
7,73,196
8,31,825
7.6%
Other expenditure
6,77,403
7,72,129
7,41,553
8,87,574
19.7%
Centrally Sponsored Schemes and other transfers
Centrally Sponsored Schemes
2,96,029
3,31,610
3,16,816
3,39,894
7.3%
Finance Commission Grants
93,704
1,20,466
1,23,710
1,49,925
21.2%
of which:
Rural Local Bodies
35,064
52,558
58,616
69,925
19.3%
Urban Local Bodies
14,400
23,359
25,843
30,000
16.1%
Grants-in-aid
9,658
10,344
10,938
20,000
82.9%
Post Devolution Revenue Deficit Grants
34,582
34,206
28,314
30,000
6.0%
Other grants
88,235
1,45,054
1,76,144
2,23,427
26.8%
Total Expenditure
23,15,113
27,86,349
26,98,552
30,42,230
12.7%
Sources: Budget at a Glance, Union Budget Documents 2020-21; PRS.
## Expenditure On Subsidies
In 2020-21, the total expenditure on subsidies is estimated to be Rs 2,62,109 crore, a decrease of 0.5% from the revised estimate of 2019-20. This is largely due to a decrease in expenditure on fertiliser subsidy. Details are given below:
Food subsidy: Allocation to food subsidy is estimated at Rs 1,15,570 crore in 2020-21, a 6.3% increase as compared
to the revised estimate of 2019-20. In 2019-20 budget, Rs 1,84,220 crore was allocated to food subsidy. However, the revised estimate is much lower than the budgeted estimate at Rs 1,08,688 crore. This is due to a 41% cut (Rs 75,532
crore in amount) in the allocation to food subsidy for 2019-20 from the budgeted stage to the revised stage.
Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 71,309 crore in 2020-21. This is a decrease of
Rs 8,689 crore (10.9%) from the revised estimate of 2019-20.
Petroleum subsidy: Expenditure on petroleum subsidy is estimated to increase by 6.1% to Rs 40,915 crore in 2020-
21. Petroleum subsidy consists of subsidy on LPG (Rs 37,256 crore) and kerosene subsidy (Rs 3,659 crore). In 2020- 21, while the LPG subsidy is estimated to increase by Rs 3,170 crore over the previous year, kerosene subsidy is estimated to decrease by Rs 824 crore.
Other subsidies: Expenditure on other subsidies includes interest subsidies for various government schemes,
subsidies for the price support scheme for agricultural produce, and assistance to state agencies for procurement, among others. In 2020-21, the expenditure on these other subsidies has decreased by Rs 1,987 crore (5.5%) over the revised estimate of 2019-20. Table 4 provides details of subsidies in 2020-21.
% change
Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
(RE 2019-20 to BE 2020-21)
Food subsidy
1,01,327
1,84,220
1,08,688
1,15,570
6.3%
Fertiliser subsidy
70,605
79,996
79,998
71,309
-10.9%
Petroleum subsidy
24,837
37,478
38,569
40,915
6.1%
Other subsidies
26,185
36,460
36,302
34,315
-5.5%
Total
2,22,954
3,38,154
2,63,557
2,62,109
-0.5%
Sources: Expenditure Profile, Union Budget 2020-21; PRS.
## Expenditure By Ministries
The ministries with the 13 highest allocations account for 53% of the estimated total expenditure in 2020-21. Of these, the Ministry of Defence has the highest allocation in 2020-21, at Rs 4,71,378 crore. It accounts for 15% of the total budgeted expenditure of the central government. Other Ministries with high allocation include: (i) Home Affairs, (ii) Agriculture and Farmers' Welfare, (iii) Consumer Affairs, Food and Public Distribution, and (iv) Rural Development. Table 5 shows the expenditure on Ministries with the 13 highest allocations for 2020-21 and the changes in allocation as compared to the revised estimate of 2019-20.
% change
Actuals
2018-19
Budgeted
2019-20
Revised
2019-20
Budgeted
2020-21
(RE 2019-20 to BE 2020-21)
Defence
4,03,457
4,31,011
4,48,820
4,71,378
5.0%
Home Affairs
1,12,189
1,19,025
1,39,108
1,67,250
20.2%
Agriculture and Farmers' Welfare
53,620
1,38,564
1,09,750
1,42,762
30.1%
Consumer Affairs, Food and Public Distribution
1,08,848
1,94,513
1,17,290
1,24,535
6.2%
Rural Development
1,13,706
1,19,874
1,24,549
1,22,398
-1.7%
Human Resource Development
80,345
94,854
94,854
99,312
4.7%
Road Transport and Highways
77,301
83,016
83,016
91,823
10.6%
Communications
35,395
38,637
35,749
81,957
129.3%
Railways
54,913
68,019
69,967
72,216
3.2%
Chemicals and Fertilisers
71,414
80,534
80,968
71,897
-11.2%
Health and Family Welfare
54,682
64,559
64,609
67,112
3.9%
Housing and Urban Affairs
40,612
48,032
42,267
50,040
18.4%
Petroleum and Natural Gas
32,371
42,901
42,901
42,901
0.0%
Other Ministries
10,76,261
12,62,809
12,44,703
14,36,648
13.8%
Total Expenditure
23,15,113
27,86,349
26,98,552
30,42,230
12.7%
Note: Expenditure is net of recoveries such as fines, and ticket sales. Sources: Expenditure Budget, Union Budget 2020-21; PRS.
Ministry of Home Affairs: Allocation to the Ministry of Home Affairs increased by Rs 28,142 crore (20.2%) in
2020-21, over the revised estimate of 2019-20. This is mainly on account of grants provided by the Ministry to the newly formed union territories of Jammu and Kashmir (Rs 30,757 crore), and Ladakh (Rs 5,958 crore).
Ministry of Communications: Allocation to the Ministry of Communications increased by Rs 46,208 crore (129.3%)
in 2020-21, over the revised estimate of 2019-20. This is mainly on account of capital infusion of Rs 20,410 crore in BSNL and MTNL for 4G spectrum, and Rs 13,184 crore of grants provided to them for Voluntary Retirement Scheme.
Ministry of Agriculture and Farmers' Welfare: Allocation to the Ministry of Agriculture and Farmers' Welfare increased by 30.1% to Rs 1,42,762 crore in 2020-21 over the previous year. This is due to an increase of Rs 20,630
crore in allocation to the PM-KISAN scheme. In 2019-20, the Ministry was allocated Rs 1,38,564 crore, which has been revised down by 21% to Rs 1,09,750 crore (due to Rs 20,630 crore of estimated underspending in PM-KISAN).
Ministry of Consumer Affairs, Food and Public Distribution: Allocation to the Ministry increased by Rs 7,245
crore (6.2%) over the previous year. In 2019-20, the Ministry was expected to spend Rs 1,94,513 crore, which has been revised down by 40% to Rs 1,17,290 crore (due to Rs 75,532 crore cut in allocation to the food subsidy).
Expenditure on Major Schemes
Among schemes, the PM-KISAN scheme (income support to farmers) has the highest allocation in 2020-21 at Rs 75,000 crore. Allocation to the scheme has increased by 37.9% from the revised estimate of 2019-20. However, in 2019-20, allocation to the scheme has been cut by Rs 20,630 crore (28%) from the budgeted stage to the revised stage. In 2018-19, expenditure on the scheme saw a 94% cut, from an estimate of Rs 20,000 crore at the revised stage to an actual expenditure of Rs 1,241 crore.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has the second highest allocation in 2020-21 at Rs 61,500 crore. This is a decrease of Rs 9,502 crore (13.4%) from the revised estimate of 2019-20. In 2019-20, allocation to the scheme has increased by 18% from Rs 60,000 crore at the budgeted stage to Rs 71,002 crore at the revised stage.
Allocation to the Pradhan Mantri Gram Sadak Yojana has increased by 38.6% over the revised estimate of 2019-20 to Rs 19,500 crore. In 2019-20, allocation to the scheme has been cut by Rs 4,930 crore (26%) from the budgeted stage to the revised stage.
Actuals
2018-19
Budgeted
2019-20
PM-KISAN
1,241
75,000
54,370
75,000
37.9%
MGNREGS
61,815
60,000
71,002
61,500
-13.4%
National Education Mission
30,830
38,547
37,672
39,161
4.0%
National Health Mission
31,502
33,651
34,290
34,115
-0.5%
Integrated Child Development Services
21,642
27,584
24,955
28,557
14.4%
Pradhan Mantri Awas Yojana
25,443
25,853
25,328
27,500
8.6%
Pradhan Mantri Gram Sadak Yojana
15,414
19,000
14,070
19,500
38.6%
Pradhan Mantri Fasal Bima Yojana
11,937
14,000
13,641
15,695
15.1%
AMRUT and Smart Cities Mission
12,085
13,750
9,842
13,750
39.7%
Green Revolution
11,758
12,561
9,965
13,320
33.7%
Swachh Bharat Mission
15,374
12,644
9,638
12,294
27.6%
National Rural Drinking Water Mission
5,484
10,001
10,001
11,500
15.0%
Pradhan Mantri Krishi Sinchai Yojana
8,143
9,682
7,896
11,127
40.9%
Mid-Day Meal Programme
9,514
11,000
9,912
11,000
11.0%
National Livelihood Mission
6,282
9,774
9,774
10,005
2.4%
Sources: Expenditure Profile, Union Budget 2020-21; PRS.
## Expenditure On Scheduled Caste And Scheduled Tribe Sub-Plans And Schemes For Welfare Of Women, Children And Ner
Budgeted
2019-20
Welfare of Women
1,36,934 1,42,813
1,43,462
0.5%
Programmes for the welfare of women and children have been allocated Rs 2,39,504 crore in 2020-21, an increase of 3.9% over the revised estimate of 2020-21. These allocations include programmes under all the ministries.
| | Welfare of Children | 91,644 87,642 | 96,042 | 9.6% |
|----------------------------|--------------------------------|---------------------------|-----------------|---------|
| Scheduled Castes | 81,341 | 72,936 | 83,257 | 14.1% |
| Scheduled Tribes | 52,884 49,268 53,653 | 8.9% | | |
| North Eastern Region (NER) | 59,370 | 53,374 | 60,112 | 12.6% |
The sub-plans for Scheduled Castes and Scheduled Tribes have been allocated a total of Rs 1,36,909 crore in 2020-21, a 12% increase over the revised estimate of 2019-20.
Sources: Expenditure Profile, Union Budget 2020-21; PRS.
| % change | Revised |
|----------------|----------------------------|
| 2019-20 | |
| Budgeted | |
| 2020-21 | (RE 2019-20 to BE 2020-21) |
| % change | |
| Revised | |
| 2019-20 | |
| Budgeted | |
| 2020-21 | |
| (RE 2019-20 to | |
| BE 2020-21) | |
## Fiscal Responsibility And Budget Management Targets
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively reduce its outstanding debt, revenue deficit and fiscal deficit. The central government gives three year rolling targets for these indicators when it presents the Union Budget each year. Table 8 shows the targets for revenue deficit and fiscal deficit as given in the Medium Term Fiscal Policy Statement.
Fiscal deficit is an indicator of borrowings by the government for financing its expenditure. The estimated fiscal deficit for 2020-21 is 3.5% of GDP.
Actuals
2018-19
Revised
2019-20
Budgeted
2020-21
Target
2021-22
Target
2022-23
Fiscal Deficit
3.4%
3.8%
3.5%
3.3%
3.1%
Revenue Deficit
2.4%
2.4%
2.7%
2.3%
1.9%
Sources: Medium Term Fiscal Policy Statement, Union Budget 2020-21; PRS.
Revenue deficit is the excess of revenue expenditure over revenue receipts. Such a deficit implies the government's need to borrow funds to meet expenses which may not provide future returns. The estimated revenue deficit for 2020-21 is 2.7% of GDP.
Primary deficit is the difference between fiscal deficit and interest payments. It is estimated at 0.4% of GDP in 2020-21. Extra-Budgetary Resources: In addition to the expenditure shown in the budget, the government also spends through extra-budgetary resources. These resources are raised by issuing bonds and through loans from the National Small Savings Fund (NSSF). In 2020-21, the government estimates an expenditure of Rs 1,86,100 crore through such extra-budgetary resources. This includes an expenditure of Rs 1,36,600 crore by the Food Corporation of India financed through loans from NSSF. Since funds borrowed for such expenditure remain outside the budget, they do not get factored in the deficit and debt figures. If borrowings made in the form of extra-budgetary resources are also taken into account, the fiscal deficit estimated for the year 2020-21 would increase from 3.5% of GDP to 4.4% of GDP. Similarly, the fiscal deficit for the year 2019-20 would increase from 3.8% of GDP to 4.6% of GDP due to extra-budgetary borrowings of Rs 1,72,699 crore.
Sources: Medium Term Fiscal Policy Statement, Union Budget (multiple years); PRS.
Over the past 15 years, the government has largely been able to keep the deficits below budgeted levels. In 2018-19, the government exceeded its budgeted target of fiscal deficit of 3.3% of GDP, as the actual deficit was at 3.4% of GDP.
In 2019-20, the government had set a budget estimate of 3.3% of GDP for fiscal deficit, and 2.3% of GDP for revenue deficit. As per the revised estimates, both the deficits have exceeded the 2019-20 budget target.
Outstanding debt is the accumulation of borrowings over the years. A higher debt implies that the government has a higher loan repayment obligation over the years.
Note: Figures for 2019-20 are revised estimates and for 2020-21 are budget estimates. Sources: Economic Surveys 2003-04 to 2018-19; Union Budget 2020-21; PRS.
Total outstanding debt of the government has decreased from 55.5% of GDP in 2000-01 to 50.1% of GDP in 2020-21 (estimate). The FRBM Act sets a target of 40% of GDP for outstanding debt to be met by 2024-25.
## Demand For Grants: Defence
The Ministry of Defence frames policies on defence and security-related matters, and ensures its implementation by the defence services (i.e. Army, Navy and Air Force). In addition, it is responsible for production establishments such as ordnance factories and defence public sector undertakings, research and development organisations, and ancillary services that assist the defence services, such as the Armed Forces Medical Services. This note analyses budgetary allocation and expenditure trends of the Ministry. The note also analyses key issues affecting the three armed forces and other issues related to the defence sector.
## Overview Of Finances
In 2020-21, the Ministry of Defence has been allocated Rs 4,71,378 crore. This includes expenditure for salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance and research and development organisations. The allocation to the Ministry of Defence is the highest allocation among all ministries of the central government. The expenditure on defence constitutes
15.5% of the central government's budget and 2.1%
of India's estimated GDP for 2020-21.
Defence budget has decreased as a proportion of GDP over the years
Over the last 10 years (2010-11 to 2020-21), the budget of the Ministry of Defence has grown at an annual average rate of 9%. The year-wise budget of the Ministry is shown below in Figure 1.
Sources: Union Budget Documents 2010-2020; PRS. Note: Figures for 2020-21 are Budget Estimates and for 2019-20 are Revised Estimates.
However, over the last 10 years, defence expenditure as a proportion of central government expenditure and GDP has decreased. In 2010-11, defence expenditure was 2.5% of GDP and 16.3% of central government expenditure, which has decreased to 2.1% of GDP and 15.5% of government expenditure, respectively, in 2020-21. The Standing Committee on Defence (2018) had recommended that the Ministry of Defence should be allocated a fixed budget of about 3% of GDP to ensure adequate preparedness of the armed forces.1
Sources: Union Budget 2010-20, Central Statistics Office; PRS. Note: Figures for 2020-21 are Budget Estimates and for 2019-20
are Revised Estimates.
India was the fourth-largest defence spender in the world in 2018
According to the Stockholm International Peace Research Institute (SIPRI), India was the fourthlargest defence spender in absolute terms in 2018 (after USA, China and Saudi Arabia).2
Figure 3 compares India's defence expenditure with the seven largest spenders in absolute terms and as a percentage of GDP. Countries such as USA and Saudi Arabia spent higher than India on defence, both in absolute terms as well as percentage of GDP. China spent lower in terms of percentage of GDP, but its absolute expenditure on defence was 3.8 times that of India.
Sources: "SIRPI Military Expenditure Database", Stockholm International Peace Research Institute, 2018; PRS.
## Growth Of 5% Over Last Year'S Budget
The budget of Ministry of Defence is estimated to grow by 5% in 2020-21 over revised estimates of 2019-20. The increase is highest for defence pensions, which is expected to grow at 13.6%. Allocations on salaries have increased by 5.6% and allocation for the capital outlay component of the budget has increased by 1.4% over the revised estimates of 2019-20. Capital outlay includes expenditure on construction work, machinery, and equipment such as tanks, naval vessels, and aircrafts.
Major Head
Actual 18-19
Revised 19-20
Budgeted 20-20
% change (RE to BE)
Salaries
1,29,836
1,34,810
1,42,292
5.6%
Capital Outlay
89,783
1,05,727
1,07,233
1.4%
Pensions
1,01,775
1,17,810
1,33,825
13.6%
Stores
43,637
44,353
42,856
-3.4%
Others
38,427
46,119
45,172
-2.1%
Total
4,03,457
4,48,820
4,71,378
5.0%
Note: Salaries, pensions and capital outlay are of the three services. Salaries include salary for civilians, auxiliary forces, Rashtriya Rifles, Jammu and Kashmir Light Infantry and Coast Guard. Pensions include rewards. Capital outlay includes capital expenses on border roads and coast guard. Stores includes ammunition, repairs and spares. Others include administration expenses, expense on research and development and housing. RE
The Standing Committee (2019) had noted that the actual increase at the stage of revised estimates 2018-19 over actuals of 2017-18 was only 0.1% after adjusting inflation rate of 3.4% for the year.3 The Committee recommended that budgetary allocations for the Ministry should be appropriately increased to factor in inflation.
Actual expenditure has been higher than the budgeted expenditure over the last few years Between 2009-10 and 2019-20, the actual expenditure was higher than the budgeted allocation for six years, which implies overspending by the Ministry of Defence for a few years. This was mostly due to overspending on defence pensions. In contrast, the actual expenditure was lower than the budgeted allocation for four years. Figure 4 below shows the actual and budgeted expenditure for the period between 2009-10 to 2019-20, and the percentage of over/underspending across these years.
Sources: Union Budget 2009-2020; PRS. Note: BE= Budget Estimates.
Changing composition of defence budget
For 2020-21, expenditure on salaries form the largest portion of the defence budget (Rs 1,42,292 crore or 30% of the defence budget). This is followed by pensions (Rs 1,33,825 crore or 28% of defence budget) and expenditure on capital outlay (Rs
1,07,233 crore or 23% of defence budget). The remaining allocation is towards stores (maintenance of equipment) and other items such as border roads, and administrative expenses. Salaries and pensions together comprise 58.6% of the defence budget.
Over the last few years (2015-2020), there has been a shift in the composition of expenditure of the Ministry. For 2015-16, the expenditure on capital outlay and pensions was 26% and 21% of the defence budget, respectively. In contrast, in 2020-
21, the expenditure on capital outlay has decreased to 23%, and the expenditure on pension has increased to 28% of the defence budget. This is illustrated in Figure 6 below. Salaries of civilian employees of the armed forces have also been increasing. The expenditure on salaries of civilians for the three armed forces between 2010-20 is shown in Figure 7. This has increased at an annual average rate of 9% for the three forces during this time period. As of March 2016, the Ministry of Defence employed around four lakh civilian employees.4
Note: Figures for 2019-20 are Revised Estimates, and for 2020- 21 are Budget Estimates.
Proportion of expenditure on pensions increasing over the years Defence pensions provides for pensionary charges for retired Defence personnel of the three services
(including civilian employees) and also employees of Ordnance Factories. It covers payment of service pension, gratuity, family pension, disability pension, commuted value of pension and leave encashment. Expenditure on defence pensions have grown at an average annual rate of 14% in the last 10 years. This is higher than the average annual growth rate of the defence budget (9%). Figure 8 shows the expenditure on defence pensions between 2010-11 to 2020-21 and the pension budget as a percentage of the defence budget.
Sources: Union Budget 2010-20; PRS. Note: Figures for 2019-20 are Revised Estimates, and for 2020-
The Standing Committee (December 2019) noted that while the budget in defence services estimates
(defence budget excluding pensions and administrative expenses) has doubled in the past decade, pension has increased thrice in amount.3 It noted that the defence pension liabilities will continue to increase exponentially every year due to increase in number of retirees, amount of dearness relief, gratuity, and other retirement benefits. The Committee observed that this increasing pension bill is a cause of concern. As of April 2016, there were around 25 lakh defence pensioners.5 The Standing Committee on Defence (January 2019) noted that the percentage of funds for pensions is bound to rise since approximately 60,000 personnel retire every year.6 The Committee noted that this reduces the funds available for modernisation of the armed forces. It stated that the government could reduce the pension bill by introducing some other pension scheme or assured jobs on early retirement.
In November 2015, a decision was taken to implement One Rank One Pension (OROP) for armed forces personnel. This implies that a uniform pension will be paid for defence personnel retiring at the same rank, irrespective of their date of retirement. It aims at bridging the gap between the rates of pension of current and past pensioners at periodic intervals. the implementation of OROP. The scheme had a total of 65,87,221 beneficiaries till May 2018.3
Table 2: Implementation of OROP: Amount disbursed (in Rs crore)
Year
Amount disbursed (Rs crore)
2015-16
2,862
2016-17
5,371
2017-18
2,563
Total
10,795
Sources: One Rank One Pension, Starred Question No. 68, June 26, 2019, Ministry of Defence, Lok Sabha; PRS.
Decreasing proportion of budget spent on capital outlay for armed forces In 2020-21, total capital expenditure on the three forces has been budgeted at Rs 1,07,233 crore, which accounts for 23% of the budget of the Ministry. Capital outlay includes expenditure on purchasing defence equipment, weaponry, aircrafts, naval ships, land, and construction of roads and bridges in border areas. Over the last 10 years, capital outlay as a percentage of total defence budget, has declined. The percentage was highest during 2011 at 30% of the total defence budget. Figure 9 shows the expenditure on capital outlay as percentage of defence expenditure over the last 10 years.
Sources: Union Budgets 2011-2020; PRS. Note: Figures for 2019-20 are Revised Estimates and 2020-21 are Budget Estimates.
Note that capital acquisition of the armed forces consists of two components: (i) committed liabilities, and (ii) new schemes. Committed liabilities are payments anticipated during a financial year in respect of contracts concluded in previous years (as acquisition is a complicated process involving long gestation periods). New schemes include new projects which are at various stages of approval and are likely to be implemented in future. The Standing Committee on Defence (2019) analysed the allocation for modernisation of armed forces against the committed liabilities for the period between 2016-2019.7 It observed that the budget allocation for modernisation which should cover both committed liabilities and new schemes did not cover committed liabilities itself. The Committee noted that inadequate allocation for committed liabilities could lead to default on contractual obligations. It recommended that the promised allocations should be disbursed for committed liabilities.
budget (2016-17 to 2019-20) (in Rs crore)
| Shortfall | Year | Committed |
|---------------|----------|--------------|
| liabilities | | |
| Budget | | |
| allocation | (in %) | |
| 2016-17 | 73,553 | 62,619 |
| 2017-18 | 91,382 | 68,965 |
| 2018-19 | 1,10,044 | 73,883 |
| 2019-20 | 1,13,667 | 80,959 |
Sources: 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019; PRS.
Given the long-term nature of defence acquisition, the Standing Committee on Defence (2017) had recommended creation of a Non-Lapsable Capital Fund Account for defence modernisation.8
According to the Committee, this would ensure that money allocated for a particular item is spent on the specific item only. However, the Ministry of Finance has objected to the creation of such a fund on various grounds including that balances in the non-lapsable fund would not be available to the Ministry of Defence automatically, as their use would require parliamentary sanction.9
Analysis of the Forces
This section analyses the budget of each of the three armed forces, as well as issues related to their operational preparedness and modernisation. In 2020-21, the total allocation to the three forces (including pensions) is Rs 4,45,483 crore (94% of the total defence budget). The rest of the allocation is towards research and development and defence services ordnance factories. Nearly 63% of the defence budget is allocated for the Army. 18% of the budget is allocated for the Air Force, and 13% for the Navy. Table 4 details the defence budget allocation amongst the three forces, and towards the other and research and development.
Major Head
RE
19-20
BE
20-21
% change (RE to BE)
% of BE 20-21
Army
2,77,093
2,97,035
7.2%
63.0%
Navy
60,882
61,890
1.7%
13.1%
Air Force
86,812
86,558
-0.3%
18.4%
Others
24,033
25,896
7.8%
5.5%
Total
4,48,820
4,71,378
5.0%
Note: The above includes allocation for defence pensions and expense on Border Roads Organisation and Coast Guard Organisation. RE is revised estimate and BE is budget estimate. Sources: Expenditure Budget, Union Budget 2020-21; PRS.
Actual expenditure has been less than the projected amount by the defence forces The expenditure on defence by the three armed forces has been significantly lower than the amount projected by the three services. For instance, in 2016-17, while the forces projected a required expenditure of Rs 2,69,243 crore, the actual expenditure during the year was Rs 2,35,769 crore (a shortfall of 12%). Figure 10 shows the difference (shortfall) between the amounts projected by the three forces and the actual expenditure between 2014-15 and 2019-20. Note that there has been a consistent shortfall ranging from 10%-30%. The average shortfall was 22% during these years.
Note: Expenditure for 2019-20 is budget estimate and expenditure for 2018-19 is based on the revised estimate. Sources: 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019; PRS
## Army
The Army is the largest of the three forces, both in terms of budget as well as number of personnel. An amount of Rs 2,97,035 crore has been allocated for the Army in 2020-21. This includes Rs 1,13,257
crore for pensions (38% of army's expenditure) and Rs 1,11,294 for salaries. The table below provides the composition of the Army's budget for 2020-21.
Head
Amount allocated
% of service budget
Pensions
1,13,257
38.1%
Salaries
1,11,294
37.5%
Modernisation 26,069
8.8%
Maintenance
18,328
6.2%
Others
28,088
9.5%
Total
2,97,035
Sources: Union Budget 2020-21; PRS. Note: Salaries include salary for civilians, auxiliary forces, Rashtriya Rifles, Jammu and Kashmir Light Infantry. Modernisation funds for the Army is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Rolling Stock, and (v) Rashtriya Rifles.
Nearly 76% of the Army's budget (Rs 2,24,551
crore) has been allocated for salaries and pensions of personnel. Note that as of July 2017, the Army has a sanctioned strength of 12.6 lakh personnel.10 Significant expenditure on salaries and pensions, leaves only 9% of the Army's budget (Rs 26,069
crore) for modernisation. Modernisation involves acquisition of state of the art technologies and weapons systems to upgrade and augment defence capabilities of the forces. Figure 11 shows the expenditure on modernisation of the Army over the last 10 years. Funds for modernisation of the Army have grown at an annual average rate of 8% between 2010-11 and 2020-21.
Sources: Union Budgets 2010-20; PRS. Notes: Figures for 2019-20 are Revised Estimates and for 2020- 21 are Budget Estimates.
The Standing Committee on Defence (2018) has noted that a modern armed forces should have onethird of its equipment in the vintage category, onethird in the current category, and one-third in the state-of-the-art category.10 However, the current position of the Indian Army is that 68% of its equipment is in the vintage category, 24% in the current category, and only 8% in the state-of-the-art category. Further, the Committee noted that the Indian Army has a significant shortage of weapons and ammunition. According to the Committee, these shortages have persisted since adequate attention was lacking both in terms of policy and budget for modernisation. The Committee stated that such a situation does not augur well in the context of a two-front war.10
## Navy
The Navy has been allocated Rs 61,890 crore (including pensions) in 2020-21. Modernisation comprises 40% (Rs 24,598 crore) of the budget of the Navy. Table 6 below provides the composition of the Navy's budget for 2020-21.
Head
Amount allocated
% of service budget
Modernisation
24,598
40%
Salaries
13,059
21%
Pensions
7,234
12%
Maintenance
6,960
11%
Others
10,039
16%
Total
61,890
Sources: Union Budget 2020-21; PRS. Note: Salaries include salary for civilians and coast guard. Modernisation funds for the Navy is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, (iii) Other Equipment, (iv) Joint Staff, (v) Naval Fleet, and (viii) Naval Dockyards and Projects.
Note that the percentage of capital outlay for the Navy to the total defence budget has declined from 6.8% in 2015-16 to 5.6% in 2020-21. The Standing Committee on Defence (2018) has stated that this could lead to a delay in induction of critical capabilities and resultant cost-overruns.10 The Committee also observed that the number of ships and submarines was 138 and naval aircrafts was 235 in 2017, which decreased to 136 and 219 respectively in 2018.
Sources: Union Budgets 2010-20; PRS. Notes: Figures for 2019-20 are Revised Estimates and for 2020- 21 are Budget Estimates.
The Committee also observed delays in various projects of the Indian Navy.10 For example, Project 75 (which involved construction of six Scorpene Class submarines), had an initial delivery date of all submarines by December 2017. However, the likely date of delivery of all submarines is February 2022. Since acquisition of new ships and submarines involves a lengthy procurement process, accident prevention is an important aspect of the organisational set up of the Navy.11 In an audit report of 2017, the CAG observed that between 2007-08 and 2015-16, 38 naval accidents took place, which claimed the lives of 33 sailors.11 Further, all naval accidents are to be investigated by a Board of Inquiry. The CAG found that only 21% of the total recommendations made by these Boards were implemented. It recommended that a mechanism should be put in place for implementing these recommendations in a time-bound manner.
## Air Force
The Indian Air Force (IAF) has been allocated Rs 86,558 crore for the year 2020-21 (including pensions for the retired personnel). Rs 39,031 crore has been allotted for modernisation of the IAF. Table 7 shows the composition of the budget of the service for the year.
## (2020-21) (In Rs Crore)
Head
Amount allocated
% of service budget
Modernisation
39,031
45%
Salaries
17,939
21%
Pensions
13,313
15%
Maintenance
9,110
11%
Others
7,165
8%
Total
86,558
Source: Union Budget 2020-21; PRS. Note: Note: Salaries include salary for civilians. Modernisation funds for the Air Force is calculated from the following heads of the capital outlay: (i) Aircraft and Aeroengine, (ii) Heavy and Medium Vehicles, and (iii) Other Equipment.
Modernisation comprises 45% (Rs 39,031 crore) of the total budget of the IAF. Note that this is a 6% decrease from the revised estimate (Rs 41,800 crore) for 2019-20 for modernisation of IAF. Figure 13 below shows the expenditure on modernisation of the IAF over the last ten years. Funds for modernisation have grown at an annual average rate of 6% between 2010-11 and 2020-21.
Sources: Union Budgets 2010-20; PRS. Notes: Figures for 2019-20 are Revised Estimates and for 2020- 21 are Budget Estimates.
The CAG has raised issues in relation to the capital acquisition process of the IAF.12 In its report (2019), the CAG examined 11 contracts of capital acquisition signed between 2012-13 and 2017-18, with a total value of approximately Rs 95,000 crore. It found that the current acquisition system was unlikely to support the operational preparedness of the IAF and recommended that the Ministry of Defence undertake structural reforms of the entire acquisition process.12 One of the recommendations of the CAG related to the planning and tendering process. The acquisition of air assets starts with the formulation of user requirements known as the Air Staff Qualitative Requirements (ASQR). The CAG had recommended in 2007 that the ASQR should be stated in terms of functional parameters, which are measurable. However, it noted that instead of using functional parameters, the IAF made the ASQR exhaustive and included technical details. In this context, the CAG repeated its earlier recommendation that ASQR should be stated in terms of functional parameters. Further, it recommended that technical experts with knowledge of the systems being considered could be involved in the acquisition process.12 The Estimates Committee (2018) has noted that there should be 70% serviceability of aircrafts since aircrafts have to undergo standard maintenance checks.13 However, as of November 2015, the serviceability of aircrafts was 60%.
## Chief Of Defence Staff
was first recommended by the report of the Group of Ministers on 'Reforming the National Security System' (2001) to provide single-point military advice to the government. The CDS will be the permanent chairman of the Chiefs of Staff Committee. Further, the CDS will also administer the three services and act as a military advisor to the Nuclear Command Authority. Further, the cabinet approved creation of the Department of Military Affairs under the Ministry of Defence. The Department
## Will Deal With Matters Related To Defence Procurement, Training And Staffing For The Services, And Promoting Use Of Indigenous Equipment. This Department Will Be Headed By The Cds. Issues In Defence Procurement
Defence procurement refers to the acquisition of defence equipment, systems and platforms which is undertaken by the Ministry of Defence, and the three armed forces. The Ministry released the Defence Procurement Procedure (DPP), 2016 in March 2016 which lays down detailed guidelines regulating defence procurement in India.14 Procurement of defence hardware is a long process, involving large number of stakeholders. Coordination issues between these stakeholders sometimes results in delays.13 For example, in the case of procurement of equipment for the air force, the CAG found that it took three to five years to just sign the contract, and another three to five years to complete the delivery.12 The defence procurement executive is currently in the Ministry of Defence.15 An Expert Committee on Defence Procurement (2015) observed that a procurement organisation needs to have specialised knowledge of various fields including technology, commercial negotiations, cost estimations, and financial structures.15 Therefore, it recommended the creation of a separate defence procurement executive, with specialist wings and personnel, outside the formal structure of the Ministry of Defence. This executive would spearhead the procurement process, with the Ministry of Defence and Service Headquarters. Note that countries such as France and the United Kingdom have independent agencies responsible for defence procurement.15 Note that the government has setup a Committee to review the DPP 2016 and the Defence Procurement Manual 2009 to remove procedural bottlenecks, simplify procedures, hasten defence acquisition, and ensure greater participation from the industry.16
## High Dependence On Imports
According to the Stockholm International Peace Research Institute, India was the fourth-largest importer of defence goods and services in 2018.2 The Estimates Committee (2018) had stated that dependence on foreign suppliers for military hardware not only results in huge expenditure on imports, but makes national security vulnerable as suppliers may not provide weapons during emergency situations.13 Table 8 notes the total procurement from foreign and Indian vendors during 2014-15 to 2018-19.
Indian vendors (2014-15 to 2018-19) (Rs crore)
| Year | Total | % |
|----------|----------|--------|
| procurem | | |
| Foreign | | |
| vendors | | |
| Indian | | |
| vendors | | |
| ent | | |
| Foreign | | |
| vendors | | |
| 39.4% | 2014 | |
| -15 | 65,860 | 25,981 |
| 37.2% | 2015 | |
| -16 | 62,342 | 23,192 |
| 39.4% | 2016 | |
| -17 | 69,150 | 27,278 |
| 39.9% | 2017 | |
| -18 | 72,732 | 29,035 |
| 48.7% | 2018 | |
| -19 | 75,921 | 36,957 |
Sources: 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019; PRS.
An Expert Committee (Chair: Mr. Dhirendra Singh) was set up to suggest amendments to the Defence Procurement Procedure, to facilitate the 'Make in India' scheme in the defence sector.15 The Expert Committee recommended three models for defence procurement: (i) strategic partnership model, for projects that are of strategic importance (such as aircrafts or submarines), (ii) development partnership model, where quality is critical and the vendor base is narrow, and (iii) competitive bidding process, where the vendor base is large and competition is feasible. Note that the DPP 2016, has a chapter on implementation of the Strategic Partnership Model.14 Further, the Draft Defence Production Policy, 2018 was released in April 2018.17 The draft policy aims to reduce India's current dependence on imports, and achieve self-reliance in development and manufacture of 13 categories of weapon systems, including fighter aircraft, warships, and missile systems by 2025. In order to further self-reliance in the defence sector, the government has allowed 100% FDI in the defence sector, with 49% under automatic approval.18 However, the Estimates Committee (2018) has observed that the indigenisation level in the defence sector is increasing at a very slow rate. It further stated that nothing concrete has been done for the implementation of the strategic partnership model, which envisaged a key role for private players in building platforms such as submarines and fighter jets in India.13 The Committee also noted the high dependence on external content by Defence Public Sector Undertakings (DPSUs). For example, the import content for platforms manufactured by Hindustan Aeronautics Limited (in terms of value of the platform), ranged between 40% to 60%.13
## Border Roads Organisation
An amount of Rs 3,050 crore was allocated in 2020- 21 for works carried out by the Border Roads Development Board (BRDB). This is 3% lower than the revised estimate for 2019-20 (Rs 3,141 crore). The BRDB was created in 1960 to ensure coordination of road construction projects in north and northeast states, for enhancing defence preparedness. The Border Roads Organisation (BRO) is the executive arm of BRDB.19 The Standing Committee on Defence (2019) observed that since 2007-08, the targets set for various construction works by BRO could not be achieved. However, despite the failure to achieve these targets, higher targets were set in subsequent years which led to further underperformance. The failure to achieve targets was attributed to various issues faced by BRO such as difficult terrain, limited working period, and lack of raw material.19 Further, the availability of construction equipment with the BRO was less than the authorised numbers in 2016-17.19 Equipment such as stone crushers and tippers were 40% and 50% less than the authorised numbers, respectively. The Standing Committee also noted that BRO was using indigenous equipment as they operate in remote locations where use of sophisticated equipment is not feasible. It recommended that use of sophisticated construction equipment may be explored to ensure quicker completion of projects.19
## Research And Development
For 2020-21, the expenditure on defence research and development is Rs 19,327 crore, which constitutes 4% of the total defence budget (6% of defence budget excluding pensions). The allocation is an increase of 9% over the revised estimates of 2019-20. However, the Standing Committee (2019) noted that India's expenditure on defence research and development is much lower compared to countries such as USA and China which spend 12% and 20% of their defence budget on research and development, respectively.20 Defence research is primarily carried out by the Defence Research and Development Organisation (DRDO). DRDO is engaged in developing defence technologies covering various areas including aeronautics, combat vehicles, and missiles. The Estimates Committee (2018) in a report on defence production analysed the functioning of DRDO.13 It stated that an examination of 14 mission mode projects, carried out by DRDO laboratories revealed that all projects failed to meet their timelines and the date of completion was extended many times. These projects included creation of a secure communication system between airborne platforms and ground stations, and an electronic warfare suit for the modified Mig-29 fighters.
##
1 "40th Report: Demands for Grants (2018-19) General Defence Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex-Servicemen, Defence Pensions, Ex-
Servicemen Contributory Health Scheme", Standing Committee on Defence, Lok Sabha, March 12, 2018, http://164.100.47.193/lsscommittee/Defence/16_Defence_40.pdf.
2 "SIPRI Military Expenditure Database", Stockholm International Peace Research Institute, https://www.sipri.org/sites/default/files/Data%20for%20all%20countries%20from%201988%E2%80%932018%20as%20a%20share%20of %20GDP%20%28pdf%29.pdf. 3 "1st Report: Demands for Grants (2019-20) General Defence Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex-Servicemen, Defence Pensions, Ex- Servicemen Contributory Health Scheme", Standing Committee on Defence, December 2019, http://164.100.47.193/lsscommittee/Defence/17_Defence_1.pdf. 4 Annual Report on Pay and Allowances of Central Government Civilian Employees 2016-17, Ministry of Finance, December 2017, https://doe.gov.in/sites/default/files/PayAllowance2016-17%28English%29.pdf. 5 Unstarred Question No. 287, Lok Sabha, Ministry of Defence, February 3, 2017, http://loksabhadocs.nic.in/loksabhaquestions/annex/11/AU286.pdf. 6 "46th Report: Demands for Grants (2018-19) General Defence Budget, Border Roads Organisation, Indian Coast Guard, Military Engineer Services, Directorate General Defence Estates, Defence Public Sector Undertakings, Welfare of Ex-Servicemen, Defence Pensions, Ex- Servicemen Contributory Health Scheme", Standing Committee on Defence, January 2019, http://164.100.47.193/lsscommittee/Defence/16_Defence_46.pdf. 7 3rd Report, Capital Outlay on Defence Services, Procurement Policy and Defence Planning, Standing Committee on Defence, December 2019, http://164.100.47.193/lsscommittee/Defence/17_Defence_3.pdf. 8 "32nd Report: Creation of Non-Lapsable Capital Fund Account, Instead of the Present System", Standing Committee on Defence, Lok Sabha, August 4, 2017, http://164.100.47.193/lsscommittee/Defence/16_Defence_32.pdf. 9 "48th Report: Action Taken by the Government on the Observations/Recommendations contained in the Fortieth Report (16th Lok Sabha) on 'Demands for Grants of the year 2018-19 on Capital Outlay on Defence Services, Procurement Policy and Defence Planning", Standing Committee on Defence, Lok Sabha, January 7, 2019, http://164.100.47.193/lsscommittee/Defence/16_Defence_48.pdf. 10 "41st Report: Demands for Grants (2018-19) Army, Navy, Air Force", Standing Committee on Defence, March 12, 2018, http://164.100.47.193/lsscommittee/Defence/16_Defence_41.pdf. 11 "Report No. 20 of 2017: Union Government (Defence Services) Navy and Coast Guard", Comptroller and Auditor General of India, https://cag.gov.in/sites/default/files/audit_report_files/Report_No.20_of_2017_Compliance_audit_Union_Government_Defence_Services_ Navy_and_Coast_Guard.pdf. Force", Comptroller and Auditor General, February 13, 2019.
## Demand For Grants: Home Affairs
The Ministry of Home Affairs is responsible for matters concerning internal security, centre-state relations, central armed police forces, border management, and disaster management. In addition, the Ministry makes certain grants to the Union Territories. This note analyses the expenditure trends and budget proposals for the Ministry of Home Affairs for 2020-21. Further, it presents some issues in the sector.
## Overview Of Finances1
The Ministry of Home Affairs has been allocated Rs 1,67,250 crore in Union Budget 2020-21. This is an increase of 20% over the revised estimates in 2019- 20, which was Rs 1,39,108 crore. Further, this is 41% higher than the budget allocation of last year, which was Rs 1,19,025 crore. A significant part of the increase is on account of funds to Jammu and Kashmir and Ladakh being allocated through Ministry of Home Affairs in 2020-21, following the reorganisation of Jammu and Kashmir into two Union Territories. The budget for the Ministry of Home Affairs constitutes 5% of the total expenditure budget of the union government in 2020-21. Figure 1 below shows the expenditure of the Ministry of Home Affairs between 2010 to 2020. The average annual growth rate in the expenditure over the last ten years has been 15%.
Sources: Union Budget 2010-20; PRS. Note: Figures for 2019-20 are Revised Estimates and for 2020-21
are Budget Estimates. Figures for all other years are actuals.
Figure 2 shows the actuals and budgeted expenditure over ten years, and the percentage of over/under utilisation of funds. Since 2015-16, the expenditure of the Ministry of Home Affairs has been higher than the budgeted expenditure every year.
Sources: Union Budget 2010-20; PRS. Note: 1. Figures for 2019-20 are Revised Estimates. 2. BE - Budget Estimates.
Of the total budget estimates for 2020-21, (i) 63% of the expenditure is on police (which includes the central armed police forces and Delhi Police); (ii) 32% is on grants made to Union Territories (UTs), and (iii) 5% is on miscellaneous items such as disaster management, rehabilitation of refugees and migrants, census and Cabinet. Table 1 shows the allocations to the heads under the Ministry of Home Affairs in the Union Budget over the last three years.
2018-19
Actuals
2019-20
Revised
2020-21
Budget
% Change
(20-21 BE/
19-20 RE)
Police
91,693
1,03,202
1,05,244
2%
UTs
14,073
15,026
52,864
252%
Others
6,423
20,880
9,142
-56%
Total
1,12,189
1,39,108
1,67,250
20%
Sources: Union Budget 2020-21; PRS. Note: BE - Budget Estimates, RE - Revised Estimates.
Police: For 2020-21, Rs 1,05,244 crore has been allocated toward police. Budget estimate for police has increased by 2% from revised estimate for 2019-
20, (Rs 1,03,202 crore). Grants and loans to Union Territories: 32% of the Ministry's budget, i.e. Rs 52,864 crore, has been allocated for grants and loans for the administration of Union Territories. This includes five Union Territories without legislatures (Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli and Daman and Diu, Lakshadweep, Ladakh), and three Union Territories with legislatures (Delhi, Puducherry, and Jammu and Kashmir). The 2020-21 budget estimates for grants and loans to Union Territories have increased by 252% (Rs 52,864 crore) from revised estimates for 2019-20, which was Rs 15,026 crore. The increase in allocation can be mostly attributed to the creation of two new Union Territories: Ladakh (Rs 5,958 crore), and Jammu and Kashmir (Rs 30,757 crore).
## Jammu And Kashmir Reorganisation Act, 20192
The Jammu and Kashmir Reorganisation Act, 2019 was
passed by Parliament on August 6, 2019. The Act provides
for the reorganisation of the state of Jammu and Kashmir into
the Union Territory of Jammu and Kashmir and Union Territory
of Ladakh. The reorganisation came into effect on October
31, 2019. The Union Territory of Ladakh comprises of Kargil
and Leh districts, and the Union Territory of Jammu and
Kashmir comprises of the remaining territories of the existing
state of Jammu and Kashmir.
The Act states that the President will make a reference to the
15th Finance Commission to include the Union Territory of
Jammu and Kashmir in the divisible pool from which it may
receive a share of the centre's taxes. Note that in its report
the 15th Finance Commission has recommended that the
share of states in the centre's taxes be decreased from 42%
to 41% for 2020-21. The 1% decrease is to provide for the
newly formed Union Territories of Jammu and Kashmir, and
Ladakh from the resources of the central government (in this
case the Ministry of Home Affairs).3
Other items: Other miscellaneous expenditure items of the Ministry of Home Affairs have been allocated Rs 9,142 crore. This includes subjects such as disaster management, rehabilitation of refugees and migrants, and administrative matters (relating to the census, the secretariat and Cabinet). Expenditure on these items constitutes 5% of the Ministry's total budget for 2020-21. Further, the 2020-21 budget estimates for miscellaneous expenditures have decreased by 56% from revised estimates for 2019-20, which was Rs 20,880 crore. This can be attributed to the fact that Rs 14,563 crore was provided as grants to Jammu and Kashmir and Ladakh in lieu of Finance Commission grants in 2019-20 revised estimates (Rs 14 crore in 2020-21 budget estimates).
Under the miscellaneous items of expenditure, there has been an increase in the allocation for census and statistics. For 2020-21, the budgeted estimate for this head is Rs 4,568 crore compared to the revised estimates for 2019-20 (Rs 1,121 crore). This increase can be attributed to the proposal for conducting the Census of India 2021 and updation of the National Population Register.4
## Analysis Of Key Areas Of Expenditure Police
In 2020-21, Rs 1,05,244 crore has been budgeted for police expenditure. This includes allocations to police organisations that are under the control of the central government, such as:
The Central Armed Police Forces which are primarily responsible for border protection and internal security.
The Delhi Police which is responsible for maintenance of law and order and prevention of crime in the national capital territory
The Intelligence Bureau which is the nodal
agency for collection of domestic intelligence.
Further, the Ministry of Home Affairs provides financial assistance to states for modernisation of state police. In addition to this, funds are allocated for building projects as well as creation of infrastructure in border areas.
2018-
2019-20
2020-21
19
RE
BE
Actual
% Change
(20-21 BE/
19-20 RE)
67,670
76,169
77,887
2%
Central Armed Police Forces Delhi Police*
7,333
8,084
8,242
2%
Police Infrastructure
5,085
4,479
4,135
-8%
Modernisation of police
3,260
4,155
3,162
-24%
Intelligence Bureau
2,109
2,446
2,575
5%
Border Infrastructure
2,030
2,128
1,997
-6%
Others**
4,206
5,741
7,247
26%
Total
91,693
1,03,202
1,05,244
2%
Sources: Union Budget 2020-21; PRS. Notes: *Includes expenditure on traffic and communication network, upgradation of infrastructure and training, and induction of technology. ** Other items include heads such as schemes for safety of women, education and research, criminology and forensic science, Land Port Authority of India, and India Reserve Battalion. BE - Budget Estimates, RE - Revised Estimates.
The total budget for police for 2020-21 has increased by 2% over the revised estimates of 2019-20. Figure 3 below shows the trend in police expenditure over the last ten years (2010-20). Expenditure on police has increased at an average annual rate of 12%.
## (2010-20)
Sources: Union Budgets 2010-20; PRS. Note: Revised Estimates used for 2019-20 and Budget Estimates for 2020-21. Actuals used for all other years.
Further, the actuals expenditure on police has been higher than budget estimates in six out of ten years. Figure 4 shows the difference between the budget estimates and actuals in percentage from 2010-20.
BE - Budget Estimates, RE - Revised Estimates.
## Central Armed Police Forces
The Ministry of Home Affairs is responsible for the Central Armed Police Forces composed of seven forces: (i) Central Reserve Police Force (CRPF) which assists in internal security and law and order, (ii) Central Industrial Security Force (CISF) which protects vital installations (like airports) and public sector undertakings, (iii) National Security Guards (NSG) which is a special counter-terrorism force, and (iv) four border guarding forces, Border Security Force (BSF), Indo-Tibetan Border Police (ITBP), Sashastra Seema Bal (SSB) and Assam Rifles (AR).
The CAPFs are estimated to receive a total allocation of Rs 77,887 crore in 2020-21. This accounts for 74% of the expenditure on police. The highest expenditure is towards the CRPF which received 34% (Rs 26,259 crore) of the total allocation. The second highest expenditure is towards the Border Security Force which has been allocated 27% of the budget, i.e. Rs 20,952 crore.
## Excessive Deployment And Training
The Estimates Committee noted in 2018 that there was heavy dependence of states on CAPFs, even for everyday law and order issues.5 The number of companies of CAPF deployed in states for over six months increased from 1,769 in 2017-18 to 1,873 in 2018-19.6 The Committee stated that this was likely to affect the counter- insurgency and border guarding operations, as well as curtail their time for training. It recommended that states must develop their own systems, and augment their police forces by providing them adequate training and equipment.5
All CAPFs have set up training institutes to meet their training requirements and imparting professional skills on specialised topics. The Estimates Committee (2018) stated that with the emergence of new security threats, there is an urgent need to upgrade the curriculum and infrastructure in training institutes.5 It recommended that the contents of training should be a mix of conventional matters as well as latest technologies such as IT and cyber security. Further, the Committee stated that while purchasing the latest equipment, training needs should be taken care of, and if required, should be included in the purchase agreement itself.5
## Modernisation Of Capfs
The Estimates Committee observed in 2018 that a significant proportion of funds allocated to the CAPFs were used for salaries (which comprised 74% of the total allocation during 2016).5 The Modernisation Plan-II was approved by the Cabinet Committee on Security for the period of 2012-17, with an allocation of Rs 11,009 crore. However, during 2013-16, the expenditure was Rs 198 crore.5 Figure 5 shows the distribution between revenue and capital expenditure for the seven CAPFs between 2009-10 and 2019-20. The average percentage spent on capital during this period was 2% of the total expenditure on CAPFs. Capital expenditure is allocation for procurement of machinery and equipment, and motor vehicles, whereas revenue expenditure is on items such as salaries, arms and ammunition, and clothing (note that the capital component does not include funds for construction).
Sources: Union Budget 2010-20; PRS. Note: Figures for 2019-20 are Revised Estimates and for 2020-21
are Budget Estimates. Figures for all other years are actuals.
The Estimates Committee (2018) also observed that the procurement process under the Modernisation Plan was cumbersome and time-consuming.5 It recommended that bottlenecks in procurement should be identified and corrective action taken. Further, it stated that the Ministry of Home Affairs and CAPFs should hold negotiations with ordinance factories and manufacturers in public or private sector to ensure uninterrupted supply of equipment.5
## Vacancies And Service Conditions
As of January 2019, 11% of sanctioned posts were vacant in the CAPFs.6 The table below shows the percentage of vacancies for seven CAPFs as of January 2019.
| Actual | % of |
|------------|----------|
| CAPFs | |
| Sanctioned | |
| Strength | Strength |
| AR | 66,408 |
| BSF | |
| 2,63,905 | |
| CISF | |
| 1,56,013 | |
| CRPF | |
| 3,24,093 | |
| ITBP | |
| 89,438 | 82,861 |
| NSG | |
| 10,844 | 10,358 |
| SSB | |
| 99,221 | 81,119 |
| Total | 2,65,911 |
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2019; PRS. Note: CRPF- Central Reserve Police Force; BSF- Border Security Force; CISF-Central Industrial Security Force; AR-Assam Rifles; ITBP-Indo Tibetan Border Police; SSB-Sashastra Seema Bal; NSG- National Security Guard.
The Standing Committee on Home Affairs (2018) has observed that there is lack of foresight, planning, and estimation of future vacancies.7 It recommended that the Ministry of Home Affairs could explore the possibility of proactively identifying vacancies and reporting the same to recruitment agencies. Further, there has been stagnation in promotion among personnel of the CAPFs. For example, in the ITBP, a constable gets promoted to head constable in 12-13 years, against the required period of five years.7
In the case of CISF, the same promotion takes 22 years.8 In this context, the Standing Committee recommended that cadre review of the CAPFs must be expedited to ensure that promotions take place in a timely manner.8
## Mobility In Border Areas
Mobility of border guarding forces has been identified as an issue affecting their operational efficiency.7 The Standing Committee on Home Affairs (2018) noted that there was a requirement of construction of 4,210 km of roads, in areas where the BSF is deployed (the Indo-Pakistan and Indo-Bangladesh border).7 Similarly, it noted personnel of the Assam Rifles are located in remote areas, and therefore require allweather roads to improve their working conditions.7 Table 4 shows the expenditure towards border infrastructure and management. This includes allocations for maintenance of border works, border check posts and out posts, and capital outlays for various items including barbed wire fencing, construction of roads, and Hi-tech surveillance on Indo-Bangladesh and Indo-Pakistan borders.
%
2020-
21
2018-19
Actuals
2019-20
Revised
Budget
Change
BE 20-
21/ RE
19-20
224
247
208
-16%
Maintenance and Border Check post Capital Outlay
1,806
1,881
1,788
-5%
Total
2,030
2,128
1,997
-6%
Sources: Union Budget 2020-21; PRS.
For 2020-21, Rs 1,997 crore has been budgeted for border infrastructure and management. This is a decrease of 6% from the 2019-20 revised estimates (Rs 2,128 crore). Figure 6 shows the expenditure on border infrastructure and management between 2010 and 2020. The expenditure has increased at an annual average growth rate of 4% during this period.
Sources: Union Budgets 2010-20; PRS. Note: Revised Estimates used for 2019-20 and Budget Estimates used for 2020-21. Figures for all other years are actuals.
The Border Roads Organisation (BRO) is responsible for construction of roads in border areas. The Standing Committee on Defence (2019) observed that since 2007-08, the targets set for various construction works by BRO had not been achieved.9 For example, while 4,189 meters of major bridges were planned in 2016-17, only 40% of this target was constructed (1,657 meters). However, despite the failure to achieve these targets, higher targets were set in subsequent years, which led to further underperformance. Issues relating to land acquisition have resulted in considerable delay in construction of border roads, bridges, and tunnels.9 These include delays in joint survey for land acquisition, non-disbursement of land acquisition payment, and demands for additional compensation. The Standing Committee on Defence (2019) observed that 593 land compensation cases were pending in various courts.9 Further, delays in obtaining forest clearances have also affected projects in border areas. According to the Standing Committee on Defence (2019), 29 cases for forest approvals were pending with the state governments.9 To resolve issues related to land acquisition and forest clearances, Empowered Committees (ECs) have been constituted for coordination between BRO and state governments.9 However, in states where large number of land acquisition cases were pending, such as Jammu and Kashmir, and Arunachal Pradesh, the ECs have met only once between 2015 and 2018.9
## Delhi Police
An amount of Rs 8,242 crore has been allocated to the Delhi Police in the 2020-21 budget. This is 2% higher than the revised estimates for 2019-20.
## Quality Of Investigation
In 2015 and 2016, 73% of cases reported to Delhi Police remained unsolved. In 2017, 65% cases remained unsolved.10 The number of solved and unsolved cases of the Delhi Police between 2015- 2018 is given below.
## By The Delhi Police (2015-2018)
Year
Cases reported
Cases solved
% of cases unsolved
2015
1,91,377
52,091
73%
2016
2,09,519
55,957
73%
2017
2,33,580
81,219
65%
2018 (up to July 15, 2018)
1,25,668
37,390
70%
Sources: Starred Question No. 227, Rajya Sabha, Ministry of Home Affairs, August 8, 2018; PRS.
The Standing Committee on Home Affairs in its report on the functioning of Delhi Police (2014), had recommended that investigation should be separated from law and order duties.11 Note that the Delhi Police has created specialised cells for economic offences, cyber-crimes and crimes against women.12 Further, the Committee observed that since investigation requires legal expertise, the training module of Delhi Police must include advanced courses on law and jurisprudence.11
## Vacancies
Similar to the Central Armed Police Forces, vacancies have been reported in the Delhi Police. As of January 2019, 11% of the total sanctioned posts (91,963) were vacant.13 The vacancies in Delhi Police between 2015-19 are given in Table 6.
| Year | Sanctioned |
|----------|---------------|
| strength | |
| Actual | |
| strength | vacancies |
| 2015 | |
| | |
| 82,242 | |
| | |
| 77,083 | |
| | |
| 6% | |
| | |
| 2016 | |
| | |
| 82,224 | 76,348 |
| | |
| 7% | |
| | |
| 2017 | |
| | |
| 84,417 | |
| | |
| 82,979 | |
| | |
| 2% | |
| | |
| 2018 | |
| | |
| 86,531 | |
| | |
| 74,712 | |
| | |
| 14% | |
| | |
| 2019 | |
| | |
| 91,963 | |
| | |
| 82,190 | |
| | |
| 11% | |
| | |
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2014-18; PRS.
The Standing Committee on Home Affairs (2014) stated that steps should be taken to assess the actual requirement of police strength to improve the policepopulation ratio.11 It recommended that the Delhi Police may take the assistance of the Bureau of Police Research and Development to improve the operational efficiency of the organisation.
## Intelligence Bureau
The Intelligence Bureau (IB) is responsible for collection of intelligence within India, and is the primary agency for counter-intelligence. An amount of Rs 2,575 crore has been allocated to the IB in 2020-21, which is 5% higher than the revised estimates of 2019-20 (Rs 2,446 crore). Note that in 2018-19, expenditure on the IB was Rs 2,109 crore.
## Multi Agency Centre
The government set up a Group of Ministers (GoM) in the year 2000, to comprehensively review the national security apparatus.14,15 The GoM recommended that the Ministry of Home Affairs should put in place arrangements for intelligence sharing, in which the IB would play the lead role, along with representatives of the state and central police forces.14 Based on these recommendations, the Multi Agency Centre was set up in the IB, for collating and sharing intelligence with all other security agencies.14,16 Further, Subsidiary Multi Agency Centres have been set up at the state-level to ensure better coordination between the different intelligence agencies.14 The Standing Committee on Home Affairs observed in 2017 that state agencies have made lower contribution in the overall inputs received by the Multi Agency Centre.14 It recommended that the Ministry should hold consultations with states to find out the reasons for this low level of contribution. Further, the Committee recommended that there should be a mechanism to perform validity checks on information obtained from other agencies, before it is shared by the Multi Agency Centre.14
## Modernisation Of Police Forces
For 2020-21, the central government has made allocations towards four items related to modernisation of police force. These are: (i) Modernisation of State Police Forces Scheme; (ii) the Crime and Criminal Tracking Network and Systems (CCTNS) scheme; (iii) Security related expenditure (SRE) scheme; and (iv) Special Infrastructure scheme (SIS) for Left Wing Areas. A total of Rs 3,162 crore has been allocated for modernisation of police forces in 2020-21, which is 24% lower than the revised estimates for 2019-20.
| 2018- | 2020- |
|------------------------------------------------|---------|
| 19 | 21 |
| 2019-20 | |
| Revised | |
| Actuals | Budget |
| % | |
| Change | |
| BE 20- | |
| 21/ RE | |
| 19-20 | |
| SRE and SIS | |
| for LWE areas | |
| 2,346 | 3,215 |
| 914 | 939 |
| Modernisation | |
| of State Police | |
| Forces and | |
| CCTNS | |
| Total | 3,260 |
| Sources: Union Budget 2020-21; PRS. | |
| BE - Budget Estimates, RE - Revised Estimates. | |
Figure 7 shows the expenditure on modernisation of police forces between 2010-20. The expenditure has increased at an average annual rate of 2.5% during this period.
## Shortage Of Infrastructure
Funds from the modernisation scheme are utilised for improving police infrastructure through construction of police stations, and provision of modern weaponry, surveillance, and communication equipment. Upgradation of training infrastructure, police housing, and computerisation are also important objectives under the scheme. The Comptroller and Auditor General (CAG) has observed lapses in the implementation of the modernisation scheme in various states.17 An audit of Karnataka for the period 2012-13 to 2016-17, found shortage of weapons ranging between 37% and 72% for various types of arms.17 The audit also found that, as of March 2017, all communication sets available with the Karnataka police were old and out of date.17 In the case of Maharashtra, an audit was carried out for the period 2011-12 to 2016-17. 18 The CAG found a shortage of 45% for modern weaponry in the state. Further, only 8% of the planned construction work under the scheme (including police stations), was completed between 2011-16.18 The Standing Committee on Home Affairs noted in 2017 that funds meant for mobility, communication, weapons, and equipment have been misused by states for procuring vehicles.19 This misuse was happening despite releasing funds after obtaining utilisation certificates from states. Note that as per the revised guidelines for the modernisation scheme, states cannot use more than 25% of funds for the acquisition of vehicles.20
## Disaster Management
The Ministry of Home Affairs is the nodal ministry for handling all disasters other than drought, which is handled by the Ministry of Agriculture.21 Disaster management includes capacity building, mitigation, and response to natural calamities and man-made disasters. Table 8 shows the allocation for various items related to disaster management.
2018-
2020-
19
21
2019-20
Revised
Actuals
Budget
% change BE 20-21 /RE 19- 20
874
983
1,019
4%
National Disaster Response Force
199
147
72
-51%
Disaster management infrastructure
303
283
296
5%
National Cyclone Risk Mitigation Project Other schemes
108
125
113
-9%
Total
1,484
1,539
1,500
-3%
Sources: Union Budget 2020-21; PRS. Note: BE - Budget Estimates, RE - Revised Estimates.
## National Cyclone Risk Mitigation Project
The National Cyclone Risk Mitigation Project (NCRMP) was launched by the Ministry of Home Affairs with the aim of minimising vulnerability in states and Union Territories that are prone to cyclone hazards. Key objectives of the project include: (i) improving early warning dissemination systems, and (ii) construction and maintenance of cyclone shelters. For 2020-21, a budgetary allocation of Rs 296 crore has been made to this project. This is a 5% increase from the revised estimates for 2019-20, which was Rs 283 crore. In its report on the impact of Cyclone Ockhi (2018), the Standing Committee on Home Affairs noted that forecasting the rapid intensification of cyclones (as in the case of cyclone Ockhi), is an area of concern. It stated that the rapid intensification of cyclones is no longer a rare phenomenon due to global warming, and recommended that the existing capacity for advanced cyclone warning needs to be bolstered.25
## National Disaster Response Force
The National Disaster Response Force is a specialised force that is responsible for disaster response and relief. For 2020-21, the budget estimate for the National Disaster Relief Force is Rs 1,019 crore, which is 4% higher than the revised estimates of 2019-20.
## Deployment Of Ndrf
The Standing Committee on Home Affairs (2018) observed that during Cyclone Ockhi, the deployment of the National Disaster Response Force was not optimal.25 It stated that seven battalions were prepositioned in Gujarat, where the impact of the cyclone was minimal, while four were pre-positioned in Kerala, where damage was on a larger scale. The Committee noted that there was a standard operating procedure for deployment of National Disaster Response Force during a disaster, according to which, states can requisition for forces. However, states may be unable to make optimal assessments of the requirements which could lead to competing demands for mobilisation of forces in disaster-stricken areas. The Committee therefore recommended that the National Disaster Management Authority make an independent assessment of the number of battalions required to be deployed. This would ensure rational assessment of needs and optimal prepositioning of National Disaster Response Force.25
## National Disaster Response Fund
The Disaster Management Act, 2005, mandates the creation of a National Disaster Response Fund and State Disaster Response Funds. Relief assistance is provided to states from the National Disaster Response Fund in case of severe natural calamities, where the State Disaster Response Fund is insufficient to cover the required expenditure.22 Allocations to the National Disaster Response Fund are made by the
3 Report for the year 2020-21, 15th Finance Commission, https://fincomindia.nic.in/ShowContent.aspx?uid1=3&uid2=0&uid 3=0&uid4=0 4 "Cabinet approves conduct of Census of India 2021 and updation of National Population Register", Press Information Bureau, Cabinet. December 24, 2019, https://pib.nic.in/PressReleseDetail.aspx?PRID=1597350. 5 "28th Report: Central Armed Police Forces and Internal Security Challenges- Evaluation and Response Mechanism", Committee on Estimates, Lok Sabha, March 16, 2018, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_28.pdf .
Ministry of Finance, though it is administratively controlled by the Ministry of Home Affairs.22 For the year 2020-21, a budgetary allocation of Rs 2,930 crore has been made to the fund, which is a 5% increase from the revised estimates of 2019-20 (Rs
2,790 crore).
The National Disaster Response Fund is financed through the National Calamity Contingency Duty (NCCD) imposed on specified goods under central excise and customs.23 The Standing Committee on Finance (2019) noted that with the introduction of GST, the scope of NCCD is shrinking.23 The revenue collected from NCCD has decreased significantly by Rs 3,190 crore between 2015-16 and 2018-19. The Committee stated that the GST Council and Ministry of Finance should consider augmenting this fund.
## Damage Assessment
In order to receive assistance from the NDRF, state governments must submit a memorandum indicating the damage and requirement of funds.24 On receipt of the memorandum, an Inter-Ministerial Central Team (IMCT) is constituted which will submit a report after an on-the-spot assessment of the damage. Thereafter, a High-Level Committee approves the amount of relief to be released from the NDRF. The Standing Committee on Home Affairs (2018) noted that there was significant difference between funds sought by state governments and amounts approved by the High-Level Committee.25 In most cases the shortfall was more than 70%, and in some cases more than 95%. According to the Committee, a reason for this shortfall could be that by the time the IMCT reaches the disaster-affected area, the signs of disaster are on the verge of diminishing. Therefore, it recommended that the IMCT should make a preliminary visit to the disaster affected areas, within one week of the disaster. Further, a joint preliminary damage assessment should be done with the state governments concerned.25
7 "214th Report: Working Conditions in Border Guarding Forces (Assam Rifles, Sashastra Seema Bal, Indo-Tibetan Border Police and Border Security Force)", Department-Related Parliamentary Standing Committee on Home Affairs, Rajya Sabha, December 12, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Re portFile/15/107/214_2018_12_15.pdf. 8 "215th Report: Working Conditions in Non-Border Guarding Central Armed Police Forces (Central Industrial Security Force, Central Reserve Police Force, and National Security Guard)", Department-Related Standing Committee on Home Affairs, Rajya Sabha, December 12, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/Re portFile/15/107/215_2018_12_15.pdf. 9 "50th Report: Provision of all-weather connectivity under Border Roads Organisation (BRO) and other agencies up to International borders as well as the strategic areas including approach roads- An appraisal", Standing Committee on Defence, Lok Sabha, February 11, 2019, http://164.100.47.193/lsscommittee/Defence/16_Defence_50.pdf.
Pursuance to Kargil Review Committee Report- A Special Reference to Management of Defence", Standing Committee on Defence, July 20, 2007, http://164.100.47.193/lsscommittee/Defence/14_Defence_22.pdf. 16 Starred Question No. 270, Rajya Sabha, Ministry of Home Affairs, July 22, 2009. 17 Audit Report (General and Social Sector) for the year ended March 2017 for Karnataka, Comptroller and Auditor General, https://cag.gov.in/sites/default/files/audit_report_files/Report_No_2_of_2018_- _General_and_Social_Sector_Government_of_Karnataka.pdf. 18 Audit Report (General and Social Sector) for the year ended March 2016 for Maharashtra, Comptroller and Auditor General, https://cag.gov.in/sites/default/files/audit_report_files/Report_No.4_of_2017_%E2%80%93_General_and_Social_Sector_Government_of_ Maharashtra.pdf. 19 "201st Report: Demands for Grants (2017-18) Ministry of Home Affairs", Department Related Standing Committee on Home Affairs, Rajya Sabha, March 15, 2017, http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Home%20Affairs/201.pdf. 20 "Guidelines for implementation of the new sub-scheme of Assistance to States for Modernisation of Police", Ministry of Home Affairs, December 13, 2017, https://mha.gov.in/sites/default/files/Guidelines14pages_19022018.pdf. 21 Report of the Fourteenth Finance Commission, Government of India, 2014, http://www.thehinducentre.com//multimedia/archive/02321/14th_Finance_Commi_2321247a.pdf. September 28, 2010, http://doe.gov.in/sites/default/files/Guidelines%20for%20National%20Disaster%20Response%20Fund%20%28NDRF%29.pdf.
## Annexure
| Major Head | |
|-------------------|----------|
| 2019-20 | |
| Budget | |
| 2019-20 | |
| Revised | |
| 2020-21 | |
| Budget | |
| Police | 98,202 |
| Miscellaneous* | 4,896 |
| UTs without | |
| legislature | |
| 12,385 | 12,388 |
| 2,713 | 2,638 |
| Grants & Loans to | |
| Jammu and | |
| Kashmir, Delhi & | |
| Puducherry | |
| Cabinet | 829 |
| Total | 1,19,025 |
Sources: Union Budget 2020-21; PRS. Note: *Includes expenditure on disaster management, social security, rehabilitation of refugees, migrants, census, civil defence, secretariat. BE - Budget Estimates, RE - Revised Estimates.
2012-13
2013-14
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
CRPF
9,983
11,124
12,747
14,327
16,804
21,974
25,647
26,259
BSF
9,095
10,294
11,687
12,996
14,909
18,652
20,388
20,952
CISF
3,798
4,301
4,955
5,662
6,563
9,115
9,990
10,180
ITBP
2,506
3,051
3,399
3,773
4,641
5,699
6,627
6,522
AR
2,901
3,276
3,450
3,848
4,724
5,694
5,780
6,062
SSB
2,179
2,719
3,148
3,418
4,045
5,420
6,533
6,600
NSG
500
498
527
569
697
1,007
1,091
1,190
Total
30,962
35,263
39,913
44,591
52,383
67,560
76,055
77,765
Sources: Union Budget 2014-20; PRS. Notes: Actuals used for all years except 2019-20 and 2020-21. Revised Estimates used for 2018-19 and Budgeted Estimates used for 2020-21; CRPF: Central Reserve Police Force; BSF: Border Security Force; CISF: Central Industrial Security Force; AR: Assam Rifles; ITBP: Indo Tibetan Police Force; SSB: Sashastra Seema Bal; NSG: National Security Guard.
| Actual | % of |
|--------------|--------------|
| | |
| vacancies | |
| Year | Sanctioned |
| strength (in | strength (in |
| | |
| lakhs) | lakhs) |
| 2012 | |
| | |
| 8.9 | |
| | |
| 7.6 | |
| | |
| 14% | |
| | |
| 2013 | |
| | |
| 9.1 | |
| | |
| 8.3 | |
| | |
| 9% | |
| | |
| 2014 | |
| | |
| 9.3 | |
| | |
| 8.7 | |
| | |
| 6% | |
| | |
| | |
| | |
| | |
| 2015 | |
| | |
| 9.5 | |
| | |
| 8.9 | |
| | |
| 7% | |
| | |
| 2016 | |
| | |
| 9.7 | |
| | |
| 9.0 | |
| | |
| 7% | |
| | |
| 2017 | 11.5 |
| 9.9 | 14% |
| 2018 | |
| 10.8 | 10 |
| 2019 | |
| 11 | 10 |
Sources: "Data of Police Organizations", Bureau of Police Research and Development, 2012-19; PRS. Note: Figures for each year are as of January 1 of that year.
% Change BE
2020-21/ BE
% Change BE
2020-21/ RE
2019-20
2019-20
| State | Releases from NDRF |
|------------------|-----------------------|
| | |
| Andhra Pradesh | 571 |
| Bihar | 400 |
| Himachal Pradesh | 518 |
| Karnataka | 3,197 |
| Maharashtra | 3,431 |
| Odisha | 3,114 |
| Rajasthan | 1,165 |
| Total | 14,108 |
Sources: Allocation and Release of Funds from SDRF/ NDRF during 2019-2020, Disaster Management Division, Ministry of Home Affairs; PRS. Notes: Data as of February 3, 2020.
## Demand For Grants : Agriculture And Farmer'S Welfare
The Ministry of Agriculture and Farmers' Welfare has two Departments: (i) Agriculture, Cooperation and Farmers' Welfare, which implements policies and programmes related to crop husbandry and farmers' welfare, and manages agriculture inputs, and (ii) Agricultural Research and Education, which coordinates and promotes agricultural research and education in the country. This note examines the allocations to the two Departments within the Ministry and their expenditure, and discusses issues in the agriculture sector.
## Overview Of Finances
The Ministry has been allocated Rs 1,42,762 crore in 2020-21.1 Allocation to the Ministry accounts for 5% of the central government's budget. This allocation is 30% higher than the revised estimate for 2019-20, primarily due to a higher allocation of Rs 75,000 crore to PM-KISAN (income support scheme for farmers) for 2020-21.2 For 2019-20 as well, the scheme was allocated Rs 75,000 crore at the budgeted stage, which has now been revised down to an estimate of Rs 54,370 crore. PM-KISAN accounts for 53% of the allocation to the Ministry in 2020-21. Other expenditure items of the Ministry, including interest subsidy for shortterm credit to farmers and Pradhan Mantri Fasal Bima Yojana, have been allocated Rs 67,762 crore in 2020-21, a 22% increase over the previous year.
Sources: Expenditure Budget, Union Budgets (2011-21); PRS.
Note that the Ministry's expenditure saw a major increase in 2016-17 due to the Interest Subsidy Scheme (for providing interest subsidy on shortterm loans to farmers). The scheme, which is being accounted under the Ministry of Agriculture since 2016-17, was under the Ministry of Finance earlier.
## Policy Proposals In The Budget Speech
In her budget speech, the Finance Minister made the following proposals regarding agriculture:
The government will encourage states which undertake
the implementation of model laws relating to land leasing, agricultural produce and livestock marketing, and contract farming.
The government will provide Viability Gap Funding for
setting up warehouses at the block/ taluk level. A Village Storage scheme has been proposed to be run by Self-Help Groups.
'Kisan Rail' with refrigerated coaches will be set up to
build a seamless national cold supply chain for perishables. 'Krishi Udaan' will be launched on
international and national routes.
Departments: The Department of Agriculture, Cooperation and Farmers' Welfare has received
94% of the allocation to the Ministry in 2020-21, while 6% has been allocated to the Department of Agricultural Research and Education (Table 1).
Department
2018-19
Actuals
2019-20
Revised
2020-21
Budgeted
% change
in 2020-
21 over
2019-20
46,076 1,01,904
1,34,400
31.9%
Agriculture, Cooperation and Farmers' Welfare
7,544
7,846
8,363
6.6%
Agricultural Research and Education Total
53,620 1,09,750
1,42,762
30.1%
Sources: Expenditure Budget, Union Budget 2020-21; PRS.
The Department of Agriculture, Cooperation and Farmers' Welfare has been allocated Rs 1,34,400
crore in 2020-21, a 32% increase over the revised estimate of 2019-20. More than 78% of the Ministry's budget is proposed to be spent on three schemes under this Department: PM-KISAN (53%), Interest Subsidy Scheme (15%), and Pradhan Mantri Fasal Bima Yojana (11%). In 2020-21, Agricultural Research and Education has been allocated Rs 8,363 crore, a 7% increase over the revised estimate of 2019-20.3 The allocation to Indian Council of Agricultural Research (ICAR) accounts for 61% of the Department's allocation in 2020-21. **Table** 6 and Table 7 in the Annexure show the major heads of allocation in the two Departments.
Budgeted vs actual expenditure: Expenditure by both the Departments has been lower than their budget allocations in most years during the period
2011-20 (**Figure 2**).
In 2019-20, the Ministry has estimated a 21% cut in expenditure as compared to the budget allocation, primarily due to Rs 20,630 crore underspending in PM-KISAN. The Standing Committee on Agriculture (2015-16) observed that a slow pace of utilisation of funds in the first half of the financial year results in a cut in allocation for the rest of the year, which leads to underspending.4
Sources: Expenditure Budget, Union Budgets (2011-20); PRS.
## Issues In The Sector Growth Of The Agriculture Sector
Growth of the sector comprising of agriculture and allied activities has been volatile over the years
(**Figure 3**). In 2019-20, the sector is estimated to grow at 2.8%, as compared to 2.9% in 2018-19.
Agriculture and Farmers' Welfare; CSO, MOSPI; PRS.
The contribution of the agriculture sector in the economy has significantly decreased from 51% in 1951 to 19% in 2011. As per the Economic Survey 2019-20, this has declined to 16.5% in 2019-20.5
Meanwhile, the share of workers who are dependent on agriculture has decreased at a lower rate from 70% in 1951 to 55% in 2011. This implies that the average income of these workers grew at a slower pace than that of workers in other sectors. The Committee on Doubling Farmers'
Income (Chair: Mr. Ashok Dalwai, 2017) observed that one way of significantly improving income of farmers is by shifting the agricultural workforce to more productive employment in non-farm sectors.6
## Income Support To Farmers
The PM-KISAN scheme was launched in February 2019 to provide income support of Rs 6,000 per year (disbursed in three instalments of Rs 2,000) to farmer families with the aim of supplementing their financial needs in procuring inputs for appropriate crop health and yields.7 Earlier, only small and marginal landholder farmer families, i.e. families with total cultivable landholding of up to two hectares, were eligible for the scheme. In May 2019, the Union Cabinet approved extension of the scheme to all farmer families irrespective of their size of landholdings. With this increase in coverage, expenditure on the scheme was estimated to increase from Rs 75,000 crore to Rs 87,218 crore in 2019-20.8 However, allocation to the scheme for 2019-20 has been cut down from Rs 75,000 crore at the budgeted stage to Rs 54,370 crore at the revised stage. Till December 13, 2019, Rs 29,877 crore was released under the scheme for the year 2019-20.9 Further, in 2018-19, of the estimated Rs 20,000 crore expenditure under the scheme, only Rs 1,241 crore (6.2% of the budget allocation) was spent.
Implementation: Initially, the scheme was expected to cover 12.5 crore beneficiaries.8 With the increase in coverage, the revised number of beneficiaries are estimated to be 14.5 crore.8 As on February 11, 2020, 8.9 crore beneficiaries have been covered under the scheme. 10 However, the number of beneficiaries reached under different instalments vary. The number of beneficiaries under the four instalments disbursed so far is as follows: (i) 8.5 crore (December 2018-March 2019), (ii) 7.6 crore (April-July 2019), (iii) 6.2 crore (August-November 2019), and (iv) 3.1 crore (December 2019-March 2020). State-wise details are given in **Table** 9 in the Annexure.
The Standing Committee on Agriculture (2019-20) noted that the issues being faced in the implementation of the scheme are: (i) nonavailability of proper land records in many states, (ii) slow pace of identification of beneficiaries and uploading of data by states, (iii) issues with matching of demographic data between PM- KISAN database and Aadhaar data, (iv) incorrect bank accounts, and (v) poor internet connectivity in rural areas hampering the uploading of data.11 The Committee recommended that the government enhance coordination with states where enrolment is slow and take corrective steps.
Land as an eligibility criterion: Farmer families which own cultivable landholding are eligible for receiving income support under the scheme. The beneficiaries are identified by states based on their land records. The scheme does not cover landless agricultural labourers who form 55% of the agricultural workers in the country (**Figure 5**).12
Agricultural workers include cultivators and labourers working in the agriculture sector. The share of landless agricultural labourers in total agricultural workers has increased over the years from 28% in 1951 to 55% in 2011. The share of cultivators has reduced from 72% to 45% during the same period.
## Agricultural Credit
Agriculture credit is provided to farmers at a subsidised cost through the Interest Subsidy scheme.13 Under the scheme, interest subsidy of two percent is provided to farmers on their shortterm crop loans of up to three lakh rupees. An additional interest subsidy of three percent is provided to farmers repaying their loan on time (within a year). In 2020-21, the scheme has been allocated Rs 21,175 crore, an 18.5% increase over the 2019-20 revised estimates.
Inadequate allocation for unsettled claims: The Standing Committee on Agriculture (2017) noted that the budget allocation to the scheme has been inadequate.42 It observed that, in 2018-19, against an estimated requirement of Rs 41,748 crore for unsettled claims (including past claims), Rs 15,000 crore (36%) was allocated. Of this, Rs 13,046 crore was spent hence, leaving Rs 28,702 crore as unsettled claims.
Short-term vs long-term loans: In 2015, the Committee on Medium-term Path on Financial Inclusion under the Reserve Bank of India (RBI) observed that the Interest Subsidy Scheme for short-term crop loans discriminates against longterm loans.14 Short-term crop loans are used for pre-harvest activities such as weeding, harvesting, sorting and transporting. Long-term loans are taken to invest in agricultural machinery and equipment, or irrigation. The Committee observed that the scheme does not incentivise long-term capital formation in agriculture, which is essential to boost productivity in the sector. The share of long-term loans in total agricultural credit declined between 2006-07 (40%) and 2012-
13 (22%) (**Figure 6**).15 However, the share has increased to 35% in 2016-17. A low share of longterm loans in agricultural credit implies that farmers are taking loans for recurring expenditures rather than to fund long-term investments.
Sources: Committee on Doubling Farmers' Income (2017), Ministry of Agriculture and Farmers' Welfare; PRS.
An Internal Working Group under the RBI (2015) observed that the Interest Subsidy scheme has distorted the agricultural credit system.16 Further, it stated that banks granted loans under the scheme without establishing that the loans are for agriculture, and claiming interest subsidy as well as priority sector benefit.
Land ownership: The RBI Committee (2015)
observed that the owner of the land is often not the cultivator even in the case of small and marginal holdings. For example, a landowner may get the benefit of subsidised credit at times, and may be the moneylender to his cultivator.14 The Committee recommended that agricultural credit must flow to the actual cultivator for which substantial reform is necessary.14 Further, it stated that the subsidised credit increases the probability of misuse. The Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (2016) also recommended the transfer of benefits to farmers directly, instead of subsidy and waivers.17 Considering that access to agricultural credit is linked to formal land titles, the RBI Committee (2015) recommended that credit eligibility certificates, which would act as tenancy or lease certificates, should be issued to tenant farmers.14 These certificates would enable landless tenant cultivators to obtain agricultural credit.
An Internal Working Group of the RBI constituted to review Agricultural Credit (2019) noted that the absence of a proper land leasing framework and a lack of land records inhibited access to institutional credit. It recommended that the centre should encourage the states to digitise and update land records in a timebound manner.19
Small and marginal farmers: Farmers with landholdings of less than a hectare primarily borrow from informal sources of credit such as moneylenders, whereas those with landholdings of two or more hectares primarily borrow from banks
(**Figure** 7).14 Informal sources of credit are typically offered at higher rates of interests, and may not have proper documentation. Note that 68% of the agricultural landholdings in the country belong to the marginal (less than one hectare) category.18 Another 18% belong to the small (between one to two hectare) category. Further, the share of the marginal category in total agricultural landholdings has been increasing over the years, from 51% in 1970-71 to 68% in 2015-16. The Internal Working Group of the RBI to Review Agricultural Credit (2019) observed that only 41% of small and marginal farmers had been covered by banks. It recommended that bank lending targets to small and marginal farmers be revised upwards from the existing 8% to 10%.19
## Crop Insurance
Crop insurance is provided to farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY).20 The scheme covers all farmers, including tenant farmers and sharecroppers, who are growing notified crops in notified areas. In 2020-21, the scheme has been allocated Rs 15,695 crore, a 15% increase over the 2019-20 revised estimate. Issues related to crop insurance raised over the years are:
Awareness about crop insurance: The Economic Survey 2018-19 noted that the share of agricultural households insuring their crops was low.21 Less than 5% of the agricultural households cultivating major crops, such as rice and wheat, insured crops. Lack of awareness about crop insurance among farmers was the major factor for not insuring their crops. Further, lack of awareness about availability of crop insurance programmes was another reason. The Standing Committee on Finance (2016) recommended that awareness should be created about what crops should be grown based on factors such as soil quality and incidence of rainfall.22
Coverage of farmers: In 2018-19, 5.18 crore farmers were insured under the scheme.23 Note that PMFBY is mandatory for farmers with loans and optional for those without loans.20 Majority (73%) of the farmers had to compulsorily enrol under the scheme, whereas 27% were non-loanee farmers. The Comptroller and Auditor General of India (2017) observed a low coverage of farmers without loans under the previous crop insurance schemes. It recommended the Ministry to ensure coverage of more farmers including those without loans.24
Assessment of losses: The Standing Committee on Agriculture (2017) observed that the state governments are not readily accepting and adopting the use of technology for assessing yield loss. It also observed that crop cutting experiments are not being carried out diligently.42 The Committee recommended that the Ministry should pursue state governments to adopt technology aids and satellite imagery for crop cutting experiments.
Timely settlement of claims: Claims under the insurance scheme must be settled within two months from the crop harvest. The Standing Committee on Agriculture (2017) recommended that an institutional mechanism be put in place to monitor faster settlement of pending claims.42 The Ministry revised the operational guidelines of the scheme in September 2018 (effective from the Rabi season 2019-20).25 The revised operational guidelines specify penalties for state governments and insurance companies in case of a delay in settlement of claims. Insurance companies are required to pay farmers 12% interest on the claim amount in case of a delay beyond two months. Further, states are required to pay 12% interest for a delay in release of their share of premium.
## Minimum Support Prices (Msps)
MSP is the price at which the government agencies purchase farmers' produce of certain notified crops. The Finance Minister in the 2019-20 budget speech announced that MSPs for certain Rabi and Kharif crops will be provided at least at one and a half times the production cost.26 This production cost, A2+FL, includes costs of inputs such as seeds and fertilisers, and implied cost of family labour. While MSPs are announced for 23 crops every year, public procurement is limited to a few such as paddy, wheat, and, to a limited extent, pulses.27 The procurement is also largely from a few states. Three states (Haryana, Madhya Pradesh, and Punjab) which produce 45% of the wheat in the country account for 81% of its procurement.28 For paddy, six states (Andhra Pradesh, Chhattisgarh, Haryana, Odisha, Punjab, and Telangana) with 38% of production have 82% share in procurement.28
Other issues with the implementation of MSPs include: (i) low awareness among farmers before the sowing season (according to NITI Aayog, 62% of the farmers were informed of MSPs after the sowing season), (ii) long distances to the procurement centres, (iii) increasing cost of transportation for farmers, and (iv) inadequate storage capacity.29 The NITI Aayog noted that the agricultural pricing policy needs to be reviewed to ensure that farmers are receiving remunerative prices for their produce. Farmers are often forced to engage in distress sales, i.e. selling below MSPs. In September 2018, the Union Cabinet approved the PM-AASHA scheme for procurement of crops from farmers.30 The scheme provides states with the option to opt for another procurement mechanism (price deficiency payment system). This mechanism does not involve any physical procurement of crops. Direct payment of the difference between the MSPs and the selling/modal prices of the crops will be made to pre-registered farmers in their bank accounts. Farmers who sell their crops in the notified market yards through a transparent auction process will be eligible.
## Irrigation
As of 2014-15, 49% of the country's net sown area was under irrigation.31 The remaining agricultural area in the country depends on rainfall. Major irrigation sources for agriculture include tubewells (46%) and other wells (17%), and canals (24%).32 Sources such as canals and tubewells use the flood irrigation technique, where water is allowed to flow in the field and seep into the soil.33 This results in wastage of water since excess water seeps into the soil or flows off the surface without being utilised. It has been recommended that farmers move from flood irrigation to micro-irrigation (drip or sprinkler irrigation systems) to conserve water.34
The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) was launched in 2015 to increase the coverage of the irrigated area.35 The Ministry implements the 'Per Drop More Crop' component under the scheme to increase water efficiency through micro-irrigation and other interventions. In 2020-21, Rs 4,000 crore has been allocated for the scheme, a 97% increase over the revised estimates of 2019-20. During the 2013-20 period, 50.7 lakh hectares (ha) of the area has been covered under micro-irrigation (**Table 2**).36
| Year | Target | Achievement | In % |
|----------|-----------|----------------|---------|
| 2013-14 | 6.6 | 4.3 | 65% |
| 2014-15 | 5.7 | 4.2 | 74% |
| 2015-16 | 5 | 5.7 | 114% |
| 2016-17 | 8 | 8.4 | 105% |
| 2017-18 | 12 | 10.5 | 88% |
| 2018-19 | 16 | 11.6 | 73% |
| 2019-20* | 14 | 6 | 43% |
| Total | 67.3 | 50.7 | 75% |
Note: Data as of February 14, 2020.
Sources: Website of Pradhan Mantri Krishi Sinchai Yojana, as accessed on February 5, 2020; PRS.
Shortfall in funds: Allocation to the scheme has been increasing over the years, but it is revised down at later stages (**Table 3**). Allocation to the scheme in 2019-20 has been revised down by 42% from Rs 3,500 crore (BE) to Rs 2,032 crore (RE).
Table 3: Budgeted vs actual expenditure under PMKSY under the Ministry (in Rs crore)
| Year | Budgeted | Actual | % shortfall |
|--------------|-------------|-----------|----------------|
| 2015-16 | 1,800 | 1,556 | 14% |
| 2016-17 | 2,340 | 1,991 | 15% |
| 2017-18 | 3,400 | 2,819 | 17% |
| 2018-19 | 4,000 | 2,918 | 27% |
| 2019-20 (RE) | 3,500 | 2,032 | 42% |
Note: Figure for 2019-20 are Revised Estimates. Sources: Expenditure Budget, Union Budgets (2015-20); PRS.
## Soil Health And Fertilisers
While the Department of Fertilisers under the Ministry of Chemicals and Fertilisers is responsible for monitoring the production, distribution, and prices of fertilisers, the Department of Agriculture, Cooperation and Farmers' Welfare is responsible for the promotion of balanced use of fertilisers.37 Balanced use refers to the use of a proper combination of various nutrients and other micronutrients. Three major nutrients are primarily used:
Nitrogen (N), Phosphatic (P), and Potassic (K). The government subsidises fertilisers through: (i) subsidy for urea (containing N fertiliser), and (ii) nutrient-based subsidy for P and K fertilisers. Rs 71,309 crore is allocated to the Department of Fertilisers for fertiliser subsidy in 2020-21, an 11% decrease (Rs 8,689 crore) over the 2019-20 revised estimate (**Table 4**).
%
change
2018-
2019-
2020-
in
19
20
21
Subsidy
Actual
Revise
Budget
s
d
ed
2020-
21 over
2019-
20
Urea
46,514
53,629
47,805
-10.9%
Nutrient based
24,090
26,369
23,504
-10.9%
Fertiliser subsidy
70,604
79,998
71,309
-10.9%
Sources: Expenditure Budget, Union Budget 2020-21; PRS.
Prices of urea are controlled by the government, whereas the prices of P and K fertilisers are market-driven.37 This has led to the lower prices of urea (N) over the years, whereas market prices of P and K fertilisers have remained higher. This is one of the reasons for imbalanced use of nutrients as urea is used more than other fertilisers.37 While the recommended ratio of use of the N, P, and K fertilisers is 4:2:1, this ratio in India in 2016-17 was at 6.7:2.7:1.38 Details of consumption of N, P, and K fertilisers are given in **Table** 8 in the Annexure.
Overuse of fertilisers could lead to an imbalance of nutrients in the soil and deteriorate the soil quality. The Standing Committee on Agriculture (2015) observed that use of fertilisers in the country was not based on scientific analysis of soil due to near absence of soil testing facilities, low awareness, and over-reliance on urea.38 In order to provide farmers with information regarding the quality of their soil, the Soil Health Card scheme was launched in 2015. Under the Soil Health Card scheme, farmers are issued soil health cards, which contain information such as nutrient status of soil and recommended dose of nutrients to be provided to improve its fertility. Rs 315 crore has been allocated for the National Project on Soil Health and Fertility in 2020-21, a 102% increase over the revised estimates of 2019- 20. During the first cycle (2015-17) of the scheme, 10.74 crore soil health cards were provided.39 During the year 2019-20, 12.4 lakh Soil Health Cards were distributed to farmers under Model Village Project.40
## Rashtriya Krishi Vikas Yojana
The umbrella scheme was initiated in 2007 for ensuring holistic development of agriculture and allied sectors by allowing states to choose their own development activities as per district and state agriculture plans.41 With the aim of making farming a remunerative economic activity, the Ministry provides financial assistance to states to spend on sub-schemes such as: (i) pre-harvest and post-harvest infrastructure, (ii) value addition using agribusiness models, and (iii) projects based on local and national priorities. Rs 3,700 crore has been allocated to the scheme for 2020-21, a 34% increase over the 2019-20 revised estimate. The Standing Committee on Agriculture (2017) observed that allocations are not utilised optimally and timely. This is due to delay in the approval of projects and funds by states and consequent slow progress of implementation, causing a reduction in the release of funds.42 For instance, in 2019-20, the scheme was allocated Rs 3,745 crore at the budgeted stage, which has been cut down by 26% to Rs 2,760 crore as per the revised estimates.
## Horticulture
Between 2001-02 and 2018-19, the production of horticulture crops increased from 146 million tonnes to 312 million tonnes (**Figure** 10).43 This implies that the horticulture production increased at an average rate of 4.9%. Production of food grains increased at a rate of 1.7% during the same period.
Sources: Horticulture Statistics at a Glance 2018, Ministry of Agriculture and Farmers' Welfare; PRS.
In 2018-19, fruits and vegetables contributed to 31% and 59% of the total horticultural production respectively. The National Mission on Horticulture seeks to promote horticulture by providing availability of quality inputs such as planting material, and post-harvest interventions such as reduction in losses and access to markets. In 2020-
21, the scheme has been allocated Rs 2,300 crore, which is 45% more than the revised estimate of 2019-20. Over the past few years, the actual expenditure under horticulture has been lower than the budgeted allocation, except in 2013-14 (**Table 5**).
## Schemes And Centrally Sponsored Schemes On Horticulture (In Rs Crore)
| Year | Budgeted | Actual |
|-----------|-------------|-----------|
| Budget vs | | |
| Actual | | |
| 2012-13 | 2,212 | 1,860 |
| 2013-14 | 2,556 | 2,857 |
| 2014-15 | 2,263 | 1,959 |
| 2015-16 | 2,000 | 1,699 |
| 2016-17 | 1,620 | 1,496 |
| 2017-18 | 2,329 | 2,035 |
Sources: Horticulture Statistics at a Glance 2018, Ministry of Agriculture and Farmers' Welfare; PRS.
## Agricultural Marketing
The Integrated Scheme on Agriculture Marketing includes sub-schemes such as: (i) agriculture marketing infrastructure, to create storage capacity and farmer consumer markets, (ii) market research and information network, (iii) strengthening of Agmark grading facilities, (iv) agro-business development to provide market linkages to farmers, and (v) e-NAM (National Agriculture Market), which is a national electronic market platform on which farmers can sell their produce. In 2020-21, the scheme has been allocated Rs 490 crore. This is 48% higher than the 2019-20 revised estimate. However, the allocation in 2019-20 has been revised down by 45%, from Rs 600 crore to Rs 331 crore. As of January 2019, 585 mandis across 18 states were integrated with e-NAM.44
APMCs: Agriculture marketing in most states is regulated by the Agriculture Produce Marketing Committees (APMCs) established by state governments. The Standing Committee on Agriculture (2018) observed that small and marginal farmers face various issues in selling their produce in APMC markets such as inadequate marketable surplus, long-distance to nearest APMC markets, and lack of transportation facilities. Most farmers lack access to government procurement facilities including APMC markets.44 The Committee observed that provisions of the APMC Acts are not implemented in their true sense, due to reasons such as: (i) limited number of traders in APMC markets thereby reducing competition, (ii) cartelisation of traders, and (iii) undue deductions in the form of commission charges and market fee.44 It observed that APMC Acts need to be reformed urgently. The Acts are highly restrictive in promotion of multiple channels of marketing and competition in the system.
## 15Th Finance Commission'S Recommendations On Agricultural Reforms
The 15th Finance Commission, in its report for 2020-21,
proposed certain criteria for providing performance-linked
incentives to states. The Commission included the
implementation of agricultural reforms as one of the
criterion. States would be eligible for certain financial
incentives if they enacted and implemented the features of:
(i) The Model Agricultural Produce and Livestock Marketing
(Promotion and Facilitation) Act, 2017, (ii) The Model
Agricultural Produce and Livestock Contract Farming and
Services (Promotion and Facilitation) Act, 2018, and (iii) The
Model Agricultural Land leasing Act, 2016.45
The Model Agricultural Produce and Livestock
Marketing (Promotion and Facilitation) Act, 2017: The
Act aims to create a single agricultural market for
agricultural produce and livestock. It seeks to remove
intermediaries by integrating farmers, exporters, consumers
and others in a single supply chain and by promoting a
direct interface between producers and consumers. The
Act aims to encourage e-trading to promote both
transparency and integration of markets within each
State/UT. Inter-state trading license, grading and
standardization and quality certification are provided for with
an aim to promote a national market for agricultural produce
and livestock.
The Model Agricultural Produce and Livestock Contract
Farming and Services (Promotion and
Facilitation) Act, 2018: The Act aims to facilitate contract
farming to improve production and marketing of agricultural
produce and livestock. It constitutes "Registering and
Agreement Recording Committee" at District, Block or
Taluka level. It seeks to support contracting farmers by
providing insurance cover and purchasing agricultural
produce as per the contract. The Act aims to expand
contract farming to small and marginal farmers through the
promotion of Farmer Producer Organisation or Companies.
The Model Agricultural Land Leasing Act, 2016: The Act
aims to improve access to land by landless and marginal
farmers by permitting and facilitating the leasing of
agricultural land. It legalises land leasing in all areas. The
Act provides for the automatic resumption of the land after
the lease period and removes the clause of adverse
possession of the land. It promotes access to institutional
loans, insurance and relief to tenants and sharecroppers.
## Agricultural Research
The Indian Council of Agricultural Research (ICAR) has been allocated Rs 5,138 crore for the year 2020-21. This is 5.5% higher than the revised estimate of 2019-20. The allocation is primarily for salaries, pensions and administrative expenses and support for different schemes under ICAR. Research under crop sciences and animal sciences have been allocated Rs 965 crore and Rs 486 crore in 2020-21. Observing that vegetable oils, pulses, cashew are among the major commodities imported between 2011 and 2016, the Standing Committee on Agriculture (2017) observed that there is a need for enhancing the production of these commodities.46 It also recommended the central government to allocate additional funds to ICAR for this purpose. The Committee noted that the production of animal vaccine is inadequate in the country. It recommended that adequate resources and manpower must be devoted to ICAR for the development of animal vaccines.
International comparison: The Committee on Doubling Farmers' Income (Chair: Mr. Ashok Dalwai, 2018) observed that the expenditure on agricultural research in India has remained around 0.3-0.4% of the agriculture GDP since 2001
4 Report no. 25, Standing Committee on Agriculture: 'Demand for Grants (2016-17), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, May 2016, http://164.100.47.193/lsscommittee/Agriculture/16_Agriculture_ 25.pdf. 5 Agriculture and Food Management, Economic Survey 2019- 20, India Budget website, January 31, 2020, https://www.indiabudget.gov.in/economicsurvey/doc/echapter_v ol2.pdf. 6 "Status of Farmers' Income: Strategies for Accelerated Growth", Report of the Committee on Doubling Farmers' Income, Ministry of Agriculture and Farmers Welfare, August 2017, http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%202.pd f. 7 Operational Guidelines of "Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)", Ministry of Agriculture and Farmers Welfare, http://agricoop.gov.in/sites/default/files/operational_GuidePM.p df. 8 "PM-KISAN Scheme extension to include all eligible farmer families irrespective of the size of landholdings", Press Information Bureau, Cabinet, May 31, 2019. 9 Rajya Sabha Unstarred Question No. 2899, Ministry of Agriculture and Farmers' Welfare, December 13, 2019, https://pqars.nic.in/annex/250/AU2899.docx. 10 PM-KISAN Dashboard, Ministry of Agriculture and Farmers' Welfare, As on February 11, 2020, https://www.pmkisan.gov.in/StateDist_Beneficiery.aspx. 11 Report no. 6, Standing Committee on Agriculture: 'Demand for Grants (2019-20), Department of Agriculture, Cooperation and Farmers' Welfare', Lok Sabha, December 2019, http://164.100.47.193/lsscommittee/Agriculture/17_Agriculture_ 6.pdf. 12 "March of Agriculture since Independence and Growth Trends", Report of the Committee on Doubling Farmers'
Income, Ministry of Agriculture and Farmers Welfare, August 2017, http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%201.pd f. 13 "Cabinet approves Interest Subvention to banks on short-Term crop loans to farmers", Press Information Bureau, Ministry of Agriculture and Farmers' Welfare, June 14, 2017. 14 Report of the Committee on Medium-term Path on Financial Inclusion, Reserve Bank of India, December 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/FFIRA27
(except in 2011 when it was 0.52% because of higher plan allocations by the government).47 The Committee observed that this is substantively lower in comparison to many developed countries, and also vis-à-vis comparable developing economies. The share of agricultural research in agriculture GDP is much higher in Brazil (1.8%), Mexico (1.05%), Malaysia (0.99%), and China (0.62%). It observed that in the high-income countries, the share stands at 3.01%. The Committee recommended that expenditure on agricultural research should be increased to up to one percent of agriculture GDP.
16 Report of the Internal Working Group to Revisit the Existing Priority Sector Lending Guidelines, Reserve Bank of India, March 2, 2015, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/PSGRE0 20315.pdf. 17 Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households, Reserve Bank of India, January 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/CFS0701 14RFL.pdf. 18 Agriculture Census 2015-16 (provisional), Ministry of Agriculture and Farmers Welfare, September 2018, https://agcensus.nic.in/document/agcen1516/T1_ac_2015_16.pd f. 19 Report of the Internal Working Group to Review Agricultural Credit, Reserve Bank of India, September 2019, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/WGREP ORT101A17FBDC144237BD114BF2D01FF9C9.PDF. 20 "Pradhan Mantri Fasal Bima Yojana (PMFBY), Ministry of Agriculture, http://agricoop.nic.in/imagedefault/whatsnew/sch_eng.pdf; "Cabinet approves New Crop Insurance Scheme - Pradhan Mantri Fasal Bima Yojana", Press Information Bureau, Ministry of Agriculture, January 13, 2016. 21 Agriculture and Food Management, Economic Survey 2018- 19, January 2018, https://mofapp.nic.in/economicsurvey/economicsurvey/pdf/099- 119_Chapter_07_Economic_Survey_2018-19.pdf. 22 Report no. 34, Standing Committee on Finance: 'State of rural/agricultural banking and crop insurance', August 2016, http://164.100.47.134/lsscommittee/Finance/16_Finance_34.pdf. 23 Lok Sabha Starred Question No. 17, Ministry of Agriculture and Farmers Welfare, December 11, 2018, http://loksabhadocs.nic.in/loksabhaquestions/annex/16/AS17.pdf . 24 Report no.7, Performance audit of Agriculture Crop Insurance Schemes, Comptroller And Auditor General of India, July 2017, https://cag.gov.in/sites/default/files/audit_report_files/Report_N o.7_of_2017_- _Performance_audit_Union_Government_Agriculture_Crop_Ins urance_Schemes_Reports_of_Agriculture_and_Farmers_Welfar e.pdf. 25 "Government modifies operational guidelines for Pradhan Mantri Fasal Bima Yojna (PMFBY)", Press Information Bureau, Ministry of Agriculture and Farmers Welfare, September 2018. 26 Budget Speech 2019-20, Union Budget 2019-20, February 1, 2018, https://www.indiabudget.gov.in/doc/bspeech/bs201819.pdf.
Ministry of Agriculture and Farmers Welfare, August 2017, http://farmer.gov.in/imagedefault/DFI/DFI%20Volume%204.pdf.
http://agricoop.nic.in/imagedefault/state_agri_1516.pdf. 35 State of Indian Agriculture 2015-16, Ministry of Agriculture and Farmers Welfare, http://eands.dacnet.nic.in/PDF/State_of_Indian_Agriculture,2015-16.pdf. 36 Website of Pradhan Mantri Krishi Sinchai Yojana, as accessed on February 5, 2020, https://pmksy.gov.in/mis/frmDashboard.aspx. 37 Report no. 43, Standing Committee on Chemicals and Fertilisers: 'Demand for Grants (2019-20), Department of Fertilisers', Lok Sabha, March 2018, http://164.100.47.193/lsscommittee/Chemicals%20&%20Fertilizers/16_Chemicals_And_Fertilizers_43.pdf. 38 Report no. 29, Standing Committee on Agriculture: 'Impact of Chemical Fertilizers and Pesticides on Agriculture and allied sectors in the country', August 2016, http://164.100.47.134/lsscommittee/Agriculture/16_Agriculture_29.pdf. 39 Lok Sabha Unstarred Question No. 453, Ministry of Agriculture and Farmers' Welfare, June 25, 2019, http://164.100.24.220/loksabhaquestions/annex/171/AU453.pdf. 40 "Year End Review 2019 - Ministry of Agriculture, Cooperation and Farmers Welfare", Press Information Bureau, Ministry of Agriculture and Farmers Welfare, January 7, 2020. 41 Revised guidelines, Rashtriya Krishi Vikas Yojana, Department of Agriculture, Cooperation and Farmers' Welfare, https://rkvy.nic.in/static/download/pdf/RKVY_14th_Fin._Comm.pdf. 42 Report no. 35, Standing Committee on Agriculture: 'Demand for Grants (2018-19), Department of Agriculture, Cooperation and Farmers'
## Annexure Allocation To Major Expenditure Heads Under The Departments
and Farmers' Welfare in 2020-21 (Rs crore)
2018-19
Actuals
2019-20
Budgeted
2019-20
Revised
2020-21
Budgeted
% change in RE
of 2019-20 over
BE of 2019-20
% change in BE
of 2020-21 over
RE of 2019-20
PM-KISAN
1,241
75,000
54,370
-27.5%
75,000
37.9%
Interest subsidy for short-term credit to farmers
11,496
18,000
17,863
-0.8%
21,175
18.5%
Pradhan Mantri Fasal Bima Yojana
11,937
14,000
13,641
-2.6%
15,695
15.1%
Pradhan Mantri Krishi Sinchai Yojana (Per Drop More Crop)
2,918
3,500
2,032
-41.9%
4,000
96.8%
Market intervention scheme and price support scheme (MIS-PSS)*
1,400
3,000
2,010
-33.0%
2,000
-0.5%
PM-AASHA
4,721
1,500
321
-78.6%
500
55.8%
Pradhan Mantri Kisan Man Dhan Yojana
-
900
200
-77.8%
220
10.0%
Green Revolution
11,758
12,561
9,965
-20.7%
13,320
33.7%
Rashtriya Krishi Vikas Yojna
3,370
3,745
2,760
-26.3%
3,700
34.1%
National Mission on Horticulture
1,997
2,225
1,584
-28.8%
2,300
45.2%
National Food Security Mission
1,606
2,000
1,777
-11.2%
2,100
18.2%
Department
46,076
1,30,485
1,01,904
-21.9%
1,34,400
31.9%
*for procurement of pulses and oilseeds Sources: Demand no. 1, Expenditure Budget, Union Budget 2020-21; PRS.
Education in 2020-21 (Rs crore)
2018-19
Actuals
2019-20
Budgeted
2019-20
Revised
2020-21
Budgeted
% change in RE
of 2019-20 over
BE of 2019-20
% change in BE
of 2020-21 over
RE of 2019-20
ICAR headquarters
5,056
4,869
4,869
0.0%
5,138
5.5%
Crop sciences
868
934
859
-8.1%
965
12.3%
Agricultural education
761
819
688
-16.0%
740
7.6%
Animal sciences
421
453
452
-0.2%
486
7.4%
Department
7,544
8,079
7,846
-2.9%
8,363
6.6%
Sources: Demand no. 2, Expenditure Budget, Union Budget 2020-21; PRS.
## Consumption Of Fertilisers
| Year | Urea (N) | Phosphatic (P) | Potassic (K) | Total (N+P+K) |
|---------|-------------|-------------------|-----------------|------------------|
| 2005-06 | 127.2 | 52 | 24.1 | 203.4 |
| 2006-07 | 137.7 | 55.4 | 23.3 | 216.5 |
| 2007-08 | 144.2 | 55.1 | 26.4 | 225.7 |
| 2008-09 | 150.9 | 65.1 | 33.1 | 249.1 |
| 2009-10 | 155.8 | 72.7 | 36.3 | 264.9 |
| 2010-11 | 165.6 | 80.5 | 35.1 | 281.2 |
| 2011-12 | 173 | 79.1 | 25.8 | 277.9 |
| 2012-13 | 168.2 | 66.5 | 20.6 | 255.4 |
| 2013-14 | 167.5 | 56.3 | 21 | 244.8 |
| 2014-15 | 169.4 | 60.9 | 25.3 | 255.8 |
| 2015-16 | 173.7 | 69.8 | 24 | 267.5 |
| 2016-17 | 167.4 | 67.1 | 25.1 | 259.5 |
| 2017-18 | 169.6 | 68.5 | 27.8 | 265.9 |
Sources: Agricultural Statistics at a Glance 2018, Ministry of Agriculture and Farmers' Welfare; PRS.
## Implementation Of Pm-Kisan
recipients (As on February 11, 2020)
| First | Second | Third | Fourth |
|------------------------------|------------------|-----------------|-----------------|
| State | | | |
| Number of | | | |
| Instalment | Instalment | Instalment | Instalment |
| Beneficiaries | | | |
| (Dec 18-Mar 19) | (Apr 19-July 19) | (Aug 19-Nov 19) | (Dec 19-Mar 20) |
| Andaman and Nicobar Islands | 16,584 | 16,504 | 15,909 |
| Andhra Pradesh | 51,54,980 | 51,17,781 | 41,75,957 |
| Arunachal Pradesh | 56,628 | 50,820 | 42,529 |
| Assam | 31,07,195 | 27,04,200 | 24,14,304 |
| Bihar | 54,98,078 | 53,48,465 | 47,02,794 |
| Chandigarh | 457 | 457 | 425 |
| Chhattisgarh | 19,81,216 | 18,80,819 | 16,54,160 |
| Dadra and Nagar Haveli | 10,564 | 10,435 | 10,309 |
| Daman and Diu | 3,587 | 3,463 | 3,372 |
| Delhi | 13,727 | 12,479 | 11,468 |
| Goa | 8,339 | 7,248 | 6,278 |
| Gujarat | 47,88,238 | 48,26,236 | 47,01,941 |
| Haryana | 15,42,748 | 14,54,111 | 14,37,275 |
| Himachal Pradesh | 8,75,212 | 8,63,955 | 8,43,492 |
| Jammu and Kashmir | 9,57,049 | 9,30,696 | 8,84,219 |
| Jharkhand | 15,15,528 | 14,52,601 | 7,43,938 |
| Karnataka | 49,73,543 | 49,05,076 | 46,72,645 |
| Kerala | 28,23,238 | 27,73,270 | 27,11,527 |
| Lakshadweep | 1,516 | 0 | 0 |
| Madhya Pradesh | 57,53,671 | 55,13,954 | 49,57,931 |
| Maharashtra | 90,73,782 | 84,57,153 | 68,21,942 |
| Manipur | 2,05,549 | 1,73,789 | 96,815 |
| Meghalaya | 72,690 | 70,236 | 64,747 |
| Mizoram | 69,420 | 67,534 | 65,510 |
| Nagaland | 1,70,286 | 1,68,749 | 1,61,731 |
| Odisha | 36,54,583 | 36,28,657 | 29,30,610 |
| Puducherry | 9,778 | 9,503 | 9,170 |
| Punjab | 22,39,849 | 22,40,071 | 22,14,919 |
| Rajasthan | 59,54,395 | 52,04,516 | 48,20,425 |
| Sikkim | 8,849 | 11 | 11 |
| Tamil Nadu | 36,16,504 | 35,28,387 | 33,72,052 |
| Telangana | 35,02,566 | 34,81,591 | 34,14,194 |
| Tripura | 1,96,462 | 1,94,696 | 1,89,720 |
| Uttar Pradesh | 2,02,34,707 | 1,87,35,405 | 1,71,04,668 |
| Uttarakhand | 7,14,783 | 7,01,781 | 6,70,035 |
| West Bengal | 0 | 0 | 0 |
| Total | 8,88,06,301 | 8,45,34,649 | 7,59,27,022 |
Sources: Website of PM-KISAN scheme as accessed on February 12, 2020; PRS.
## Demand For Grants: Food And Public Distribution
The Ministry of Consumer Affairs, Food and Public Distribution has two Departments: (i) Food and Public Distribution, and (ii) Consumer Affairs. Allocation to the Ministry accounts for 4% of the budget of the central government in 2020-21.1
Department of Food and Public Distribution is responsible for ensuring food security through procurement, storage, and distribution of food grains, and for regulating the sugar sector.2 In 2020- 21, the Department has been allocated Rs 1,22,235 crore (98% of the Ministry's allocation).3 This is 6% higher than the revised estimate of 2019-20.
Department of Consumer Affairs is responsible for spreading awareness among consumers about their rights, protecting their interests, implementing standards, and preventing black marketing.4 In 2020-21, the Department has been allocated Rs 2,300 crore, which is 12% higher than the revised estimate of 2019-20.5 This note examines the allocations to the Department of Food and Public Distribution. It also looks at the broad issues in the sector, along with key observations and recommendations made by expert committees over the years.
## Overview Of Finances
% change
in 2020-21
Department
2018-19
Actuals
2019-20
Revised
2020-21
Budgeted
over
2019-20
Food & Public Distribution
1,07,078
1,15,240
1,22,235
6.1%
Consumer Affairs
1,770
2,050
2,300
12.2%
Total
1,08,848
1,17,290
1,24,535
6.2%
Sources: Expenditure Budget, Union Budget 2020-21; PRS.
In 2020-21, allocation to the Department of Food and Public Distribution has increased by Rs 6,995 crore (6.1%) over the revised estimate of 2019-20. However, the estimated expenditure for 2019-20 has reduced by 40% from Rs 1,92,240 crore at the budgeted stage to Rs 1,15,240 crore at the revised stage. This is due to a Rs 75,532 crore cut in the allocation to food subsidy for the year 2019-20. Since 2016-17, the Department's expenditure has been much lower than the funds allocated to it in the budget (Figure 1) as an increasing portion of food subsidy was replaced by borrowings by the Food Corporation of India (FCI). As a result, the payment due to FCI by the end of 2019-20 is estimated to be Rs 2.4 lakh crore.6 In 2018-19, the Department utilised 61% of the allocation, while Rs 67,081 crore remained unspent.
Due to this underspending trend, in 2020-21, the Department's allocation is Rs 18,285 crore less than what it spent five years ago (2015-16).
Note: Figures for 2019-20 are revised estimates. Sources: Expenditure Budget, Union Budgets (2010-20); PRS.
## Food Subsidy
Food subsidy is the largest component of the Department's expenditure. It accounts for 95% of the allocation to the Department in 2020-21 (details of other expenditure heads are given in Annexure).3 The subsidy is given to the Food Corporation of India (FCI) and states for procuring food grains from farmers at government notified prices and selling them at lower subsidised prices (known as Central Issue Prices), under the National Food Security Act, 2013.3 The Act mandates coverage of 75% of the population in rural areas and 50% in urban areas, and currently covers 81 crore people.7,8
The subsidy also covers the storage cost incurred by FCI in maintaining buffer stocks in order to ensure food security in the country.3 **Table** 2 (on the next page) shows the expenditure on food subsidies during 2010-21. The expenditure on food subsidy increased from Rs 63,844 crore in 2010-11 to Rs 1,39,419 crore in 2015-16. The Standing Committee (2016-17) on Food, Consumer Affairs and Public Distribution noted that the reasons for increase in food subsidy include: (i) increase in the procurement cost of food grains, (ii) non-revision of the Central Issue Prices since 2002, and (iii) implementation of the National Food Security Act, 2013 in all states.9
| % increase | % of |
|---------------|----------|
| Year | |
| Food | |
| over the | |
| subsidy | |
| previous year | |
| allocation | |
| utilised | |
| 2010-11 | 63,844 |
| 2011-12 | 72,822 |
| 2012-13 | 85,000 |
| 2013-14 | 92,000 |
| 2014-15 | 1,17,671 |
| 2015-16 | 1,39,419 |
| 2016-17 | 1,10,173 |
| - 21% | |
| 82% | |
| 2017-18 | 1,00,282 |
| - 9% | |
| 69% | |
| 2018-19 | 1,01,327 |
| 1% | |
| 60% | |
| 2019-20 | 1,08,688 |
| 7% | |
| 59% | |
| 2020-21 | 1,15,570 |
| 6% | |
| - | |
Note: Figures for the years 2019-20 and 2020-21 are estimates. Sources: Expenditure Budget, Union Budgets (2011-21); PRS.
However, since 2016-17, spending on food subsidy by the Department has comparatively decreased, as a major part of the funds allocated for food subsidy remain unspent (40% of the budget allocation was not utilised in 2018-19). This underspending by the Department has increased over the years, even though the actual requirement of funds for food subsidy being higher than the amount it spends.10 This gap can be bridged if more funds are spent by the Department for food subsidy. To fill this gap in the meanwhile and meet the cost incurred each year in subsidising food, FCI relies on borrowings.
## Components Of Food Subsidy
Expenditure on food subsidy can be classified under three heads (break-up in **Table 3**):
Subsidy to FCI: The Food Corporation of
India (FCI) receives subsidy for procuring food grains from farmers at government notified
prices and selling them at lower subsidised prices. It also receives subsidy for the storage cost incurred in maintaining buffer stocks.
Subsidy to states: Under the decentralised
procurement scheme, states may choose to undertake the operations of procurement, storage, and distribution on behalf of FCI, for which they are provided with subsidy.
Sugar subsidy: Sugar subsidy is provided for
giving one kg of sugar per month at subsidised rates to families covered under the Antyodaya Anna Yojana (i.e. poorest of the poor families).
Majority of the budget for food subsidy is allocated to FCI. However, subsidy released to FCI by the Department has decreased from Rs 1.12 lakh crore in 2015-16 to Rs 70,098 crore in 2018-19. This is due to a consistent cut in FCI's share of the food subsidy budget (for instance, Rs 68,025 crore, or 49%, cut in 2018-19 from the budgeted stage).
% change in
2020-21 over
Subsidy
2018-19
Actuals
2019-20
Revised
2020-21
Budgeted
2019-20
Subsidy to FCI
70,098
75,000
77,983
4.0%
31,029
33,508
37,337
11.4%
Subsidy to states (decentralised procurement) Sugar subsidy
200
180
250
38.9%
Total
1,01,327 1,08,688
1,15,570
6.3%
Sources: Demand no. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2020-21; PRS.
## Issues In The Sector
FCI and state agencies procure food grains from farmers at the government notified Minimum Support Prices (MSPs). These food grains are provided to the economically weaker sections at subsidised prices through fair price shops under the public distribution system. The central and state governments provide food grains to beneficiaries under the National Food Security Act, 2013 as well as certain other welfare schemes such as the Mid- Day Meal scheme. In this section, we examine some issues relating to the: (i) pending dues of FCI, (ii) provision of food subsidy, (iii) Public Distribution System (PDS), and (iv) sugarcane dues to farmers.
## Pending Dues Of Fci
The central government provides food subsidy to FCI as reimbursement of the loss it incurs in its procurement, storage, and distribution operations. The CAG (2019) observed that when the budget for food subsidy is not sufficient to clear the dues of FCI, such dues are carried over to the next year.11 As a result of such carryovers each year, payment due to FCI for food subsidy has increased from Rs 41,517 crore at the end of 2015-16 to Rs 2.4 lakh crore at the end of 2019-20.6 Note that the subsidy paid to FCI by the Department has decreased from Rs 1.12 lakh crore in 2015-16 to Rs 75,000 crore in 2019-20. Although the Department had received a much higher allocation during the period 2016-20 for payment to FCI, due to budget cuts made during the year, the actual amount paid to FCI decreased. For instance, in 2019-20, subsidy to FCI has been cut by 50% from Rs 1.51 lakh crore at the budgeted stage to Rs 75,000 crore at the revised stage. As the subsidy dues of FCI increased significantly vis-à-vis the budget expenditure, since 2017-18, all the payments being made to FCI by the Department are going towards clearing past dues. Due to this delay in clearing dues by the Department, FCI has to borrow money from various sources for giving subsidy and funding its operations. When FCI uses such borrowings, the Department has to provide additional funds for payment of interest on these borrowings. The CAG observed that the central government has adopted this off-budget method of financing the subsidy dues, thereby deferring the payment to FCI.12 This understates a particular fiscal year's expenditure by keeping deferred expenditure off-budget, and prevents transparent depiction of fiscal indicators.12 For instance, if the central government had to clear all the subsidy dues of FCI in the year 2019-20
itself, its fiscal deficit (borrowings) for the year 2019-20 would increase from 3.8% of GDP to 5% of GDP.
Sources: Food Corporation of India; PRS.
Note that in November 2019, the Union Cabinet approved increasing the equity of FCI from Rs 3,500 crore to Rs 10,000 crore.13 As per the revised estimates for 2019-20, an amount of Rs 1,000 crore has been allocated for this purpose. Further, Rs 1,000 crore has been budgeted for 2020-21. This increased equity could be leveraged by FCI to borrow from the market.
## Provision Of Food Subsidy
The Targeted Public Distribution System (TPDS), through which food grains are distributed at subsidised prices, seeks to provide food security to people below the poverty line. Over the years, while the spending on food subsidy has increased, the ratio of people below the poverty line has decreased from 54.9% in 1973-74 to 21.9% in 2011-
12 (**Table** 4).
| Year | Poverty ratio (in %) | No. of Poor (in crore) |
|---------|-------------------------|---------------------------|
| 1973-74 | 54.9% | 32.1 |
| 1977-78 | 51.3% | 32.9 |
| 1983-84 | 44.5% | 32.3 |
| 1987-88 | 38.9% | 30.7 |
| 1993-94 | 36.0% | 32 |
| 2004-05 | 27.5% | 30.2 |
| 2011-12 | 21.9% | 26.9 |
Note: Figures from 1973-74 to 2004-05 have been computed using the Lakdawala methodology, and figures for 2011-12 have been computed using the Tendulkar methodology. Sources: Planning Commission; PRS.
A similar trend can also be seen in the proportion of undernourished persons in India, which reduced from 23.7% in 1990 to 15.2% in 2014 (**Table** 5).
| Proportion of | Number of |
|-----------------------|--------------|
| Year | population |
| undernourished (in %) | |
| undernourished | |
| persons (in crore) | |
| 1990-92 | 23.7% |
| 2000-02 | 17.5% |
| 2005-07 | 20.5% |
| 2010-12 | 15.6% |
| 2014-16 | 15.2% |
Note: Figures for 2014-16 are provisional estimates. Sources: Food and Agriculture Organisation, 2015: Table 5.14, Chapter 5, Volume II, Economic Survey 2015-16; PRS.
Nutritional balance: The National Food Security Act, 2013 guarantees five kg of food grains per person per month to entitled beneficiaries at subsidised prices. Further, Antyodaya Anna Yojana households, which constitute the poorest of the poor, are entitled to 35 kg per household per month at subsidised prices. Presently, the food items provided by the central government for distribution under PDS are rice, wheat, and sugar.14 As can be seen in Figure 3 and Figure 4, there has been a change in the pattern of nutritional intake among people in both rural and urban areas (details given in Tables 9 and 10 in the Annexure). Although cereals or food grains contain only 10% protein, their share as a percentage of the total protein intake has been over 50% in both rural and urban areas.15 However, other foods such as meat and pulses contain more than 20% protein but contribute to only 15% of the total protein intake of the country.15
Sources: Nutritional intake in India (2011-12), NSSO; PRS.
The share of cereals in calorie intake has reduced by 10% in rural areas and 7% in urban areas, whereas that of milk, eggs, fish, and meat has increased (Table 9 in the Annexure).15 This indicates a reduced preference for wheat and rice, and a rise in preference towards other protein-rich food items. The National Food Security Act, 2013 requires the central and state governments to undertake steps to diversify commodities distributed under PDS.7
Imbalance in farm production: Minimum Support Price (MSP) is the price at which the government agencies purchase farmers' produce of certain notified crops. Typically, MSP is higher than the market price and seeks to incentivise farmers to grow crops on which the support is offered. As wheat and rice (paddy) are major food grains provided under the PDS, the focus of procurement is on these crops. While a significant proportion of these two crops are procured at MSP, there is very limited procurement of other crops (see Figure 5).16,17,18
This skews the production of crops in favour of wheat and paddy, and does not offer an incentive for farmers to produce other items such as pulses.19 Further, this puts pressure on the water table as these crops and sugarcane (which also has an assured procurement price- see page 6 and 7) are water-intensive crops.20 As procurement of wheat and paddy is done at MSP (which is often above market prices), its stocks have grown. At the end of 2018-19, the stocks of these crops were more than the offtake for a full year (see Table 12 in the Annexure).
## Revision Of Central Issue Price (Cip)
Under the National Food Security Act, 2013 (NFSA), food subsidy is given to beneficiaries at the CIP, which was last revised in 2002. CIP for wheat and rice can be found in **Table 6**.
| Commodity | AAY | BPL | APL |
|--------------|--------|--------|--------|
| Rice | 3 | 5.65 | 7.95 |
| Wheat | 2 | 4.15 | 6.1 |
Note: AAY - Antyodaya Anna Yojana, BPL - Below Poverty Line, APL - Above Poverty Line. Sources: Food Grain Bulletin (December 2019), Department of Food and Public Distribution; PRS.
In comparison to the CIP, the economic cost (including procurement, stocking, distribution) for wheat is Rs 27/kg and for rice is Rs 37/kg as of February 2020.21 Food subsidy is calculated as the difference between the economic cost of procuring food grains, and their CIP. While the economic cost for rice has increased from Rs 1,098/quintal (Rs 11/kg) in 2001-02 to Rs 3,727/quintal (Rs 37/kg) in 2020-21, and of wheat from Rs 853/quintal (Rs 9/kg) to Rs 2,684/quintal (Rs 27/kg) over the same period, the CIP has not been revised.21 This has led to an increasing gap between the economic cost and CIP, leading to an increase in expenditure on food subsidy.29 Trends in economic cost, CIP and subsidies for wheat and rice can be found in Figure 6 and Figure 7.
Sources: Food Corporation of India; PRS.
In 2018-19, the Ministry had stated that increasing the CIP could be one of the measures to bridge the gap between the funds it requires, and the funds it is actually allocated. Details related to the procurement of food grains, off-take and stock can be found in **Table 12** of the Annexure.
## Delivery Of Food Subsidy
Leakages in PDS: Leakages refer to food grains not reaching intended beneficiaries. Note that recent public data on leakage is not available. The latest available data is for 2011. According to the 2011 data, leakages in PDS were estimated to be 46.7% (see Table 11 in the Annexure).22,23 Leakages may be of three types: (i) pilferage or damage during transportation of food grains, (ii) diversion to non-beneficiaries at fair price shops through issue of ghost cards, and (iii) exclusion of people entitled to food grains but who are not on the beneficiary list.24,25 Studies have shown that targeting mechanisms such as TPDS are prone to large exclusion and inclusion errors.26
Exclusion errors occur when entitled beneficiaries do not get food grains. It refers to the percentage of poor households that are entitled to but do not have PDS cards. Exclusion errors had declined from 55% in 2004-05 to 41% in 2011-12 (Figure 8).
Inclusion errors occur when those that are ineligible get undue benefits. Inclusion errors increased from 29% in 2004-05 to 37% in 2011-12. Declining exclusion errors and increasing inclusion errors are due to two reasons. First, increase in the coverage of TPDS has reduced the proportion of poor who do not have access to PDS cards. Second, despite a decline in poverty rate, non-poor are still identified as poor by the government thus allowing them to continue using their PDS cards.27
Sources: Evaluation study on the role of PDS in shaping households and nutritional security in India, NITI Aayog, December 2016; PRS.
Note that under NFSA, states are responsible for the identification of beneficiaries. In 2016, the Comptroller and Auditor General of India (CAG) found that this process had not been completed by the states, and 49% of the beneficiaries were yet to be identified.28
Alternative subsidy systems: Over the years, several solutions that have been suggested include: (i) DBT of food subsidy, and (ii) end-to-end computerisation of the entire system.22,46
The NFSA states that the centre and states should introduce schemes for cash transfers to beneficiaries.7 Various experts and bodies have also suggested replacing TPDS with a Direct Benefit Transfer (DBT) system.29,30 Advantages and disadvantages of these methods of delivering benefits have been discussed below.
TPDS: TPDS assures beneficiaries that they
would receive food grains, and insulates them against inflation and price volatility. Further, food grains are delivered through fair price shops in villages, which are easy to access.31,32
However, high leakages have been witnessed in the system, both during transportation and distribution. These include pilferage and errors of inclusion and exclusion from the beneficiary list. In addition, it has also been argued that the distribution of wheat and rice may cause an imbalance in the nutritional intake.7 Beneficiaries have also reported receiving poor quality food grains as part of the system.
Cash Transfers: Cash transfers seek to
increase the choices available with a beneficiary, and provide financial assistance. It has been argued that the costs of DBT may be lesser than TPDS, owing to lesser costs incurred on transport and storage. These transfers may also be undertaken electronically.31,32
On the other hand, it has been argued that cash received as part of DBT may be spent on nonfood items. Further, such a system may expose beneficiaries to inflation. In this regard, one may need to consider the low penetration and access to banking in rural areas.33
In 2015, the Department released two notifications: The Cash Transfer of Food Subsidy Rules and The Food Security (Assistance to State Governments) Rules.34,35 As per these notifications, the central government offers state governments two choices for reforming their respective PDS machinery: (i) replacing the existing PDS with DBT, or (ii) Fair Price Shop automation, which involves installation of Point of Sale devices, for authentication of beneficiaries and electronic capture of transactions. So far, more than 4.3 lakh (82%) Fair Price Shops have been automated across the country.36 Details regarding the status of computerisation of PDS can be found in **Table 13** of the Annexure.
The High-Level Committee on Restructuring of FCI in 2015 had suggested that switching to DBT for food subsidy would reduce the food subsidy bill of the government by more than Rs 30,000 crore.22 While making this recommendation, the Committee illustrated this by taking the case of subsidy given on rice (**Table 7**). It assumed that as part of DBT, the government would transfer Rs 22/Kg for rice to a beneficiary.
| 1. CIP | Rs 3/Kg |
|--------------------------------------------|------------|
| 2. MSP | Rs 20/Kg |
| 3. Subsidy (3=2-1) | Rs 17/Kg |
| Rs 27/Kg | |
| 4.Cost to government | |
| (Subsidy + Costs on procurement, storage | |
| and distribution) | |
| 5. Cash subsidy to beneficiaries | Rs 22/Kg |
| 6. Government saving (6=5-4) | Rs 5/Kg |
| 7. Increase in beneficiary benefit (7=5-3) | Rs 5/Kg |
Sources: High-Level Committee Report on Reorienting FCI, January 2015; PRS.
Aadhaar: The High-Level Committee (2015) had also recommended the introduction of biometrics and Aadhaar to plug leakages in PDS. Such transfers could be linked to Jan Dhan account, and be indexed to inflation.22 As of December 2017, 119 crore Aadhaar cards have been issued, covering 98% of the population.37 In February 2017, the Ministry made it mandatory for beneficiaries under NFSA to use Aadhaar as proof of identification for receiving food grains.38 This was aimed to facilitate the removal of bogus ration cards, check leakages and ensure better delivery of food grains.22,39,40 Note that beneficiaries may face issues with Aadhaar authentication while availing PDS benefits. According to data submitted by UIDAI to the Supreme Court in Justice K. S. Puttaswamy vs Union of India, the Aadhaar authentication failure rate (across all purposes) was 8.5% for iris scans and 6% for fingerprints.41 However, in the judgement, the Court had held that services cannot be denied due to Aadhaar authentication failure.
Further, as of July 2017, while 100% ration cards had been digitised, the seeding of these cards with Aadhaar was at 79%.42 Between 2016 and 2018, around 1.5 crore ration cards were deleted due to detection of bogus, fake, and duplicate cards during Aadhaar seeding (see Table 15 of the Annexure for the state-wise breakup).
## Current Challenges In Pds
Storage: The Department allocates funds for the construction of godowns to increase storage capacity. This includes allocations for the Warehousing Development and Regulatory Authority (WADA). In 2019-20, Rs 60 crore has been allocated for storage and godowns, and Rs eight crore has been allocated to WADA. As of December 2017, the total storage capacity in the country is 725 lakh tonnes, of which 359 lakh tonnes is with the FCI and 366 lakh tonnes is with the state agencies.43 The total stock of food grains in the country as of July 2017 was 555 lakh tonnes.
The CAG in its performance audit found that the available storage capacity in states was inadequate for the allocated quantity of food grains.44 For example, as of October 2015, of the 233 godowns sanctioned for construction in Maharashtra, only 93
had been completed. In Assam, although the storage capacity was enough for the state's allocation, the conditions of the godowns were found to be too damp for storage. Some of the storage in Jharkhand was also found to be unfit, either because of its remote location or the damaged condition of the godowns. The CAG also noted that in four of the last five years, the stock of food grains in the central pool had been higher than the storage capacity available with the FCI (see Figure 9).33
Sources: CAG Performance Audit on Preparedness for Implementation of National Food Security Act, 2013; PRS.
As seen in **Figure** 9, it was only in 2015 that the stock of food grains was lower than the storage capacity. According to the CAG, this was owing to an increase in procurement under Decentralised Procurement (DCP), and less food grains in the central pool.33 Under DCP, the state governments undertake procurement, storage and distribution of food grains on behalf of the central government. The states are reimbursed by the centre for the expenditure incurred by them.45 The Standing Committee on Food, Consumer Affairs and Public Distribution (2017) has recommended increasing the procurement undertaken by states, and reducing the expenditure on centralised procurement by the FCI.9 They noted that this would drastically reduce the transportation cost borne by the government as states would distribute the food grains to the targeted population within their respective states. As on December 2019, only 17 states have adopted decentralised procurement.36
Fair Price Shops: Fair Price Shops are licensed ration shops which provide food grains and kerosene under the public distribution system. They may also sell certain other goods in some states. It has been observed by various experts and the Ministry that the margins on which the Fair Price Shops operate are low.46 Further, in the absence of economic viability, there may be cases where the dealer resorts to unfair practices. In order to make these shops viable, some states have taken steps such as:
Chhattisgarh provided seed capital of Rs 75,000
to each fair price shop free of any interest for 20 years. It also increased the commission on food grains from Rs 8/quintal to Rs 30/quintal.
States such as Assam and Delhi have permitted the sale of non-PDS items at these fair price shops. Such items include oil, potatoes, onion, tea, and mobile recharge coupons.
## Sugarcane Dues
The Department is also responsible for formulation of policies and regulations for the sugar sector. In 2020-21, Rs 2,602 crore has been allocated for providing assistance to sugar mills through various measures, which is 97% higher than the revised estimate of 2019-20. These measures include: (i) direct assistance to mills for clearing sugarcane dues of farmers, (ii) reimbursing the mills for maintaining buffer stocks, (iii) facilitating exports, and (iv) improving ethanol production capacity. The assistance is being provided with the aim of improving the liquidity of sugar mills in order to facilitate payment of sugarcane dues of farmers.47,48 Note that as on September 15, 2019, payment of Rs 11,784 crore is pending with sugar mills as dues for 2018-19 and earlier years.49 State-wise details of the dues are given in Table 16 of the Annexure. These sugarcane dues accumulate due to delay in payments to farmers for their produce. In years of surplus production, the sugar prices fall impacting the sale of sugar and liquidity of mills.50 As a result,
3 Demand No. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/sbe15.pdf. 4 About DCA, Department of Consumer Affairs, https://consumeraffairs.nic.in/about-us/about-dca. 5 Demand No. 14, Department of Consumer Affairs, Expenditure Budget, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/sbe14.pdf. 6 "Food Subsidy Released to FCI and Incurred by FCI (Rs. in Crores.) as on 27.01.2020", Website of Food Corporation of India, as accessed on February 5, 2020, http://fci.gov.in/finances.php?view=22.
mills are unable to pay farmers leading to delay in payments and accumulation of dues. Note that sugar mills are obligated to purchase sugarcane from all farmers within their specified area at a price fixed by the government. Conversely, farmers are bound to sell to the respective mills.
Rationalisation of sugarcane pricing has been recommended as one of the steps for improving the efficiency of the sugar industry. The central government fixes the Fair and Remunerative Price (FRP) for sugarcane, which is the minimum price that must be paid by sugar mills to farmers.51 The FRP is fixed based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). It is recommended taking into consideration: (i) the cost of production, (ii) rate of recovery of sugar, (iii) availability of sugar to consumers at a fair price, (iv) returns to farmers from alternative crops and the general trend of prices of agricultural commodities, (v) realisation from sale of by-products, and (vi) reasonable margins for farmers on account of risks and profits. State governments can also intervene in sugarcane pricing by announcing a State Advised Price (SAP). SAPs are usually much higher than the FRP. This creates a distortion in the industry as SAP is neither linked to sugar recovery nor it takes into account domestic and global prices and other relevant parameters. As a result, when sugar prices are low, mill owners are unable to pay farmers resulting in delayed payment and accumulation of dues. The CACP (2018) recommended that the FRP must be implemented in all states and the announcement of SAP by states should be stopped immediately.51 In case state governments decide to continue with SAP, the difference between SAP and FRP should be paid by the state governments directly to farmers.
Department of Food and Public Distribution', Lok Sabha, March
2017, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/16_Food_Consumer_Affair s_And_Public_Distribution_15.pdf. 10 Report no. 20, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demands for Grants (2018-19), Department of Food and Public Distribution', Lok Sabha, March
2018, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/16_Food_Consumer_Affair s_And_Public_Distribution_20.pdf. 11 Report no. 20 of 2018, 'Compliance of the Fiscal Responsibility and Budget Management Act, 2003 for the year 2016-17', Comptroller and Auditor General of India, January 2019, https://www.cag.gov.in/sites/default/files/audit_report_files/Repo rt_No_20_of_2018_Compliance_of_the_Fiscal_Responsibility_a nd_Budget_Management_Act_2003_Department_of_Economic_ Affairs_Minis.pdf. 12 Report no. 20, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demands for Grants (2018-19), Department of Food and Public Distribution', Lok Sabha, March
2018, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa
19 "Prices, Agriculture and Food Management", Chapter 5, Economic Survey 2015-16, http://unionbudget.nic.in/budget2016-2017/es2015- 16/echapvol2-05.pdf. 20 Chapter 7: Agriculture and Food Management, Volume II, Economic survey 2018-19, https://www.indiabudget.gov.in/budget2019- 20/economicsurvey/doc/vol2chapter/echap07_vol2.pdf. 21 Economic Cost, Food Corporation of India (last accessed on February 10, 2020), http://fci.gov.in/finances.php?view=23. 22 Report of the High Level Committee on Reorienting the Role and Restructuring of Food Corporation of India, January 2015, http://www.fci.gov.in/app2/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%20Reorienting%20the% 20Role%20and%20Restructuring%20of%20FCI_English_1.pdf. 23 Third Report of the Standing Committee on Food, Consumer Affairs and Public Distribution: Demands for Grants 2015-16, Department of Food and Public Distribution, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affairs%20&%20Public%20Distribution/16_Food_Consumer_Affairs_And_P ublic_Distribution_3.pdf. 24 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf. 25 Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf. 26 Report of the Expert Group to advise the Ministry of Rural Development in the methodology for conducting the Below Poverty Line (BPL) Census for 11th Five Year Plan, August 2009, http://rural.nic.in/sites/downloads/circular/ReportofExpertGroupChaired- Dr.N.C.Saxena.pdf. 27 Evaluation Study on the Role of Public Distribution System in shaping household and nutritional security in India, NITI Aayog, December 2016, http://niti.gov.in/writereaddata/files/document_publication/Final%20PDS%20Report-new.pdf. 28 Audit on the Preparedness for Implementation of National Food Security Act, 2013 for the year ended March, 2015, Report No. 54 of 2015, Comptroller and Auditor General of India, http://cag.gov.in/sites/default/files/audit_report_files/Union_Civil_National_Food_Security_Report_54_of_2015.pdf. 29 "Prices, Agriculture and Food Management", Chapter 5, Economic Survey 2015-16, http://unionbudget.nic.in/budget2016-2017/es2015- 16/echapvol2-05.pdf. 30 Working Paper 294, "Leakages from Public Distribution System", January 2015, ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf. 31 Revival of the Public Distribution System: Evidence and Explanations, The Economic and Political Weekly, November 5, 2011, http://www.epw.in/system/files/pdf/2011_46/44-45/Revival_of_the_Public_Distribution_System_Evidence_and_Explanations.pdf. 32 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf. 33 'Report of the Internal Working Group on Branch Authorisation Policy', Reserve Bank of India, September 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/IWG99F12F147B6E4F8DBEE8CEBB8F09F103.PDF. 34 "The Cash Transfer of Food Subsidy Rules, 2015", Ministry of Consumer Affairs, Food and Public Distribution, September 3, 2015, http://dfpd.nic.in/writereaddata/Portal/News/32_1_cash.pdf.
## Annexure
2018-19
Actuals
2019-20
Budgeted
2019-20
Revised
2020-21
Budgeted
% change in BE
of 2020-21 over
RE of 2019-20
Food subsidy
1,01,327
1,84,220
1,08,688
1,15,570
6.3%
Subsidy to Food Corporation of India (FCI)
70,098
1,51,000
75,000
77,983
4.0%
Subsidy to states (decentralised procurement)
31,029
33,000
33,508
37,337
11.4%
Sugar subsidy payable under PDS
200
220
180
250
38.9%
Assistance to state agencies for intra-state movement of food grains and for margin of fair price shops' dealers
3,884
4,102
1,679
3,983
137.2%
Investment in equity capital of FCI
500
1,000
1,000
1,000
0%
Assistance to sugar mills for the 2017-18 season
376
100
63
-
-
Assistance to sugar mills for the 2018-19 season
-
1,000
2,000
200
-90%
Assistance to sugar mills for the 2019-20 season
-
-
100
500
400%
Scheme for defraying expenditure towards internal transport, freight, handling and other charges on export
-
501
551
200
-63.7%
Scheme for creation and maintenance of buffer stock of sugar
200
350
550
200
-63.6%
Scheme for extending soft loan to sugar mills
-
200
100
120
20%
Financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity
-
100
50
50
0%
Schemes for development of sugar industries
443
351
221
172
-22.2%
Department
1,07,078
1,92,240
1,15,240
1,22,235
6.1%
Sources: Demand no. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2020-21; PRS.
Vegetables &
Meats,
eggs, &
Cereals
Pulses, nuts,
& oilseeds
fruits
Milk & milk
products
Miscellaneous
fish
Rural
1993-94
71.0
4.9
2.0
0.7
6.2
15.2
1999-00
67.6
5.5
2.0
0.8
6.2
17.9
2004-05
67.5
5.0
2.2
0.8
6.4
18.1
2009-10
64.2
4.5
1.8
0.7
6.8
22.0
2011-12
61.1
5.2
1.9
0.8
7.1
23.9
Urban
1993-94
58.5
6.1
3.3
1.0
8.0
23.1
1999-00
55.1
6.9
2.9
1.1
8.2
25.8
2004-05
56.1
6.7
3.2
1.1
8.6
24.3
2009-10
55.0
5.9
2.6
1.0
9.4
26.1
2011-12
51.6
6.4
2.6
1.1
9.1
29.2
Sources: Table T18, Nutritional Intake in India, 2011-12, NSSO; PRS.
Year
Cereals
Pulses
Milk and milk products
Egg, fish, and meat
Other food
Rural
1993-94
69.4
9.8
8.8
3.7
8.4
1999-00
67.4
10.9
9.2
4.0
8.4
2004-05
66.4
9.5
9.3
4.0
10.8
2009-10
64.9
9.1
10.0
4.0
12.0
2011-12
62.5
10.6
10.6
4.7
11.7
Urban
1993-94
59.4
11.5
11.7
5.3
12.1
1999-00
57.0
13.1
12.4
6.0
11.5
2004-05
56.2
11.0
12.3
5.5
15.0
2009-10
56.4
11.3
13.8
5.6
13.0
2011-12
53.7
12.4
13.6
6.4
13.9
Sources: Table T21, Nutritional Intake in India, 2011-12, NSSO; PRS.
| State/UT | Total consumption from PDS | Offtake (2011-12) | Leakage | % leakage |
|-------------------|-------------------------------|----------------------|------------|--------------|
| Andhra Pradesh | 36.1 | 40.7 | 4.6 | 11.3% |
| Arunachal Pradesh | 0.8 | 1.0 | 0.2 | 20.0% |
| Assam | 9.5 | 24.4 | 14.9 | 61.1% |
| Bihar | 11.3 | 36.2 | 24.9 | 68.8% |
| Chhattisgarh | 16.7 | 16.7 | 0.0 | 0.0% |
| Goa | 0.4 | 0.8 | 0.4 | 50.0% |
| Gujarat | 4.4 | 15.7 | 11.3 | 72.0% |
| Haryana | 2.2 | 7.3 | 5.1 | 69.9% |
| Himachal Pradesh | 4.9 | 6.3 | 1.4 | 22.2% |
| Jammu and Kashmir | 8.8 | 9.1 | 0.3 | 3.3% |
| Jharkhand | 3.1 | 12.4 | 9.3 | 75.0% |
| Karnataka | 16.2 | 30.1 | 13.9 | 46.2% |
| Kerala | 11.4 | 20.1 | 8.7 | 43.3% |
| Madhya Pradesh | 15.5 | 30.7 | 15.2 | 49.5% |
| Maharashtra | 19.3 | 42.7 | 23.4 | 54.8% |
| Manipur | 0.0 | 2.0 | 2.0 | 100.0% |
| Meghalaya | 0.8 | 2.5 | 1.7 | 68.0% |
| Mizoram | 0.9 | 1.1 | 0.2 | 18.2% |
| Nagaland | 0.1 | 2.0 | 1.9 | 95.0% |
| Odisha | 15.4 | 24.4 | 9.0 | 36.9% |
| Punjab | 3.4 | 8.7 | 5.3 | 60.9% |
| Rajasthan | 10.1 | 29.8 | 19.7 | 66.1% |
| Sikkim | N/A | N/A | - | - |
| Tamil Nadu | 39.5 | 45 | 5.5 | 12.2% |
| Tripura | 2.7 | 3.3 | 0.6 | 18.2% |
| Uttar Pradesh | 43.2 | 82.9 | 39.7 | 47.9% |
| Uttarakhand | 4.6 | 6.6 | 2.0 | 30.3% |
| West Bengal | 13.4 | 43.9 | 30.5 | 69.5% |
| Total | 295.5 | 554.5 | 259 | 46.7% |
Note: Data from National Sample Survey 2011-12. Sources: Table 1, Working Paper 294, "Leakages from Public Distribution System", ICRIER, January 2015; PRS.
| Procurement | Offtake | | Stocks | |
|----------------|-----------|-----------|----------|-------|
| Year | | % Offtake | | |
| Rice | Wheat | Total | Rice | Wheat |
| 2003-04 | 22.9 | 15.8 | 38.7 | 25.0 |
| 2004-05 | 24.7 | 16.8 | 41.5 | 23.2 |
| 2005-06 | 27.6 | 14.8 | 42.4 | 25.1 |
| 2006-07 | 25.1 | 9.2 | 34.3 | 25.1 |
| 2007-08 | 28.7 | 11.1 | 39.9 | 25.2 |
| 2008-09 | 34.1 | 22.7 | 56.8 | 24.6 |
| 2009-10 | 32.0 | 25.4 | 57.4 | 27.4 |
| 2010-11 | 34.2 | 22.5 | 56.7 | 29.9 |
| 2011-12 | 35.0 | 28.3 | 63.4 | 32.1 |
| 2012-13 | 34.0 | 38.2 | 72.2 | 32.6 |
| 2013-14 | 31.9 | 25.1 | 56.9 | 29.2 |
| 2014-15 | 31.6 | 28.0 | 59.6 | 30.7 |
| 2015-16 | 34.1 | 28.1 | 62.2 | 31.8 |
| 2016-17 | 36.5 | 23.6 | 60.1 | 32.8 |
| 2017-18 | 37.6 | 30.6 | 68.2 | 35.0 |
| 2018-19 | 42.7 | 35.0 | 77.7 | 34.4 |
| Online Allocation of | Computerisation of |
|-------------------------|-----------------------|
| State/ UT | |
| Digitisation of | |
| Ration Cards | |
| Aadhaar Seeding | |
| with Ration Cards | Food grains |
| % of Fair Price Shops | |
| with Operational ePoS | |
| Andhra Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Arunachal Pradesh | |
| 100% | |
| 57% Implemented | - |
| Assam | |
| 100% | |
| 0% Implemented | - |
| Bihar | |
| 100% | |
| 78% Implemented | Implemented |
| Chhattisgarh | |
| 100% | |
| 98% Implemented | Implemented |
| Goa | |
| 100% | |
| 98% Implemented | Implemented |
| Gujarat | |
| 100% | |
| 99% Implemented | Implemented |
| Haryana | |
| 100% | |
| 100% Implemented | Implemented |
| Himachal Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Jammu and Kashmir | |
| 100% | |
| 82% Implemented | - |
| Jharkhand | |
| 100% | |
| 95% Implemented | Implemented |
| Karnataka | |
| 100% | |
| 100% Implemented | Implemented |
| Kerala | |
| 100% | |
| 99% Implemented | Implemented |
| Madhya Pradesh | |
| 100% | |
| 90% Implemented | Implemented |
| Maharashtra | |
| 100% | |
| 97% Implemented | Implemented |
| Manipur | |
| 100% | |
| 79% Implemented | - |
| Meghalaya | |
| 100% | |
| 0% Implemented | - |
| Mizoram | |
| 100% | |
| 93% Implemented | - |
| Nagaland | |
| 100% | |
| 65% Implemented | - |
| Odisha | |
| 100% | |
| 96% Implemented | Implemented |
| Punjab | |
| 100% | |
| 99% Implemented | Implemented |
| Rajasthan | |
| 100% | |
| 96% Implemented | Implemented |
| Sikkim | |
| 100% | |
| 90% Implemented | Implemented |
| Tamil Nadu | |
| 100% | |
| 100% Implemented | Implemented |
| Telangana | |
| 100% | |
| 99% Implemented | Implemented |
| Tripura | |
| 100% | |
| 100% Implemented | Implemented |
| Uttar Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Uttarakhand | |
| 100% | |
| 93% Implemented | Implemented |
| West Bengal | |
| 100% | |
| 64% Implemented | Implemented |
| Andaman and Nicobar | |
| Islands | |
| 100% | |
| 97% Implemented | Implemented |
| Chandigarh | |
| 100% | |
| 100% NA | NA |
| Dadra and Nagar Haveli | |
| 100% | |
| 100% Implemented | Implemented |
| Daman and Diu | |
| 100% | |
| 100% Implemented | Implemented |
| Delhi | |
| 100% | |
| 100% Implemented | Implemented |
| Lakshadweep | |
| 100% | |
| 100% Implemented | NA |
| Puducherry | |
| 100% | |
| 100% NA | NA |
| Total | |
| 100% | |
| 88% | 34 |
Sources: Report no. 2, Standing Committee of Food, Consumer Affairs and Public Distribution, Lok Sabha, December 10, 2019; PRS
| Year | Paddy (common) | % increase over last year | Wheat | % increase over last year |
|---------|-------------------|------------------------------|----------|------------------------------|
| 2009-10 | 1,000 | 17.6% | 1,100 | 1.9% |
| 2010-11 | 1,000 | 0.0% | 1,120 | 1.8% |
| 2011-12 | 1,080 | 8.0% | 1,285 | 14.7% |
| 2012-13 | 1,250 | 15.7% | 1,350 | 5.1% |
| 2013-14 | 1,310 | 4.8% | 1,400 | 3.7% |
| 2014-15 | 1,360 | 3.8% | 1,450 | 3.6% |
| 2015-16 | 1,410 | 3.7% | 1,525 | 5.2% |
| 2016-17 | 1,470 | 4.3% | 1,625 | 6.6% |
| 2017-18 | 1,550 | 5.4% | 1,735 | 6.8% |
| 2018-19 | 1,750 | 12.9% | 1,840 | 6.1% |
| 2019-20 | 1,815 | 3.7% | 1,925 | 4.9% |
Sources: Commission for Agricultural Costs and Prices, Ministry of Agriculture and Farmers' Welfare; PRS.
| States/UTs | 2016 | 2017 | 2018 | State-wise Total |
|---------------------------|-----------|-----------|----------|---------------------|
| Andhra Pradesh | 4,75,023 | 5,449 | - | 4,80,472 |
| Andaman & Nicobar Islands | - | - | - | 0 |
| Arunachal Pradesh | 4,396 | 56 | - | 4,452 |
| Assam | 1,08,681 | 42,077 | 1,35,250 | 2,86,008 |
| Bihar | 6,291 | - | - | 6,291 |
| Chandigarh | - | 88 | - | 88 |
| Chhattisgarh | 1,50,000 | 1,50,000 | - | 3,00,000 |
| Dadra & Nagar Haveli | 549 | - | - | 549 |
| Daman & Diu | 101 | 272 | 4,898 | 5,271 |
| Delhi | 22,696 | 3,969 | 486 | 27,151 |
| Goa | 10,115 | - | - | 10,115 |
| Gujarat | 22,119 | 18,965 | 95,659 | 1,36,743 |
| Haryana | 19,648 | 29,686 | 2,91,926 | 3,41,260 |
| Himachal Pradesh | 1,148 | 172 | 56,858 | 58,178 |
| Jammu and Kashmir | 50,709 | 664 | - | 51,373 |
| Jharkhand | 4,46,025 | - | - | 4,46,025 |
| Karnataka | 1,44,432 | 3,26,382 | 4,572 | 4,75,386 |
| Kerala | - | - | 3,314 | 3,314 |
| Lakshadweep | 442 | - | - | 442 |
| Madhya Pradesh | 3,89,124 | 1,84,673 | - | 5,73,797 |
| Maharashtra | 11,55,908 | - | - | 11,55,908 |
| Manipur | - | 336 | - | 336 |
| Meghalaya | - | - | 370 | 370 |
| Mizoram | 101 | 559 | - | 660 |
| Nagaland | - | 8,521 | - | 8,521 |
| Odisha | 6,50,471 | 35,740 | - | 6,86,211 |
| Puducherry | 9,886 | - | - | 9,886 |
| Punjab | - | 69,945 | 34,972 | 1,04,917 |
| Rajasthan | 13,71,230 | 73,110 | 8,016 | 14,52,356 |
| Sikkim | 11,714 | 1,126 | - | 12,840 |
| Tamil Nadu | 84,470 | 9,089 | - | 93,559 |
| Telangana | 5,21,790 | - | - | 5,21,790 |
| Tripura | 92,728 | - | - | 92,728 |
| Uttar Pradesh | 25,86,541 | 44,41,748 | - | 70,28,289 |
| Uttarakhand | 89,984 | 3,18,718 | 1,26,268 | 5,34,970 |
| West Bengal | | | | |
| $ | | | | |
| | - | - | - | 0 |
| Total | 84,26,322 | 57,21,345 | 7,62,589 | 1,49,10,256 |
Note: *Cards deleted due to detection of ghost/fraudulent/duplicate/ineligible/migration /deaths etc. during the process of digitisation, deduplication, Aadhaar seeding in run-up /implementation of National Food Security Act. $West Bengal has individual Ration Cards system. Sources: Second Report, Standing Committee on Food, Consumer Affairs and Public Distribution (2019-20); PRS.
| State | 2016-17 & Earlier | 2017-18 | 2018-19 | Total Arrears |
|----------------|----------------------|------------|------------|------------------|
| Andhra Pradesh | 1 | 5 | 132 | 138 |
| Bihar | 39 | 8 | 478 | 524 |
| Chhattisgarh | 0 | 2 | 39 | 41 |
| Goa | 0 | 0 | 5 | 5 |
| Gujarat | 35 | 2 | 804 | 841 |
| Haryana | 0 | 0 | 80 | 80 |
| Karnataka | 33 | 0 | 225 | 258 |
| Madhya Pradesh | 8 | 8 | 9 | 25 |
| Maharashtra | 174 | 62 | 396 | 632 |
| Odisha | 3 | 0 | 19 | 21 |
| Puducherry | 22 | 0 | 0 | 22 |
| Punjab | 0 | 26 | 589 | 615 |
| Rajasthan | 0 | 0 | 0 | 0 |
| Tamil Nadu | 1,529 | 65 | 346 | 1,940 |
| Telangana | 0 | 0 | 46 | 46 |
| Uttar Pradesh | 144 | 41 | 5,990 | 6,174 |
| Uttarakhand | 25 | 109 | 286 | 420 |
| West Bengal | 0 | 0 | 0 | 0 |
| Total | 2,014 | 326 | 9,444 | 11,784 |
Sources: Second Report, Standing Committee on Food, Consumer Affairs and Public Distribution (2019-20); PRS.
## Demand For Grants: Rural Development
The Ministry of Rural Development is responsible for development and welfare activities in rural areas. The Ministry has two departments: (i) rural development, and (ii) land resources. The **Department of Rural Development** under the Ministry is responsible for implementation of many major schemes in rural areas. These schemes are targeted at poverty reduction, provision of basic services, employment generation, rural infrastructure and habitation development.
The **Department of Land Resources** aims to increase productivity of degraded land through the process of integrated watershed management. It also aims to develop an integrated land information management system to improve real-time information on land, and to optimise use of land resources. This note presents the budgetary allocations to the Ministry of Rural Development, and analyses various issues related to the schemes implemented by the Ministry.
## Allocation In Union Budget 2020-21
The Ministry of Rural Development has the fourth highest allocation across Ministries in 2020-21, at Rs 1,22,398 crore. In 2020-21, the Department of Rural Development has an allocation of Rs 1,20,147 crore, accounting for 98% of the Ministry's allocation. It witnessed a
2% decrease in funds from revised estimates of 2019-20. In 2019-20, the Department was allocated Rs 1,17,647 crore, which increased by Rs 5,002 crore (4%) in the revised estimates stage for that year.
On the other hand, the Department of Land Resources has an allocation of Rs 2,251 crore, which is 18.5% more than the revised estimates of 2019-20. In 2019-20, the Department was allocated Rs 2,227 crore, which decreased by Rs 327 crore (15%) in the revised estimates stage for that year. Table 1 gives the trend in budgetary allocation towards the Ministry over the past three years.
| RE | BE |
|-------------|----------|
| Department | |
| Actuals | |
| (18-19) | (19-20) |
| % change | |
| (RE to BE) | |
| Rural | |
| Development | |
| 1,11,842 | 1,22,649 |
| Land | |
| Resources | |
| 1,864 | 1,900 |
| Total | 1,13,706 |
Note: BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2020-21, Ministry of Rural Development; PRS.
## Department Of Rural Development
In the past 10 years, the expenditure of the Department of Rural Development has seen an annual growth of 7.2%. Except in 2011-12 and 2012-13, when the Department reduced its spending, its expenditure increased in all other years up till 2019-20. In 2020-21 the estimated expenditure is 2% less than the revised estimates for the previous year.
130,000
Note: Values for 2019-20 and 2020-21 are revised estimates and budget estimates respectively.
Sources: Union Budgets 2011-12 to 2020-21; PRS.
## Major Schemes Under The Department
Table 2 represents the budgetary allocation for major schemes under the Department of Rural Development.
of Rural Development (Rs crore)
| Department | |
|--------------|----------|
| Actuals | |
| (2018-19) | |
| Revised | |
| (2019-20) | |
| Budgeted | |
| (2020-21) | |
| % change | |
| (RE to BE) | |
| MGNREGS | 61,815 |
| PMAY-G | 19,308 |
| PMGSY | 15,414 |
| NSAP | 8,418 |
| NRLM | 5,783 |
| Rurban | |
| Mission | |
| 433 | 300 |
| Others | 671 |
| Total | 1,11,842 |
Note: BE is budget estimate and RE is revised estimate. Others include central sector projects like management support to rural development programs, socio-economic and caste census survey and centre's expenditure. Sources: Demands for Grants 2020-21, Department of Rural Development, Ministry of Rural Development; PRS.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), continues to account for
more than half of the Department's budget.
However, the funds allocated to it have decreased by 13% this year.
Funds allocated for the rural roads scheme, Pradhan Mantri Gram Sadak Yojana (PMGSY) has seen an increase of 39% from the revised estimates of 2019-20.
estimated to be on the MGNREGS. This is
followed by the rural component of Pradhan Mantri Awaas Yojana - Gramin (16.2%), and PMGSY (16.2%).
## Financial Allocations Comparing Outcomes Mahatma Gandhi National Rural Employment Guarantee Scheme
The main goal of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is to provide guaranteed 100 days of wage employment per financial year to every rural household whose adult members volunteer to do unskilled manual work.1 The Mahatma Gandhi National Rural Employment Guarantee Act specifies a list of works that can be undertaken to generate employment. These are related to water conservation, land development, construction, and agriculture, among others. The scheme at present covers all districts of the country with the exception of those that have a 100% urban population.2 In 2020-21, it has been allocated Rs 61,500, which is 51% of the Department's budget.
Budgeted versus actual expenditure: Figure 3
shows the expenditure on the scheme from 2010- 11 to 2020-21. For most of these years, expenditure on the scheme has been more than or around 50% of the Department's budget.
Sources: Union Budgets 2010-11 to 2020-21; PRS.
Table 3 shows the trends in allocation and actual expenditure on MGNREGS over the past nine years.
MGNREGS (Rs crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2011-12 | 40,000 | 29,212 | 73% |
| 2012-13 | 33,000 | 30,273 | 92% |
| 2013-14 | 33,000 | 32,992 | 100% |
| 2014-15 | 34,000 | 32,977 | 97% |
| 2015-16 | 34,699 | 37,341 | 108% |
| 2016-17 | 38,500 | 48,215 | 125% |
| 2017-18 | 48,000 | 55,166 | 115% |
| 2018-19 | 55,000 | 61,815 | 112% |
| 2019-20 | 60,000 | 71,002 | 118% |
Note: The 'actuals' figure for 2019-20 is the revised estimate. Sources: Union Budgets 2011-12 to 2020-21; PRS.
The budget estimates for the last five years have been similar to the actuals from the previous year. However, the actual expenditure on the scheme for these years has exceeded the budget estimates. Note that in 2020-21, the allocation to the scheme saw a 13% decline from the revised estimates of 2019-20.
Demand for work: MGNREGS is a demand driven scheme. From 2013-14 to 2019-20, the average demand from registered households is 41% (in the range of 36% to 43%). The share of households that were provided employment as compared to the ones demanding employment has reduced from 93% in 2013-14 to 87% in 2019-20.3
Employment Provided: The scheme guarantees
100 days of employment. However, from 2012 to 2018, the average number of days of employment has been 45.5 days, with a maximum of 49 days of employment in 2015-16. As MGNREGS is a demand driven scheme, this could be due to either lower demand for such work (signalling sufficient opportunities to obtain work in the open market) or not providing employment when demanded.
per household
Year
Average days of employment
provided per household
2012-13
46
2013-14
46
2014-15
40
2015-16
49
2016-17
46
2017-18
46
Sources: MGNREGS MIS Report 2018-19; PRS.
Work Completed: The scheme also aims to create durable assets to improve rural livelihood through the work done while providing employment. As indicated in figure 4, the percentage of work completed under the scheme has been falling since the last four years. In 2019-20 (as of February
2020) percentage of work completed was at 14%.
Sources: MGNREGS MIS Report (as on February 8, 2020); PRS.
Delayed payments: MGNREGS stipulates that wage payments must be made within 15 days of the date of closure of the muster roll.2 Delays in payments are calculated from the 16th day onwards. **Table 5** shows the percentage of delayed payments out of the total payments over the past six years. It also indicates the number of days that payments were delayed by. As shown in the table, the proportion of delayed payments has reduced from 71.6% in 2014-15 to 3.4% in 2019-20. In 2017-18, delays in payments came down substantially from the previous year. The Economic Survey 2018-19, stated that the implementation of direct benefit transfers has helped in reducing delays in payments.4
wages under MGNREGS (in %)
Composition of delayed
Year
% Delayed
Payment
payments(%)
>90 days 61-90
31-60
15-30
2014-15
71.6%
13.4%
9.8% 22.0%
26.3%
2015-16
63.1%
9.5%
8.1% 19.0%
26.5%
2016-17
56.6%
14.2%
8.4% 15.9%
18.1%
2017-18
15.5%
1.8%
0.9%
3.6%
9.2%
2018-19
10.4%
1.9%
0.7%
2.0%
5.8%
2019-20
3.4%
0.2%
0.2%
0.7%
2.3%
Sources: MGNREGS MIS Report, Delayed Payments (as on
February 8, 2020); PRS.
Currently under the MGNREGS, unemployment allowance (if employment is not provided within 15 days of application) is paid from state government funds.1 The CAG report (2013) on the scheme states that this puts an additional burden on the states.5 The CAG suggested that the Ministry of Rural Development should consider partial reimbursement of unemployment allowance.5
Indexing of minimum wage rate: The minimum wage rate under the scheme is fixed by the central government on the basis of the Consumer Price Index-Agricultural Labourers (CPI-AL). If this not available, the minimum wage rate fixed by the states for agricultural labourers is considered.6 The Standing Committee on Rural Development (2019- 20) noted that the wage rate under MGNREGS is much less than the minimum wages fixed by states. It recommended that wages under MGNREGS should be increased and linked to an index which takes inflation into account.7
Further, the Committee on Alignment of MGNREGS wages under the Ministry of Rural Development (2017) noted that the type of work done by agricultural labourers and MGNREGS workers is different. Thus, there should be difference in their minimum wages. It also noted that the weighting diagram of Consumer Price Index-Rural was more recent and provided for higher expenditure on education and medical care compared to CPI-AL. It recommended using Consumer Price Index-Rural instead of the existing CPI-AL for revising MGNREGS wages.8
Difference in states minimum wage: If CPI-AL
is not available, the minimum wage rate fixed by the states for agricultural labourers is considered.
Every state has its defined Schedule of Rates for defining work output and calculating wages, thus the wage can be different for every state. The Committee on Alignment of MGNREGS (2017) observed that this variation is unsustainable for a programme where wage component is fully funded by the centre. It recommended convergence on Schedule of Rates across states to avoid variation.8
## Pradhan Mantri Awaas Yojana- Gramin
Pradhan Mantri Awaas Yojana- Gramin (PMAY-
G) got the second highest allocation in the Department's budget this year. The funds allocated to the scheme (Rs 19,500 crore) comprise 16.2% of the Department's finances.
In the past eleven years, the expenditure on the scheme has seen an annual growth of 8%.
rural housing scheme (Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2010-11
8,996
10,337
115%
2011-12
8,996
9,872
110%
2012-13
9,966
7,868
79%
2013-14
13,666
12,981
95%
2014-15
16,000
11,106
69%
2015-16
10,025
10,116
101%
2016-17
15,000
16,071
107%
2017-18
23,000
22,572
98%
2018-19
21,000
19,308
92%
2019-20
19,000
18,475
97%
Note: The 'actuals' figure for 2019-20 is the revised estimate. Note that the numbers for years to 2010-11 to 2014-15 are the allocations towards Indira Awaas Yojana. Sources: Union Budgets 2010-11 to 2020-21; PRS.
Target construction of houses: Figure 6 shows the number of houses completed compared to the target construction in the last eight years. The construction rate has been lower than the target from 2012 to 2017. In 2017-18 and 2018-19, the completion rate saw a high increase. However, as of November 2019, the completion rate for 2019- 20 was at 3%.
Note: Data for 2019-20 is as of November 23, 2019. Sources: Report on Demand for Grants, Standing Committee on Rural Development, Ministry of Rural Development 2017-18, 2019-20; PRS.
In the budget speech of 2019-20, it was highlighted that under PMAY-G, 1.95 crore houses are proposed to be provided to eligible beneficiaries by 2021-22. As per the implementation of budget announcements, against the target of 60 lakh houses set for 2019-20, 1.82 lakh houses were completed, as of November 22, 2019.9 The Standing Committee on Rural Development (2019-20) noted that there are sanctioned beneficiaries whose houses are incomplete or the construction is yet to start. It noted that this is a major obstacle in the achievement of target of housing for all by 2022. It recommended fast completion of houses targeted under the scheme.7
Increase in financial assistance under PMAY-
G: Under PMAY-G, financial assistance of Rs
1,20,000 in plain areas and Rs 1,30,000 in hilly areas is provided to rural BPL households for construction of a dwelling unit. The Standing Committee on Rural Development (2019-20) noted that the financial assistance provided is not proportionate with the rising inflationary cost of the construction, material and other aspects of house building. It recommended the Ministry to review the assistance provided by them.7
## Pradhan Mantri Gram Sadak Yojana
Pradhan Mantri Gram Sadak Yojana (PMGSY) seeks to provide all-weather road connectivity to all eligible unconnected habitations, existing in the core network in rural areas of the country. The scheme has been allocated Rs 19,500 crore in 2020-21, accounting for 16.2% of the Department's budget. As Figure 7 indicates, over the past years, the expenditure on the scheme had been increasing until 2015-16. However, it has been decreasing since then.
Sources: Union Budgets 2012-13 to 2020-21; PRS.
Inconsistency in budgetary allocation: Table
7 shows the trends in allocation and actual estimates of expenditure on PMGSY. In most years, there has been significant underutilisation of funds. In 2018-19, the expenditure on the scheme was 81% of its allocation. A similar trend can be seen in 2019-20.
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2012-13 | 24,000 | 8,387 | 35% |
| 2013-14 | 21,700 | 13,095 | 60% |
| 2014-15 | 14,391 | 14,188 | 99% |
| 2015-16 | 14,291 | 18,290 | 128% |
| 2016-17 | 19,000 | 17,923 | 94% |
| 2017-18 | 19,000 | 16,862 | 89% |
| 2018-19 | 19,000 | 15,414 | 81% |
| 2019-20 | 19,000 | 14,070 | 74% |
Note: The 'actuals figure for 2019-20 is the revised estimate. Sources: Union Budgets 2012-13 to 2020-21; PRS.
Slow pace of work: The Standing Committee on Rural Development (2018-19) noted that the pace of work under the scheme has been really low, especially in hilly states like Uttarakhand. It recommended that the pace of completion of projects be increased to ensure achievement of the target of the scheme.10
## Difference Between Targets And Achievements:
Figures 8 and 9 give details of length of roads constructed and habitations connected in the last seven years, under the scheme.
Note: Data for 2019-20 is as of February 9, 2020. Sources: Pradhan Mantri Gram Sadak Yojana Online Management, Monitoring and Accounting System (OMMAS), Ministry of Rural Development; PRS.
In 2014-15 and 2015-16, the length completed was more than the target length. However, since 2016- 17, the Ministry has not been able to achieve its targets for both number of habitations to be connected and length of road. As of February 8, 2020, in 2019-20, 33% of target road length had been constructed and 20% of the target habitations had been connected.
Sources: Pradhan Mantri Gram Sadak Yojana Online Management, Monitoring and Accounting System (OMMAS), Ministry of Rural Development; PRS.
In the budget speech of 2019-20, it was highlighted that the target of connecting all eligible and feasible habitations under PMGSY will be completed by 2019. The budget documents indicate that 95% of the eligible (as per the census 2001) and feasible habitations have been connected.9
Maintenance of roads: For ensuring sustainability of roads built under PMGSY, each contractor has to provide for: (i) defect liability for five years, and (ii) paid routine maintenance after completion of work. The Standing Committee on Rural Development (2019-20) noted that the upkeep and maintenance of roads has been poor. It recommended that the Ministry ensure stricter norm compliance, and hold the contractors and agencies accountable for their negligence.7
## National Social Assistance Program
National Social Assistance Program (NSAP) is a welfare program which comprises of a number of sub-schemes that primarily aim to provide public assistance to citizens in case of unemployment, old age, sickness, and any form of disability. The major schemes include Indira Gandhi National Old Age Pension Scheme, Indira Gandhi National Widow Pension Scheme, and Indira Gandhi National Disability Pension Scheme. The funds allocated to the scheme (Rs 9,197 crore) comprise 7.7% of the Department's finances. Table 8 shows the budget estimates and actual expenditure by states under the scheme from 2012- 13 to 2019-20.
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2012-13 | 8,447 | 6,912 | 82% |
| 2013-14 | 9,615 | 8,534 | 89% |
| 2014-15 | 10,635 | 7,087 | 67% |
| 2015-16 | 9,082 | 8,616 | 95% |
| 2016-17 | 9,500 | 8,854 | 93% |
| 2017-18 | 9,500 | 8,694 | 92% |
| 2018-19 | 9,975 | 8,418 | 84% |
| 2019-20 | 9,200 | 9,200 | 100% |
Note: The 'Actuals' figure for 2019-20 is the revised estimate. Sources: Union Budget 2012-13 to 2020-21; PRS.
Shortfall and underutilisation of funds: The Standing Committee on Rural Development (2018- 19) noted shortfall of funds for the scheme due to the slow rate of fund release.11 The reason given by the Ministry for the same is non-submission of requisite documents by the states/UTs in time. This impacts the implementation of the scheme.11 At the same time, the Committee also noted that there was continuous underutilisation of funds under the scheme. This can also be seen in Table 8. In 2018-19, 16% of the funds budgeted were not utilised. However, in 2019-20 the budgeted amount is estimated to be fully utilised.
## National Rural Livelihoods Mission
National Rural Livelihoods Mission (NRLM) aims to reduce poverty through promotion of diversified and gainful self-employment and skilled wage employment opportunities. In 2020-21, the funds allocated to the scheme (Rs
9,210 crore) comprise 7.7% of the Department's finances. Table 9 shows the actual expenditure by states under the scheme from 2012-13 to 2019-20.
| | Year | Budgeted | Actuals % of Budgeted |
|---------|---------|-------------|--------------------------|
| 2012-13 | 3,915 | 2,195 | 56% |
| 2013-14 | 4,000 | 2,022 | 51% |
| 2014-15 | 4,000 | 1,413 | 35% |
| 2015-16 | 2,705 | 2,514 | 93% |
| 2016-17 | 3,000 | 3,157 | 105% |
| 2017-18 | 4,500 | 4,327 | 96% |
| 2018-19 | 5,750 | 5,783 | 101% |
| 2019-20 | 9,024 | 9,024 | 100% |
Note: From 2015-16, allocation to start-up village entrepreneurship program has also been included. Sources: Union Budgets 2012-13 to 2020-21; PRS.
## Department Of Land Resources
The Department of Land Resources implements two key schemes: (i) Integrated Watershed Development Component of Pradhan Mantri Krishi Sinchai Yojana (WDC-PMKSY), and (ii) Digital India Land Records Modernisation Programme (DILRMP). This year, the Department saw a 18% increase in allocation, over the revised estimates of 2019-20. Out of the Rs 2,251 crore allocated to the Department, Rs 2,000 crore will be spent on WDC-
PMKSY, and Rs 239 crore will be spent on DILRMP. The allocation for WDC-PMKSY has increased by 9% and the allocation for DILRMP has increased by 377%, from the revised estimates of the previous year.
| Revised | Budgeted |
|-------------|-------------|
| Major Heads | |
| Actuals | |
| 18-19 | 19-20 |
| % Change | |
| (RE to BE) | |
| WDC - PMKSY | 1,786 |
| DILRMP | 68 |
| Secretariat | 10 |
| Total | |
Note: WDC - Watershed Development Component PMKSY is Pradhan Mantri Krishi Sinchai Yojana. DILRMP is Digital India Land Records Modernisation Programme. BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2020-21, Department of Land Resources, Ministry of Rural Development; PRS.
## Watershed Development Component Of Pradhan Mantri Krishi Sinchai Yojana
The Integrated Watershed Management Programme aims to develop rain fed portions of net cultivated area and culturable wastelands.12 In 2015, it was subsumed as one of the components of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
The activities under Watershed Development Component are drainage line treatment, soil and moisture conservation, rain water harvesting, and afforestation, among others. The scheme received the highest allocation of Rs 2,000 crore (89%) under the Department's budget. Table 11 shows the actual expenditure by states under the scheme from 2015-16 to 2019-20. Note that there is under-utilisation of the budgeted amounts since the last four years.
crore)
| Year | Budgeted | | Actuals |
|----------|------------|-------|-----------|
| % of | | | |
| Budgeted | | | |
| 2015-16 | 1,530 | 1,527 | 100% |
| 2016-17 | 1,550 | 1,510 | 97% |
| 2017-18 | 2,150 | 1,671 | 78% |
| 2018-19 | 2,251 | 1,786 | 79% |
| 2019-20 | 2,066 | 1,838 | 89% |
Note: Values for 2019-20 is revised estimate. Sources: Union Budgets 2015-16 to 2020-21; PRS.
Completion of projects: The Standing Committee on Rural Development (2019-20) noted that as of November 2019, of the 8,214
sanctioned projects, 2,770 (34%) projects have been reported completed.13 The Committee recommended that the delay in completion of projects needs to be resolved fast.
## Digital India Land Records Modernisation Programme (Dilrmp)
DILRMP is a part of the Digital India initiative.14 The scheme was changed into a Central Sector Scheme in April 2016.15 With this change, the scheme is now implemented by the central government with 100% of the grants coming from the centre. The major components of the programme include: (i) computerisation of all existing land records, (ii) digitisation of maps, (iii) survey/resurvey, and updating of all the settlement records, and (iv) computerisation of registration and its integration with the land records maintenance system. In 2020-21, the programme has been allocated Rs 239 crore, which is a 377% increase over the revised estimates of 2019-20. **Table 13**
shows the trends in allocation and actual expenditure on the programme over the past ten years. Note that there is significant underspending across all the years. In 2018- 19, the expenditure on the scheme was 27% of the budget estimates for the year. Similarly, 2019-20, the revised estimates for the scheme are 33% of the budget estimates for the year.
| Year | Budgeted | | Actuals |
|----------|------------|--------|-----------|
| % of | | | |
| Budgeted | | | |
| 2010-11 | 200 | 156 | 78% |
| 2011-12 | 150 | 106 | 71% |
| 2012-13 | 150 | 95 | 63% |
| 2013-14 | 378 | 213 | 56% |
| 2014-15 | 250 | 179 | 72% |
| 2015-16 | 90 | 40 | 44% |
| 2016-17 | 150 | 139 | 93% |
| 2017-18 | 150 | 93 | 62% |
| 2018-19 | 250 | 68 | 27% |
| 2019-20 | 150 | 50 | 33% |
Note: The 'utilised' figure for 2019-20 is the revised estimate. Sources: Union Budgets 2009-10 to 2020-21; PRS.
Progress of components under DILRMP:
DILRMP is currently being implemented in all states, but with differential progress.16 Land records have been computerised for 90% of the villages.16 However, the mutation records (recording the transfer of ownership) have been computerised for only 59% of the villages.16 This means that the remaining 41% of the villages do not have updated records with the current data on ownership. If the intent of digitising records is to have easy access to correct data, real time updating of property records becomes essential.
However, real time updation of Record of Right
(RoR) and maps has been done for only 22% of the villages.16 The RoR is the primary record that shows how rights on land are derived for the land owner, and records the property's transactions from
##
1 The National Rural Employment Guarantee Act, 2005 https://nrega.nic.in/amendments_2005_2018.pdf. 2005, Operational Guideline 2013, lines_4thEdition_eng_2013.pdf. 3 MNREGA MIS Report, 2013-14 to 2019-20, Ministry of Rural Development, http://mnregaweb4.nic.in/netnrega/MISreport4.aspx. 4 Effective use of technology for welfare schemes - Case of MGNREGS. Economic Survey 2018-19, Volume I. https://www.indiabudget.gov.in/economicsurvey/doc/vol1chapte r/echap10_Vol1.pdf. 5 "Report No. 6, Performance Audit of Mahatma Gandhi National Rural Employment Guarantee Scheme", Comptroller and Auditor General of India, 2013, http://www.cag.gov.in/sites/default/files/audit_report_files/Unio n_Performance_Civil_Ministry_Rural_Development_6_2013.pd f. 6 The National Rural Employment Guarantee Act, 2005 https://nrega.nic.in/amendments_2005_2018.pdf 7 "First Report: Demands for Grants (2019-20) of Department of Rural Development", Standing Committee on Rural Development, December 5, 2019, http://164.100.47.193/lsscommittee/Rural%20Development/17_ Rural_Development_1.pdf. 8 "Report of the Committee on Alignment of MGNREGA
Wages with Minimum Agricultural Wages." July, 2017.
Ministry of Rural Development, MGNREGA Division. http://www.im4change.org/siteadmin/tinymce/uploaded/Draft% 20report%20of%20Nagesh%20Singh%20Committee%20July% 202017.pdf.
time to time. 22 states/ UTs have started issuing digitally signed RoRs.16
Slow pace of work: The Standing Committee on Rural Development (2019-20) noted that the work under the programme is being completed at a slow pace. It recommended the Ministry to ensure expeditious completion of modernisation of land records in all states.13
9 Implementation of Budget Annoucements 2019-20, https://www.indiabudget.gov.in/doc/impbud2019-20.pdf. 10 "Standing Committee on Rural Development, 2018-19, Department of Rural Development, Ministry of Rural Development"
http://164.100.47.193/lsscommittee/Rural%20Development/16_ Rural_Development_52.pdf. 11 "46th Report: Demands for Grants (2018-19) of Ministry of Rural Development", Standing Committee on Rural Development, March 13, 2018, http://164.100.47.193/lsscommittee/Rural%20Developme nt/16_Rural_Development_46.pdf. 12 Programme Details, Watershed Development Component Of Pradhan Mantri Krishi Sinchai Yojana (WDC-PMKSY), Department Of Land Resources, Ministry of Rural Development https://dolr.gov.in/programme-schemes/pmksy/watersheddevelopment-component-pradhan-mantri-krishi-sinchai-yojanawdc-pmksy. 13 "Standing Committee on Rural Development, 2019-20, Department of Land Resources, Ministry of Rural Development" http://164.100.47.193/lsscommittee/Rural%20Development/17_ Rural_Development_3.pdf. 14 Digital India Land Records Modernization Program, Department of Land Resources, Ministry of Rural Development, http://nlrmp.nic.in/faces/common/home.xhtml. 15 "Rationalization of Centrally Sponsored Scheme DILRMP as Central Sector Scheme", Department of Land Resources, Ministry of Rural Development, September 22, 2016. http://dolr.nic.in/dolr/downloads/PDFs/DILRMP%20Clarificatio ns%202016-09-22.pdf. 16 "Digital India Land Records Modernization Programme - MIS, last accessed on February 9, 2020, http://dilrmp.gov.in/#.
## Demand For Grants: Human Resource Development
The Ministry of Human Resource Development consists of two departments: (i) school education and literacy, and (ii) higher education. In 2020-21, the Ministry has been allocated Rs 99,312 crore, the sixth highest allocation among all Ministries. The allocation constitutes 3% of the central government's estimated expenditure for 2020-21. This note presents the trends in expenditure, and discusses some of the issues related to the education sector.
The Department of School Education and Literacy under the Ministry is broadly responsible for education imparted between the ages of six to 18 years, i.e., school education. Under the Right to Education (RTE) Act, 2009 the government is mandated to provide elementary education to all children between six to 14 years of age. Secondary education is imparted between classes nine to 12 for children between 14-18 years of age. In 2020-21, this Department has been allocated Rs
59,845 crore, accounting for 60% of the Ministry's total allocation.
The **Department of Higher Education** is responsible for higher education, and training for students above 18 years of age. Higher education includes undergraduate and postgraduate courses, doctoral degrees, and certificates following the completion of 12 years of schooling or equivalent. In 2020-21, the Department has been allocated Rs
39,467 crore, accounting for 40% of the Ministry's total allocation.
## Overview Of Finances Budget Estimates 2020-21
The Ministry has been allocated Rs 99,312 crore in 2020-21. This is a 4.7% increase over the revised estimate of 2019-20.1
## Table 3: Budget Allocations For The Mhrd (2020- 21) (In Rs Crore)
%
RE
BE
Department
Actuals
2018-19
2019-20
2020-21
chang
e (RE
to BE)
48,441
56,537
59,845
5.9%
School Education & Literacy Higher Education
31,904
38,317
39,467
3.0%
Total
80,345
94,854
99,312
4.7%
Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Expenditure Budget, Ministry of Human Resource Development, 2020-21; PRS.
Table 2 depicts the major heads under which the Ministry spends its funds (as a percentage of its total allocation). In 2020-21, expenditure on centrally sponsored schemes (Samagra Shiksha and Mid-Day Meal Programme in Schools) constitute 50% of the estimated spending of the Ministry. This is followed by expenditure towards autonomous bodies such as the Kendriya Vidyalaya Sangathan (9%) and grants to central universities (8%).
| Expenditure head | Allocation (%) |
|--------------------------------|-------------------|
| Samagra Shiksha | 39% |
| Mid-Day Meal Programme | 11% |
| Autonomous Bodies | 9% |
| Grants to Central Universities | 8% |
| IITs | 7% |
| UGC and AICTE | 5% |
| Others | 20% |
| Total | 100% |
Note: Autonomous Bodies include Kendriya Vidyalaya and Sangathan, Navodaya Vidyalaya Samiti.
'Others' includes other schemes and programmes under the Ministry each with an allocation of less than 5% of the total expenditure. Sources: Expenditure Budget, Vol. 2, Ministry of Human Resource Development, 2020-21; PRS.
## Budget Speech Highlights 2019-20
A new National Education Policy will be released. The new Policy proposes major changes in both school education and higher education.
To ensure greater inflow of finance in education, steps will be taken to enable sourcing external commercial borrowings and Foreign Direct Investment in India.
About 150 higher educational institutions will start apprenticeship embedded degree and diploma courses by March 2021.
As part of the 'Study in India' which focuses on bringing foreign students to study in Indian higher educational institutions, the government will hold Ind- SAT in Asian and African countries.
## Department Of School Education And Literacy
In 2020-21, the Department has been allocated Rs
59,845 crore, a 5.9% increase over the revised estimates of 2019-20.1 Figure 1 shows the allocation of the Department of School Education and Literacy over the past 10 years (2010-20).
Note: Revised estimates have been used for 2019-20 and Budget estimates for 2020-21. Sources: Union Budgets, 2010-20; PRS.
Note that in 2015-16, the allocation was reduced by 9%. Since then, the allocation has been on an upward trajectory. Between 2010-11 and 2020-21, allocation to the Department has grown at an average annual rate of 5%. Table 3 compares actual allocation of the Department with the budget estimates. The utilisation in the last three years has been over 97% of the budget estimates.
actual expenditure (2010-19) (in Rs crore)
Year
Budget
estimate
Actuals
Actuals/BE
(%)
2010-11
33,214
36,433
110%
2011-12
41,451
40,641
98%
2012-13
48,781
45,631
94%
2013-14
52,701
46,856
89%
2014-15
55,115
45,722
83%
2015-16
42,220
41,800
99%
2016-17
43,554
42,989
99%
2017-18
46,356
46,600
101%
2018-19
50,000
48,441
97%
2019-20
56,537
56,537*
*100%
Note: BE - Budget Estimate. *Revised Estimate Sources: Union Budgets, 2012-20; PRS.
Table 4 presents the details of the Department's allocation in 2020-21. In July 2018, the Ministry launched the 'Samagra Shiksha' scheme, which subsumed three schemes, namely: (i) Sarva Shiksha Abhiyan (class 1-8), (ii) Rashtriya Madhyamik Shiksha Abhiyan (class 9-12), and (iii) Teacher Education. In 2020-21, expenditure on centrally sponsored schemes (Samagra Shiksha and Mid-Day Meal Programme in Schools) constitute 87% of the estimated spending of the Department of School Education and Literacy.
%
Major Head
2018-19
Actuals
2019-
20 RE
2020-
21 BE
change
(RE to
BE)
29,437
36,292
38,861
7.1%
National Education Mission
Samagra Shiksha
36,274
38,751
6.8%
25,616
Sarva Shiksha Abhiyan
3,399
Rashtriya Madhyamik Shiksha Abhiyan
422
18
110
514.5%
Teachers Training and Adult Education
9,514
9,912
11,000
11.0%
National Programme of Mid-Day Meal in Schools Autonomous bodies
8,588
9,754
9,205
-5.6%
Scholarships
484
423
483
14.2%
Others
418
155
297
91.3%
Total
48,441
56,537
59,845
5.9%
Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Expenditure Budget, Ministry of Human Resource Development, Union Budget 2020-21; PRS.
Samagra Shiksha has been allocated Rs 38,751
crore in 2020-21. This is an increase of 6.8% from the revised estimates of 2019-20. Note that, *Teacher Training and Adult Education* (subsumed under Samagra Shiksha) has been allocated Rs 110 crore in 2020-21. This is an increase of 515% from the revised estimates of 2019-20. However, the Department had budgeted to spend Rs 125 crore in 2019-20 which was revised down to Rs 18 crore.
Mid-Day Meal Scheme (MDMS):
Expenditure on Mid-Day Meal Scheme (MDMS) increased by about 11% in 2020-21 from the revised estimates of 2019-20. The MDMS targets children in the same age group
as covered by the SSA (6 to 14 years).
Autonomous bodies: Autonomous bodies like
the National Council of Educational Research and Training, and Kendriya Vidyalaya
Sangathan saw a decrease in their allocation by
5.6% (from the revised estimates of last year) and were allocated Rs 9,205 crore in 2020-21.
Scholarships: Scholarships saw an increase of
14.2% in its allocation in 2020-21. Scholarships provided by the Ministry include provisions of Rs 6,000 per year to one lakh meritorious students of economically weaker sections. The aim is to reduce drop-out of students in class eight and encourage them to
continue schooling till class 12.
## Issues In School Education Enrolment, Transition And Dropout Rates
Enrolment: Gross Enrolment Ratio (GER) is the student enrolment as a proportion of the corresponding eligible age group in a given year. In 2015-16, enrolment in classes 1-5 was about 99.2%, which signals a more age appropriate (six to 10
The GER at the upper primary (92.8%), secondary (80%) and senior secondary (56.2 %) levels have increased in the last few years. Note that, while enrolment has gone up at the secondary level, overall there is a decline in the number of children staying in school (See Figure 7). Also, the amount of funds being spent on elementary education (class 1-8) has been significantly higher than the expenditure on secondary education (class 9-12). Table 5 captures the expenditure for Sarva Shiksha Abhiyan and Rashtriya Madhyamik Shiksha Abhiyan since 2014-15.
| Year | SSA | RMSA | Total |
|---------|--------|---------|----------|
| 2014-15 | 24,123 | 3,398 | 27,521 |
| 2015-16 | 21,590 | 3,562 | 25,152 |
| 2016-17 | 21,678 | 3,699 | 25,377 |
| 2017-18 | 19,319 | 3,602 | 22,921 |
| Year | | | |
| Samagra | | | |
| Shiksha | | | |
| 2018-19 | 29,294 | | |
| 2019-20 | 25,404 | | |
Note: Numbers for 2019-20 are as of January 1, 2020. SSA and RMSA subsumed under Samagra Shiksha in 2018-19. Source: Lok Sabha, Unstarred Question No. 205, Ministry of Human Resource Development, February 3, 2020; PRS.
India's enrolment rate in primary education (class 1- 5) is comparable to that of developed countries. However, it falls behind these countries after class 6 (see Figure 3).
Sources: Education statistics at a glance, Ministry of Human Resource Development, 2018; PRS.
Attendance: Attendance is the ratio of the number of persons in the official age group attending a particular class-group to the total number persons enrolled in school in that age-group. The attendance for both boys and girls falls as the level of education rises in school education. As Figure 4 indicates there is negligible difference between the attendance of boys and girls.
Sources: Key Indicators of Social Consumption in India: Education, NSSO, 2018; PRS.
Transition and dropouts: The dropout rate peaks at the secondary level (class 9-10) at 17% as compared to 4% in elementary school (class 1-8) and 2% in upper secondary school (class 11-12)
(see Figure 5). This is also reflected in the transition rates in school education where the lowest transition rate is at the secondary level (class 10 to 11) at 66%. Note that a transition rate below 100% indicates that the students are held back or have dropped out of school. According to NSSO data (2018), the key reasons for females dropping out is to engage in domestic activities (30%), lack of interest in education (15%), and marriage (13%). On the other hand, the key reasons for males dropping out is to engage in economic activities (37%), financial constraints (24%), and lack of interest in education (19%).3 Till 2019, under the RTE Act, a child could not be expelled or detained until the completion of elementary education (until class 8). However, RTE Act was amended in 2019 to remove the provision related to no-detention to address low learning outcomes. Note that, the Draft National Education Policy (2019) recommends that the amendments to the RTE Act on continuous and comprehensive evaluation and the no detention policy must be reviewed. It states that there should be no detention of children till class eight. Instead, schools must ensure that children are achieving age appropriate learning levels.4
## Quality Of Learning
Elementary education: Over the years, expert committees have made some adverse observations regarding the learning outcomes of children. The Central Advisory Board on Education (CABE, 2014), National Achievement Survey (2012 and 2017), and the Economic Survey (2016-17) observed declining learning levels in elementary education even after the implementation of the RTE
Act.5,6,7,8
As per the Annual Status of Education Report, between 2014 to 2018, there has been a gradual improvement in both basic literacy and numeracy for class three students but still only 25% of them are at grade level (ability to read and do basic operations like subtraction of class two level). The report also shows that one out of four children leaving class eight are without basic reading skills (ability to read at least at class two level).9
Under the RTE Act, children are enrolled in the class that corresponds to their age, irrespective of their learning levels. This results in a situation where in the same class, depending on when they are enrolled in school, children may have different learning requirements. It has been recommended that special training be organised and is of flexible duration to enable the child to be at par with other children and to ensure his integration with the class.10 Note that, the RTE Rules were amended in February 2017 to include class-wise, subject-wise learning outcomes till class eight.11
Secondary education: In the National Achievement Survey (2015) for class 10, in the English subject, 24% students were in the range of 0-35% score and 61% students were in the range of 36-50% score. Further, 35% students were in 0- 35% scores, and 49% students were in the range of 36-50% scores in Mathematics.12
Nature of assessment: Under the RTE Act, the Continuous and Comprehensive Evaluation (CCE) method is used for evaluating learning levels in elementary education. It includes paper-pencil tests, drawing and reading pictures, and expressing orally, and is different than the traditional system of examinations. However, CCE has not been adequately implemented or monitored.5 It has been recommended that proper design of assessment and using this information can help improve the quality and innovation in terms of teaching and learning.13 Note that the RTE Act 2009 has been amended state that a regular examination will be held in class 5 and class 8 at the end of every academic year. If a child fails the exam, he will be given additional instruction, and take a re-examination. If he fails in the re-examination, the relevant central or state government may decide to allow schools to detain the child. The Draft National Education Policy (2019) noted that the current education system solely focuses on rote learning of facts and procedures. Hence, it recommends that the curriculum load in each subject should be reduced to its essential core content. This would make space for holistic, discussion and analysis-based learning.4
## Other Issues
Teachers related issues: Experts have identified various issues with regard to the role of teachers to address the challenges confronting elementary education.4,14,10 These include: (i) low teacher accountability and appraisal, (ii) poor quality of the content of teacher-education and changes required in the curriculum of B. Ed and D. Ed courses, (iii)
need for continuous in-service teacher training and upgradation of skill set, (iv) inadequate pupil teacher ratio and deployment of teachers for noneducational purposes, (v) teacher vacancies, and (vi)
excessive recruitment of contract/para teachers.
In 2017, nine lakh posts of teachers were vacant in elementary schools.15 Further, more than one lakh teacher posts were vacant in secondary schools. The draft National Education Policy (2019) recommends that teachers should be deployed with a particular school complex (comprising one secondary school and all the public schools in its neighbourhood) for at least five to seven years. Further, teachers should not be allowed to participate in any non-teaching activities (such as cooking mid-day meals or participating in vaccination campaigns) during school hours that could affect their teaching capacities. For teacher training, the draft Policy recommends that existing B.Ed. programme be replaced by a four-year integrated B.Ed. programme that combines high-quality content, pedagogy, and practical training. An integrated continuous professional development will also be developed for all subjects. Teachers will be required to complete a minimum of 50 hours of continuous professional development training every year.
The Right to Education Act, 2009 (RTE Act):
Currently, the RTE Act provides for free and compulsory education to all children from the age of six to 14 years. The draft National Education Policy (2019) recommended extending the ambit of the RTE Act to include early childhood education and secondary school education.
School accountability: In 2014, CABE
recommended introducing a performance management system for all teachers, school leaders, and department officials, with performance measures linked with student learning outcomes.5 Such measures of school accountability exist in other countries. For example, in the United States, under the No Child Left Behind Act, schools are required to do annual assessment of learning outcomes in reading and mathematics for students from classes 3 to 8. If the school fails to achieve minimum test scores then the consequences include removal of teachers or the headmaster from service, school restructuring or closure, and an option for students to transfer to another school.16
## Department Of Higher Education
The Department of Higher Education has been allocated Rs 39,467 crore in 2020-21, a 3% increase over the revised estimate of 2019-20. Figure 6 depicts the allocation to the Department of Higher Education since 2010-11.
Expenditure on education by the centre and the states as a proportion of the Gross Domestic Product (GDP) has been around 3% between 2014-15 to 2018-19.17 Out of this figure, roughly 1% is spent on higher education in India.
Note: Revised estimates have been used for 2019-20 and budget estimates for 2020-21.
Sources: Union Budgets, 2008-20; PRS.
Table 6 indicates the actual allocation of the Department compared to the budget estimates of that year. The utilisation has been over 90% of the budget estimates in the last three years as seen in the table. In 2016-17 and 2017-18, the Department exceeded its budget estimates, i.e., crossed 100% utilisation.
Year
Budget
Estimate
Actuals
Actuals/BE (%)
2010-11
16,690
15,472
93%
2011-12
21,912
19,505
89%
2012-13
25,275
20,423
81%
2013-14
26,750
24,465
91%
2014-15
27,656
23,152
84%
2015-16
26,855
25,439
95%
2016-17
28,840
29,026
101%
2017-18
33,330
33,614
101%
2018-19
35,010
31,904
91%
2019-20
38,317
38,317*
100%
Note: BE - Budget Estimate. *Revised Estimate Sources: Union Budgets, 2010-20 PRS.
Education in 2020-21 (in Rs crore)
%
2019-20
2020-21
Major Heads
2018-19
Actuals
RE
BE
change
(RE to
BE)
Grants to Central Universities
6,599
8,287
7,643
-8%
IITs
5,590
6,560
7,332
12%
UGC and AICTE
5,114
4,857
5,109
5%
NITs
3,389
3,547
3,885
10%
Student Financial Aid
1,897
2,321
2,316
0%
2,263
2,100
2,200
5%
Higher Education Financing Agency (HEFA) Improvement in salary of teachers
469
1,800
1,900
6%
IISERs
620
841
896
7%
IIMs
351
501
476
-5%
Digital India-elearning
455
541
444
-18%
World Class Institutions
127
325
400
23%
IIITs
428
375
393
5%
Research and Innovation
205
340
307
-10%
1,393
1,380
300
-78%
Rashtriya Uchhatar Shiksha Abhiyan (RUSA) Others
3,005
4,543
5,864
29%
Grand Total
31,904
38,317
39,467
3%
Sources: Expenditure Budget, Vol. 2, Ministry of Human Resource Development, Union Budget 2020-21; PRS.
Key allocation trends are as follows:
About 51% of the Department's expenditure
has been allocated to central universities (as grants), IITs, and statutory and regulatory bodies (University Grants Commission (UGC) and All India Council for Technical Education
(AICTE)).
The bulk of the enrolment in higher education is handled by state universities and their affiliated colleges. However, these state universities receive small amounts of grants from the Union
Budget. Nearly 65% of the UGC's budget is
utilised by the central universities and their colleges while state universities and their affiliated colleges get only the remaining 35%.18 The Standing Committee on Human Resource Development (2016) recommended that the mobilisation of funds in state universities should be explored through other means such as endowments, and contributions from industry and alumni.18
The Higher Education Financing Agency (HEFA) has been allocated Rs 2,200 crore for 2020-21, a 5% decrease over the revised estimates of 2019-20. HEFA is tasked with the creation of high quality infrastructure in premier educational institutions. All the
centrally funded higher educational institutions are eligible for joining as members of the HEFA.19 Note that HEFA is jointly promoted by Canara Bank and the Ministry of Human Resource Development with an authorised capital of Rs 10,000 crore. HEFA has been tasked to mobilise one lakh crore rupees to meet the infrastructure needs of higher educational institutions by 2022. So far, the HEFA has approved 75 projects of higher and medical educational institutions amounting to Rs 25,565 crore.20
Allocation to World Class Institutions in 2020- 21 is Rs 400 crore, an increase of 23% from the revised estimates of 2019-20. The government has selected ten private institutions and eight public institutions as institutes of eminence.21 These institutions will have greater autonomy in admitting foreign students, fixing fees, and recruiting foreign faculty. Further, each public institution declared as an institute of eminence will get financial assistance of up to Rs 1,000 crore over the period of five years.
The funding allocation for Rashtriya Uchchtar Shiksha Abhiyan (RUSA) has significantly decreased by 78% at Rs 300 crore (from the 2019-20 revised estimates). RUSA aims to improve the overall quality of existing state higher educational institutions by ensuring conformity to prescribed norms and standards. Note that, in 2018, the Union Cabinet approved the continuation of the scheme till March 31, 2020.
## Issues In The Higher Education Sector Enrolment Levels
In India, GER in higher education has almost tripled over a period of 15 years, going from 9% in 2002-03 to 26% in 2017-18 (see Figure 7).22,23
Sources: All India Survey on Higher Education, 2017-18;
PRS. A GER of 26% implies that 26% of people in the target age-group are enrolled in universities. The GER for higher education in India is fairly low compared to other countries such as the UK and USA (Figure 8). The Draft National Education Policy (2019) states that it aims to increase GER to 50% by 2035.4
Sources: Education Statistics at a Glance, Ministry of Human Resource Development, 2018; PRS.
Student enrolment is highest at the UG level (79.2%) followed by PG (11.2%). The recent AISHE 2017-18 report reveals that student enrolment decreases as one goes further higher from the undergraduate level of education.23
## Regulatory Issues In Higher Education
Over the years, several expert bodies such as the National Knowledge Commission (2009), the Yashpal Committee (2010), and the Committee for Evolution of the New Education Policy (2016) have suggested measures to reform higher education to address issues related to access, quality, funding and governance.24,25,26 Noting that the current system is overregulated but under governed, these bodies recommended consolidating all existing regulators under an independent regulator. This body was envisaged to perform its regulatory functions without interfering with the academic
and institutional autonomy of higher educational institutions.4 The Draft National Education Policy (2019) proposed setting up of the National Higher Education Regulatory Authority (NHERA).4 This independent authority would replace the existing individual regulators in higher education, including professional and vocational education. This implies that the role of all professional councils such as the Bar Council of India would be limited to setting standards for professional practice. UGC's role would be limited to providing grants to higher education institutions. Note that the government had released the draft Higher Education Commission of India (Repeal of University Grants Commission Act) Bill, 2018 in June 2018. It seeks to replace the UGC and set up a Higher Education Commission.27
## Quality Standards In Higher Education
Currently, there are two accrediting institutions - (i) the National Board of Accreditation (NBA) established by AICTE, and (i) the National Assessment and Accreditation Council (NAAC)
established by UGC. In terms of the quality of universities, out of 323 universities accredited by the NAAC in the most recent cycle, only 23 universities have been given an 'A+' grade.28 The Standing Committee on Human Resource Development (2016) noted that accreditation of higher educational institutions needs to be at core of the regulatory arrangement in higher education. It recommended that credit rating agencies, reputed industry associations, and professional bodies should be encouraged to rate Indian universities and educational institutions.29 The draft National Education Policy (2019) recommended separating NAAC from the UGC into an independent and autonomous body.4 In its new role, NAAC will function as the top level accreditor, and will issue licenses to different accreditation institutions, who will assess higher educational institutions once every five to seven years. All existing higher education institutions should be accredited by 2030.
## Private Sector And Profit Motive In Higher Education
A UGC report in 2012 noted that the distribution of public and private institutions in India is skewed. This is because enrolment in public universities is largely concentrated in conventional disciplines (arts and sciences) whereas in private institutions, more students are enrolled in market-driven disciplines (engineering, management, etc.).30 Thus, with a rise in private universities, there is a mismatch of the demand and supply of subject disciplines in the private sector education. The National Knowledge Commission noted that while private investment is high in the disciplines of engineering, medicine and management; majority of enrolment is still taking place in the traditional disciplines like arts.25 The Yashpal Committee further noted that the private sector should not confine itself to the commercially viable sectors such as management, accountancy, and medicine as this leads to the responsibility of the government to maximise enrolment in general subjects.24
## Fee Structure
The Standing Committee on Human Resource Development has been observed that many private institutions of higher education charge exorbitant fees. 31 In the absence of well-defined norms, fees charged by such universities have remained high. UGC regulates fees for courses offered in deemed universities, to an extent. They state that the fees charged shall be directly linked to the cost of running the course and the institution shall ensure non-commercialisation of education. In 2002, the Supreme Court ruled that the fees charged by private unaided educational institutes could be regulated.32 Also, while banning capitation fee (fees exceeding the tuition fee), it allowed institutes to charge a reasonable surplus. AICTE had constituted a Committee in 2014 under Justice Srikrishna to recommend the fee to be charged by the private technical educational institutes in the country.33 The Committee recommended the maximum tuition and development fee to be charged.
## Teacher Related Issues
According to UGC, out of the total teaching posts of 17,425 in various UGC funded Central Universities, 6,141 (35%) teaching posts are lying vacant.34 Further, in 20 Indian Institute of Management (IIMs), out of the 1,004 total sanctioned teaching posts, 253 posts are lying vacant;35 and in 7 IISERs
1 Expenditure Budget, Vol. 2, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/sbe58.pdf; https://www.indiabudget.gov.in/doc/eb/sbe59.pdf. 2 Educational Statistics at a Glance 2018, Ministry of Human Resource Development, https://mhrd.gov.in/sites/upload_files/mhrd/files/statisticsnew/ESAG-2018.pdf. 3 Key Indicators of Household Social Consumption on Education in India, NSS 75th Round, June 2018, Ministry of Statistics and Programme Implementation, http://www.mospi.gov.in/sites/default/files/publication_reports/K I_Education_75th_Final.pdf. 4 "Draft National Education Policy", Ministry of Human Resource Development, May 31, 2019, https://mhrd.gov.in/sites/upload_files/mhrd/files/Draft_NEP_201 9_EN_Revised.pdf . 5. "Report of CABE Sub Committee on Assessment on implementation of CCE and no detention provision", 2015, Ministry of Human Resource Development, http://mhrd.gov.in/sites/upload_files/mhrd/files/do cument-reports/AssmntCCE.pdf. 6 A summary of India's National Achievement Survey, Class VIII, 2012, National Council of Educational Research and Training, http://mhrd.gov.in/sites/upload_files/mhrd/files/upload_document /11-March-National-Summary-Report-NAS-Class-VIII.pdf. 7 National Achievement Survey 2017, Dashboard, http://nas.schooleduinfo.in/dashboard/nas_ncert#/. 8 Economic Survey, 2016-17, http://indiabudget.nic.in/es2016- 17/echapter_vol2.pdf. 9 Economic Survey, 2018-19, Ministry of Finance, /echap10_vol2.pdf. http://mhrd.gov.in/sites/upload_files/mhrd/files/documentreports/RPE_2011-12.pdf.
and IISc, Bangalore, the total number of sanctioned teaching posts is 1,117 and 153 are lying vacant.36 The Standing Committee on Human Resource Development (2017) reasoned that this could be due to two reasons: (i) young students not finding the profession of teaching attractive; or (ii) the recruitment process is long and involves too many procedural formalities.18 The Draft National Educational Policy (2019) observed that poor service conditions and heavy teaching loads at higher education institutions have resulted in low faculty motivation.4 Further, lack of autonomy and no clear career progression system are also major impediments to faculty motivation. It recommended development of a Continuous Professional Development programme and introduction of a permanent employment (tenure) track system for faculty in all higher education institutions by 2030. Further, a desirable studentteacher ratio of not more than 30:1 must be ensured.
http://www.ncert.nic.in/departments/nie/esd/pdf/NASSummary.p df. 13 World Development Report, 2018, World Bank, http://www.worldbank.org/en/publication/wdr2018. 14 "Implementation of Right of Children to Free and Compulsory Education (RTE) Act, 2009", Comptroller and Auditor General of India, July 21, 2017, http://www.cag.gov.in/content/report-no23- 2017-compliance-audit-union-government-implementation-rightchildren-free-and. 15 Lok Sabha, Unstarred Question No. 76, Ministry of Human Resource Development, February 3, 2020, http://164.100.24.220/loksabhaquestions/annex/173/AU76.pdf. 16 K-12 Education: Highlights of the No Child Left Behind Act of 2001, Library of Congress. Congressional Research Service, February 28, 2005, https://digital.library.unt.edu/ark:/67531/metadc824710/m1/1/. 17 'Social Infrastructure, Employment, and Human Development', Chapter 10, Economic Survey, 2019-20, Ministry of Finance, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter /echap10_vol2.pdf. 18 "Report no. 284: Issues and Challenges before the Higher Educational Sector in India", Standing Committee on on Human Resource Development, December 14, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20HRD/284.pdf. 19 "Cabinet approves establishment of Higher Education Financing Agency for creating capital assets in higher educational institutions", Press Information Bureau, Cabinet, September 12, 2016. 20 Year End Revie 2019- Ministry of Human Resource Development Press Information Bureau, January 6, 2020. 21 Lok Sabha, Unstarred Q No. 44, Ministry of Human Resource Development, Answered on November 18, 2019, http://loksabhaph.nic.in/Questions/QResult15.aspx?qref=6362&ls no=17. 22 All India Survey on Higher Education, 2014-15, Ministry of Human Resource and Development, Department of Higher Education, http://aishe.nic.in/aishe/viewDocument.action?documentId=206. 23 All India Survey on Higher Education, 2017-18, Ministry of Human Resource and Development, Department of Higher
## Union Budget, 2020-21
| Change | Change |
|--------------------------------------------|-----------|
| Major Heads | |
| 2018-19 | |
| Actuals | |
| 2019-20 | |
| Budgeted | |
| 2019-20 | |
| Revised | |
| 2020-21 | |
| Budgeted | |
| between BE | |
| 2019-20 and | |
| RE 2019-20 | |
| between RE | |
| 2019-20 and | |
| BE 2020-21 | |
| Department of School Education and | |
| Literacy | |
| 48,441 | |
| Scholarships | 484 |
| Autonomous bodies | 8,588 |
| National Education Mission | 29,437 |
| Samagra Shiksha | |
| Sarva Shiksha Abhiyan | 25,616 |
| Rashtriya Madhyamik Shiksha | |
| Abhiyan | |
| 3,399 | |
| Teachers Training and Adult | |
| Education | |
| 422 | 125 |
| National Programme of Mid-Day Meal | |
| in Schools | |
| 9,514 | 11,000 |
| Others | 418 |
| Department of Higher Education | 31,904 |
| Higher Education Financing Agency | |
| (HEFA) | |
| 2,263 | 2,100 |
| Student Financial Aid | 1,897 |
| Digital India-e-learning | 336 |
| Research and Innovation | 205 |
| Statutory and regulatory bodies (UGC and | |
| AICTE) | |
| 5,114 | 5,059 |
| Grants to Central Universities | 6,599 |
| Indian Institutes of Technology | 5,590 |
| Indian Institutes of Management | 351 |
| National Institutes of Technology | 3,389 |
| Indian Institute of Science, Education and | |
| Research (IISERs) | |
| 620 | 899 |
| Indian Institutes of Information | |
| Technology(IIITs) | |
| 428 | 375 |
| Rashtriya Uchhatar Shiksha Abhiyan | |
| (RUSA) | |
| 1,393 | 2,100 |
| Improvement in Salary Scale of University | |
| and College Teachers | |
| 469.17 | 2000 |
| World Class Institutions | 127 |
| Others | |
| 3,005 | 4,405 |
| 5,864 | 29.1% |
| Total | 80,345 |
Sources: Demand for Grants, Ministry of Human Resource Development, Union Budget, 2020-21; PRS.
## Indicators On School And Higher Education
GER in Secondary
GER in Elementary Education
Education
GER in Higher
(Classes 1-8)
(Classes 9-12)
State/ UT
Education
Total
(Beyond class 12)
Primary
Upper
Primary
Elementary
Secondary
Higher
Secondary
Andhra Pradesh
82.8
82.1
82.5
76.3
60.6
32.4
Arunachal Pradesh
106.2
119.9
110.4
85.9
51.2
29.7
Assam
107.4
96.7
103.7
78.6
39.7
18.7
Bihar
98.1
103.9
99.9
76.7
28.8
13.6
Chhattisgarh
97.1
100.8
98.5
87.7
54.5
18.6
Goa
101.3
97.1
99.7
99.3
78.7
30.1
Gujarat
95.0
97.2
95.8
74.5
43.2
20.4
Haryana
93.9
94.4
94.1
86.3
60.8
29.2
Himachal Pradesh
97.9
103.0
99.8
103.9
92.0
39.6
Jammu & Kashmir
77.1
66.2
73.0
61.7
52.9
30.9
Jharkhand
96.6
91.8
95.0
63.5
37.1
19.1
Karnataka
103.7
2.9
99.7
84.4
41.9
28.8
Kerala
95.1
93.6
94.6
99.4
79.4
37.0
Madhya Pradesh
92.1
89.7
91.3
80.2
47.1
21.5
Manipur
120.6
119.3
120.2
86.5
64.4
33.7
Maharashtra
97.5
98.7
97.9
91.7
70.7
32.0
Meghalaya
129.1
128.0
128.8
83.3
40.6
25.8
Mizoram
115.7
127.5
119.3
95.9
54.6
25.7
Nagaland
81.7
90.4
84.4
61.8
36.3
18.7
Odisha
100.2
94.6
98.1
79.9
40.1
22.1
Punjab
99.3
97.7
98.7
87.1
72.2
29.5
Rajasthan
97.8
92.0
95.8
76.6
60.3
23.0
Sikkim
92.0
136.8
106.9
112.0
64.2
53.9
Tamil Nadu
102.0
93.4
98.6
93.9
83.7
49.0
Telangana
98.6
86.9
94.1
81.8
50.6
36.2
Tripura
102.4
126.4
110.0
112.3
41.9
19.2
Uttar Pradesh
87.2
72.7
82.1
67.8
59.0
25.8
Uttarakhand
96.4
86.7
92.7
84.4
77.1
39.1
West Bengal
96.3
96.3
96.3
78.6
50.9
19.3
Andaman & Nicobar Islands
86.9
83.1
85.4
84.1
72.8
23.2
Chandigarh
80.1
95.6
85.8
89.7
83.2
50.6
Dadra & Nagar Haveli
82.9
91.6
86.0
91.2
51.8
9.3
Daman & Diu
84.0
81.1
82.9
73.3
34.6
5.5
Delhi
109.2
129.0
115.9
114.4
74.2
46.3
Lakshadweep
70.0
81.4
79.8
105.7
97.9
7.4
Puducherry
85.6
84.8
85.3
87.5
74.2
46.4
India
95.1
90.7
93.6
79.4
55.4
26.3
Note: Enrolment rate can exceed 100% due to early or late school entrance and grade repetition, or for example, children not in the 6-14 age group still being enrolled in elementary school. Data for higher education is of 2018. Sources: Flash Statistics, DISE 2016-17; AISHE 2018-19, Ministry of Human Resource Development; PRS.
| Management Type (in %) (2016-17) | Pupil Teacher Ratio (2015-16) |
|-------------------------------------|----------------------------------|
| Higher | |
| State/UT | |
| Government | |
| Upper | |
| Primary | |
| Secondary | |
| (Classes 9- | secondary |
| Private | |
| schools | schools |
| Others | |
| Primary | |
| (Classes 1-5) | |
| (Classes 6-8) | 10) |
| Higher | |
| (Beyond | |
| class 12) | |
| Andhra Pradesh | 26.4 |
| Arunachal | |
| Pradesh | |
| 13.6 | 85.2 |
| Assam | 13.7 |
| Bihar | 5.4 |
| Chhattisgarh | 12.5 |
| Goa | 34.7 |
| Gujarat | 34.9 |
| Haryana | 32.3 |
| Himachal Pradesh | 14.9 |
| Jammu & Kashmir | 18.3 |
| Jharkhand | 5.4 |
| Karnataka | 34.3 |
| Kerala | 61.1 |
| Madhya Pradesh | 18.4 |
| Maharashtra | 37.5 |
| Manipur | 30.8 |
| Meghalaya | 44.8 |
| Mizoram | 31.8 |
| Nagaland | 25.9 |
| Odisha | 14.2 |
| Punjab | 25.9 |
| Rajasthan | 32.3 |
| Sikkim | 33.6 |
| Tamil Nadu | 33.2 |
| Telangana | 30.9 |
| Tripura | 7.08 |
| Uttar Pradesh | 34.4 |
| Uttarakhand | 10.1 |
| West Bengal | 10.7 |
| Andaman & | |
| Nicobar Islands | |
| | |
| | |
| 17.1 | 83.0 |
| Chandigarh | 39.8 |
| Dadra & Nagar | |
| Haveli | |
| 12.3 | 86.7 |
| Daman & Diu | 17.1 |
| Delhi | 51.3 |
| Lakshadweep | - |
| Puducherry | 42.4 |
| India | 25.2 |
Note: Government schools consist of schools run by department of education, tribal/social welfare department, local body, other government and central government. Private schools consist of private aided and private unaided schools, 'Others' comprises Madrasas and unrecognised schools. Type of management of schools is for 2016-17. Pupil teacher ratio is for 2015-16, except for higher education which is for 2018-19. Sources: Flash Statistics, U-DISE 2016-17; AISHE 2018-19, Educational Statistics at a Glance 2018; Ministry of Human Resource Development; PRS
## Demand For Grants: Road Transport And Highways
The Ministry of Road Transport and Highways formulates and administers policies for road transport, and transport research. It is also involved with the construction and maintenance of the National Highways (NHs) through the National Highways Authority of India (NHAI), and the National Highways and Infrastructure Development Corporation Limited (NHIDCL). It also deals with matters relating to road transport such as implementation of central legislation such as the Motor Vehicles Act, 1988. This note looks at the proposed expenditure of the Ministry for the year 2020-21, its finances over the last few years, and issues with the same.
## Allocations In Union Budget 2020-21 Fund Allocation1
The total expenditure on the Ministry of Road Transport and Highways for 2020-21 is estimated at Rs 91,823 crore. This is 11% higher than the revised estimates for 2019-20. In 2020-21, capital expenditure is estimated at Rs 81,975 crore while revenue expenditure is estimated at Rs 9,849 crore. Note that in 2014-15, the ratio between revenue and capital expenditure was 50:50. In 2015-16, this ratio changed, with the Ministry spending more funds on capital expenditure. Since then, the Ministry has increased its capital expenditure significantly, while revenue expenditure has gradually declined. In 2020-21,
89% of the Ministry's spending is estimated to be on capital expenditure.
2018-19
Actual
2019-20
Revised
2020-21
Budget
% Change
BE 2020-21/
RE 2019-20
Revenue
9,655
10,854
9,849
-9%
Capital
67,646
72,162
81,975
14%
Total
77,301
83,016
91,823
11%
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Demands for Grants 2020-21, Ministry of Road Transport and Highways; PRS.
## Overview Of Finances Utilisation Of Funds
In the past few years, the expenditure of the Ministry has seen a significant increase, with the maximum year-on-year increase at 42% seen in 2015-16.
Notes: Figures for 2019-20 are revised estimates.
Sources: Ministry of Road Transport and Highways budget documents 2009-20; PRS.
However, usually the actual expenditure by the Ministry has been lower than the budget estimates
(see **Figure 2**). In 2018-19, the Ministry exceeded its budgeted expenditure for that year by 9%.
Note: The number for 2019-20 compares the budget estimates with the revised estimates. Sources: Ministry of Road Transport and Highways budget documents 2009-20; PRS.
## Policy Announcements In The Budget Speech2
In her budget speech, the Finance Minister made the following announcements regarding the roads sector:
Rs 100 lakh crore will be invested on infrastructure over the next five years.
Accelerated development of highways will be undertaken. This will include development of 2,500 km access control highways, 9,000 km of economic corridors, 2,000 km of coastal and land port roads and 2,000 km of strategic highways.
The Delhi-Mumbai Expressway and two other packages would be completed by 2023. The Chennai- Bengaluru Expressway will be started.
At least 12 lots of highway bundles of over 6,000 km
will be monetised before 2024.
## Expenditure Of The Central Government
In 2020-21, of the total expenditure, the highest allocation is towards roads and bridges at Rs 48,777 crore(53%).1 This is followed by allocation towards NHAI at Rs 42,500 crore (46%).1
## Road Transport And Highways
Major
head
2018-19
Actual
2019-20
Revised
2020-21
Budget
% Change
BE 2020-21/
RE 2019-20
Roads and bridges
37,825
45,897
48,777
6%
NHAI
39,287
36,691
42,500
16%
166
273
379
39%
Road transport and safety Others
117
155
167
8%
Total
77,301
83,016
91,823
11%
Notes: BE - Budget Estimate; RE - Revised Estimate. Sources: Demands for Grants 2020-21, Ministry of Road Transport and Highways; PRS.
Roads and bridges: In 2020-21, the allocation towards roads and bridges is Rs 48,777 crore. This is 6% more than the revised estimates of 2019-20 (Rs 45,897 crore).1 Note that in 2018-19, the actual allocation towards roads and bridges (Rs 37,825 crore) was 8% lower than the budget estimate for that year. Expenditure under roads and bridges includes development of NHs, projects related to expressways, increasing the number of lanes under various projects, and development of road connectivity in left wing extremism affected areas.
NHAI: The central government develops and maintains NHs through the NHAI. NHAI has been allocated Rs 42,500 crore in 2020-21, which is 16% more than the revised estimates for 2019-20 (Rs 36,691 crore).1 Of the budgeted amount, 49% (Rs 20,750 crore) will be provided from the Central Road and Infrastructure Fund , 27% (Rs 11,500 crore) will be provided from the Permanent Bridge Fees Fund, and the remaining 24% (Rs 10,250 crore) will come from the monetisation of the National Highways Fund.1 Expenditure on the NHAI includes funding towards the umbrella highway scheme, Bharatmala Pariyojana. This scheme seeks to optimise efficiency of freight and passenger movement by bridging critical infrastructure gaps. It also aims to increase the number districts with NH linkages from 300 to 550.3 Under Phase I of Bharatmala Pariyojana, 34,800 km of roads will be developed over a period of five years. Phase I will also subsume 10,000 km of balance roadworks under the National Highway Development Programme. The estimated cost of Phase I is Rs 5,35,000 crore, spread over five years. Till October 2019, 255 road projects with an aggregate length of about 10,699 km, and costing Rs 2,64,916 crore have been approved under Bharatmala Pariyojana Phase-I.4 Out of the 255
approved projects, 225 projects with an aggregate length of about 9,561 km have already been awarded for construction.5 For the current financial year (2019-20), the target of highway construction under Bharatmala Pariyojana is 4,462 km and target of award is 7,800 km, subject to pre-construction clearance, land availability and project viability.6
## Funds Managed By The Ministry
The Ministry manages its expenditure through various funds. Their details are provided below.
Central Road and Infrastructure Fund (CRIF):
A majority of the Ministry's expenditure is managed through transfers from the CRIF. A portion of the cess collected on motor spirit and high speed diesel is earmarked for the development of NHs and SHs, and the amount is transferred to the non-lapsable CRIF. This amount is eventually released to the NHAI, and to the state/UT governments for development of road infrastructure (and other infrastructure projects such as railways) in the country.7 For 2020-21, the transfer from CRIF towards the Ministry is estimated at Rs 59,622 crore.1 This is a 9% increase from the revised estimates of 2019-20 (Rs 54,539 crore).
Permanent Bridge Fees Fund (PBFF): Funds transferred to the PBFF relate to the revenue collected by the government by way of: (i) fees levied for the use of certain permanent bridges on NHs by motor vehicles, (ii) toll on NHs, and (iii) revenue share received on some PPP projects. These funds are then released to the NHAI for the development of NHs entrusted to it.1 For 2020-21, the transfer to PBFF is estimated at Rs 11,518 crore.1 This is a 9% increase from the revised estimates of 2019-20 (Rs 10,610 crore).
National Investment Fund (NIF): The NIF was created in 2005, and is credited with proceeds from disinvestments of public sector enterprises. The Ministry finances the Special Accelerated Road Development Programme in North East (SARDP- NE) with funds from the NIF. For 2020-21, the transfer to NIF is estimated at Rs 6,780 crore.1 This is 12% higher than the revised estimates of 2019-20 (Rs 6,070 crore).
National Highways Fund: In August 2016, the Union Cabinet had authorised NHAI to monetise certain public funded NH projects.8 Such monetisation includes transferring operations and maintenance of stretches of NHs to private contractors on a long-term basis. In 2020-21, Rs 10,250 crore is estimated to be generated through such monetisation. This is marginally higher than the revised estimate of 2019-20 (Rs 10,000 crore).
## Rs Crore)
Funds
2018-19
Actual
2019-20
Revised
2020-21
Budget
% Change
BE 2020-21/
RE 2019-20
CRIF
50,762
54,539
59,622
9%
PBFF
9,584
10,610
11,518
9%
9,682
10,000
10,250
2%
National Highways Fund
5,980
6,070
6,780
12%
National Investment Fund
Notes: BE - Budget Estimate; RE - Revised Estimate. Sources: Demands for Grants 2020-21, Ministry of Road Transport and Highways; PRS.
## Issues To Consider
India has one of the largest road networks in the world with about 59 lakh km of road length.9 This road length includes National Highways (NHs), Expressways, State Highways (SHs), district roads, PWD roads, and project roads. In India, road infrastructure is used to transport over 60% of total goods and 85% of total passenger traffic.9 NHs comprise about 2% of the road network but carry about 40% of the total road traffic.10 However, the roads sector has been facing several constraints such as: (i) lack of equity with developers, (ii) higher cost of financing, (iii) shortfall in funds for maintenance, (iv) unavailability of land for the expansion of NHs, (v) significant increase in land acquisition cost, and (vi) bottlenecks and checkpoints on NHs which could adversely impact benefits of GST.11 Further, the value of NPAs in the infrastructure sector (including roads and highways) has been increasing, with NPAs at around Rs 2.6 lakh crore as of August 2016.12 We discuss some of these issues below.
## Issues With Financing
The table below highlights the total investment in roads sector, as highlighted by the Economic Survey 2019-20.13
## Thousand Crore)
Private
Sector
Budgetary
Support
Borrowings
investment
2014-15
29
19
3
2015-16
46
30
23
2016-17
49
16
33
2017-18
60
17
51
2018-19
76
22
61
2019-20
43
12
26
Sources: Economic Survey 2019-20; PRS.
Role of central government in financing: The Standing Committee on Transport (2016) had observed that while the Ministry of Road Transport and Highways invests in the construction of roads, it does not have its own source of revenue other than budgetary support from the central government.14 It recommended that the RBI and Ministry of Finance may help the Ministry of Road Transport to set up its own dedicated financial institutions to generate funds for development of the road sector. It also recommended that Ministry should monitor toll collection and channel any surplus funds towards stressed projects. The Committee (2016) had also noted that while the central government has allocated a huge budget for the road sector, this will not be sustainable over the long term.14 It suggested that the government should devise ways and establish appropriate financial institutions and models to encourage the return of private investment to the road sector. More recently, the Standing Committee on Transport (2018) noted that road development needs concerted efforts in the form of mobilisation of funds from other sources along with increasing budgetary allocation as private sector involvement has been depleting in recent years.15 In November 2019, the Union Cabinet approved certain changes in existing contract methods to allow NHAI to monetise existing NHs.16
Borrowings: In 2020-21, NHAI estimates to borrow Rs 65,000 crore towards capital outlay. This amount is 13% lower than the revised estimates for borrowings (Rs 75,000 crore). Note that this borrowing is in addition to the Rs 42,500 crore of budgetary support discussed earlier. In 2018-19, about 68% of the funding for capital outlay towards roads and highways was estimated to come from borrowings, and the remaining from budgetary support. However, as per the actual figures, 63% of the funding came from borrowings. In 2017-18 also, the actual capital outlay funding from borrowings was marginally lower than what was estimated. In 2018-19, the budgetary support was 21% higher than the budget estimates for that year. This could imply that NHAI has been unable to raise the required level of borrowing, and the central government has to step in to bridge the funding gap. The Standing Committee on Transport (2018) had questioned the ability of the government to complete projects in the absence of the required funding.
## Private Financing And Contracts:
It has been noted that private financing for the roads sector is a challenge.10,17 Several PPP road projects have not been able to attract bids.17 The major highway developers in the country are also facing financial capacity constraints. Further, there is a lack of debt products that are aligned with the revenue stream profile of highway projects (longterm projects where toll collection can begin only after the entire project is completed). This makes financing of such projects difficult, and has resulted in some projects getting stalled at the construction stage. This also discourages prospective bidders.17 The Committee on Revisiting & Revitalizing the PPP model of Infrastructure Development (Chair: Dr. Vijay Kelkar) had looked at issues with PPP
projects in India, in November 2015.18 It had recommended setting up an independent regulator for the roads sector to help bring in and regulate private players in the sector. It had also noted that service delivery (such as constructing roads) to citizens is the government's responsibility and should not be evaded through PPPs. The Kelkar Committee (2015) had also observed that since infrastructure projects span over 20-30 years, a private developer may lose bargaining power because of abrupt changes in the economic or policy environment.18 It recommended that the private sector must be protected against such loss of bargaining power. This could be ensured by amending the terms of the concession agreement to allow for renegotiations.
Non-performing assets: The Standing Committee on Transport (2016) had observed that several of the long-term loans disbursed for the road sector are turning into non-performing assets (NPAs).14 Project bids are often made without proper study, and projects are awarded in a hurry. This results in stalling of projects, and concessionaires leave midway. Concessionaires had also anticipated higher revenue realisation but achieved less due to the economic downturn.14 Banks and other infrastructure lending institutions have also been reluctant to finance the highways sector.14 This has led to difficulties in debt servicing, putting additional stress on the road infrastructure portfolios. Besides increasing the cost of the project, delays also make it difficult to obtain additional debt.14
The Standing Committee (2016) recommended that banks should take due diligence while disbursing loans to concessionaires. It also suggested that the bank NPAs may be supported by government allocation. Banks could be empowered to recover the bad debts. Further, in light of huge NPAs lying with a single bank, the Standing Committee (2019) recommended that guidelines prescribing a limit up to which a bank can lend to a single borrower be framed to minimise the risk involved in lending.19 The Standing Committee on Transport (2019) also suggested that NHAI should revisit the financial requirements for bidders to ensure their eligibility for bidding process.20 While the onus of the feasibility of the bids made by the concessionaire lies mainly with the banks, NHAI should exercise due diligence while awarding projects to concessionaire with poor performance history.
## Performance Of Nhai
The Comptroller and Auditor General of India (2016) had noted several procedural inefficiencies with NHAI.19 For example, NHAI could not realise toll on certain projects due to delays in approvals, toll operations, and other procedural lapses. NHAI did not adhere to the Ministry's guidelines on maintenance of project wise balance sheet and cash flow.19 Loss of revenue was also noted due to inefficient bidding process for engagement of toll collecting agencies.19 The Committee on Public Undertakings (2017) had also noted several issues in the financial performance of NHAI such as: (i) insufficiency of funds, (ii) gap between the funds allocated to the Ministry, and released to NHAI, and (iii) underutilisation of funds.24 For example, funds that are left unspent at the end of a financial year is shown as 'opening balance' at the beginning of the next financial year. This opening balance was Rs 2,672 crore and Rs 6,740 crore for the years 2015-16 and 2016-17 respectively.24 This shows NHAI's inability to optimally utilise available funds. Committees have also suggested more due diligence on the part of NHAI. The Standing Committee on Transport (2019) recommended that NHAI should compare its project cost estimates with the actual costs incurred on road projects. If there is a substantial difference between the bid price offered by the concessionaire and the project cost estimates made by the government, NHAI should review its cost estimation methodologies.
## Investment In Maintenance Of Roads
In 2020-21 the Ministry has allocated Rs 2,618 crore towards maintenance of roads and highways (including toll bridges). This is Rs 492 crore (16%) lower than the revised estimates of 2019-20.
The Ministry has allocated about 3% of its budget towards maintenance of NHs. This is for a total NH length of 1.14 lakh km. In comparison, in 2020-21 the US government seeks to allocate $23.74 billion (51% of its total budget on highways) towards its National Highway Performance Program, to improve the condition and performance of their National Highway System (roughly 2.2 lakh miles of length).21 The National Transport Development Policy Committee (2014) had noted that the amount spent on maintenance of roads is low.22 This results in roads with potholes, weak bridges, and poor pavements, and has safety consequences. Further, maintenance is carried out only when required, as opposed to being a part of preventive measures.22 The Standing Committee on Transport (2017) had observed that the entire length of NHs in the country cannot be maintained with this amount. It had recommended that the budget for maintenance of NHs should be increased. Maintenance of roads should be given top priority as it increases the life span of roads. An effective monitoring mechanism for repair and maintenance of roads should be put in place.17 Further, there should be penalties for contractors and engineers in case of poor quality repair, maintenance, and construction. The Standing Committee on Transport (2018) had also noted issues of under-utilisation under maintenance and repairs works.
## Investment In Road Safety
In 2020-21, the Ministry has allocated Rs 379 crore towards road transport and safety. This is 39% higher than the revised estimates of 2019-20. This would provide for various things such as road safety programmes, setting up of facilities on NHs, for extending relief to accident victims, strengthening of public transport, research and development, and training. This amount is about 0.4% of the Ministry's total budget. In comparison, the US federal government spends about $2.7 billion on its Highway Safety Improvement Programme (6% of its total expenditure on highways).21
In 2017, there were 4,64,910 road accidents in India, which killed about 1.5 lakh people and injured about 4.7 lakh people.23 In 2019, Parliament passed the Motor Vehicles (Amendment) Bill, 2019 which seeks to address various issues around road safety. It increases the penalties for various offences under the Act, and provides for a Motor Vehicle Accident Fund which would be used for treatment of persons injured in road accidents. It also provides for a National Road Safety Board, which would advise the central and state governments on all aspects of road safety and traffic management.
## Targets Vs Performance
Road construction: The rate of road construction has improved in the last few years. Achievement of construction targets (for NHs) has ranged between 55% to 70% in the last five years. The Standing Committee on Transport (2018) noted that of the total length to be constructed under NHDP i.e., 56,323 km, 33,820 km (60%) has been completed.15 The balance work has been transferred under the Bharatmala Pariyojana. The Standing Committee on Transport (2017) had noted that the targets could not be met due to shortage of funds. Reasons for incomplete projects include delays in obtaining clearances, poor financial and technical performance of the contractors, and law and order issues. The Economic Survey 2018-19 also highlighted issues such as time and cost overruns due to delays in project implementation, procedural delays, and lesser traffic growth than expected which increased the risk factor of the projects resulting in stalling of projects. Table 5 below shows the road length constructed per year.
Constructed
% achievement
(constructed/
Year
Target
(km)
(km)
target)
2014-15
6,300
4,410
70%
2015-16
10,950
6,061
55%
2016-17
15,000
8,231
55%
2017-18
15,000
9,829
66%
2018-19
15,000
10,855
72%
2019-20
15,000
4,622
31%
Note: Construction figures for 2019-20 are till September 30, 2019. Sources: Economic Survey 2019-20; PRS.
## Connectivity In Remote Areas
The Ministry also allocates funds towards the development of highways in areas with poor connectivity. Some of these projects include the Special Accelerated Road Development Programme in North East (SARDP-NE), Externally Aided Projects and Roads Projects in Left-Wing Extremism Affected Areas. In 2020-21, Rs 6,780 crore has been allocated towards the SARDP-NE project, which is 12% higher than the revised estimates of 2019-20. The Standing Committee (2018) had noted underutilisation of funds and under-achievement of targets in SARDP-NE.15
## Project Delays And Increase In Project Costs
The Committee on Public Undertakings (2017) had noted that from 1995, till June 2016, out of the total 388 projects completed, only 55 projects were completed on or before time.24 Delays in the completion of the projects were mainly attributed to: (i) the long time taken in land acquisition, and obtaining environment and forest clearances, (ii) poor performance of concessionaires due to economic slowdown, (iii) cash flow problems, and (iv) law and order issues.25 Such delays increase project costs, eventually making certain projects unviable. As of December 2018, 435 infrastructure and road projects were pending, and the Ministry expects to complete them by October 2020.26 The Standing Committee on Transport (2015) had recommended that a coordination mechanism at the central level with the Ministries of Finance, Environment and Forest and Defence will help speed up the process of clearances.17 The Standing Committee (2016) had also suggested that the Ministry of Road Transport and Highways should obtain all these clearances before awarding the projects to concessionaires.
## Increase In Land Acquisition Costs
From January 1, 2015, the compensation for land acquired by NHAI is determined as per the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act,
2013. The Committee on Public Undertakings
(2017) had noted that due to higher compensation under the 2013 Act, the expenditure by the Ministry of Road Transport on land acquisition
##
1 Notes on Demands for Grants 2020-21, Demand no 84, Ministry of Road Transport and Highways, https://www.indiabudget.gov.in/doc/eb/sbe84.pdf. 2 Budget Speech 2020-21, https://www.indiabudget.gov.in/budgetspeech.php. 3 Lok Sabha Unstarred question no. 1129, Ministry of Road Transport and Highways, December 21, 2017. 4 Rajya Sabha Unstarred question no. 2373, Ministry of Road Transport and Highways, December 9, 2019. 5 Rajya Sabha Unstarred Question No. 1563, Ministry of Road Transport and Highways, December 2, 2019. 6 Lok Sabha Unstarred Question No. 1688, Ministry of Road Transport and Highways, November 28, 2019. 7 Notes on Demand for Grants 2014-15, Demand no 83, Ministry of Road Transport and Highways. 8 "Cabinet authorized National Highways Authority of India to monetize public funded national highway projects", Press Information Bureau , Cabinet Committee on Economic Affairs (CCEA), August 3, 2016, http://pib.nic.in/newsite/PrintRelease.aspx?relid=148306. 9 Basic Road Statistics of India 2016-17, Ministry of Road Transport and Highways, http://morth.nic.in/showfile.asp?lid=4585. 10 Annual Report 2017-18, National Highways Authority of India, Ministry of Road Transport and Highways, https://nhai.gov.in/writereaddata/Portal/Images/pdf/Compressed NHAIAnnualReportEnglishcorrected.pdf. 11 Chapter 8: Industry and Infrastructure, Economic Survey 2016-17, Volume 2, August 2017, http://www.indiabudget.gov.in/es2016-17/echapter_vol2.pdf. 12 "246th Report: Demands for Grants (2017-18) of Ministry of Road Transport and Highways", Standing Committee on Transport, Tourism and Culture, March 17, 2017, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Transport,%20Tourism%20and%20Culture /246.pdf. 13 Chapter 8, Industry and Infrastructure, Economic Survey 2019-20, February 1, 2020, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapte r/echap08_vol2.pdf. 14 "236th Report: Infrastructure Lending in Road Sector", Standing Committee on Transport, Tourism and Culture, August 10, 2016, http://164.100.47.5/newcommittee/reports/EnglishCommittees/C ommittee%20on%20Transport,%20Tourism%20and%20Culture /236.pdf. 15 "259th Report: Demands for Grants (2018-19) of Ministry of Road Transport and Highways", Standing Committee on increased from Rs 9,097 crore in 2014-15 to Rs
21,933 crore in 2015-16.24 The Committee also observed that farmers who were entitled to lesser compensation under the older law, have been approaching courts for increased compensation.24 This has further delayed the land acquisition process and added to the cost of projects. In 2017-18, NHAI spent more funds on land acquisition (41% of the expenses) as compared to project expenditure (39%).10
Transport, Tourism and Culture, March 6, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/102/259_2018_6_17.pdf. 16 "Year End Review 2019- Ministry of Road Transport &
Highways", Press Information Bureau, Ministry of Road Transport and Highways, January 1, 2020. 17 "220th Report: Demands for Grants (2015-16) of Ministry of Road Transport and Highways", Standing Committee on Transport, Tourism and Culture, April 28, 2015, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/31/220_2016_7_17.pdf. 18 "Report of the Committee on Revisiting and Revitalising Public Private Partnership Model of Infrastructure", Department of Economic Affairs, Ministry of Finance, November 2015, https://www.pppinindia.gov.in/infrastructureindia/documents/10 184/0/kelkar+Pdf/0d6ffb64-4501-42ba-a083-ca3ce99cf999. 19 Chapter 12: Ministry of Road Transport and Highways, Report No. 9 of 2017, 2016, Compliance Audit Union Government Commercial, Comptroller and Auditor General of India, April 5, 2017, http://www.cag.gov.in/sites/default/files/audit_report_files/Exec utive_Summary_report_No_9_%20of_2017_on_compliance_au dit_observations_union_government.pdf. 20 "272nd Report: Action Taken by the Government on the Recommendations/Observations of the Committee contained in its Two Hundred and Thirty Sixth Report on 'Infrastructure Lending in Road Sector", Standing Committee on Transport, Tourism and Culture, December 9, 2019, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/20/127/272_2019_12_15.pdf. 21 FHWA FY 2019 Budget, Federal Highway Administration, https://www.fhwa.dot.gov/cfo/fhwa-fy-2019-cj-final.pdf.
22 "Volume 3, Chapter 2, Roads and Road Transport", India Transport Report: Moving India to 2032, National Transport Development Policy Committee, June 17, 2014, http://planningcommission.nic.in/sectors/NTDPC/volume3_p1/r oads_v3_p1.pdf. 23 Road Accidents in India 2017, Transport Research Wing, Ministry of Road Transport and Highways, http://morth.nic.in/showfile.asp?lid=3369. 24 19th Report, Committee on Public Undertaking: 'National Highways Authority of India', Lok Sabha, August 2, 2017, http://164.100.47.193/lsscommittee/Public%20Undertakings/16 _Public_Undertakings_19.pdf. 25 Lok Sabha Unstarred Question No. 1808, Ministry of Road Transport and Highways, November 28, 2019. 26 Lok Sabha Unstarred question no. 505, Ministry of Road Transport and Highways, December 13, 2018.
## Demand For Grants: Telecommunications
The Department of Telecommunications under the Ministry of Communications is responsible for making policies, licensing, monitoring, regulation, research and international co-operation in the field of telecommunications. The Department operates several Public Sector Undertakings involved in providing telecommunication services, consultancy, and equipment manufacturing. This note presents the trends in expenditure and discusses some of the issues in the sector.
## Overview Of Finances Expenditure1,2
In 2020-21, the Department has been allocated Rs 66,432 crore, a 184% increase over the revised estimates of 2019-20. 61% of the allocation is towards revenue expenditure and the remaining 39% is towards capital expenditure. As shown in Table 1, in 2020-21, capital expenditure and revenue expenditure have increased by 422% and 121% over the revised estimates of 2019-20, respectively. The significant increase in allocation is to provide for the revival plan for BSNL and MTNL, which was approved by the Union Cabinet in October, 2019.3 A total of Rs 37,268 crore has been allocated for this purpose (56% of total allocation). The revival plan provides for: (i) capital infusion for allotment of the 4G spectrum (capital expenditure), and (ii) costs to be incurred towards voluntary retirement scheme.3 Excluding the revival plan, total expenditure is budgeted to grow at 25% over the revised estimates of 2019-20, with growth in revenue expenditure at 30% and that in capital expenditure at 7%.
| 2019-20 | 2020-21 |
|------------|------------|
| | |
| 2018-19 | |
| Actuals | RE |
| % change | |
| (RE 2019- | |
| 20 to BE | |
| 2020-21) | |
| Revenue | 18,492 |
| Capital | 2,114 |
| Total | 20,606 |
Sources: Demand No. 13, Department of Telecom, 2020-21, PRS.
Figure 1 shows the trend in actual expenditure during the 2010-21 period. During the 2010-20 period, actual expenditure has increased at an annual average growth rate of 13.8%. The higher increase in expenditure since 2015-16 as compared to previous years is due to allocation towards BharatNet (a scheme to connect all gram panchayats by broadband), and Optical Fibre Network for Defence Services scheme.
As seen in Figure 2, funds allocated to the Department have been underutilised in general, except in 2015-16
and 2016-17, where actual expenditure exceeded budget estimates by 52% and 29% respectively. In 2015-16, the increased expenditure was mainly due to allocation for a refund of upfront charges to BSNL and MTNL towards surrender of certain spectrum. In 2016- 17, it was due to increased allocation towards BharatNet at the revised stage. In 2018-19, actual expenditure was 27% less than the budgeted expenditure. As per the revised estimates of 2019-20, 85% of the allotted funds will be utilised.
Note: Revised Estimates used for 2019-20. Budget Estimates used for 2020-21. Sources: Demands of Department of Telecom, 2010-21; PRS.
Note: BE: Budget Estimates; Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2010-20; PRS.
## Major Expenditure Heads
In 2020-21, 57% of the total allocation is towards support to PSUs (Rs 38,045 crore). This is mainly to provide for the revival plan of BSNL and MTNL (Table 3). Expenditure on pensions continues to be a high proportion of the Department's expenditure (Figure 3).
In 2020-21, 21% of the total allocation is towards pension (Rs 13,982 crore). Rs 6,000 crore has been allocated towards the BharatNet scheme (9% of the total allocation). Under the expenditure head
"Compensation to Telecom Service Providers", funds are being provided to finance various schemes for the creation and augmentation of telecom infrastructure and services in rural and remote areas.
| 437 | 1,284 | 38,045 | 2863% | Total support to |
|-----------|----------|-----------|----------|---------------------|
| PSUs | | | | |
| Pension | 11,991 | 13,190 | 13,982 | 6% |
| BharatNet | 4,316 | 2,000 | 6,000 | 200% |
| 1,927 | 4,725 | 5,000 | 6% | Network for |
| defence | | | | |
| services | | | | |
| 473 | 1,000 | 2,000 | 100% | Compensation |
| to TSPs | | | | |
| Others | 1,056 | 1,211 | 1,265 | 4% |
| Total | 20,606 | 23,350 | 66,432 | 184% |
Budget Estimates.
% of the
Expenditure Head
2020-21
total
BE
allocation
Capital infusion in BSNL for 4G spectrum
14,115
21%
Capital infusion in MTNL for 4G spectrum
6,295
9%
Ex-gratia for retiring employees of BSNL/MTNL
9,890
15%
Implementation of VRS (BSNL/MTNL)
3,295
5%
Grants-in-aid to BSNL for payment of GST
2,541
4%
Grants-in-aid to MTNL for payment of GST
1,133
2%
Financial Infusion to ITIL
405
1%
Others
372
1%
Total
38,045
57%
Note: ITIL: Indian Telephone Industries Limited. Sources: Demand No. 13, Department of Telecom, 2020-21, PRS.
## Universal Service Obligation Fund
The Universal Service Obligation Fund (USOF) was established to provide widespread, non-discriminatory, and affordable access to quality information and communication technology services to people in rural and remote areas.
Resources for this fund are raised through a Universal Access Levy (UAL) which is 5% of the Adjusted Gross Revenue (AGR) earned by all the operators under various licenses currently.4 Adjusted Gross Revenue is the value of gross revenue after deduction of taxes and roaming/PSTN charges from Gross Revenue. UAL is first credited to the Consolidated Fund of India and then disbursed to the USOF. The ongoing schemes funded through USOF include: (i) BharatNet, (ii) setting up of towers in left-wing extremism affected areas, and (iii) comprehensive telecom development plan for the north-east region. A total expenditure of Rs 8,000 crore from this fund has been planned for 2020-21. This is an increase of 167% over the revised estimates of 2019-20. However, note that in 2019-20, only 36% (Rs 3,000 crore) of the budgeted allocation (Rs 8,350 crore) is estimated to be utilised (revised estimates). During the 2011-21 period, expenditure from the USOF has grown at an annual average growth rate of 18.9%.
Sources: Demands of Department of Telecom, 2011-21; PRS. Note: Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2011-20; PRS.
Figure 5 depicts the trend in fund utilisation under the USOF during the 2011-20 period. The fund utilisation has been low in the last three years. In the years 2017-
18 and 2018-19, only 60% and 48% of the allocation was utilised respectively. As per the revised estimates, in 2019-20, only 36% of the allocation from USOF will be utilised.
Balance of Funds under USOF: In its audit report of the Ministry of Communications for the FY 2017-18, the Comptroller and Auditor General of India (CAG) observed that a large amount earned as Universal Access Levy (UAL) is yet to be transferred to the Universal Service Obligation Fund (USOF).5 By the end of 2019-20, a total of Rs 51,552 crore remains to be transferred to the USOF by the central government.6 The disbursal to the USOF has been only a small fraction of UAL over the years. A total of Rs 70,198 crore has been earned as UAL during the 2010-20 period, out of which only Rs 32,465 crore has been disbursed (46%).6 As shown in Figure 6, the gap between disbursal and UAL has been high over the years, which has led to a rise in balance. In January 2015, the Telecom Regulatory Authority of India (TRAI) had observed that the Department has not been able to devise enough schemes to utilise the earnings of UAL.7 It also recommended reducing UAL from 5% to 3%.7
Note: UAL: Universal Access Levy; Disbursal: Amount transferred to USOF; Balance: Balance at the end of that Financial Year. Sources: USOF Website as accessed on February 7, 2020; PRS.
In March 2018, the Standing Committee on Information Technology noted that with increasing outlay on schemes including BharatNet, Mobile Towers in Left Wing Extremism Affected Areas and Comprehensive Telecom Development Plan for the North-East, utilisation of USOF funds will improve.4
Progress of comprehensive telecom development plan for the north-east region: The comprehensive development plan for the north-east region was approved in September 2014 to: (i) install 6,673 mobile towers at 8,621 identified uncovered villages, (ii) install 321 mobile towers along the national highways, and (iii) strengthen the transmission network in the region.8 The Standing Committee on Information Technology (2019) made following observations regarding the plan:
In 2018-19, no amount was utilised from the
budget allocation of Rs 400 crore. Similarly, in 2019-20, no amount has been proposed by the Department at the revised estimates stage as compared to Rs 1,100 crore at the budget stage.
A total of 2004 towers were to be set up by
October 2019, however, only 878 towers (44%) were installed as of October 22, 2019.
The Committee recommended forming an inquiry committee to establish responsibility for the implementation failure of the plan so far.8
## Bharatnet
BharatNet aims to create a network to connect all the Gram Panchayats (approximately 2.5 lakh) by broadband by laying around 6.5 lakh km of optical fibre. It seeks to provide non-discriminatory access to the network to all the telecom service providers. These service providers include mobile operators, Internet Service Providers (ISPs), Cable TV operators, content providers. Bharat Broadband Network Limited (BBNL) is a special purpose vehicle to create, operate, maintain and manage the BharatNet infrastructure. The project is financed through the USOF. The estimated total cost of the project is Rs 42,068 crore.4 BharatNet is divided into three phases. Phase-I to connect 1.2 lakh panchayats was completed in December 2017. Phase-II to connect the remaining panchayats is underway, and phase-III is earmarked for future purposes. The scheme also aims to provide lastmile connectivity through Wi-Fi by creating five access points per GP (12.5 lakh Wi-Fi hotspots).9
As seen in Table 2, In 2020-21, the budget allocation of the scheme has increased by 200% over the revised estimates of the previous year. Note that, as per the revised estimates, only 33% of the allotted funds were utilised in 2019-20 (**Figure 7**). The corresponding figures for 2017-18 and 2018-19 were 44% and 53% of the allotment respectively.
Note: BE: Budget Estimates; Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2015-20; PRS.
Delay in Completion: In March 2018, the Standing Committee on Information Technology noted that although approved in 2011, the initial target of BharatNet had to be revised in 2014 due to inadequate planning and design, and unpreparedness to address the issues.10
Under the revised deadline, phase-I was due by March
2017 but could be completed by December 2017.10 Phase-II, which was to be completed by March 2019, is not near completion and the target was revised to March 2020.10,11 Table 4 shows the status of BharatNet as of February 2020.12,13
| | Parameter | Target | Achievement In % |
|-----------------------|--------------|--------------|----------------------|
| Length of OFC laid* | 6.5 lakh km | 4.14 lakh km | 64% |
| 2.5 lakh | 1.48 lakh | 59% | Number of panchayats |
| where OFC laid* | | | |
| 2.5 lakh | 1.35 lakh | 54% | Number of panchayats |
| which are service- | | | |
| ready* | | | |
| 2.5 lakh | 0.45 lakh | 18% | Number of panchayats |
| where Wi-Fi installed | | | |
| # | | | |
| 2.5 lakh | 0.18 lakh | 7% | Number of panchayats |
| where Wi-Fi | | | |
| operational | | | |
| # | | | |
Note: *as of February 7, 2020, #as of February 10, 2020. Sources: Website of BBNL as accessed on February 10, 2020; PRS.
Under-utilisation of BharatNet network: The Standing Committee on Information Technology (2019) observed that efforts are required towards improving the uptime and utilisation of network infrastructure created under BharatNet.8 As on February 10, 2020, BharatNet had 12,91,780 users and total data used per month was 89,224 GB.13 This implies that average data consumption per user per month was around 71 MB.
## Network For Defence Services
This project aims to provide a dedicated pan-India optical fibre cable-based network for use by defence services. The original total sanctioned cost of the project is Rs 13,334 crore.4 In May 2018, the central government announced that the budget of the project has been increased to Rs 24,664 crore.14 BSNL is the implementing agency for this project. A combined total of 60,000 km of the optical fibre network is to be laid under this project. In 2020-21, the allocation to the scheme (Rs 5,000 crore) has increased by 6% over the revised estimates of the previous year (Table 2). The revised estimates of 2019-20 for the scheme was the same as the budget estimates of that year. Figure 8 shows the trend in fund utilisation under this scheme during 2015-20. In 2018-
19, only 43% of the budgeted fund was utilised.
Delay in completion: The project was to be completed by July 2015.4 As of December 2019, 94% of the 60,000 km of optical fibre network has been laid.8 The revised deadline for completion was set for May 2020, however, the project is now estimated to be completed by December 2020.1414 The Standing Committee on Information Technology (2018) observed that the delay has resulted in huge cost overruns from the initial estimation of Rs 8,098 crore in 2009 to Rs.24,664 crore in 2018.4
## Receipts15, 16
Communication services are one of the major sources of non-tax revenue of the central government. In 2016- 17, the non-tax revenue from communication services was the largest contributor to the non-tax revenue of the central government, accounting for 26% of the total non-tax revenue.17 This includes receipts from spectrum auctions, one-time fee from new operators and recurring license fees and spectrum charges from telecom service providers which is a percentage share of the Adjusted Gross Revenue (AGR) of the operators.
## Non-Tax Revenue
The projected non-tax revenue for 2020-21 from communication services is Rs 1,33,027 crore, 126% higher than the revised estimates of 2019-20 (Rs 58,990 crore). Although budget documents do not provide clarity, this increase may be due to anticipated recovery of past dues from the service providers as per a recent Supreme Court decision on the definition of gross revenue. It could also come from spectrum auction in the coming financial year. In 2019-20, the non-tax revenue from communication services is estimated to be 17% higher than the budget estimates. Note that the actual revenue in 2018-19 was 16% less than the budget estimates of that year.
| 2019-20 | 2020-21 | % |
|------------|------------|----------|
| | | |
| 2018-19 | | |
| Actuals | RE | BE |
| Total | | |
| 40,816 | 58,990 | 1,33,027 |
Note: RE: Revised Estimates; BE: Budget Estimates.
As shown in **Figure 9** (on the next page), during the
2017-2020 period, non-tax revenue from communication services was lower as compared to earlier years in absolute terms. There was a decrease in the revenue of the telecom sector owing to stiff competition and aggressive pricing war.4 As per the budget estimates of 2020-21, the revenue is expected to show an upward trend. At the end of 2018-19, the arrears of non-tax revenue from communication services is 30% of the total arrears of non-tax revenue of the central government (Table 6). Of the arrears of non-tax revenue overdue by less than a year, the arrears of communication services comprise of a major portion of the total arrears (80%).
| Duration | Arrears- |
|-------------|----------------|
| % share* | |
| (Year) | Communications |
| Arrears of | |
| non-tax | |
| revenue | |
| Total | |
| 0-1 | 66,832 |
| 1-2 | 4,533 |
| 2-3 | 8,660 |
| 43-5 | 520 |
| >5 | 985 |
| Total | 81,530 |
Note: * % share indicates the share of non-tax revenue from communication services in the total arrears of non-tax revenue of the central government. Sources: Union Budget Documents, 2020-21; PRS.
## Issues For Consideration State Of Finances Of Telecom Sector
In March 2018, the Standing Committee on Information Technology observed that after entry of a new private player in 2016, the sector has seen a stiff competition and aggressive pricing war.4 This has led to reduced tariffs and a notable decline in revenue. In the aftermath, the weaker players have exited the market and consolidation among other companies is ensuing. The telecom sector has large capital expenditure requirements. The near-term implication has been a serious drop in profitability and a problem of high debt.
Trends in subscriber base: With the introduction of
4G, the telecom sector has shifted from the 'voicecentric' to 'data-centric' market.18 Between the fourth quarter of 2016 and the third quarter of 2019, the total number of internet subscribers has increased from 39.1 crore to 68.7 crore.19, 20 Between the fourth quarter of 2016 and the third quarter of 2019, the price of per GB data has gone down from Rs 163.8 to seven rupees.19,20 The data consumption per user per month during the same period has grown from 878.6 MB to 10.4 GB.19,20
At the end of the third quarter of 2019, the total internet subscribers per 100 population are 52.1 in India.20 The total urban internet subscribers per 100 population are 104.3 whereas the total rural internet subscribers per 100 population are 27.6.20 As per the International Telecommunications Union Report, in 2019, the number of internet users per 100 inhabitants was 53.6 in the world, 82.5 in Europe, 77.2 in Americas and 48.4 in Asia-Pacific.21
Trends in revenue: Even though consumption has increased manifold and the subscriber base continues to grow, due to a steep reduction in tariffs, the gross revenue of the telecom sector has seen an adverse effect (Figure 10).4 The Adjusted Gross Revenue fell by 18.9% between 2016 and 2017 and by 10.2% between 2017 and 2018. Adjusted Gross Revenue is the value after deduction of taxes and roaming/PSTN charges from Gross Revenue. During the first three quarters of 2019, the Adjusted Gross Revenue has seen a 3.7% increase as compared to the first three quarters of the previous year.
Sources: TRAI Performance Indicator Reports, 2009-18; PRS.
Figure 11 shows the trend in Average Revenue Per User (ARPU) between 2011 and 2019. ARPU has dropped from Rs 110-140 levels seen between 2013 and 2016 to Rs 70-80 levels between 2018 and 2019.22
Sources: TRAI Performance Indicator Reports, 2011-19; PRS.
Trends in debt: As of October 2017, the total debt of the telecom sector stood at Rs 7.9 lakh crore.4 This is more than three times the gross revenue of the sector in 2018. This included Rs 2.6 lakh crore of total borrowings out of which Rs 1.8 lakh crore was domestic borrowing.4 This also included deferred liability worth Rs 3.0 lakh crore to the Department of Telecommunications on account of spectrum fees.4 In July 2017, the Inter-Ministerial Group on Stressed Assets noted that some operators are facing financial stress due to low operating cash flows, inadequate equity infusion and unsustainable debt.4 As of December 2019, gross domestic bank credit to the telecom sector stood at 1.34 lakh crore, an increase of 16% as compared to 1.20 lakh crore at the end of 2018-19.23
Impact of a recent Supreme Court judgement: Since
2003, there has been a dispute between telecom service providers and the Department regarding what constitutes gross revenue.4 Over these years, service providers have paid a lower license fee and spectrum usage charges as compared to the demands raised by the Department. In October 2019, the Supreme Court in its judgement upheld the demands of the Department.24 The Court also held that the service providers are liable to pay the interest, penalty, and penalty on interest on these dues.24 As a result, the service providers are required to pay an additional amount of Rs 92,642 crore as license fee and Rs 55,055 crore as spectrum usage charges on account of dues for years between 2003 and 2019.24 This amount is provisional and subject to revision for updation of interest and penalty. As per the judgement, the service providers have been given three months to pay these dues from the date of the judgement.24 This is likely to increase the financial burden of the service providers. They will also be required to pay a higher license fee and spectrum usage charges going forward as compared to what they have been paying so far. This will further impact their profit margins. Note that in November 2019, the Union Cabinet approved deferred payment of spectrum auction instalments due for years 2020-21 and 2021-22.25
This measure is expected to ease the cash outflow of financially stressed service providers and facilitate payment of statutory liabilities and interest on bank loans.25 The telecom service providers will have the option to defer payments due for the years 2020-21 and 2021-22, for one or both years. The deferred payment will be spread equally in the remaining instalments to be paid by the service providers. Interest charges will be applicable as per the provisions under the terms and conditions of the spectrum allotment.
Trends in foreign investment: During 2010-2019, the telecom sector has been the third-largest recipient sector of FDI equity inflow.26 The FDI equity inflow in the Financial Year 2017-18 was Rs 39,748 crore whereas the FDI equity inflow in the Financial Year 2018-19 was Rs 18,337 crore, a decrease of 54%.26, 27
## Spectrum Fees And Taxes
The Economic Survey of India (2017-18) noted that the telecom sector is facing an issue of higher spectrum charges.28 It observed that lower spectrum charges will augment the spread of telecommunication services and will help in socio-economic transformation.28 In January 2015, Telecom Regulatory Authority of India (TRAI) in its report observed that the total effective rate of the license-related levy has gone up significantly in the recent past and that spectrum prices in the country are amongst the highest in the world.7 The total taxes and levies are as high as 30% of the revenue of an operator.7 This adversely impacts the need to continue a low tariff regime in the country. It had recommended that the license fee should be reduced from 8% to 6% by reducing Universal Access Levy from 5% to 3%.7 As of December 2019, the license fee is 8%.19 In 2017, TRAI, as well as the Department of Telecommunications, had recommended lowering Goods and Services Tax (GST) from 18% to 5% and 12% respectively for the telecom sector.29
## Spectrum Management
One of the key functions of the Department of Telecommunications is to allocate, monitor and manage spectrum. The Comptroller and Auditor General of India (CAG) in its audit report for FY 2017-18 had noted that the National Frequency Register was not being properly maintained and was not the correct reflection of spectrum assignments.7 National Frequency Register (NFR) is the basic record for all frequency assignments and is referred to identify assignable frequency for any new applicant.30 A substantial amount of spectrum identified for commercial use was allotted to Railways and Defence. However, due to limited use by these departments, such spectrum was left unused and its commercial potential remained unutilised.5
There were serious deficiencies in the effective monitoring of the spectrum.5 The updated database of wireless licenses was not being provided to monitoring stations thereby reducing the whole monitoring process in an ineffective exercise. There was inattention towards maintenance of monitoring equipment.5 Ineffective monitoring could lead to unauthorised uses or misuse of the spectrum by undesirable entities.5
## 5G Readiness
5G is the next technology frontier in the telecom sector. According to the High-Level Forum of the Department on 5G, 5G is predicted to create a cumulative economic impact of USD one trillion in India by 2035.31 As of December 2019, 5G services are being rolled out on a commercial basis in countries like South Korea, USA, Spain and Italy, although on a limited scale. TRAI has observed that spectrum availability is one of the most important issues in full realization of the potential of 5G.18 In August 2018, the High-Level Forum of the Department on 5G recommended that fresh spectrum should be allocated for 5G services.31 As of January 2020, the auction of spectrum for 5G is yet to be completed.
As per TRAI's white paper on 5G, an additional investment of 4.0-4.5 lakh crore rupees will be required
by the telecom sector to seamlessly implement 5G
networks.18 3.5 GHz spectrum band is likely to be the first band to be globally used for 5G deployment.18 The Department is yet to auction spectrum in that band. The telecom service providers are likely to incur an additional investment initially while launching 5G
services on account of spectrum cost.18
## Promotion Of Domestic Manufacturing Of Telecom Equipment
The Standing Committee on Information Technology (2019) observed that India is highly dependent on the import of telecom equipment.8 During 2017-18 and 2018-19, India imported telecom equipment worth Rs
1.4 lakh crore and 1.2 lakh crore, respectively.8 The Committee observed that this indicates a lack of requisite ecosystem for the promotion of domestic manufacturing.8 The Committee noted that some of the reasons for the dependence on import are: (i) import of telecom equipment at zero duty as agreed in international treaties, (ii) low investment in research and development and creation of intellectual property rights, and (iii) lack of market access for indigenous manufacturers.8 The Committee noted that imports are likely to increase substantially with the introduction of newer technology such as 5G.8
## State Of Psus Telecom Service Providers
BSNL and MTNL are the public sector undertakings (PSUs) engaged in providing telecommunication services in the country. BSNL and MTNL have been incurring losses continuously since FY 2009-10.32 As per the Department of Public Enterprises guidelines, both these PSUs have been declared as 'Incipient Sick'.32 A PSU is considered 'Incipient Sick' if its net worth is less than 50% of its paid-up capital in any financial year, or if it had incurred losses for three consecutive years.33 In 2018-19, as against the revenue target of Rs 26,000 crore, actual revenue of the two PSU operators was Rs 17,761 crore.8 In 2018-19, BSNL and MTNL posted a net loss of Rs 14,904 crore and Rs 3,390 crore respectively (Table 7).8
| Parameter | BSNL | MTNL |
|-------------------|---------|---------|
| Income Target | 23,150 | 2,850 |
| Actual Income | 19,321 | 2,607 |
| Total Expenditure | 34,225 | 5,997 |
| Net Profit/Loss | -14,904 | -3,390 |
| Total asset* | 135,482 | 14,677 |
| Total liability* | 35,729 | 24,412 |
| Net worth* | 74,734 | -9,735 |
| Outstanding debt* | -15,983 | 19,750 |
Note: * as of March 31, 2019. Outstanding debt of BSNL does not include overdraft. That of MTNL does not include bonds worth Rs 4,533 crore. Sources: First Report of the Standing Committee on Information Technology (2019); PRS.
The Standing Committee on Information Technology (2019) noted that challenges for the PSU operators in earning revenue include: (i) absence of 4G services
(except in few places for BSNL) in data-centric telecom market, (ii) lack of cash flows hindering capital outlay and expansion, (iii) sharp decline in average revenue per user across all services due to competition in the sector, and (iv) rapid decline in landline business due to changing market needs.8 The market share of PSU operators in the number of total subscribers as well as revenue share has seen a decline. The share of PSU operators in total subscribers declined from around 13%-14% during 2012-13 to 10%-11% levels during 2017-19. The share of PSU operators in Adjusted Gross Revenue of the sector declined from around 12%-13% during 2012-13 to 9%-10% levels between 2017-19. BSNL and MTNL spend a significant share of their income on staff salaries. As of June 2019, the employee cost for BSNL and MTNL was 75% and 87% of their total income respectively.34 In comparison, the employee cost for private telecom service providers varied between 5%-7% of their total income.8 In March 2018, the Standing Committee on Information Technology noted that there has been continuous underperformance by telecom PSUs in meeting Internal and External Budgetary Resources (IEBR) targets.4 IEBR is an important revenue source for implementing various schemes of the PSUs and it constitutes the resources raised by PSUs through profits, loans and equity.35 The shrinking revenue has hampered its capabilities to generate resources.4 Only 26.6%, 39.0% and 24.1% of the IEBR target was met in 2014-15, 2015-16 and 2016-17 respectively.4
Revival plan for BSNL and MTNL: In October 2019, the Union Cabinet approved a revival plan for BSNL and MTNL.3 The plan also provided in-principle approval for the merger of both PSUs. Key features of the plan are as follows: (i) allotment of 4G spectrum with funding from central government of Rs 23,814
crore, (ii) sovereign guarantee for raising long-term bonds of Rs 15,000 crore for restructuring debt and meeting expenditure requirements, (iii) funding of Rs 17,169 crore for offering voluntary retirement scheme to employees aged 50 years and above, along with coverage of cost towards pension and gratuity.3
## Indian Telephone Industries Limited (Itil)
Indian Telephone Industries Limited is involved in telecom equipment manufacturing. A package worth Rs 4,157 crore was approved for ITIL as part of a revival plan in 2014.17 ITIL has seen a consistent increase in its turnover since 2015-16.4 Its total income has increased from Rs 620 crore in 2014-15 to Rs 2,005 crore in 2018-19.8 The company posted a net profit of Rs 93 crore in 2018-19.8 The Standing Committee on Information Technology (2018) observed that ITIL's turnover is mainly coming from government business and recommended that it should work toward increasing its share in private business.4
Funds allocated to ITIL for capital upgradation have not been in line with demand.8 For instance, against a request of Rs 405 crore in 2019-20, ITIL received only Rs 105 crore.8 This affected the projects undertaken by ITIL under the revival plan.8 Out of Rs 2,264 crore for capital expenditure under the revival plan, ITIL
received only Rs 769 crore as of December 2019.8
##
1 Demand No. 13, Demand for Grants, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/dg13.pdf. 2 Expenditure Budget, Department of Telecommunications, Union Budget 2019-20, https://www.indiabudget.gov.in/doc/eb/sbe13.pdf. 3 "Union Cabinet approves revival plan of BSNL and MTNL and inprinciple merger of the two", Cabinet, Press Information Bureau, , October 23, 2019, https://pib.gov.in/PressReleseDetail.aspx?PRID=1588848. 4 "47th Report: Demands for Grants (2018-19) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, March 13, 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_I nformation_Technology_47.pdf. 5 "Report No 21 of 2018, Compliance and Performance Audit of Ministry of Communications and Ministry of Electronics &
Information Technology", CAG, 2018, https://www.cag.gov.in/sites/default/files/audit_report_files/Report_N o_21_of_2018_Compliance_and_Performance_Audit_of_Union_Gov ernment_Ministry_of_Communications_.pdf. 6 "Statement showing the balance of UAL amount available as potential fund under USO as on 31.03.2019", Universal Service Obligation Fund, Department of Telecommunications, website as accessed on February 7, 2020, http://www.usof.gov.in/usof-cms/usoffund-status-table.jsp. 7 "Recommendations on Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges", TRAI, January 6, 2015, https://main.trai.gov.in/sites/default/files/Reco- AGR-Final-06.01.2015_0.pdf. 8 "First Report: Demands for Grants (2019-20) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, December 2019, http://164.100.47.193/lsscommittee/Information%20Technology/17_I nformation_Technology_1.pdf. 9 "Telecom at a Glance", Department of Telecommunications Website as accessed on July 1, 2019, http://dot.gov.in/sites/default/files/Telecom%20at%20a%20Glance.pd f?download=1. 10 "50th Report: Progress of Implementation of BharatNet", Standing Committee on Information Technology, August 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_I nformation_Technology_50.pdf. 11 Unstarred Question No 621, Rajya Sabha, Ministry of Communications, June 27, 2019, https://164.100.158.235/question/annex/249/Au621.pdf. 12 "BharatNet Status as on January 31, 2020", Website of BBNL as accessed on February 7,2020, http://bbnl.nic.in/BharatNet.pdf. 13 "BharatNet Usage Statistics as on 03.02.2020", Website of BBNL as accessed on February 7, 2020, http://www.bbnl.nic.in/usage2.pdf. 14 "Cabinet approves enhancement of budget for implementation of Network for Spectrum for Defence Services", Cabinet, Press Information Bureau, May 16, 2018, http://www.pib.nic.in/PressReleseDetail.aspx?PRID=1532262. 15 Non-Tax Revenue, Union Budget, 2020-21, https://www.indiabudget.gov.in/doc/rec/ntr.pdf. 16 Arrears of Non-Tax Revenue, Union Budget, 2020-21,
19 "The Indian Telecom Services Performance Indicators October- December 2016", TRAI, April 7, 2017, https://main.trai.gov.in/sites/default/files/Indicator_Reports_Dec_16_ 07042017.pdf. 20 "The Indian Telecom Services Performance Indicators July-
September 2019", TRAI, January 8, 2020, https://main.trai.gov.in/sites/default/files/PIR_08012020_0.pdf. 21 ITU World Telecommunications/ICT Indicators Database, International Telecommunications Union, https://www.itu.int/en/ITU- D/Statistics/Documents/statistics/2017/ITU_Key_2005- 2017_ICT_data.xls. 22 "The Indian Telecom Services Performance Indicators April-June 2016", TRAI, December 12, 2016, https://main.trai.gov.in/sites/default/files/Indicator_Reports_April_Ju ne_01_12_2016.pdf. 23 Sectoral Deployment of Bank Credit, Reserve Bank of India, January 31, 2020, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR1842E397CCE 37974402499F5A6DA08B575E4.PDF. 24 Starred Question No 329, Lok Sabha, Ministry of Communications, December 11, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AS329.pdf. 25 "Cabinet approves proposal for Mitigating financial stress being faced by the Telecom Services Sector", Cabinet, Press Information Bureau, November 20, 2019, https://pib.gov.in/PressReleseDetail.aspx?PRID=1592553. 26 Quarterly Factsheet for Quarter Ending March 2019, Department for Promotion of Industry and Internal Trade, https://dipp.gov.in/sites/default/files/FDI_Factsheet_27May2019.pdf. 27 Unstarred Question No 789, Lok Sabha, Ministry of Communications, June 26, 2019, http://164.100.24.220/loksabhaquestions/annex/171/AU789.pdf. 28 Economic Survey of India 2017-18, Volume 1, http://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf. 29 Unstarred Question No 1509, Lok Sabha, Ministry of Communications, June 27,2017, https://eparlib.nic.in/bitstream/123456789/765718/1/AU1509_13_16. pdf. 30 Press Release, CAG, January 8, 2019, https://cag.gov.in/sites/default/files/press_release/Press_21_of_2018. pdf. 31 "Making India 5G Ready", Report of the 5G High Level Forum Prepared by Steering Committee, Department of Telecommunications, August 23, 2018, http://dot.gov.in/sites/default/files/5G%20Steering%20Committee%2 0report%20v%2026.pdf. 32 Unstarred Question No 1773, Lok Sabha, Ministry of Communications, February 13, 2019, http://164.100.24.220/loksabhaquestions/annex/17/AU1773.pdf, 33 Official Memorandum, Department of Public Enterprises, October 29, 2015, https://dpe.gov.in/sites/default/files/R-79.pdf.
## Demand For Grants: Railways
The Railways finances were presented on February 1, 2020 by the Finance Minister Ms. Nirmala Sitharaman along with the Union Budget 2020-21. The Ministry of Railways manages the administration of Indian Railways and policy formation through the Railway Board. Indian Railways is a commercial undertaking of the government.1 This note looks at the proposed expenditure of the Ministry of Railways for the year 2020-21, its finances over the last few years, and issues with the same.
## Key Highlights
Revenue: Railways' revenue for 2020-21 is
estimated at Rs 2,25,913 crore which is a 10% increase from the revised estimates of 2019-20.
Traffic revenue: Total revenue from traffic for
2020-21 is estimated at Rs 2,25,613 crore, which is a 10% increase from the revised estimates of 2019- 20. In 2020-21, revenue from both freight and passenger traffic is expected to grow by 9%. As per the revised estimates of 2019-20, revenue from freight traffic is estimated to be 6% lower than the budget estimate.
Expenditure: The total revenue expenditure by
Railways for 2020-21 is projected at Rs 2,19,413 crore which is an 8% increase from the revised estimates of 2019-20. In 2019-20 (revised estimates), total revenue expenditure is estimated to be 3% lower than the budget estimate.
Operating Ratio: In 2020-21, the Railways'
Operating Ratio is estimated to be 96.2%. This is marginally better than the revised estimates of 2019- 20 at 97.4%.
## 2020-21 Budget Announcements2
Key announcements and proposals related to Railways made in Budget 2020-21 include:
Railways will set up a Kisan Rail to build a national cold supply chain for perishables, including milk, meat and fish. This will be set up through PPP arrangements. Express and freight trains will have refrigerated coaches.
Rs 100 lakh crore will be invested on infrastructure over the next five years. This will include projects on modernising railway stations, metro and railway transportation, and logistics and warehousing.
Large solar power capacity will be set up alongside the rail tracks, on the land owned by the Railways.
Four station re-development projects and operation of 150 passenger trains will be implemented through PPP mode.
More Tejas type trains will be introduced to connect iconic tourist destinations.
A 148 km long suburban transport project will be
set up in Bangalore at a cost of Rs 18,600 crore. The central government will provide 20% of equity and facilitate external assistance of up to
60% of the project cost.
## Overview Of Finances3,4
In the last few years, Railways has been struggling to generate its own revenue. Railways' operating ratio has consistently been higher than 90% in the past several years, which indicates that its capability to generate operational surplus is low. The growth rate of Railways' earnings from its core business of running freight and passenger trains has been declining (see **Figure 3**). This is due to a decline in the growth of both freight and passenger traffic. Railways is also steadily losing traffic share to other modes of transport. The share of Railways in total freight traffic has declined from 89% in 1950-51 to 30% in 2011-12.5 During the same period, share of roads on total freight traffic increased from 11% to 61%. On the other hand, Railways' expenditure on salaries has been gradually increasing with a significant jump every few years due to Pay Commission revisions. Between
2015 and 2020 (budget estimate), Railways' expenditure on salary has grown at an average annual rate of 13%. There is an increasing expenditure on pension too, which is unproductive, as this does not generate any revenue for the Railways. The pension bill may increase further in the next few years, as about 40% of the Railways staff was above the age of 50 years in 2016-17.6 A decline in the growth of internal revenue generation has meant that Railways has been funding its capital expenditure through budgetary support from the central government and borrowings. While the support from central government has mostly remained consistent, Railways' borrowings have been increasing. An increased reliance on borrowings could further exacerbate the financial situation of Railways.7,8 In the following section we discuss each of these components.
## Railways' Revenue
Indian Railways is financed through: (i) its own internal resources (freight and passenger revenue, and leasing of railway land), (ii) budgetary support from the central government, and (iii) extra budgetary resources (primarily borrowings but also includes institutional financing, public private partnerships, and foreign direct investment). Railways' working expenses (salaries, staff amenities, pension, asset maintenance) are met through its internal resources. Capital expenditure (procurement of wagons, station redevelopment) is financed through extra budgetary resources, the budgetary support from central government, and Railways' internal resources.
## Budgetary Support From Central Government
The central government supports Railways in order to expand its network and invest in capital expenditure. Until recently, this budgetary support from the central government used to be the primary source of funds for capital expenditure for Railways. However, since 2015- 16, an increasingly higher proportion of the capital expenditure is being met through extra budgetary resources. In 2017-18, 54% of the capital expenditure was met through extra budgetary resources. In 2020-21, the gross budgetary support from central government is proposed at Rs 70,250 crore. This is 3% higher than the revised estimates of 2019-20 (Rs 68,105 crore). The central government also reimburses Railways for the operating losses made on strategic lines, and for the operational cost of e-ticketing to IRCTC (Rs 2,216 crore as per budget estimates of 2020-21).
## Internal Resources
Railways earns its internal revenue primarily from passenger and freight traffic. In 2018-19 (latest actuals), freight and passenger traffic contributed to about 67% and 27% of the internal revenue respectively. In 2020- 21, Railways expects to earn 65% of its internal revenue from freight and 27% from passenger traffic. The remaining 8% will be earned from other miscellaneous sources such as parcel service, coaching receipts, and sale of platform tickets.
Freight traffic: In 2018-19, Railways generated most of its freight revenue from the transportation of coal (45%), followed by cement (8%), iron ore (7%), and pig iron/
finished steel (7%) (see **Figure 1**). It mostly transports bulk freight, and the freight basket has mostly been limited to include raw materials for certain industries such as power plants, and the iron and steel plants. In 2020-21, Railways expects to earn Rs 1,47,000 crore from goods traffic, an increase of 9% over the revised estimates of 2019-20. Passenger traffic and revenue: Passenger traffic is broadly divided into two categories: suburban and nonsuburban traffic. Suburban trains are passenger trains that cover short distances of up to 150 km, and help move passengers within cities and suburbs. Majority of the passenger revenue (94% in 2018-19) comes from the non-suburban traffic (or the long-distance trains). In 2020-21, Railways expects to earn Rs 61,000 crore from passenger traffic, an increase of 9% over the revised estimates of 2019-20. However, note that in
2020-21, passenger traffic is estimated to grow at 1%. In 2019-20 (revised estimates), a 2% decline is estimated in passenger traffic, while no change is estimated in passenger revenue.
## Extra Budgetary Resources (Ebr)
Extra Budgetary Resources (EBR) include market borrowings such as financing from banks, institutional financing, and external investments. External investments in Railways could be in the form of public private partnerships (PPPs), joint ventures, or market financing by attracting private investors to potentially buy bonds or equity shares in Railways. Railways mostly borrows funds through the Indian Railways Finance Corporation (IRFC). IRFC borrows funds from the market (through taxable and tax-free bond issuances, term loans from banks and financial institutions), and then follows a leasing model to finance the rolling stock assets and project assets of Indian Railways. In the past few years, borrowings have increased sharply to bridge the gap between the available resources and expenditure. As mentioned earlier, majority of the Railways' capital expenditure used to be met from the budgetary support from central government. In 2015-16, this trend changed with majority of Railways' capital expenditure being met through EBR. In 2020-21, Rs 83,292 crore is estimated to be raised through EBR, which is marginally higher than the revised estimates of 2019-20 (Rs 83,247 crore).
## Capital Outlay
The total proposed capital outlay (amount spent on asset creation) for 2020-21 is Rs 1,61,042 crore. This is 3%
higher than the revised capital outlay for 2019-20 (Rs 1,56,352 crore).
## 2018-19 Actuals
2019-20
Revised
2020-21
Budget
% Change
(2020-21 BE/
2019-20 BE)
52,838
68,105
70,250
3%
Gross Budgetary Support
4,663
5,000
7,500
50%
Internal Resources
75,876
83,247
83,292
0%
Extra Budgetary Resources Total
1,33,377
1,56,352
1,61,042
3%
Note: RE - Revised Estimates; BE - Budget Estimates. Sources: Expenditure Profile, Union Budget 2020-21; PRS.
Majority of this capital expenditure will be financed through extra budgetary resources (52%), followed by the budgetary support from the central government (44%). Railways will fund only 5% of this capital expenditure from its own internal resources. **Figure 2**
shows the trends in capital outlay over the last few years.
This implies that Railways' capability to fund its capital outlay from its own revenue stream has been declining.
Note: RE - Revised Estimates, BE - Budget Estimates. Sources: Expenditure Profile, Union Budget 2020-21; PRS.
## Challenges In Raising Revenue
Over the last few years, there has been a decline in the growth of both rail based freight and passenger traffic
(see Figure 3). This affects Railways' earnings from its core business of running freight and passenger trains. In 2019-20, Railways estimates a decline in some of its key revenue earning traffic. For example, coal traffic is estimated to decline by 6% from the budget estimates, and food grains transport by 11%. Overall freight traffic is estimated to decline by 5% in 2019-20. Similarly, in 2019-20 (revised estimate), passenger traffic is estimated to decline by 2% from the budget estimates. The National Transport Development Policy Committee (NTDPC), in 2014, had noted that freight services are run with a focus on efficiency instead of customer satisfaction.5 The rail network's capacity is severely constrained due to which trains tend to slow down, affecting the quality of services. Further, Indian Railways does not have an institutional arrangement to attract and aggregate traffic of smaller parcel size.5
Therefore, it has been losing out on high potential markets such as FMCGs, hazardous materials, or automobiles and containerised cargo. Most of this traffic is transported by roads.
Note: RE - Revised Estimates; BE - Budget Estimates. Sources: Expenditure Profile, Union Budget 2020-21; PRS.
The freight basket is also limited to a few commodities, most of which are bulk in nature (see **Figure 1**). For
example, in 2018-19, coal contributed to about 45% of freight revenue and 30% of the total internal revenue. Therefore, any shift in transport patterns of any of these bulk commodities (coal, cement, iron ore) could affect Railways' finances significantly.
## Freight Cross-Subsidises Passenger Traffic
In 2017-18, passenger and other coaching services incurred losses of Rs 37,937 crore, whereas freight operations made a profit of Rs 39,956 crore.9 Almost 95% of profit earned from freight operations was utilised to compensate for the loss from passenger and other coaching services. The total passenger revenue during this period was Rs 46,280 crore. This implies that losses in the passenger business are about 82% of its revenue. Therefore, in 2017-18, for every one rupee earned in its passenger business, Indian Railways ended up spending Rs 1.82. These losses are primarily caused due to: (i) passenger fares being lower than the costs, and (ii) concessions to various categories of passengers.10 The NITI Aayog (2016) had noted that Railways ends up using profits from its freight business to provide for such losses in the passenger segment, and also to manage its overall financial situation.10 Such cross-subsidisation has resulted in high freight tariffs. The NTDPC report (2014) had noted that, in India, the average freight revenue per Net Tonne Kilometre is one of the highest in the world, second only to Germany (one NTKM is the net weight of goods carried for a kilometre). In comparison, the average realisation per Passenger Kilometre is one of the lowest in the world (one PKM is when a passenger is carried for a kilometre). Various experts have recommended rationalising both freight and passenger fares. One of the ways could be to price passenger fares closer to cost, thereby increasing these fares. However, in a competitive market where the demand for transport is elastic, Railways can only increase fares up to a certain limit depending on the competition from other transport modes like roads and airways.10 Note that in January 2020, Railways marginally increased the passenger fares for the nonsuburban traffic.11
## Social Service Obligations Of The Railways
In 2016-17, passenger and other coaching services incurred losses of Rs 37,937 crore.9 Railways classifies these losses as the social service obligations of its passenger business. As mentioned earlier, these obligations include: (i) pricing tickets at fares lower than costs, and (ii) passenger concessions (such as cheaper tickets for senior citizens, army veterans).10
Three issues arise from such classification. First, it is not clear whether this figure hides any operational inefficiencies. The Committee on Restructuring Railways (2015) had noted that the methods of calculating the cost of running passenger business are not scientific and accurate.7 Therefore, it is difficult to compute accurately the levels of under-recoveries.
Second, inefficiency in Railways' fare structure may also be a factor contributing to the losses in the passenger service business.10 The NITI Aayog had suggested that Railways can price passenger fares as per the prevalent market rates in corresponding transport modes.10 The CAG (2018) had noted that there is no justification for the Railways for not fully recovering the cost of passenger services in case of AC and First Class travel.12 Third, this raises the question whether Railways should bear these social obligations, when it works as a commercial department under the government. The NITI Aayog (2016) had noted that there is lack of clarity on the social and commercial objectives of Railways. The Committee on Restructuring Railways (2015) had noted that several decisions on the Indian Railways such as increase in fares, introduction of new trains, and provision of halts are not taken on the basis of commercial considerations.7 The Standing Committee on Railways (2017) had recommended that the Ministry of Finance should reimburse the Ministry of Railways on losses made on all strategically important lines.6 In 2020-21, Rs 2,216 crore has been allocated towards reimbursement for losses on strategic lines.
## Railways' Expenditure
In 2018-19 (latest actuals available), Indian Railways spent most of its money on staff (42% of its working expenditure), followed by expenses on pension fund (24%), and fuel (18%). In 2020-21, the total revenue expenditure by Railways is estimated at Rs 2,19,413 crore which is an 8% increase over the revised estimates of 2019-20.
## Staff Wages And Pension
Staff wages and pension together comprise two-thirds of the Railways' expenditure. For 2020-21, the expenditure on staff is estimated at Rs 92,993 crore, which is 7% higher than the revised estimates of 2019-20. Allocation to the Pension Fund is estimated at Rs 53,260 crore, which is 10% higher than the revised estimates of 2019- 20. Together, these constitute about 66% of the Railways' estimated revenue expenditure in 2020-21. The Committee on Restructuring Railways (2015) had observed that the expenditure on staff is extremely high and unmanageable. This expense is not under the control of Railways and keeps increasing with each Pay Commission revision. Further, employee costs (including pensions) is one of the key components that reduces Railways' ability to generate surplus, and allocate resources towards operations. The Committee had recommended unifying and streamlining the
recruitment process, and rationalising the manpower. It also recommended making the organisation more business oriented, amenable to private participation while retaining an optimal level of functional specialisation within it.
In December 2019, the Union Cabinet approved organisational restructuring of Indian Railways.13 This restructuring includes merging various Group A services into a single service called Indian Railways Management Service. The proposed restructuring will also include reorganising the Railways Board on functional lines. It will have four members responsible for (i) infrastructure, (ii) operations & business development, (iii) rolling stock, and (iv) finance, respectively. Currently, the Board has several directorates to assist in its work, mostly on departmental lines (such as infrastructure, land, coaching, economics, finance, finance (budget).
## Fuel And Electricity
In 2020-21, the expense on fuel and electricity is estimated to be Rs 32,435 crore, an increase of 4% from the revised estimates of 2019-20. The expense on fuel and electricity is estimated to decrease by 5%, from Rs 32,810 crore in 2018-19 to Rs 31,043 crore in 2019-20 (revised estimates).
## Lease Charges
Railways also pays lease charges to the Indian Railways Finance Corporation (IRFC). IRFC borrows funds from the market (through taxable and tax-free bond issuances, term loans from banks and financial institutions), and then follows a leasing model to finance the rolling stock assets and project assets of Indian Railways. In 2020-21, Rs 14,224 crore is estimated to be spent on lease charges, which is an increase of 16% from the revised estimates of 2019-20. These lease charges are estimated to increase from Rs 9,977 crore in 2018-19 to Rs 11,566 crore in 2019-20 (revised estimate).
## Depreciation Reserve Fund (Drf)
Appropriation to the DRF is intended to finance the costs of new assets replacing old ones.8 In 2020-21, appropriation to DRF is estimated at Rs 800 crore. In the last few years, appropriation to the DRF has decreased significantly. In 2014-15, appropriation to the DRF was Rs 7,775 crore. In 2018-19, this appropriation to the DRF was reduced to Rs 300 crore. Under-provisioning for the DRF has been observed as one of the reasons behind the decline in track renewals, and procurement of wagons and coaches.8 The Standing Committee on Railways (2015) had observed that appropriation to the DRF is obtained as a residual after payment of the dividend and appropriation to the Pension Fund, instead of the actual requirement for the replacement of assets.8 CAG (2019) noted that at the end of 2017-18, the value of over-aged assets pending for replacement using this fund was estimated at Rs 1,01,194 crore.
Further, in 2017-18, the Railways' contribution towards its new safety fund, the Rashtriya Rail Sanraksha Kosh was advanced entirely from the DRF. The Standing Committee on Railways (2018) had noted that transferring funds from DRF to the Rail Sanraksha Kosh, does not allow for replacement and repair of depreciating assets. It shows a lack of vision and poor way of utilising and appropriating valuable resources.14
## Safety
The expenditure on safety includes revenue expenditure such as repairs and maintenance of tracks and wagons. It also includes capital expenditure such as track renewals, bridge works, creating level crossings, and road over bridges and under bridges (see **Table 2**).
## Table 2: Expenditure On Safety (In Rs Crore)
2018-19 Actuals
2019-20 Revised
2020-21 Budget
% Change (2020-21 BE/ 2019-20 RE)
Revenue
45,342
47,707
51,326
8%
Capital
21,615
23,266
26,522
14%
Total
66,957
70,973
77,848
10%
Note: RE - Revised Estimates, BE - Budget Estimates.
Sources: Expenditure Profile, Union Budget 2020-21; PRS.
Rashtriya Rail Sanraksha Kosh: The Rashtriya Rail Sanraksha Kosh (RRSK) was created in 2017-18 to finance critical safety related works of renewal, replacement and augmentation of assets. The fund has a corpus of one lakh crore rupees over a period of five years (partially funded by the central government). In 2020-21, Railways has allocated Rs 5,000 crore towards the RRSK. The remaining Rs 15,000 crore will be provided from the general revenues of the central government. As per the revised estimates of 2019-20, Railways is estimated to allocate Rs 2,500 crore towards the fund, which is 50% less than the proposed allocation for that year (Rs 5,000 crore). In 2018-19, the actual allocation towards the fund was Rs 3,024 crore, which is 40% less than the proposed allocation of Rs 5,000 crore. With Railways struggling to meet its expenditure and declining internal revenues, it is unclear how Railways will continue to fund the RRSK. As discussed earlier, in 2017-18, the RRSK was credited through funds from the DRF. The Ministry of Railways mentioned that the adverse resource position of the transporter during 2018- 19 did not permit the desired level of funds to be transferred to the fund.15 The Standing Committee on Railways (2018) also noted that if funds from the fund cannot be utilised well, then the purpose of having a dedicated safety fund becomes futile.14
## Revenue Surplus And Operating Ratio
Railways' surplus is calculated as the difference between its total internal revenue and its revenue expenditure (this includes working expenses and appropriation to pension and depreciation funds). Operating Ratio is the ratio of the working expenditure (expenses arising from day-to-day operations of Railways) to the revenue earned from traffic. Therefore, a higher ratio indicates a poorer ability to generate surplus that can be used for capital investments such as laying new lines, or deploying more coaches. The CAG (2019) noted that in 2017-18, the decline in revenue surplus led to a decline in appropriation to the various funds managed by Railways from its internal resources.9 In the last decade, Railways has been struggling to generate higher surplus. Consequently, the Operating Ratio has consistently been higher than 90% for more than a decade. In 2020-21, Railways expects to generate a surplus of Rs 6,500 crore. This is a 71% higher than the revised estimates of 2019-20 (Rs 3,811 crore). In 2018-19, the ratio worsened to 97.3% as compared to the estimated ratio of 92.8%. The CAG (2019) had noted that if advances for 2018-19 were not included in receipts, the operating ratio for 2017-18 would have been 102.66%.9
Note: RE - Revised Estimates, BE - Budget Estimates. Sources: Expenditure Profile, Union Budget 2020-21; PRS. Investment: Part A Financials (Budget + IEBR), Investment: Part B Physical Targets, Investment: Part C Revenue Earning Traffic Performance Targets, a Glance, Expenditure Profile 2020-21.
pdf. 10 "Reviewing the Impact of "Social Service Obligations" by Indian Railways", NITI Aayog, http://niti.gov.in/writereaddata/files/document_publication/Social-Costs.pdf. 11 "Indian Railways rationalizes Passenger Fares", Press Information Bureau, Ministry of Railways, January 1, 2020. 12 Report No. 1 of 2018: Railways Finances, Financial Audit, For the year ended March 2017, Report of the Comptroller and Auditor General of India, https://cag.gov.in/sites/default/files/audit_report_files/Report_No.1_of_2018_- _Finance_Audit_on_Railways_Finances_in_Indian_Railways_Union_Government.pdf. 13 "Cabinet approves transformational Organisational Restructuring of Indian Railways", Union Cabinet, Press Information Bureau, December 24, 2019. 14 "19th Report: Demands for Grants (2018-19)", Standing Committee on Railways, March 6, 2018, http://164.100.47.193/lsscommittee/Railways/16_Railways_19.pdf. 15 "2nd Report: Demands for Grants (2019-20)", Standing Committee on Railways, December 12, 2019, http://164.100.47.193/lsscommittee/Railways/17_Railways_2.pdf.
## Annexure Appendix I: Railways Budget 2020-21 Summary Table 6: Railways Receipts And Expenditure For 2020-21 (In Rs Crore)
| | |
|---------------------------------|-------------------------------|
| 2018-19 | |
| Actuals | |
| 2019-20 | |
| Budget | |
| 2019-20 | |
| Revised | |
| 2020-21 | |
| Budget | |
| % Change | |
| (2019-20 RE/ | |
| 2019-20 BE) | |
| % Change | |
| (2020-21 BE/ | |
| 2019-20 RE) | |
| | Receipts |
| 1 | Passenger |
| 2 | Freight |
| 3 | Other traffic sources |
| 4 | |
| Gross Traffic Receipts | |
| (1+2+3) | |
| 189,907 | 216,675 |
| 5 | Miscellaneous |
| 6 | Total Internal Revenue (4+5) |
| | Expenditure |
| 7 | Ordinary Working Expenses |
| 8 | Appropriation to Pension Fund |
| 9 | |
| Appropriation to Depreciation | |
| Reserve Fund | |
| 300 | 500 |
| 10 | |
| Total Working Expenditure | |
| (7+8+9) | |
| 184,780 | 205,500 |
| 11 | Miscellaneous |
| 12 | |
| Total Revenue Expenditure | |
| (10+11) | |
| 186,734 | 207,900 |
| 13 | Net Surplus (6-12) |
| 14 | |
| Appropriation to Rashtriya Rail | |
| Sanraksha Kosh | |
| 3,024 | 5,000 |
| 15 | |
| Appropriation to Development | |
| Fund | |
| 750 | 1,000 |
| 16 | Appropriation to Capital Fund |
| 17 | Operating Ratio |
Note: RE - Revised Estimate, BE - Budget Estimate. Sources: Expenditure Profile 2020-21; PRS.
## Explanatory Notes Performance Parameters
1.
'Net Surplus' represents excess of revenue receipts over revenue expenditure (Railways' internal revenue and expenditure).
2.
'Operating Ratio' is the ratio of operating expenses to receipts. A lower ratio indicates higher surplus availability for investments.
## Railway Funds
3.
Depreciation Reserve Fund - Finances the cost of new assets replacing old assets including the cost of any improved features.
Appropriation to this fund are made on the recommendations of the Railway Convention Committee (RCC).
4.
Pension Fund - Finances all pension payments to retired Railway staff.
5.
Rashtriya Rail Sanraksha Kosh - Finances critical safety related works of renewal, replacement and augmentation of assets.
## Table 7: Freight Traffic Details (Ntkm In Millions; Earnings In Rs Crore)
| | 2018-19 Actuals | 2019-20 Revised | 2020-21 Budgeted |
|--------------------------------|--------------------|--------------------|---------------------|
| % Change (2020-21 | | | |
| BE/ 2019-20 RE) | | | |
| Commodity | NTKM | Earnings | NTKM |
| Coal | 3,11,487 | 56,964 | 2,84,907 |
| Raw materials for steel plants | | | |
| except iron | | | |
| 15,141 | 2,359 | 14,387 | 2,350 |
| Pig Iron & finished steel | 49,926 | 8,422 | 42,369 |
| Iron Ore | 43,322 | 9,377 | 45,744 |
| Cement | 67,818 | 10,166 | 59,916 |
| Foodgrains | 57,575 | 7,616 | 53,254 |
| Fertilisers | 46,835 | 6,348 | 44,899 |
| Petroleum & Lubricants | 29,333 | 5,632 | 29,104 |
| Container Service | 57,882 | 7,369 | 53,900 |
| Other Goods | 59,204 | 8,328 | 51,532 |
| Miscellaneous earnings | | 4,852 | |
| Total | 7,38,523 | 127,433 | 6,80,012 |
Notes: NTKM - Net Tonne Kilometre (One NTKM is the net weight of goods carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates. Sources: Expenditure Profile 2020-21; PRS.
2018-19 Actuals
2019-20 Revised
2020-21 Budgeted
% Change 2020-21 BE/
2019-20 RE
PKM
Earnings
PKM
Earnings
PKM
Earnings
PKM
Earnings
Suburban
Total Suburban
1,46,678
2,813
1,57,952
2,998
1,63,008
3,095
3%
3%
Non Suburban
AC First class
1,871
518
1,997
596
2,010
651
1%
9%
AC Sleeper
23,252
3,864
25,176
4,512
25,334
4,930
1%
9%
First Class (M&E)
87,207
11,223
84,479
11,726
85,009
12,810
1%
9%
First Class (ordinary)
623
178
521
160
524
175
1%
9%
AC 3 Tier
13,291
1,893
12,752
1,958
12,832
2,140
1%
9%
Sleeper Class (M&E)
115
15
65
9
65
10
0%
9%
Second Class (M&E)
282
13
386
18
388
20
1%
9%
Sleeper Class (ordinary)
2,91,144
14,321
3,22,820
17,126
3,24,844
18,710
1%
9%
Second Class (Ordinary)
3,523
146
3,934
176
3,959
192
1%
9%
AC Chair Car
3,69,835
11,418
3,27,300
10,898
3,29,352
11,906
1%
9%
Executive Class
2,19,353
4,666
2,53,784
5,822
2,55,376
6,360
1%
9%
Total Non-Suburban
10,10,496
48,254
10,33,214
53,002
10,39,693
57,905
1%
9%
Total Passenger
11,57,174
51,067
11,91,166
56,000
12,02,701
61,000
1%
9%
Notes: PKM - Passenger Kilometre (One PKM is when a passenger is carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates. Sources: Expenditure Profile 2020-21; PRS.
## Demand For Grants: Health And Family Welfare
The Ministry of Health and Family Welfare has two departments: (i) the Department of Health and Family Welfare, and (ii) the Department of Health Research. The Department of Health and Family Welfare is responsible for functions including: (i) implementing health schemes, and (ii) regulating medical education and training. The Department of Health Research is broadly responsible for conducting medical research. This note analyses the financial allocation trends and key issues concerning the health sector.
## Overview Of Finances
Overall, India's public health expenditure (sum of central and state spending) has remained between 1.2% to 1.6% of GDP between 2008-09 and 2019- 20.1,2,3 This expenditure is relatively low as compared to other countries such as China (3.2%), USA (8.5%), and Germany (9.4%). In 2020-21, the Ministry received an allocation of Rs 67,112 crore. This is an increase of 3.9% over the revised estimates of 2019-20 (Rs 64,609 crore).4 Under the Ministry, the Department of Health and Family Welfare accounts for 97% of the Ministry's allocation, at Rs 65,012 crore. Whereas, the Department of Health Research is allocated Rs
2,100 crore (3% of the allocation).
%
RE
BE
Item
Actuals
2018-19
2019-20
2020-21
Change
(RE to
BE)
52,954
62,659
65,012
3.8%
Health & Family Welfare Health Research
1,728
1,950
2,100
7.7%
Total
54,682
64,609
67,112
3.9%
Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Demand Nos. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2020-21, PRS.
The revised estimate in 2019-20 for the Department of Health and Family Welfare matched the budget estimate of Rs 62,659 crore. Whereas, the Department of Health Research slightly overshot its budget estimate by Rs 50 crore.
Table 2 contains the allocation to major expenditure heads under the Ministry for the year 2020-21.
under the Ministry (in Rs crore)
%
RE
2019-
BE
2020-
Major Heads
Actuals
2018-19
20
21
Change
(RE to
BE)
NHM (total)
31,045 33,790 33,400
-1%
-NRHM
25,495
27,834
27,039
-3%
-NUHM
868
950
950
0%
-Others
4,682
5,006
5,411
8%
8,718
10,095
9,616
-5%
Autonomous Bodies (AIIMS, PGIMER, ICMR)
1,998
3,200
6,400
100%
Ayushman Bharat: Pradhan Mantri Jan Arogya PMSSY
3,797
4,733
6,020
27%
1,803
2,956
2,900
-2%
National AIDS & STD Control Programme Family Welfare Schemes
598
776 831
7%
227
114
29
-75%
Rashtriya Swasthya Bima Yojana Others
6,497
8,946
7,916
-12%
Total
54,682 64,609 67,112
4%
Note: BE - Budget Estimate; RE - Revised Estimates; NHM- National Health Mission; NRHM- National Rural Health Mission; NUHM- National Urban Health Mission; PMSSY- Pradhan Mantri Swasthya Suraksha Yojana. Autonomous Bodies include the All India Institute of Medical Science, Post Graduate Institute of Medical Education and Research, Chandigarh, and the Indian Council of Medical Research, New Delhi Sources: Demand No. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2020-21, PRS.
The National Health Mission (NHM) receives
about 50% of the Ministry's allocation, which
amounts to Rs 33,400 crore in 2020-21. Under the NHM, the rural component, i.e., the National Rural Health Mission (NRHM) has been allocated Rs 27,039 crore, a 3% decrease over the revised estimates of 2019-20. The allocation for National Urban Health Mission (NUHM) at Rs 950 crore remained the same over the revised estimates of 2019-20.
Other items under NHM include funds for health and medical education amounting to Rs 4,686 crore in 2020-21.
Allocation to autonomous institutes like the AIIMS and the Indian Council of Medical Research saw a decrease of 5% at Rs 9,616 crore from the revised estimates of 2019-20.
Pradhan Mantri Jan Arogya Yojana has seen the
highest increase in allocation at 100% (Rs 6,400 crore) over the revised estimates of 2019-20 (Rs 3,200 crore). The scheme provides a cover of Rs five lakh per family per year to about 10.7
crore families belonging to the poor and vulnerable population.
Higher allocation has been made for Pradhan Mantri Swasthya Suraksha Yojana at Rs 6,020 crore (27% increase). It focuses on correcting regional imbalances in the availability of affordable tertiary healthcare services.
## Budget Speech Highlights 2020-21
A health cess of 5% will be levied (in addition to customs duty) on certain medical devices, such as X-ray machines, imported into India. This cess may be utilised for the financing of health infrastructure and services.
Viability gap funding window has been proposed for setting up hospitals in the publicprivate partnership mode. Proceeds from taxes on medical devices would be used to support this health infrastructure.
Jan Aushadhi Kendra Scheme will be expanded to all districts offering 2,000 medicines and 300 surgicals by 2024.
## Trends In Allocation And Expenditure
In the last 15 years, the allocation to the Department of Health and Family Welfare has increased from Rs 11,366 crore in 2006-07 to Rs 65,012 crore in 2020- 21. Over the period 2006-20, the Compound Annual Growth Rate (CAGR) has been 13%. CAGR is the annual growth rate over a certain period of time.
Note: % change in allocation is BE (2020-21) over RE (2019-20)
for 2020-21.
Sources: Union Budgets, 2006-07 to 2020-21; PRS.
Table 3 indicates the actual expenditure of the Department of Health and Family Welfare compared with the budget estimates of that year (2010-20). The utilisation has been over 100% in the last three years, i.e., the Department exceeded its budget estimates. As per the revised estimates of 2019-20, the Department has already reached 100% of utilisation.
| Year | BE | Actuals | Actuals/BE |
|---------|--------|------------|---------------|
| 2010-11 | 23,530 | 22,765 | 97% |
| 2011-12 | 26,897 | 24,355 | 91% |
| 2012-13 | 30,702 | 25,133 | 82% |
| 2013-14 | 33,278 | 27,145 | 82% |
| 2014-15 | 35,163 | 30,626 | 87% |
| 2015-16 | 29,653 | 30,626 | 103% |
| 2016-17 | 37,066 | 37,671 | 102% |
| 2017-18 | 48,853 | 51,382 | 105% |
| 2018-19 | 52,800 | 52,954 | 103% |
| 2019-20 | 62,659 | 62,659* | 100% |
Note: BE - Budget Estimates; *Revised Estimates. Sources: Union Budgets, 2010-20; PRS.
Financial allocations to outcomes
## National Health Mission
The National Health Mission (NHM) consists of two sub missions, the National Rural Health Mission (focused on rural areas) and the National Urban Health Mission (focused on urban areas). NHM aims at strengthening public health systems and healthcare delivery. The various components under NHM include: (i) reproductive, maternal, new born and child health services (RCH Flexi Pool), (ii) NRHM Mission Flexi Pool for strengthening health resource systems, innovations and information, (iii) immunisation including the Pulse Polio Programme,
(iv) infrastructure maintenance, and (v) National Disease Control Programme. Note that, funding for NHM is done through flexible pools, such as RCH flexible pool, and flexible pool for communicable diseases. The rationale for creating of the flexible pool is to allow more financial flexibility and efficient distribution of funds in order to obtain desired health outcomes. The allocation for NHM in 2020-21 (Rs 33,400 crore) saw a 1% decrease over the revised estimates of 2019-20. NHM's percentage share in the total budget has decreased from 73% in 2006-07 to 50% in 2020-21. In 2020-21, there has been no change in allocation towards all the flexible pools. The funding for the flexible pools are: (i) Rs 5,703 crore for the immunisation pool, (ii) Rs 2,178 crore towards the flexible pool for communicable diseases, and (iii) Rs 717 crore towards the flexible pool for noncommunicable diseases.
Table 4 shows the key targets achieved under the NHM framework.
| Targets (2012-17) | Status (as on Dec 2019) |
|-------------------------------|----------------------------|
| Reduce IMR to 25 | IMR has reduced to 35 in |
| 2017. | |
| Reduce MMR to | |
| 100/1,00,000 live births | |
| MMR has reduced to 122 in | |
| 2017. | |
| Reduce TFR to 2.1 | TFR has reduced to 2.3 in |
| 2016. | |
| Annual Malaria Incidence | |
| to be < .001 | |
| Annual Malaria Incidence | |
| is 0.02 in 2019. | |
| Less than 1 % microfilaria | |
| prevalence in all districts | |
| Out of 256 endemic districts, | |
| 99 have reported incidence | |
| less than 1% till 2018. | |
| Kala-Azar elimination by | |
| 2015, <1 case per 10,000 | |
| population in all blocks | |
| 92% endemic blocks have | |
| achieved the elimination | |
| target in 2019, | |
| Reduce annual prevalence | |
| and mortality from | |
| Tuberculosis by half | |
| Incidence reduced from 300 | |
| per lakh in 1990 to 204 per | |
| lakh in 2017. | |
| Mortality reduced from 76 | |
| per lakh in 1990 to 31 per | |
| lakh in 2017. | |
Source: Health and Family Welfare Statistics 2017; Unstarred Question No. 4335, Ministry of Health and Family Welfare, Lok Sabha, December 13, 2019; PRS. Note: IMR-Infant Mortality Rate; MMR-Maternal Mortality Rate; TFR-Total Fertility Rate.
The objective of NHM is to ensure universal access to equitable, affordable, and quality health care services. This is done through improving health infrastructure and enhancing service delivery by training human resources in healthcare. Healthcare infrastructure in India can be categorised into physical infrastructure and the human resources who provide medical services.
## Physical Infrastructure
Depending on the level of care required, healthcare in India is broadly classified into three types. This classification includes primary care (provided at primary health centres), secondary care (provided at district hospitals), and tertiary care institutions (provided at specialised hospitals like AIIMS). Primary health care infrastructure provides the first level of contact between health professionals and the general population.5 Broadly, based on the population served and the type of services provided, primary health infrastructure in rural areas consists of a three tier system. This includes Sub-Centres (SCs), Primary Health Centres (PHCs), and Community Health Centres (CHCs).6 A similar set up is maintained in urban areas.7 The number of SCs, PHCs, and CHCs in 2005 and 2018 respectively across rural and urban areas are given in **Figure 2**.
Source: Comparative Statement, Health Management Information System; PRS. A shortfall has been observed at different levels of the healthcare delivery system. As of 2018, there is a shortage of 2,188 CHCs, 6,430 PHCs and 32,900 SCs.8 The Ministry has noted that the existing ones are also poorly equipped and have inadequate infrastructure with many PHC's functioning in erstwhile single room SCs and many SCs in thatched accommodation.9 Note that under NRHM, states were permitted to establish facilities as per need. However, not many states did so due to lack of funds and the inability to close down even existing facilities (not in use) because of administrative bottlenecks.9 Under NHM, support is provided to states to strengthen existing public health facilities. As of 2018, there are 25,778 government hospitals (including community health centres) in India.10 Further, states have constructed 268 new district hospitals and upgraded 3,288 hospitals.3 With regard to secondary and tertiary care, the HLEG (2011) recommended that in order to guarantee secondary and tertiary care, equitable access to functional beds must also be provided.11 According to the World Health Statistics, India ranks among the lowest in this regard, with 0.7 beds per 1,000 people, far below the global average of 3.4 beds.12 It recommended functional bed capacity should be expanded to 2 beds per 1000 population by 2022.
## Human Resources In Health
Between 2014 and 2018, the number of registered doctors increased by 24% from 7,47,109 to 9,23,749.8 Note that despite the increase, there has been a steady increase in the shortfall of doctors, specialists and surgeons. For example, as of 2018, there is a shortfall of 46% of doctors, and 82% of specialists including surgeons, obstetricians, gynaecologists, physicians, and paediatricians in Primary Health Centres across India.8 Certain reasons identified for the shortage of personnel in government facilities include: (i) poor working environment, (ii) poor remuneration making migration to foreign countries and to the private sector more attractive, and (iii) procedural delays in recruitment and poor forward planning for timely filling up of positions. It has been estimated that the filling up of human resource gaps in 16 states would require an expenditure equivalent to 0.6% of GDP.11
| Profession | | 2014 |
|--------------|-----------|--------|
| Allopathic | | |
| Doctors | | |
| 7,47,109 | 9,23,749 | 24% |
| AYUSH | | |
| Doctors** | | |
| 7,36,538 | 7,99,879 | |
| 9% | | |
| Nurses and | | |
| Pharmacists | | |
| 32,86,157 | 40,91,597 | |
| 25% | | |
Notes: **includes Ayurveda Unani Siddha Naturopathy Homeopathy. Source: Economic Survey 2019-20; PRS.
## Pradhan Mantri Jan Arogya Yojana (Pmjay)
Launched in September 2018 under the Ayushman Bharat programme, PMJAY aims to provide a cover of Rs five lakh per family per year to 10.7 crore families (no cap on family size and age) belonging to poor and vulnerable population.13 The scheme subsumed two centrally sponsored schemes, namely, Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme.
Benefits: The scheme provides insurance coverage for secondary and tertiary healthcare. At present, 1,393 procedures across different specialties such as general medicine, oncology, cardiology, and orthopaedics are covered. In addition, the scheme provides for pre and post hospitalisation expenses. In 2020-21, PMJAY has been allocated Rs 6,400 crore, an increase of 100% over the revised estimates of 2019-20. In 2019-20, the scheme was allocated Rs 6,400 crore which was revised downward to Rs 3,200 crore. A study report by the 15th Finance Commission estimated the demand and expenditure on the PMJAY for the next five years. It stated that the total costs (centre and states) of PMJAY for 2019 could range from Rs 28,000 crore to Rs 74,000 crore.14 This estimate takes into account: (i) the assumption that all targeted beneficiaries will be covered (approximately 50 crore people), (ii) hospitalisation rates over time, and (iii) average expenditure on hospitalisation. Further, it noted that these costs could go up to between Rs 66,000 crore and Rs 1,60,089 crore in 2023 (accounting for inflation). Note that, the Standing Committee on Health (2018) and a study report of the 15th Finance Commission (2019) have noted that PMJAY is just an extension of RSBY which provided for coverage of up to Rs 30,000 per family per annum.14,15 Hence, to ensure proper implementation of the scheme, an analysis of the failures and inadequacies of RSBY should be done. This would look at whether: (i) RSBY covered all potential beneficiaries, (ii) hospitalisation rates increased under the scheme, and (iii) insurance companies were profitable under the scheme.
While PMJAY provides coverage for secondary and tertiary levels of healthcare, most of the out-of-thepocket expenditure made by the consumers is actually on buying medicines (52%), and towards public hospitals (22%) (See Figure 3).16 Out-of-thepocket expenditure are the payments made directly by individuals at the point of service where the entire cost of the health service is not covered under any financial protection scheme.
Several expert bodies including the High Level Expert Group (HLEG) set up by the Planning Commission (2011) and the High Level Group of Health Sector (2019) have observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level.11,17 It recommended that the focus of healthcare provision should be towards providing primary healthcare for the country. In this context, as part of the Ayushman Bharat programme, 1,50,000 existing Sub Health Centres (first contact between health system and population) and Primary Health Centres (referral unit for Sub Centres) will be upgraded to Health and Wellness Centres by December 2022. These centres will provide comprehensive primary health care, free essential drugs and diagnostic services.
The table below shows details regarding the implementation of the Ayushman Bharat programme which includes PMJAY and Health and Wellness Centres.
Table 6: Status of implementation of Ayushman Bharat (as of January 2020)
Indicators
All India
Beneficiary families covered (in lakhs)
1,363
% claims paid
63%
Number of empanelled hospitals
19,752
Health and Wellness Centres
29,572
Sources: Lok Sabha Unstarred Question No. 1,066, Ministry of Health and Family Welfare, answered on November 22, 2019; HWC Portal, Ayushman Bharat; PRS.
## Pradhan Mantri Swasthya Suraksha Yojana
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) has been implemented since 2003 with objective of: (i) correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, and (ii) augmenting facilities for quality medical education in the country. This includes establishing AIIMS like institutions and upgrading certain state government hospitals. Over the years, the scheme has been expanded to cover 20 new AIIMS and 71 state government hospitals. In 2018, the Comptroller and Auditor General (CAG) noted that all new AIIMs overshot their completion time by almost five years.18 There were similar delays observed in the upgradation of state government hospitals. Further, it was found that the Ministry had estimated the capital cost for setting up six new AIIMS in Phase 1 to be Rs 332 crore per institute. After four years, this cost was revised to Rs 820 crore per institute, on account of shortcomings in planning and assessment of requirements. The Standing Committee on Health and Family Welfare (2017 and 2018) noted that this indicates poor assessment of time and cost which have left the allocated funds unused.15,19
Notes: Values for 2019-20 and 2020-21 are revised estimates and budget estimates respectively
Sources: Union Budget 2008-09 to 2020-21; PRS. In 2020-21, the allocation to PMSSY increased by 27% over the revised estimates of 2019-20 (see Figure 6) at Rs 6,020 crore. Allocation towards PMSSY increased from Rs 654 crore in 2010-11 to Rs 6,020 crore in 2020-21.
## Health Research
The Standing Committee on Health and Family Welfare (2018) noted that there is a huge, persistent, and recurring mismatch between the projected demand for funds and actual allocation to the Department of Health Research.20,21 In 2020-21, its allocation has seen an increase of 7.7% over the revised estimates of 2019-20 at Rs 2,100 crore. The Committee also noted that the Department had reported shortfall of funds for implementation of projects and on the other hand, there was underutilisation of funds released. This mismatch between the demanded and allocated funds has led to impact in terms of restrictions in the sanctioning of new labs, providing recurring grants to the ongoing projects, and upgradation of health research infrastructure.20 This also led to repercussions in the medical research output. For example, in two years i.e. 2015 and 2016, only 1,685 research papers have been published by the Indian Council of Medical Research and 3 patents have been granted against the 45 patents filed.20
## The National Medical Commission Act, 2019
A legislation regarding the medical regulatory
authority was passed by Parliament to oversee
medical education and practice. The National
Medical Commission Act, 2019 replaced the current
Medical Council of India (MCI). The MCI was
established under the 1956 Act to establish uniform
standards of medical education and regulate its
practice.
The Act provides for a medical education system
which ensures: (i) availability of adequate and high
quality medical professionals, (ii) adoption of the
latest medical research by medical professionals, (iii)
periodic assessment of medical institutions, and (iv)
an effective grievance redressal mechanism.
## Drug Regulation
The central and state agencies for drug regulation are governed by the Drugs and Cosmetics Act, 1940 (DCA). The DCA provides for the regulation of import, manufacture, sale, and distribution of drugs. Although the DCA is a central legislation, it is implemented by the states. Over the years, various Committees have examined the issues relating to the regulation of drugs. The Mashelkar Committee Report (2003) highlighted the following challenges of the drug regulatory system: (i) inadequacy of trained and skilled personnel at the central and state levels, (ii) lack of uniformity in the implementation of regulatory requirements and variations in regulatory enforcement, and (iii) inadequate or weak drug control infrastructure at the state and central level.22 Expert committees have recommended many steps to address these concerns regarding drug regulation in the country.22,23,24 They include: (i) a new independent and professionally run regulatory body, Central Drug Administration reporting directly to MoHFW, (ii) categorising the states in terms of scale of industry (manufacturing and sale) and investment in their regulation accordingly, (iii) the revision and imposition of higher fees for drug applications, clinical trials, and registration of imported drugs and foreign manufacturers, and (iv) establishment of technical expert committees for new drug approvals.
## Quality Of Drugs
The Standing Committee Report (2013) found that the prevalence of poor quality drugs to be around 7-8 %, where non-standard drugs outnumber spurious drugs.25 The extent of 'non-standard quality' drugs in the National Drug Survey between 2014 and 2016 was 3.2%.26 The extent of 'spurious' drugs during the same time period was 0.02%.26 A drug is deemed to be 'spurious' if: (i) it is manufactured under a name which belongs to another drug, (ii) if it is an imitation of another drug, (iii) if it has been substituted wholly or partly by another drug, and
##
1 Economic Survey, 2015-16, Ministry of Finance, http://indiabudget.nic.in/budget2016-2017/es2014-15/echaptervol1.pdf. 2 Economic Survey, 2016-17, Ministry of Finance, http://indiabudget.nic.in/es2016-17/echapter.pdf. 3 Economic Survey, 2019-20, Ministry of Finance, https://www.indiabudget.gov.in/economicsurvey/doc/vol2chapter
/echap10_vol2.pdf. 4 Demand Nos. 42 & 43, Ministry of Health and Family Welfare, Union Budget 2020-21, https://www.indiabudget.gov.in/doc/eb/sbe42.pdf; https://www.indiabudget.gov.in/doc/eb/sbe43.pdf. 5 Chapter VIII: Public Health Care System, Planning Commission of India, http://planningcommission.nic.in/aboutus/committee/strgrp/stgp_ fmlywel/sgfw_ch8.pdf. 6 Part I, Rural Health Care System in India, Rural Health Statistics 2018, https://nrhmmis.nic.in/RURAL%20HEALTH%20STATISTICS/(A)%20RHS %20- %202014/Rural%20Health%20Care%20System%20in%20India. pdf. 7 Framework for Implementation, National Urban Health Mission ,May, 2013, http://nrhm.gov.in/images/pdf/NUHM/Implementation_Framewo rk_NUHM.pdf. 8 Rural Health Statistics 2018, Health Management Information Systems, Ministry of Health and Family Welfare. 9 "Survey Report & Recommendations of Clinical Establishments", Ministry of Health and Family Welfare, 2013, http://clinicalestablishments.nic.in/WriteReadData/788.pdf. 10 Health and Family Welfare Statistics 2017, Ministry of Health and Family Welfare.
(iv) if it wrongly claims to be another manufacturer's product.27 With regard to quality of drugs, the Mashelkar Committee recommended that: (i) states should take more samples to check the quality of drugs manufactured and sold in the market, (ii) states should also monitor the source of purchase and quality of drugs stocked by registered medical practitioners, and (iii) number of drug inspectors and their skills must be upgraded according to the load of work of inspections and monitoring.22
## Drug Pricing
The National Pharmaceutical Pricing Authority (NPPA) monitors the availability and pricing of drugs in the country. NPPA fixes the prices of drugs/devices included in Schedule I of Drugs (Prices Control) Order (DPCO), 2013 after their notification under National List of Essential Medicines (NLEM). NLEM, 2015 consists of 3,754 medicines in total. Wherever instances of manufacturers/ importers charging prices higher than the prices fixed by the NPPA are reported, these cases are examined in detail. Since the inception of NPPA in 1995 till 2019, 2,038 demand notices have been issued to pharmaceutical companies for having overcharged patients on the sale of formulations at prices above the ceiling prices notified by NPPA.28 An amount of Rs 5,477 crore is still remaining to be paid and an amount of Rs 4,033 is under litigation.28
2011, http://planningcommission.gov.in/reports/genrep/rep_uhc0812.pd f. 12 Hospital beds (per 1,00 people), Work Bank Database, last accessed on January 31, 2020,
https://data.worldbank.org/indicator/SH.MED.BEDS.ZS. 13 "Ayushman Bharat –Pradhan Mantri Jan AarogyaYojana (AB- PMJAY) to be launched by Prime Minister Shri Narendra Modi in Ranchi, Jharkahnd on September 23, 2018", Press Information Bureau, Ministry of Health and Family Welfare, September 22, 2018, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1546948. 14 'Ayushman Bharat: Costs and Finances of the Prime Minister Jan Arogya Yojana', Institute of Economic Growth, Study Report for the 15th Finance Commission, https://fincomindia.nic.in/ShowContentOne.aspx?id=27&Section =1. 15 "Report no. 106: Demands for Grants 2018-10 (Demand No.
42) of the Department of Health and Family Welfare", Standing Committee on Health and Family Welfare, March 8, 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ ReportFile/14/100/106_2019_7_10.pdf. 16 Household Health Expenditures in India (2013-14), December 2016, Ministry of Health and Family Welfare, http://www.mohfw.nic.in/sites/default/files/38300411751489562 625.pdf 17 A Report of the High Level Group of Heath Sector, 15th Finance Commission, https://fincomindia.nic.in/ShowContentOne.aspx?id=27&Section =1 18 Report No. 10, Performance Audit on Pradhan Mantri Swasthya Suraksha Yojana, August 7, 2018, Family Welfare, Ministry of Health and Family Welfare, May 8, 2012,
| 2019-20 | 2019-20 | 2020-21 |
|------------------------------------------------|------------|------------|
| Major Heads | | |
| 2018-19 | | |
| Actuals | BE | RE |
| % Change | | |
| RE (2019- | | |
| 20)/Actuals | | |
| (2018-19) | | |
| Change | | |
| between | | |
| RE 2019- | | |
| 20 and BE | | |
| 2020-21 | | |
| Department of Health Research | 1,728 | 1,900 |
| Department of Health and Family Welfare | 52,954 | 62,659 |
| Pradhan Mantri Swasthya Suraksha Yojana | 3,797 | 4,000 |
| Family Welfare Schemes | 598 | 950 |
| National AIDS and STD Control Programme | 1,803 | 2,500 |
| National Health Mission | 31,045 | 32,995 |
| -National Rural Health Mission | 25,495 | 27,039 |
| -National Urban Health Mission | 868 | 950 |
| -Tertiary Care Programs | 289 | 550 |
| -Strengthening of State Drug Regulatory System | 179 | 206 |
| -Human Resources for Health and Medical | | |
| Education | | |
| 4,214 | 4,250 | 4,500 |
| Infrastructure Development for Health Research | 103 | 160 |
| Rashtriya Swasthya Bima Yojna | 227 | 156 |
| Pradhan Mantri Jan Arogya Yojana | 1,998 | 6,400 |
| Autonomous Bodies | 8,718 | 9,920 |
| Others | 6,394 | 7,478 |
| Total | 54,682 | 64,559 |
Sources: Demand for Grants, Ministry of Health and Family Welfare, Union Budget, 2020-21; PRS.
State
Average health expenditure
(rural)
Andhra Pradesh
13,227
31,242
Arunachal Pradesh
5,678
8,926
Assam
6,966
47,064
Bihar
11,432
25,004
Chhattisgarh
12,149
22,647
Delhi
30,613
34,730
Goa
29,954
23,165
Gujarat
14,298
20,155
Haryana
18,341
32,370
Himachal Pradesh
18,860
28,590
Jammu & Kashmir
8,442
13,948
Jharkhand
10,351
13,151
Karnataka
14,091
22,190
Kerala
17,642
15,465
Madhya Pradesh
13,090
23,993
Maharashtra
20,475
29,493
Manipur
6,061
10,215
Meghalaya
2,075
18,786
Mizoram
8,744
13,461
Nagaland
5,628
15,788
Odisha
10,240
19,750
Punjab
27,718
29,971
Rajasthan
12,855
16,731
Sikkim
8,035
9,939
Tamil Nadu
11,842
23,757
Telangana
19,664
20,617
Tripura
5,694
11,638
Uttar Pradesh
18,693
31,653
Uttarakhand
9,162
25,703
West Bengal
11,327
24,875
Andaman & Nicobar Islands
3,373
8,389
Chandigarh
16,389
35,158
Dadra & Nagar Haveli
4,219
7,749
Daman & Diu
10,223
6,930
Lakshadweep
10,418
8,604
Puducherry
7,965
14,076
All India
14,935
24,436
Sources: District Level Household and Facility Survey -4 (2012-13); PRS.
Average health expenditure
(urban)
| | Population | Crude |
|-------------------------------------------------------------------------------------------------------------|---------------|------------|
| State | (Million) | Birth Rate |
| Total | | |
| Fertility | | |
| 2011 | 2016 | Rate, 2016 |
| Under 5 | | |
| mortality | | |
| rate, 2016 | | |
| | | |
| Number of | | |
| live births | | |
| per 1,000 | | |
| in a | | |
| population. | | |
| Number of | | |
| children | | |
| born to a | | |
| woman in | | |
| her life time | | |
| Death | | |
| between 0- | | |
| 5 years, | | |
| per 1,000 | | |
| live births | | |
| Andhra Pradesh | 49 | 16 |
| Assam | 31 | 22 |
| Bihar | 104 | 27 |
| Chhattisgarh | 26 | 23 |
| Gujarat | 60 | 20 |
| Haryana | 25 | 21 |
| Jharkhand | 33 | 23 |
| Karnataka | 61 | 18 |
| Kerala | 33 | 14 |
| Madhya Pradesh | 73 | 25 |
| Maharashtra | 112 | 16 |
| Odisha | 42 | 19 |
| Punjab | 28 | 15 |
| Rajasthan | 69 | 24 |
| Tamil Nadu | 72 | 15 |
| Telangana | 35 | 18 |
| Uttar Pradesh | 200 | 26 |
| West Bengal | 91 | 15 |
| Arunachal | | |
| Pradesh | | |
| 1 | 19 | 2.7 |
| Delhi | 17 | 16 |
| Goa | 1 | 13 |
| Himachal Pradesh | 7 | 16 |
| Jammu & Kashmir | 13 | 16 |
| Manipur | 3 | 13 |
| Meghalaya | 3 | 24 |
| Mizoram | 1 | 16 |
| Nagaland | 2 | 14 |
| Sikkim | 1 | 17 |
| Tripura | 4 | 14 |
| Uttarakhand | 10 | 17 |
| Andaman & | | |
| Nicobar Islands | | |
| 0 | 12 | 1.5 |
| Chandigarh | 1 | 14 |
| Dadra & Nagar | | |
| Haveli | | |
| 0 | 25 | 3.3 |
| Daman & Diu | 0 | 24 |
| Lakshadweep | 0 | 19 |
| Puducherry | 1 | 14 |
| All India | 1,211 | 19 |
| Sources: Census Data 2011; Sample Registration System 2019; Health and Family Welfare Statistics 2017; PRS. | | |
Life
Expectancy
Maternal
Mortality
Underweight
children (%)
Infant Mortality
Rate (per 1000
live Births) 2016
2015
Ratio
2015-17
at Birth
(Years)
2012-16
Composite index of stunting and wasting
Number of infants who die before reaching one, per 1,000 live births
Number of maternal deaths, per 1,00,000 live births
How long a new born can expect to live, on existing death rate
## Demand For Grants: Housing And Urban Affairs
The Ministry of Housing and Urban Affairs formulates policies, coordinates activities of various agencies (at the state and municipal level), and monitors programmes in the area of urban development. It also provides states and urban local bodies (ULBs) with financial assistance through various centrally supported schemes. In 2017, the Ministry of Housing and Poverty Alleviation, and the Ministry of Urban Development were combined to form the Ministry of Housing and Urban Affairs. This note looks at the expenditure incurred by the Ministry, the status of the various schemes implemented, and the issues faced with investment required for urban planning.
## Overview Of Finances Allocation In Budget 2020-211
The total expenditure on the Ministry of Housing and Urban Affairs for 2020-21 is estimated at Rs 50,040 crore. This is 18% higher than the revised estimates for 2019-20. In 2020-21, while revenue expenditure of the Ministry is estimated at Rs 28,891 crore (58%), capital expenditure is estimated at Rs 21,149 crore (42%). Since 2014-
15, the Ministry's revenue expenditure has been higher than its capital expenditure.
| 2019-20 | 2020-21 |
|-------------|------------|
| | |
| 2018-19 | |
| Actuals | RE |
| % change | |
| 2020-21 BE/ | |
| 2019-20 RE | |
| Revenue | 24,838 |
| Capital | 15,773 |
| Total | 40,062 |
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Notes on Demands for Grants, 2019-20, Ministry of Housing and Urban Affairs; PRS.
## Policy Proposals In The 2020-21 Budget2
In her budget speech, the Finance Minister made the following announcements regarding the housing and urban development sector:
Extension of tax exemption for affordable
housing: Currently, an exemption is provided
on profits or gains arising out of building affordable houses if the project was approved by March 31, 2020. Further, an additional tax deduction of up to Rs 1,50,000 is provided on interest paid on loans for self-occupied house owners if the loan was sanctioned by March 31, 2020. The deadline in both cases has been extended to March 31, 2021.
Concession to real estate sector: Currently,
for transactions involving immovable property
where the consideration is less than the circle rate by more than 5%, the difference is counted as income both in the hands of the purchaser and the seller. The Budget proposes to increase this limit to 10%.
New smart cities: Five new smart cities will
be developed in collaboration with states through the PPP mode.
## Expenditure Trends
Between 2009 and 2020, the expenditure of the Ministry has increased at an average annual rate of 20%. The maximum year-on-year increase (91%) was seen in 2014-15, followed by 2016-17 (83%). This increase could be attributed to the introduction of the new schemes - Smart Cities Mission and AMRUT in 2014-15, and Pradhan Mantri Awas Yojana in 2016-17.
Note: For the years 2009-10 till 2018-19, the figures are a combination of the erstwhile Ministry of Housing and Urban Poverty Alleviation, and the Ministry of Urban Development. Values for 2019-20 and 2020-21 are revised and budget estimates respectively. Sources: Ministry of Housing and Urban Affairs budget documents 2009-10 to 2020-21; PRS. The Standing Committee on Urban Development, (2017) had noted that the budgetary allocations to the Ministry were lower than the Ministry's demand.3 Although there was a 36% increase in the budget estimate for 2018-19 over the budget estimate for 2016-17, it was short of what the Ministry had projected. Fox example, in 2017-18, while the erstwhile Ministry of Urban Development projected an expenditure of Rs 68,410 crore, it was allocated Rs 34,212 crore in that year's budget.3 The Standing Committee on Urban Development (2018) had also noted that with the schemes picking up momentum, the allocation towards them should be increased for better implementation. The Standing Committee on Urban Development (2019) noted that since 2017 this gap between the demand and the budgetary allocations has progressively reduced.4 This gap has been reduced through Extra Budgetary Resources (EBR). However, the actual expenditure by the Ministry has been consistently lower than the budget estimates (see **Figure 2**).
Note: For the years 2009-10 till 2019-20, the figures are a combination of the erstwhile Ministry of Housing and Urban Poverty Alleviation, and Ministry of Urban Development. Values for 2019-20 are revised estimates. Sources: Ministry of Housing and Urban Affairs budget documents 2009-10 to 2020-21; PRS.
## Major Schemes And Issues
The Ministry implements several centrally sponsored schemes, and few central sector schemes. These include: (i) Atal Mission for Rejuvenation and Urban Transformation (AMRUT), (ii) 100 Smart Cities Mission, (iii) Pradhan mantra Awas Yojana - Urban (PMAY-U), (iv) Swachh Bharat Mission - Urban (SBM-U), and (v) Deendayal Antyodaya Yojana-National Urban Livelihood Mission (DAY-NULM). The Ministry also develops and manages metro rail projects across the country.
Of the expenditure allocated to the Ministry in 2020-21, the highest allocation is towards metro projects at 40% of the total budget. The allocation towards the key schemes is shown in Table 2 and Figure 3.
SBM
(Urban)
Others
12%
5%
| 2019-20 | 2020-21 |
|---------------|------------|
| | |
| 2018-19 | |
| Actual | RE |
| % change | |
| 2020-21 BE/ | |
| 2019-20 RE | |
| Metro | 14,470 |
| PMAY | |
| (Urban) | |
| 6,135 | 6,853 |
| AMRUT | 6,183 |
| Smart Cities | 5,902 |
| SBM (Urban) | 2,462 |
| DAY-NULM | 498 |
| 369 | 371 |
| Projects in | |
| North-Eastern | |
| Region | |
| Others | 4,594 |
| Total | |
| 40,612 | |
| | |
| 42,267 | |
| | |
| 50,040 | |
| | |
| 18% | |
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Notes on Demand for Grants 2020-21, Ministry of Housing and Urban Affairs; PRS.
## Metro Projects
Fund allocation: The Ministry of Housing and Urban Affairs is responsible for urban transport which includes metro projects. Investments in these projects are made in various forms including grants, equity investments, debt, and pass-through assistance for externally aided projects. As of December 20, 2018, there are 27 ongoing metro rail that have been set up as a 50:50 joint venture between the central government and respective state governments. These have a total approximate completion cost of Rs 3,36,954 crore. 534 km of metro line are operational, while 677 km are under implementation.5 In 2020-21, Rs 20,000 crore has been allocated towards metro projects. This is a 6% increase over the revised estimates of 2019-20. Allocation towards metro projects includes allocation towards the National Capital Region Transport Corporation.
The table below shows the trends in allocations and expenditure towards metro projects.
## Rs Crore)
| Year | Budgeted | Actuals | % utilised |
|---------|-------------|------------|---------------|
| 2014-15 | 8,026 | 5,998 | 75% |
| 2015-16 | 8,260 | 9,300 | 113% |
| 2016-17 | 10,000 | 15,327 | 153% |
| 2017-18 | 18,000 | 13,978 | 78% |
| 2018-19 | 15,000 | 14,470 | 96% |
| 2019-20 | 19,152 | 18,890 | 99% |
| 2020-21 | 20,000 | | |
*Revised estimates. Sources: Ministry of Housing and Urban Affairs Budget documents 2014-15 to 2020-21; PRS.
In 2020-21, the capital expenditure on metro projects is estimated to be 93% of the Ministry's total capital expenditure. The Standing Committee on Urban Development (2017) noted that a high allocation towards metro projects leads to inadequate funds for other projects.3 It recommended financing metro projects through other options such as international cooperation. The Standing Committee on Urban Development
(2019) had recommended that state/UT
governments must be consulted to find ways to reduce the huge outlay on metro works to enable other schemes to receive adequate funding.4 The Committee also noted that the investment on metro projects has almost doubled from Rs 10,000 crore in 2016-17 to Rs 19,152 crore in 2019-20.4 However, it had also acknowledged that measures had been taken to bring down costs. These include offering consultancy services to metro projects in Dhaka and Istanbul, as well as exporting 'Make in India' products to projects in Brisbane and Johannesburg. It suggested adopting similar steps to reduce the dependency of metro projects on the union budget.4
Planning of metro systems: The National Transport Development Policy Committee (NTDPC) report had observed that high speed mass transit systems such as metro rail do not always reduce door-to-door travel time, which is the most relevant indicator for users.6 Underground or elevated transport systems do not save time as compared to cars/ two-wheelers, when trip distances are short, because time is lost in walking from ground level to the platform level. Metro rail systems are efficient only when the average trip distance is greater than 12 km. Indian cities, because of their mixed land use patterns and higher density development, have shorter trip lengths, and hence are better suited for non-motorized travel. The NTDPC had recommended that the decision to implement metro rail projects should also consider the high cost factor. Rail-based metro systems should be considered after examining the opportunity cost of investing in expensive fixed infrastructure. For example, Phase I of Delhi metro cost Rs 191 billion for 65 km, whereas the Golden Quadrilateral highway project connecting four major cities in India through highways cost Rs 300 billion for 5,846 km. Further, the Delhi metro, including its three phases, will cater to 15% of the total commuter trips within the city.6 The NTDPC had recommended that metro rail projects should initially be limited to cities with population more than five million. Further, the cities should be able to cover all costs through user charges or fiscal costs. The NTDPC had also recommended that Indian cities should focus on improving their existing bus systems, adding bus rapid transit (BRT) systems, and improving nonmotorised transport.
Last mile connectivity: The Standing Committee on Urban Development (2019) highlighted the need to promote door to door connectivity of the Delhi Metro. It had suggested that cab aggregator services could employ auto rickshaws and cycle rickshaws to remedy this.4
## Urban Rejuvenation Mission: Amrut And Smart Cities Mission
The AMRUT Mission was launched in June
2015.7 The Mission seeks to provide basic services (such as water supply, sewerage, and urban transport) in cities, especially to the poorer households. It is a Centrally Sponsored Scheme with a total central assistance of Rs 50,000 crore for five years (2015-20). In 2020-21, the AMRUT Mission has been allocated Rs 7,300 crore. This is 14% more than the revised estimates of 2019-20. The Ministry seeks to spend Rs 50,000 crore on AMRUT by 2019-20. As per the government's proposal, the Ministry should have spent the entire amount by this year. However, so far the Ministry has allocated Rs 33,599 crore (67% of the proposed amount), and spent Rs 25,077 crore (50% of the proposed amount). The following table (**Table 4**)
compares the actual expenditure against the proposed allocation towards AMRUT.
expenditure ( Rs crore)
Year
Proposed
Allocation
Budget
Actual
% change
(actuals/
budget)
2015-16
5,000
3,919
2,702
69%
2016-17
15,000
4,080
4,864
119%
2017-18
15,000
5,000
4,936
99%
2018-19
9,000
6,000
6,183
103%
2019-20
6,000
7,300
6,392*
88%
2020-21
-
7,300
Total
50,000
33,599
25,077
*Revised Estimate. Sources: Standing Committee on Urban Development (2017); Ministry of Housing and Urban Affairs Demand for Grants for the years 2015-16 to 2020-21; PRS.
The Smart Cities Mission aims to develop cities that provide core infrastructure and apply 'smart'
solutions to give its citizens a decent quality of life to its citizens, and a sustainable environment.8 100 cities have been selected under the Mission, which were selected based on a Smart City challenge. The cities were evaluated based on their Smart City Plans which consisted of a pan city development strategy and an area based development strategy. The mission is being operated as a Centrally Sponsored Scheme. The central government was to provide financial of up to Rs 48,000 crore over five years (2015-20), that is, an average of Rs. 100 crore per city per year.8 The states and ULBs will have to contribute an equal amount, and generate the additional amount as required through other sources such as borrowings, municipal bonds.8
The Smart Cities Mission has been allocated Rs 6,450 crore in 2020-21, which is 87% higher than the revised estimates of 2018-19.
| Year | Budgeted | Actuals | % utilised |
|---------|-------------|------------|---------------|
| 2015-16 | 2,020 | 1,484 | 73% |
| 2016-17 | 3,215 | 4,412 | 137% |
| 2017-18 | 4,000 | 4,526 | 113% |
| 2018-19 | 6,169 | 5,902 | 96% |
| 2019-20 | 6,450 | 3,450* | 53% |
| | | | |
| 2020-21 | 6,450 | | |
*Revised estimates. Sources: Budget documents 2015-16 to 2020-21; PRS.
Till 2018, the actual allocation towards this scheme has been equal to or higher than the budget estimate, indicating over-spending. In 2019-20 the revised expenditure is almost half of the budgetary allocation. While the Ministry sought to allocate Rs 48,000 crore towards the scheme by 2019-20, so far Rs 21,150 crore has been allocated (44% of the planned expenditure). So far, all the 100 selected Smart cities have formed their Special Purpose Vehicles (SPVs) and appointed Project Management Consultants
(PMCs).9 **Table 6** provides the status of the smart city projects.10
## November, 2019)
Cost of
projects
Project status
Number of
projects
(in Rs crore)
Total Proposed
5,151
2,05,018
Tendered
4,178
1,49,512
Work orders issued
3,376
1,05,458
Completed
1,296
23,170
Sources: Lok Sabha questions; PRS.
## Pradhan Mantri Awas Yojana - Urban (Pmay-U)
The housing shortage is expected to reach 200 lakh by 2022.11 It was estimated that about 56% of this shortage falls in the Economically Weaker Sections (EWS), 40% in the Lower Income Group (LIG) category, and the rest 4% in the middle and higher income groups. The Ministry estimates the demand for housing at around 100 lakh.12 PMAY-U is an affordable housing scheme being implemented from 2015 to 2022. It seeks to help the central government achieve its target of
'housing for all target' by 2022. So far 4,424 cities have been covered under PMAY-U.13
The scheme comprises four components: (i) in situ rehabilitation of existing slum dwellers (using the existing land under slums to provide houses to slum dwellers) through private participation, (ii) credit linked subsidy scheme (CLSS) for EWS, LIG, and middle income group (MIG), (iii) affordable housing in partnership, and (iv) subsidy for beneficiary-led individual house construction. The Ministry provides central assistance to ULBs for the implementation of the scheme through the respective state governments.
Allocation: The budgetary allocation towards the scheme for 2020-21 is Rs 8,000 crore. This is a 17% increase over the revised estimates for 2019- 20. The funding towards the scheme comes from the Central Road and Infrastructure Fund. From the total allocation for PMAY-U in 2020-21, the maximum (63%) will go towards interest payment against loans raised through extra budgetary sources (EBR) for the scheme. The credit linked subsidy scheme component received 17% of the total allocation for PMAY-U, while 16% was allocated for central assistance to states.
| 2019-20 | 2020-21 |
|-----------------|------------|
| | |
| 2018-19 | |
| Actual | RE |
| % change | |
| 2020-21 BE/ | |
| 2019-20 RE | |
| - | 3,000 |
| Interest | |
| Payment | |
| against loan | |
| raised through | |
| EBR | |
| 4,192 | 2,681 |
| Central | |
| assistance to | |
| states/ UTs | |
| CLSS-I for | |
| EWS/LIG | |
| 1,300 | 600 |
| CLSS-II for MIG | 600 |
| Others | |
| 43 | 172 |
| 74% | |
| Total | 6,135 |
Notes: BE - Budget Estimate; RE - Revised Estimate.
Sources: Notes on Demand for Grants 2020-21, Ministry of Housing and Urban Affairs; PRS.
House construction: Till December 27, 2019, 103
lakh houses have been approved.13 Of this, 31% houses have been constructed. Note that these numbers also include some houses sanctioned under the earlier scheme - Jawaharlal Nehru National Urban Renewal Mission. With the target of the scheme at 100 lakh houses by 2022, and 32 lakh houses been constructed so far, it is unclear how the central government will construct the remaining houses (almost 69% of the target) in two years. The Standing Committee on Urban Development (2019) noted that the estimated demand for housing projects under PMAY-U was Rs 1,80,000 crore, as on October 28, 2019.4 The total central assistance sanctioned was Rs 1,42,000 crore, out of which Rs
57,896 crore had been released. It recommended the unhindered availability of funds be ensured to achieve the goal of 'Housing for All' by 2022.
House construction
Houses sanctioned
103.32 lakh
Of which, under construction
61.55 lakh
60% of the approved houses
Of which completed
32.16 lakh
31% of the approved houses
Central assistance (in Rs crore)
Central assistance sanctioned
1,60,000
Of which central assistance released
63,709
40% of the sanctioned assistance
Note: The total houses approved includes some houses that were sanctioned under the earlier Jawaharlal Nehru National Urban Renewal Mission. Sources: PMAY-U MIS; PRS.
Rental housing: As per the 2011 census, 27.5% of urban residents lived in rented houses. According to the Report of the Group of Secretaries (2017), a rental housing scheme could further complement PMAY-U in achieving the housing target.14 The Ministry proposed a Draft National Urban Housing Policy in October 2015.15 It seeks to promote the sustainable development of house ownership with a view to ensuring an equitable supply of rental housing at affordable prices. The Ministry also released the Draft Model Tenancy Act, 2019 in July 2019 to provide for the regulation and speedy adjudication of matters related to rental housing, and repeal the existing state rent control laws.16
Lending by housing finance companies- Both housing finance companies (HFCs), and public sector banks offer low cost funding for housing. HFCs have an 80% share in the implementation of CLSS component of PMAY-U.14 However, they face constraints such as inability to access long term funds.14 The Union Cabinet had approved the creation of a National Urban Housing Fund (NUHF) worth Rs 60,000 crore in February 2018.17 The NUHF aims to raise funds in the next four years (till 2022) to ensure a sustained flow of central release under PMAY-U to enable construction of houses. As of July 17, 2019, Rs 28,000 crore has been released to States\UTs under the NUHF.18
## Swachh Bharat Mission - Urban (Sbm-U)
Swachh Bharat Mission (SBM), launched in October 2014, aims to eliminate open defecation and achieve 100% scientific management of municipal solid waste in all 4,041 statutory towns by October 2, 2019.19,20
In 2020-21, Rs 2,300 crore has been allocated towards the scheme. This is 77% higher than the revised estimates of 2019-20. In 2019-20, the expenditure is estimated to fall short of the budget estimate by 51%.
The total estimated cost of implementation of SBM-U is Rs 62,009 crore. Of this, the share of the central government is Rs 14,623 crore, and states' assistance will amount to Rs 4,874 crore.
The remainder is to be financed via various sources such as the private sector, Swachh Bharat Kosh, market borrowing, and external assistance. As on February 11 2020, the central government has released Rs 5,641 crore.21
Toilet construction: **Table 9** shows the number of toilets constructed as on February 11, 2020, as compared to the targets set for October 2019.22
## On February 11, 2020)
| | Target | Completed |
|------------|-----------|--------------|
| 66,42,222 | 61,31,239 | 92% |
| Individual | | |
| Household | | |
| Latrines | | |
| 5,07,589 | 5,79,819 | 114% |
| Community | | |
| and Public | | |
| Toilets | | |
Sources: Swachh Bharat Mission Urban - Dashboard; PRS.
## Other Issues To Consider Additional Investment Required
The pace of urbanisation is increasing in the country. As per the 2011 census, around 31% of the country's population resided in urban areas.23 By 2031, around 600 million (43%) people is expected to live in urban areas, an increase of over 200 million in 20 years. Given the pace of urbanisation, large capital investments are needed for infrastructure projects which includes support from central and state governments in the form of capital grants. With the current rate of urbanisation, the High Powered Expert Committee (HPEC) for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period from 2012-2031.24 As per their framework, the investment in urban infrastructure should increase from 0.7% of GDP in 2011-12 to 1.1% of GDP by 2031-32. In 2020-21, the estimated expenditure by the Ministry of Housing and Urban Affairs is 0.22% of the GDP. The Ministry of Finance had noted that budgetary outlays alone will not be enough to service the growing demands on local governments for improving their infrastructure.25 Alternate sources of financing are required to meet the funding gap.25 The flagship schemes of the Ministry (such as
Smart Cities Mission, Swachh Bharat Mission)
seek to meet their financing requirements through a mix of sources such as borrowings, municipal bond financing, and PPPs.
The Standing Committee on Urban Development (2019) noted an urgent need for huge resource mobilisation in a phased by 2024 and afterwards by 2030. This was needed to ensure that Housing and Urban Affairs schemes have adequate funding, as well as to realise the goal of successfully strengthening the country's economy.4
## Financial Capacity Of Cities
The Constitution (74th Amendment) Act, 1992 devolved certain functions relating to urban development to ULBs, including the power to collect certain taxes. These function include urban planning, planning for economic and social development, and urban poverty alleviation. The new schemes under the Ministry, seek to decentralise the planning process to the city and state level, by giving them more decision making powers. This implies that a significant share of the funding needs to be raised by the cities themselves. However, there is an imbalance between the functions and finances of ULBs.26 The ULBs in India are amongst the weakest in the world both in terms of capacity to raise resources and financial autonomy.24 The share of own revenue for ULBs has declined from 63% in 2002-03 to 53% in 2007- 08, and to 44% in 2015-16.27,28 Several states have not devolved enough taxation powers to local bodies. Further, local governments collect only a small fraction of their potential tax revenue. While the central and state governments provide the ULBs with funds, these devolved funds are largely tied in nature, to either specific sectors or schemes. This constrains the spending flexibility of ULBs. Such a situation may pose problems when implementing the new schemes, where the ULBs have to raise a significant share of the revenue. For example, the Bhubaneswar Smart City Plan has a total project cost of Rs 4,537 crore (over five years), while the city's annual budget for 2014-15 was Rs 469 crore.29,30 PPPs have been an important instrument to finance and develop infrastructure projects. However, projects in many sectors require support from ULBs in the form of additional financial resources.
Inability to service such funding requirements constrains project implementation.25 In such cases, ULBs can access capital markets through issuance of municipal bonds. Municipal bonds are marketable debt instruments issued by ULBs, the funds raised may be used for capital projects, refinancing of existing loans, and meeting working capital requirements. The Securities and Exchange Board of India regulations (2015) regarding municipal bonds provide that, to issue such bonds, municipalities must: (i) not have negative net worth in any of the three preceding financial years, and (ii) not have defaulted in any loan repayments in the last one year.31 Therefore, a city's performance in the bond market depends on its fiscal performance. Some financing mechanisms, such as municipal bonds, have been around in India for the last two decades, but cities haven't been able to make much use of them. In order to improve the finances of the ULBs, the HPEC had recommended that state governments should share a pre-specified percentage of their revenues from all taxes on goods and services with ULBs, and this should be mandated constitutionally.24 Further, ULBs should be provided with formula-based transfers, and grantsin-aid.24 The ULBs could raise their own revenue by tapping into land-based financing sources, and improving non-tax revenues (such as water and sewerage charges, and parking fee).24
## Technical Capacity Of The Ulbs
Until recently, it has been observed in the urban sector that while the central government allocated funds, it did not play a role in the implementation of the projects. On the other hand, while ULBs and states implemented the projects, they did not raise the funds. The new schemes seek to empower ULBs to raise their own revenue. Both the national missions, AMRUT and Smart Cities, have a component for capacity building of ULBs. The HPEC had observed that municipal administration has suffered due to (i) presence of untrained and unskilled manpower, and (ii) shortage of qualified technical staff and managerial supervisors.24 It had recommended improving the technical capacity of ULBs. This can be achieved by providing technical assistance to state governments, and ULBs in planning, financing, monitoring, and operation of urban programm Development, April 27, 2015. 12 Unstarred Question No.1439, Ministry of Housing and Urban Affairs, Lok Sabha, February 12, 2019, http://164.100.24.220/loksabhaquestions/annex/17/AU1439.pdf. 13 Pradhan Mantri Awas Yojana - Urban MIS, Ministry of Housing and Urban Affairs, last accessed on February 11, 2020, https://pmayurban.gov.in/. 15 Draft National Urban Housing Policy, Ministry of Housing and Urban Affairs website, October, 2015, http://mohua.gov.in/upload/uploadfiles/files/National_Urban_Rental_Housing_Policy_Draft_2015.pdf. 16 The Model Tenancy Act, 2019, Ministry of Housing and Urban Affairs, July 10, 2019, http://mohua.gov.in/upload/whatsnew/5d25fb70671ebdraft%20Model%20Tenancy%20Act,%202019.pdf. 17 "Cabinet approves creation of national Urban Housing Fund", Press Information Bureau, Ministry of Housing and Urban Affairs, February 22, 2018, http://pib.nic.in/newsite/PrintRelease.aspx?relid=176687. 18 Starred Question No. 262, Ministry of Housing and Urban Affairs, Rajya Sabha, July 17, 2019, https://pqars.nic.in/annex/249/As262.pdf. Press Information Bureau, November 30, 2017, http://pib.nic.in/newsite/PrintRelease.aspx?relid=173995. 20 "PM launches Swachh Bharat Abhiyaan", Prime Minister's Office, Press Information Bureau, October 2, 2014, http://pib.nic.in/newsite/PrintRelease.aspx?relid=110247. 21 Swachh Bharat Mission Urban - Financial Progress, Ministry of Housing and Urban Affairs, last accessed on February 11, 2020, http://swachhbharaturban.gov.in/writereaddata/financial_progress.pdf?id=5mw5jzzbj3sabgx4. 22 Swachh Bharat Mission Urban - Dashboard, Ministry of Housing and Urban Affairs, last accessed on February 11, 2020, http://swachhbharaturban.gov.in/dashboard/?id=5mw5jzzbj3sabgx4. 23 Challenge of Urbanisation, Approach to the 12th five year plan, Planning Commission, October 2011, http://planningcommission.gov.in/plans/planrel/12appdrft/appraoch_12plan.pdf. infrastructure services, March 2011, http://icrier.org/pdf/FinalReport-hpec.pdf.
## Demand For Grants: Petroleum And Natural Gas
The Ministry of Petroleum and Natural Gas is concerned with exploration and production of oil and natural gas, refining, distribution and marketing, import and export, and conservation of petroleum products. The Ministry has been allocated Rs 42,901 crore for 2020-21. The allocation for the ministry has remained unchanged from the allocation from the revised estimates for the year 2019-20.
Note: Figures for 2019-20 are Revised Estimates and for 2020- 21 are Budget Estimates. Sources: Union Budget 2020-21; PRS.
The Ministry's expenditure, historically, has been following the trend in global crude oil prices. The crude oil prices have risen steadily from 28 USD/barrel in January 2016 to 80 USD/barrel in October 2018, before showing a volatile trend thereafter. The global crude oil price was 66 USD/barrel in December 2019.
Sources: Petroleum Planning and Analysis Cell; PRS.
Note that the price of petrol and diesel in India is higher compared to neighbouring nations, such as Pakistan, Sri Lanka and Nepal. On the other hand, the price of Kerosene is lower in India, compared to these nations.
Note: Price as on November 1, 2019. Petrol, Diesel price is the price at Delhi, whereas price for Kerosene is the price at Mumbai. Sources: Oil Industry Information at a Glance, Petroleum Planning and Analysis Cell, November 2019; PRS.
Rise in crude oil prices usually also leads to rise in under-recoveries. Under-recovery refers to the difference in the cost of producing petroleum products, and the price at which they are delivered to consumers. It indicates the loss incurred by oil marketing companies while supplying these products. Central government compensates the oil marketing companies by sharing some of this incurred loss through a burden sharing mechanism. **Figure 4** shows the trend of underrecoveries with the price of global crude oil.
Sources: Petroleum Planning and Analysis Cell; PRS.
## Overview Of Finances
Petroleum and Natural Gas (in Rs Crore)
| Major Head | Actual |
|---------------|-----------|
| 18-19 | |
| Revised | |
| 19-20 | |
| Budgeted | |
| 20-21 | |
| % change | |
| (RE to BE) | |
| LPG | |
| subsidy | |
| 20,268 | 34,086 |
| Kerosene | |
| subsidy | |
| 4,569 | 4,483 |
| PDH | |
| pipeline | |
| 1,207 | 1,552 |
| NSP | 1,300 |
| Others | 5,027 |
| Total | 32,371 |
Note: NSP = National Seismic Programme.
Sources: Union Budget Documents 2020-21; PRS.
LPG Subsidy: The Ministry provides subsidy on LPG cylinders to beneficiaries. Prior to 2013, this subsidy was provided in the form of subsidized cylinders. Following the launch of the PAHAL scheme in 2013, this subsidy is directly credited to the bank accounts of the beneficiary.1 In 2020-21, the Ministry is estimated to spend Rs 37,256 crore on LPG subsidy, which is 9.3% higher than the revised estimates of 2019-20.
Kerosene Subsidy: The Ministry provides subsidized kerosene through the Public Distribution System (PDS). In 2020-21, the Ministry has allocated Rs 3,659 crore for Kerosene subsidy, which is 18.4% lower than the revised estimates of 2019-20.
PDH Pipeline: The Phulpur-Dhamra-Haldia
(PDH) Pipeline is being developed by GAIL India to transport natural gas.2 The project will connect five states to the National Gas Grid. In 2020-21, Rs 728 crore has been allocated for the project.
National Seismic Programme: The Ministry is conducting a seismic survey of all sedimentary basins of India, where such data is available. The Programme was launched in October 2016 with an estimated expenditure of Rs 5,000 crore.3 The Programme has been allocated Rs 207 crore for 2020-21. This is 64% lower than the revised estimates of 2019-20.
Sources: Union Budget 2020-21; PRS.
## Key Issues And Analysis Subsidy On Lpg And Kerosene
The subsidy on LPG is the largest component of the Ministry's expenditure, with approximately
87% of its total budget allocated to it. For 2020- 21, the budget allocation for LPG subsidy has increased by 9.3% from the revised estimate for the same in 2019-20. Further, the revised estimate for 2019-20 also marked a 3.3% increase from the budgeted estimates of 2019-20. The total amount allocated for subsidies in 2020- 21 is Rs 40,915 crore which is a 6% increase from the revised estimates of 2019-20 and constitutes 95% of the total allocation to the ministry.
Sources: Union Budget Documents; PRS.
The expenditure on subsidies can be divided in three major heads: (i) Direct Benefit Transfer (DBT-PAHAL scheme) for LPG and (ii) Pradhan Mantri Ujjwala Yojana (PMUY) scheme for LPG, and (iii) Kerosene subsidy.
Table 2 highlights the expenditure for subsidies in the above three heads for 2018-19, revised estimate of expenditure for 2019-20 and the budgeted allocation for 2020-21.
| Major Head | Actual |
|-------------------------------------|-----------|
| 18-19 | |
| Revised | |
| 19-20 | |
| Budgeted | |
| 20-21 | |
| % change | |
| (RE to BE) | |
| DBT-PAHAL | 16,478 |
| PMUY | 3,200 |
| Kerosene | |
| subsidy | |
| 4,569 | 4,483 |
| Total | 24,247 |
| Sources: Union Budget 2020-21; PRS. | |
## Pradhan Mantri Ujjwala Yojana Scheme
According to the National Sample Survey (2011- 12), more than 67% of the rural households in the country used firewood as the primary source of energy for cooking.4 This is shown in **Figure 7**.
The PMUY scheme was launched in May 2016 with the objective of providing LPG connections to women from below poverty line households with a support of Rs.1,600 per connection.5 The scheme aimed to target five crore households, which was later (February 2018) revised to target eight crore households by 2020.6 The ambit of the scheme was also expanded to cover all SC/ST households, beneficiaries of Pradhan Mantri Awas Yojana (Gramin), forest dwellers, backward classes, in addition to households identified under the Socio Economic and Caste Census (SECC).6 According to the Ministry, as of September 2019, a total of 8.03 crore PMUY connections were released across 715 districts in the country. Of these, the maximum connections were released in Uttar Pradesh (1.48 crore), followed by West Bengal (89 lakh) and Bihar (86 lakh). 7 State-wise details on number of connections released under the scheme (as of September 2019 and December 2017) are provided in Table 6 in the Annexure. Nearly all states have seen a rapid increase in connections released under the scheme. The Comptroller and Auditor General (CAG) submitted a performance audit report on the PMUY scheme in December 2019. In its Report, CAG found that as of March 31, 2019, 7.2 crore connections were released under the scheme.8
The CAG also raised concerns related to lack of sustained usage of cylinders released under the scheme. As per Ministry data, till December 2018, there were nearly 5.9 crore beneficiaries under the scheme and the total number of refills under the scheme was nearly 28.8 crore.9 Figure 9 highlights the proportion of consumers who opted for refill under the scheme. 75% of consumers opted for a refill under the scheme and 57% opted for 3 or more refills (from date of getting the connection till December 2018). State-wise details (including UTs) on the proportion of consumers who opted for refill under the scheme are noted in **Table 7** in the Annexure.
The refill proportion was highest in Delhi (97%), Haryana (94%), Uttarakhand (88%). The proportion was lowest in Chhattisgarh (48%), Jharkhand (56%), Assam and Odisha (64%).
Sources: Refill data, PMUY website, Ministry of Petroleum & Natural Gas; PRS.
The CAG performance audit report noted that the average annual refill rate for PMUY beneficiaries is low compared to the refill rate for non-PMUY
beneficiaries (shown in **Figure 10**).8 The CAG
recommended that since the target of releasing connections has broadly been achieved, the scheme should now be focused towards sustained usage of LPG cylinders.
The Standing Committee on Petroleum and Natural Gas (2019) also noted disparity in the average refill of domestic cylinders (6.3 cylinders during last year) and the average refill of LPG
cylinders by PMUY beneficiaries (3.1 cylinders).10
It recommended a scheme to incentivise PMUY beneficiaries to increase refills of LPG cylinders. Further, it recommended that the government should broaden the scope of the scheme to cover poor families residing in urban and semi-urban areas, with eventually aiming to provide LPG connections to all eligible households.10 An assessment report by the Petroleum Planning and Analysis Cell (2016) pointed out the key barriers for not applying for LPG connection are: (i) high initial cost, including security deposit / price of gas stove and, (ii) high recurring cost of the cylinder.11 The Report also identified easy availability of firewood in the vicinity of forests as another primary barrier to adoption of LPG. The top five states where over 40% of the households procure firewood for free are Gujarat, Madhya Pradesh, Jharkhand, Uttar Pradesh and Nagaland. The CAG also highlighted issues related to implementation of the scheme. It noted that there were various cases of: (i) discrepancies in identification of beneficiaries, (ii) delay in installation of connections, (iii) diversion of cylinders for commercial purposes, and (iv) noncompliance with safety standards.8 Further, the CAG noted that there are no parameters under the scheme to assess outcomes related to performance of the scheme (such as improvement in health of women and reduction in air pollution). It recommended that the Ministry should develop a roadmap to assess these outcomes.
## Pratyaksha Hastaantarit Laabh (Pahal)
PAHAL Scheme was launched in 2014 (54 districts in first phase) and launched in rest of the country in 2015.12 Under the scheme, a consumer (with annual income up to Rs 10 lakh) can avail Direct Benefit Transfer (DBT) cash-subsidy for a LPG cylinder. The beneficiaries buy LPG cylinders at market rate and subsequently receive subsidy directly in their bank accounts. The average subsidy per cylinder on domestic LPG during the year 2016-17, 2017-18 and 2018-19 (up to 1st half) was Rs 108.8, Rs 173.4 and Rs 219.1, respectively.13 The effective cost of a domestic LPG cylinder (14.24 kg) after DBT subsidy, as of November 2019, was Rs 546.6.14 As of September 2019, nearly 25.7 crore LPG consumers had joined the scheme (state wise details in Annexure).15 Figure 11 below shows cumulative cash transfer and beneficiaries under the scheme for 2014-15 to 2019-20.
Sources: Direct Benefit Transfer website, accessed on February 8, 2020; PRS. Note: Numbers for a year are cumulative transfers till that year.
The CAG (in 2019) noted that the coverage of LPG in the country has increased from 62% in May 2016 to 94.3% in March 2019.8 **Table 3**
details the coverage of LPG in the country.
Households
As on
Total connections
(in crore)
(in crore)
Coverage (in %)
May-16
16.7
26.9
62.0%
Mar-17
19.7
27.3
72.8%
Mar-18
22.4
27.7
80.9%
Mar-19
26.5
28.2
94.3%
Sources: CAG Performance Audit, December 2019; PRS.
As per Direct Benefit Transfer web portal, the implementation of PAHAL scheme has resulted in an estimated savings of Rs 65,661 crore (up to December 2019).16 4.54 crore duplicate, fake, non-existent and inactive LPG connections have been eliminated under the scheme. The 'GiveItUp' campaign was started by the Ministry with the aim to motivate consumers who can afford to pay the market price for LPG to voluntarily surrender their subsidy.17 1.03 crore consumers have opted out of the scheme under the 'GiveItUp' campaign (as of December 2018).13 The CAG report on 'Implementation of PAHAL
Scheme' (2016) noted that the scheme appears to have addressed the concern regarding diversion of subsidised LPG cylinders to commercial consumers.18 However, the risk of diversion of nonsubsidised domestic LPG to commercial consumers still remains as there is a significant difference in the cost of non-subsidised domestic LPG and commercial LPG. There have also been complaints of supply of underweight cylinders and non-transfer of subsidy due to deseeding of Aadhaar from payments databases.19,20 The consumer has now been given the option of receiving subsidy through bank account transfer without the use of Aadhaar.
## Kerosene Subsidy
Over the last few years, the Ministry's expenditure on providing subsidy for kerosene has reduced from Rs 7,339 crore in 2015-16 to an estimated Rs
3,659 crore in 2020-21 (see Figure below).
Sources: Union Budget Documents; PRS. Note: Figures for 2019-20 are Revised Estimates and Figures for 2020-21 are Budget Estimates.
Note that the government has stated that with the increase in LPG coverage and electrification in villages, the allocation for kerosene has been rationalised.21 The Standing Committee on Petroleum and Natural Gas (2017) had recommended that the Ministry should reduce the expenditure on this subsidy and work towards the eventual withdrawal of the subsidy.22 The Committee noted that an increase in the coverage of LPG beneficiaries is necessary to reduce dependence on kerosene.22 This will result in the usage of cleaner fuel, promote the health of users, and address the problem of adulteration. The Committee also recommended that states should be encouraged to move towards the direct cash transfer of kerosene subsidy to reduce inefficiencies in the delivery.
## Dependence On Imports
India's import of crude oil has increased from 1,63,775 TMT (Thousand Metric Tons) in 2010- 11 to 2,26,498 TMT in 2018-19. Crude oil is refined in oil refineries to transform oil into useful petroleum products such as high speed diesel, LPG and kerosene. These petroleum products are used as raw materials in various sectors and industries such as transport (fuel) and petrochemicals. Further, they may also be used in factories to operate machinery or fuel generator sets. In 2018-19, India's total export of petroleum products was 61,096 TMT.
Table 4 shows the total import of crude oil and petroleum products, consumption of petroleum products in the country and India's exports of petroleum products for the last 10 years.
petroleum products in the country (in TMT)
Crude
Year
Oil
Petroleum
products
imports
Petroleum
products
import
Petroleum
products
export
consumption
2010-11 1,63,595
17,379
59,077
1,41,040
2011-12 1,71,729
15,849
60,837
1,48,132
2012-13 1,84,795
16,354
63,408
1,57,057
2013-14 1,89,238
16,697
67,864
1,58,407
2014-15 1,89,435
21,301
63,932
1,65,520
2015-16 2,02,850
29,456
60,539
1,84,674
2016-17 2,13,932
36,287
65,513
1,94,597
2017-18 2,20,433
35,461
66,833
2,06,166
2018-19 2,26,498
33,348
61,096
2,13,216
2019-20 1,68,589
31,619
50,055
1,60,603
Note: Data for 2019-20 is till December 2019. Sources: Petroleum Planning and Analysis Cell; PRS.
Note that the India's net import (total imports - exports) as a fraction of consumption has risen from 86.4% in 2010-11 to 93.5% in 2019-20.
Figure 13 shows the variation of net imports of petroleum products as a percentage of total consumption in the country.
Sources: Petroleum Planning and Analysis Cell; PRS.
The Standing Committee on Petroleum and Natural Gas (2019) noted that the Middle East accounts for more than two-thirds of India's crude oil imports, and urged the government to continue its crude oil import diversification efforts.10 For Natural Gas, the total imports as a fraction of consumption has risen from 28% in 2011-12 to
47% in 2018-19. **Figure 14** shows the variation of net imports of Natural Gas as a percentage of total consumption of Natural Gas.
Sources: Petroleum Planning and Analysis Cell; PRS.
Note: MMSCM = Million Metric Standard Cubic Meters.
The Standing Committee on Petroleum and Natural Gas (2018) had noted that it does not find any concrete action taken by the ministry and a clear strategy with stipulated timelines to achieve the target of reduction in import dependence by 10% by 2022.23
## Production And Exploration
India's Crude Oil and Condensate production has fallen from 38,082 TMT in 2011-12 to 34,203 TMT in 2018-19. Similarly, the production of Natural Gas has fallen from 46,453 MMSCM (Million Metric Standard Cubic Meters) in 2011- 12 to 32,058 MMSCM in 2018-19. The Standing Committee on Petroleum and Natural Gas (2018) also noted that crude oil production has been stagnant for the last few years, which is a matter of serious concern.23
## Oil And Natural Gas
The Cabinet approved a policy framework for reforms in the exploration and licensing policy for oil and gas fields in February 2019.24 The reforms aimed to enhance domestic exploration and production of oil and gas. Previously, Cabinet had approved policy framework for exploration and exploitation of unconventional hydrocarbons such as shale oil and gas, and coal bed methane (CBM). Note that CBM production in India has shown an upward trend. (Figures in **Table 5**).
| Year | Production (in MMSCM) |
|--------------|--------------------------|
| 2015-16 | 1.07 |
| 2016-17 | 1.54 |
| 2017-18 | 2.23 |
| 2018-19 (P*) | 4.93 |
| 2019-20 (P*) | 6.24 |
| 2020-21 (P*) | 7.29 |
Sources: Standing Committee on Petroleum and Natural Gas, Lok Sabha, Twenty-fifth Report, August 2018; PRS.
Note: P* = Provisional.
## Mergers And Disinvestment Of Oil Psus
The government has stated that it proposes to create an integrated public sector oil company to match the performance of international and domestic private sector oil and gas companies.25 In January 2018, the government entered into an agreement with the Oil and Natural Gas Corporation (ONGC) for the sale of its 51% equity share-holding in Hindustan Petroleum Corporation Ltd (for Rs 36,915 crore).26 Through this acquisition, ONGC became the country's first vertically integrated 'oil major' company, with presence across entire value chain. Further, in November 2019, the Union Cabinet approved disinvestment of its 53.3% share in Bharat Petroleum Corporation Ltd along with transfer of management control to a strategic buyer.27 The Ministry of Petroleum and Natural Gas has held that mergers and acquisitions of PSUs will result in synergies and optimisation of logistics costs and refinery operations.28 The Standing Committee on Petroleum and Natural Gas (2017) noted that the creation of a 'oil major' will be helpful to strengthen balance sheet of PSUs.29 Further, it would lead to sharing of skills and research and development, and improve overall competitiveness of oil PSUs on global stage. However, the Committee recommended that the government needs to proceed with caution as there are several challenges such as integration of human resources and creating synergies in companies having diverse operations.
##
Ministry_of_Petroleum_and_Natural_Gas_0.pdf. 9 Refill Data, Pradhan Mantri Ujjwala Yojana, accessed on February 6, 2020, https://pmuy.gov.in/registereduser.html. 101st Report of the Standing Committee on Petroleum and Natural Gas on the Demands for Grants of the Ministry of Petroleum and Natural Gas (2019-20), December 2019, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natural%20Gas/17_Petroleum_And_Natural_Gas_1.pdf 11 Assessment report: Primary survey on household cooking fuel usage and willingness to convert to LPG, Petroleum Planning & Analysis Cell, Ministry of Petroleum and Natural Gas, June 2016, http://ppac.org.in/WriteReadData/Reports/201710310449342512219PrimarySurveyReportPPAC.pdf. 12 PAHAL-Direct Benefits Transfer for LPG(DBTL) Consumers Scheme, Ministry of Petroleum and Natural Gas, http://petroleum.nic.in/dbt/whatisdbtl.html. 13 '1.03 crore LPG Consumers have voluntarily Surrendered LPG Subsidy', Press Information Bureau, Ministry of Petroleum and Natural Gas, December 17, 2018. 14 Oil Industry Information at a Glance, Petroleum Planning and Analysis Cell, November 2019, https://www.ppac.gov.in/WriteReadData/Reports/201912060336500305462ReadyReckonerNov2019WebVersion.pdf. 15 "Pahal Scheme", Unstarred Question No. 2016, answered on December 6, 2019, Ministry of Petroleum and Natural Gas, Lok Sabha, http://164.100.24.220/loksabhaquestions/annex/172/AU2106.pdf. 16 Estimated Gains, Direct Benefit Transfer, as accesed on February 8, 2020, https://dbtbharat.gov.in/estimatedgain. 17 'GiveItUp', About the GiveItUp campaign, Ministry of Petroleum and Natural Gas, http://www.givitup.in/about.html. 18 CAG Report on Implementation of PAHAL (DBTL) Scheme, Report No. 25 of 2016, Ministry of Petroleum and Natural Gas, https://cag.gov.in/sites/default/files/audit_report_files/Union_Commercial_Compliance_Full_Report_25_2016_English.pdf. 19 'DBTL under Implementation in 715 Districts', Press Information Bureau, Ministry of Petroleum and Natural Gas, December 31, 2018. 20 '23.24 Crore Consumers joined Direct Benefit Transfer of LPG subsidies', Press Information Bureau, Ministry of Petroleum and Natural Gas, January 2, 2019. 21 Unstarred Question No. 2295, Lok Sabha, Ministry of Petroleum and Natural Gas, Answered on January 1, 2018, http://164.100.47.190/loksabhaquestions/annex/13/AU2295.pdf. 22 18th Report of the Standing Committee on Petroleum and Natural Gas on the Demands for Grants of the Ministry of Petroleum and Natural Gas (2017-18), March 2017, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natural%20Gas/16_Petroleum_And_Natural_Gas_18.pdf. 23 Standing Committee on Petroleum and Natural Gas, Lok Sabha, Twenty-fifth Report, August 2018, http://164.100.47.193/lsscommittee/Petroleum%20&%20Natural%20Gas/16_Petroleum_And_Natural_Gas_25.pdf. 24 "Exploration and Licensing Policy for Enhancing Domestic Exploration and Production of Oil and Gas", Press Information Bureau, Ministry of Petroleum and Natural Gas, February 21, 2019. 25 Budget Speech, Union Budget 2017-18, https://www.indiabudget.gov.in/budget2017-2018/ub2017-18/bs/bs.pdf.
Table 6: Number of connections released under PMUY scheme
Sr. No.
State/UT
PMUY connections (as of
PMUY connections (as of
Total LPG
December 2017)
September 2019)
consumers
1
Andaman & Nicobar Islands
1,697
13,103
1,07,101
2
Andhra Pradesh
79,743
3,90,998
1,34,65,372
3
Arunachal Pradesh
3,985
44,668
2,59,205
4
Assam
5,78,494
34,93,730
70,29,230
5
Bihar
44,81,284
85,71,668
1,73,25,775
6
Chandigarh
NA
88
2,75,875
7
Chhattisgarh
17,35,640
29,98,629
51,45,256
8
Dadra and Nagar Haveli
11,437
14,438
88,164
9
Daman and Diu
201
427
61,314
10
Delhi
519
77,051
48,61,826
11
Goa
978
1,082
4,87,619
12
Gujarat
12,32,009
29,07,682
1,03,71,353
13
Haryana
3,44,195
7,30,702
67,31,527
14
Himachal Pradesh
23,074
1,36,084
18,25,405
15
Jammu and Kashmir
3,57,855
12,03,246
31,54,279
16
Jharkhand
9,98,804
32,93,035
55,80,576
17
Karnataka
7,86,370
31,51,238
1,57,49,694
18
Kerala
28,676
2,56,303
86,92,507
19
Lakshadweep
108
292
7,981
20
Madhya Pradesh
30,16,371
71,79,224
1,48,30,583
21
Maharashtra
16,87,784
44,37,624
2,71,42,633
22
Manipur
20,415
1,56,195
5,39,943
23
Meghalaya
21,756
1,50,664
3,14,088
24
Mizoram
579
28,123
2,93,998
25
Nagaland
7,021
55,143
2,58,493
26
Odisha
18,59,230
47,50,478
85,09,322
27
Puducherry
2,116
13,566
3,70,292
28
Punjab
3,63,372
12,25,067
83,65,306
29
Rajasthan
24,48,313
63,92,482
1,60,92,755
30
Sikkim
545
8,747
1,40,838
31
Tamil Nadu
8,52,810
32,43,190
2,08,73,136
32
Telangana
41
10,75,202
1,07,35,477
33
Tripura
27,555
2,72,323
7,30,963
34
Uttar Pradesh
63,27,936
1,47,86,745
3,96,08,333
35
Uttarakhand
1,32,729
4,04,703
25,83,171
36
West Bengal
48,05,919
88,76,053
2,18,07,612
Total
3,22,39,561
8,03,39,993
27,44,17,002
Sources: State-wise PMUY connections released, Pradhan Mantri Ujjwala Yojana, Ministry of Petroleum and Natural Gas, as accessed on February 10, 2020; Unstarred Question No. 1093, answered on December 27, 2017, Ministry of Petroleum and Natural Gas, Rajya Sabha; Unstarred Question No. 182, answered on November 18, 2019, Ministry of Petroleum and Natural Gas, Rajya Sabha; PRS.
| No. of consumers | % of consumers |
|---------------------|-------------------|
| No. of consumers | % of consumers |
| who came for | |
| State/UT | |
| Total connections | |
| who came for | who came for |
| till 2018 | 3 or more |
| refill | refill |
| who have | |
| taken 3 or | |
| more refills | refill |
| Andaman and | |
| Nicobar | |
| 7,294 | 5,935 |
| Andhra Pradesh | 1,93,104 |
| Arunachal | |
| Pradesh | |
| 36,818 | 29,155 |
| Assam | 23,68,650 |
| Bihar | 69,98,869 |
| Chandigarh | 46 |
| Chhattisgarh | 26,53,521 |
| Dadra and Nagar | |
| Haveli | |
| 13,012 | 12,522 |
| Daman and Diu | 412 |
| Delhi | 63,894 |
| Goa | 1,052 |
| Gujarat | 19,07,333 |
| Haryana | 6,16,511 |
| Himachal | |
| Pradesh | |
| 91,071 | 78,287 |
| Jammu and | |
| Kashmir | |
| 8,46,553 | 6,03,958 |
| Jharkhand | 24,68,589 |
| Karnataka | 18,35,054 |
| Kerala | 1,56,533 |
| Lakshadweep | 287 |
| Madhya Pradesh | 52,98,247 |
| Maharashtra | 34,80,922 |
| Manipur | 1,03,903 |
| Meghalaya | 1,32,965 |
| Mizoram | 25,080 |
| Nagaland | 46,555 |
| Odisha | 35,51,904 |
| Puducherry | 12,814 |
| Punjab | 11,44,478 |
| Rajasthan | 44,08,608 |
| Sikkim | 5,442 |
| Tamil Nadu | 28,07,171 |
| Telangana | 5,22,787 |
| Tripura | 1,89,895 |
| Uttar Pradesh | 1,00,96,085 |
| Uttarakhand | 2,74,256 |
| West Bengal | 68,94,558 |
| Total | 5,92,54,273 |
Sources: Refill data, PMUY website, Ministry of Petroleum & Natural Gas, accessed on February 6, 2020; PRS.
| Sr. No. | State/UT |
|----------------------------|-----------------------------|
| PAHAL scheme consumers | |
| (as on September 20, 2019) | |
| 1 | Andaman and Nicobar Islands |
| 2 | Andhra Pradesh |
| 3 | Arunachal Pradesh |
| 4 | Assam |
| 5 | Bihar |
| 6 | Chandigarh |
| 7 | Chhattisgarh |
| 8 | Dadra and Nagar Haveli |
| 9 | Daman and Diu |
| 10 | Delhi |
| 11 | Goa |
| 12 | Gujarat |
| 13 | Haryana |
| 14 | Himachal Pradesh |
| 15 | Jammu and Kashmir |
| 16 | Jharkhand |
| 17 | Karnataka |
| 18 | Kerala |
| 19 | Lakshadweep |
| 20 | Madhya Pradesh |
| 21 | Maharashtra |
| 22 | Manipur |
| 23 | Meghalaya |
| 24 | Mizoram |
| 25 | Nagaland |
| 26 | Odisha |
| 27 | Puducherry |
| 28 | Punjab |
| 29 | Rajasthan |
| 30 | Sikkim |
| 31 | Tamil Nadu |
| 32 | Telangana |
| 33 | Tripura |
| 34 | Uttar Pradesh |
| 35 | Uttarakhand |
| 36 | West Bengal |
| | Total |
Sources: "Pahal Scheme", Unstarred Question No. 2016, answered on December 6, 2019, Ministry of Petroleum and Natural Gas, Lok Sabha; PRS.
## Demand For Grants: Jal Shakti
The Ministry of Jal Shakti is responsible for the development, maintenance and efficient use of water resources in the country and coordination of drinking water and sanitation programs in rural areas. The Ministry was created in 2019 by integrating the Ministries of: (i) water resources, river development, and Ganga rejuvenation, and (ii) drinking water and sanitation. This note presents budgetary allocations to the Ministry of Jal Shakti, and analyses various issues related to water resources in the country and the schemes implemented by the Ministry.
## Allocations In Union Budget 2020-21
In 2020-21, the Ministry of Jal Shakti received an allocation of Rs 30,478 crore. This is an increase of Rs 4,600 crore (18%) over the revised estimates of 2019-20. **Table 1** provides details on allocations to the two departments under the Ministry.
Budgeted
Department
Actuals
(18-19)
Revised
(19-20)
(20-21)
% change
(RE to BE)
18,412
18,360
21,518
17%
Drinking Water and Sanitation Water Resources
7,422
7,518
8,960
19%
Total
25,834
25,878
30,478
18%
Note: BE is budget estimate and RE is revised estimate. Sources: Demands for Grants 2020-21, Ministry of Jal Shakti; PRS.
## Policy Proposals For Jal Shakti In Union Budget 2020-21
Cities with over a million population will be encouraged to provide piped water supply to all households in 2020.
The government will focus on solid waste collection, source segregation, and processing.
## Department Of Drinking Water And Sanitation
The Department of Drinking Water and Sanitation administers programs for safe drinking water and sanitation in rural areas. It is responsible for the monitoring and implementation of Swachh Bharat Mission-Gramin and the Jal Jeevan Mission (the National Rural Drinking Water Programme).1 The Department has an allocation of Rs 21,518
crore, accounting for 71% of the Ministry's allocation. This was a 17% increase in allocation over the revised estimates of 2019-20. Over the past 10 years, the expenditure by the Department of Drinking Water and Sanitation increased at an annual growth rate of 9%. In the last ten years, the Department saw the highest increase in expenditure (49%) in 2016-17, over the previous year. **Figure 1** below shows the trends in expenditure by the Department in the last decade.
Note: Values for 2019-20 are revised estimates and 2020-21 are budget estimates. Allocations before 2019-20 were towards the erstwhile Ministry of Drinking Water and Sanitation. Sources: Union Budgets 2010-11 to 2020-21; PRS.
From 2011-12 (when the Department of drinking water and sanitation was created) to 2014-15, the Department's expenditure was focused on drinking water. From 2015 to 2019, the focus of expenditure shifted on rural sanitation. However, since 2019-20 the allocation towards both the schemes has been approximately equal.
Note: Values for 2019-20 are revised estimates and 2020-21 are budget estimates. Sources: Union Budgets 2011-12 to 2020-21; PRS.
Figure 3 shows the expenditure utilisation by the Department over the last nine years (% change between actual expenditure and budgeted expenditure). Between 2011-15, the actual expenditure was lower than the budgeted expenditure. During 2015-18, the Department spent more than the allocated amount. The actual expenditure in 2015-16 was 78% higher than the budgeted expenditure for the year. However, in 2018-19 and 2019-20 (revised estimate), the expenditure was again less than the budget estimate for these years.
Note: The expenditure figure for 2019-20 is revised estimate. Sources: Union Budgets 2011-12 to 2020-21; PRS.
## Schemes Under The Department Of Drinking Water And Sanitation
Expenditure by the Department is primarily towards the two major schemes, the Jal Jeevan Mission (JJM) and the Swachh Bharat Mission-
Gramin (SBM-G). **Table 2** provides details on allocation to the Department over the past three years.
| Revised | Budgeted | Major |
|------------|-------------|----------|
| head | | |
| Actual | | |
| 18-19 | 19-20 | 20-21 |
| % change | | |
| (20-21 BE/ | | |
| 19-20 RE) | | |
| JJM | 5,484 | 10,001 |
| SBM-G | 12,913 | 8,338 |
| Others | 15 | 21 |
| Total | 18,412 | 18,360 |
Note: RE is Revised Estimates, BE is Budget Estimates. Sources: Demands for Grants 2020-21, Department of Drinking Water and Sanitation; PRS.
JJM aims to provide adequate and safe drinking water to the rural population in the country. It has been allocated Rs 11,500 crore in 2020-21, which is a 15% increase over the revised estimates of 2019-20. SBM-G aims to achieve universal sanitation coverage and improve cleanliness in the country. It has been allocated Rs 9,994 crore in 2020-21, which is a 20% increase over the revised estimates of 2019-20.
## Department Of Water Resources
The Department of Water Resources, River Development, and Ganga Rejuvenation is responsible for: (i) planning, policy formation, and coordination of water resources in the country, (ii) scrutiny and monitoring of irrigation and flood control projects, (iii) supporting state level activities for ground water development, and (iv) reduction of pollution and rejuvenation of rivers.2 In 2020-21, the Department has an allocation of Rs
8,960 crore, accounting for 29% of the Ministry's allocation. This is 19% higher than the revised estimates of 2019-20. In the past six years, expenditure by the Department of Water Resources has increased at an annual growth rate of 5%.
## Water Resources Over The Years (Rs Crore)
Note: Values for 2019-20 and 2020-21 are revised estimates and budget estimates respectively.
Sources: Union Budgets 2015-16 to 2020-21; PRS.
## Major Schemes Under The Department Of Water Resources
In 2020-21, 57% of the Department's expenditure is estimated to be on the Pradhan Mantri Krishi Sinchai Yojna. This is followed by the National River Conservation Plan (9.4%), Namami Gange (8.9%), and Water Resources Management (8.6%).
Budgeted
Major Head
Actuals
(18-19)
Revised
(19-20)
(20-21)
% change
(RE to BE)
PM Krishi Sinchai Yojna
3,439
4,026
5,127
27%
National River Conservation
1,620
1,200
840
-30%
Namami Gange
688
353
800
127%
Water Resources Management
569
636
775
22%
Central Water Commission
362
403
403
0%
Central Ground Water Board
227
243
245
0%
Others
1,106
1,303
1,418
9%
Total
7,422
7,518
8,960
19%
Note: BE is budget estimate and RE is revised estimate. Others include central sector projects like river basin management, and major irrigation projects. Sources: Demands for Grants 2020-21, Department of Water Resources, River Development, and Ganga Rejuvenation, Ministry of Jal Shakti; PRS.
## Issues To Consider Irrigation
The Economic Survey (2016-17) highlighted that 52% of the total net sown area in India is unirrigated and depends on rainfall for agriculture.3 It noted that when rainfall is significantly less than usual, the unirrigated areas have higher adverse effects compared to the irrigated areas. Therefore, it argued that India needs to branch out its irrigation cover.
The Pradhan Mantri Krishi Sinchai Yojana
(PMKSY) was launched during 2015-16.4 The scheme seeks to: (i) expand coverage of irrigation, (ii) improve water use efficiency on farms, and (iii) introduce sustainable water conservation practices.5 The Jal Shakti Ministry implements certain components of the scheme, such as PMKSY - Har Khet Ko Pani and Flood Management and Borders Area Programme.4 The other components of the scheme are implemented by the Ministry of Agriculture and Farmers Welfare and the Ministry of Rural Development.
Utilisation: Figure 5 shows the expenditure on the scheme from 2016-17 to 2020-21. The scheme has been allocated Rs 5,127 crore in 2020-21. Its share in the Department's expenditure increased from 35% in 2016-17 to 57% in 2020-21.
Har Khet ko Pani: This scheme's objectives include: (i) creation of new water sources, (ii) restoration and repair of traditional water bodies, (iii) command area development, and (iv) strengthening of distribution network from irrigation sources to the farm.6,7 Some components of the scheme are:
Accelerated Irrigation Benefit Programme
(AIBP): Under this scheme, financial
assistance is being provided for faster completion of irrigation projects. From June to December 2019, of the target 43 lakh hectare, projects in 29 lakh hectare (69%) were completed.8
Of the 106 projects selected under the scheme, 21 (20%) projects are facing constraints such as land acquisition, legal, and contractual issues.8
Command Area Development and Water
Management Programme: The objective of
the programme is to enhance utilisation of irrigation potential created. This is achieved
through activities such as construction of field
channels, land levelling, and reclamation of waterlogged area.9 Currently, there are 88 projects under the programme, of which only 12 (14%) have achieved more than 50% physical progress.10
## Flood Management
The National Water Policy (2012) identifies that the climate change has deepened incidences of water related disasters like floods, increased erosion and increased frequency of droughts.11 The centre supports states by providing financial assistance for undertaking flood management works in critical areas through the Flood Management and Border Areas Programme (under PMKSY). From 2016-17 to November 2019, central assistance of Rs 1,429 crore has been released under the scheme.12 The Standing Committee on Water Resources (2017-18) notes that out of 522 flood management works approved under the programme during 2007- 17, only 298 (57%) were completed up to March 31 2017.13 Further, in most of the projects, the financial progress was in the range of 10% to 30%, due to less release of funds because of inadequate budget allocation.13
## Conservation And Rejuvenation Of Rivers
The Ministry of Jal Shakti implements the Namami Gange Mission with the objective of rejuvenation of river Ganga and its tributaries through activities such as treatment of municipal sewage and industrial effluents, river surface cleaning, rural sanitation, and afforestation.14 Currently, 114 (37%) of the 310 projects sanctioned under the Mission have been completed.15 The scheme was launched with a budget outlay of Rs 20,000 crore for the period 2015-2020.16 During the period 2014-15 to 2018-19, Rs 6,106 crore (31%) has been spent on the programme.16 In 2020-21, the scheme has been allocated Rs 800 crore, which is 126% more than the revised estimates for 2019-20. Table 4 shows the trends in budget allocation and actual expenditure on Namami Gange from 2015- 16. Note that the utilisation under the scheme has always been under 50% of its allocation.
Table 4: Budgeted versus actual expenditure on Namami Gange (in Rs crore)
Year
Budgeted
Actuals
% of
Budgeted
2015-16
-
100
-
2016-17
-
1,675
-
2017-18
2,300
700
30%
2018-19
2,300
688
30%
2019-20
750
353
47%
Note: The 'actuals' figure for 2019-20 is the revised estimate. Sources: Union Budgets 2015-16 to 2019-20; PRS.
The Standing Committee on Water Resources (2017-18) notes that the physical progress under the scheme has not been satisfactory.17 In response to the Committee's observations, the Ministry responded that the following bottlenecks affect the implementation of projects: (i) delay in tendering process, (ii) non-availability of land for sewage treatment plants leading to delay in execution of projects, (iii) underutilisation of sewage treatment plants' capacities due to inadequate house sewer connections in cities, and (iv) non-effective implementation of public outreach programmes and community consultation, among others.17
## Swachh Bharat Mission - Gramin
In 2014, the Swachh Bharat Mission (Gramin) was launched by restructuring the Nirmal Bharat Abhiyan.18 The Mission aimed to achieve universal sanitation coverage, improve cleanliness and eliminate open defecation in the country by October 2, 2019.19 In 2020-21, the Mission has been allocated Rs 9,994 crore, which is an increase of 20% from the revised estimate of 2019-20. The expenditure on towards rural sanitation schemes has increased from Rs 1,580 crore in 2010-11 to Rs 12,913 crore in 2018-19.
Note: Values for 2019-20 and 2020-21 are revised estimates and budget estimates respectively. Sources: Union Budgets 2009-10 to 2020-21; PRS.
Figure 6 shows the expenditure on the scheme from
2009-10 to 2020-21. Expenditure on rural sanitation has increased at an annual growth rate of 21% from 2009-10 to 2020-21. A significant part of this increase was seen from 2015-16 onwards, after the launch of SBM-G. Table 5 shows the trends in budget allocation and actual expenditure on rural sanitation over the past 11 years. Note that between 2015-16 to 2017-18, actual expenditure on SBM-G exceeded the budgetary estimates.
Table 5: Budgeted versus actual expenditure on SBM-G (in Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2009-10
1,080
1,200
111%
2010-11
1,580
1,580
100%
2011-12
1,650
1,500
91%
2012-13
3,500
2,474
71%
2013-14
3,834
2,244
59%
2014-15
4,260
2,841
67%
2015-16
3,625
6,703
185%
2016-17
9,000
10,484
116%
2017-18
13,948
16,888
121%
2018-19
15,343
12,913
84%
2019-20
9,994
8,338
83%
Note: The 'utilised' figure for 2019-20 is the revised estimate. Sources: Union Budgets 2009-10 to 2019-20; PRS.
Construction of Individual Household Latrines
(IHHLs): The cost for constructing a household toilet was increased from Rs 10,000 to Rs 12,000 in September 2014 when the Nirmal Bharat Abhiyan was restructured into SBM-G.20 This cost for constructing toilets is shared between the centre and the state in the ratio of 60:40. **Table 6** gives the number of household toilets constructed since the inception of the scheme.
| Year | Toilets Constructed |
|---------|------------------------|
| 2014-15 | 48,51,153 |
| 2015-16 | 1,24,48,886 |
| 2016-17 | 2,16,32,580 |
| 2017-18 | 2,96,01,619 |
| 2018-19 | 2,24,49,812 |
| 2019-20 | 1,18,83,221 |
| Total | 10,28,67,271 |
Sources: SBM Dashboard, Ministry of Jal Shakti; PRS.
As per the Department, 43.2% of the rural households had access to toilets in in 2014-15, which has increased to 100% in February 2020.21 Figure 7 illustrates the total coverage of household toilets since the inception of the SBM programme.
Open Defecation Free (ODF) villages: Under SBM-G, a village is declared as ODF when: (i) there are no visible faeces in the village, and (ii) every household as well as public institution uses safe technology options for faecal disposal.22 After a village declares itself as ODF, states are required to verify the ODF status of such a village. Since sanitation is a state subject, the department has set some broad guidelines for ODF verification. This includes indicators that are in accordance with the ODF verification definition, such as access to a toilet facility and its usage, and safe disposal of faecal matter through septic tanks. The guidelines for ODF state that since it is not a one-time process, at least two verifications must be carried out.23 The first verification must be carried out within three months of the declaration to verify the ODF status. Further, to ensure sustainability of ODF, a second verification must be carried out around six months after the first verification. As per the Management Information System of SBM-G, a total of 6,03,175 villages across 706
districts and 36 states and union territories have been declared as ODF as of February 2020. Of these, 5,99,266 villages (99.4%) have been verified as ODF under the first level verification.24 1,66,047 (28%) of these villages have been verified ODF under the second level verification.25 Statewise details on the number of villages declared and verified ODF are presented in the annexure.
## Jal Jeevan Mission
The Jal Jeevan Mission was launched in 2019 with the aim to provide functional household tap connection to every rural household by 2024.26 It subsumed the National Rural Drinking Water Programme. The total estimated cost of JJM is Rs 3.6 lakh crore.26 In 2020-21 it has been allocated Rs 11,500 crore, which is an increase of 15% from the revised estimates of 2019-20. In 2019-20, the scheme was allocated Rs 10,001 crore which remained the same in the revised estimate stage. **Figure 8** shows the expenditure on drinking water schemes over the last nine years.
Values for 2019-20 and 2020-21 are revised estimates and budget estimates respectively. Sources: Union Budgets 2009-10 to 2018-19; PRS.
After a reduction in expenditure on the scheme from 2015-16 to 2018-19, the expenditure on the scheme increased from 2019-20 onwards. Note that expenditure on the scheme from 2019-20 is similar to the expenditure on it before 2015-16.
Target versus achievements: JJM aims to provide functional household tap connections to every household at the rate of 55 Litres Per Capita Per Day (LPCD). The coverage of the National Rural Drinking Water Programme (NRDWP) was monitored in terms of habitations having provision of minimum 40 LPCD of potable drinking water sources at a reasonable distance. **Table 7** gives details on rural habitations and population covered under NRDWP. State details of coverage of rural habitations under the scheme are provided in the Annexure.27
| Drinking water | % Rural habitation | % Population |
|-------------------|-----------------------|-----------------|
| sources | covered | covered |
| More than 40 | | |
| LPCD | 81% | 77% |
| Less than 40 | | |
| LPCD | 16% | 19% |
| Water with | | |
| quality issues | 3% | 4% |
Note: The data is as reported by states as of December 2019. Source: Starred Question No. 351, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, Lok Sabha; PRS.
Note that the coverage of piped-water-supply remains low. As of December 2019, only 18.4% of rural households have piped-water supply connections.28
Contamination of drinking water: The Estimates Committee in its report on 'Evaluation of Rural Drinking Water Programmes' (2015) had noted that NRDWP is over-dependant on ground water.29 It also noted that ground water is affected by arsenic and other contaminants in several districts of the country.
Table 8 shows the number of habitations affected due to the presence of Flouride, Arsenic, Iron, Nitrate and other contaminants. As of January 2019, 3.6% (61,551) of the total habitations (17,24,423) were affected by contamination of ground water.30
| Contaminants | Number of affected | % of affected |
|-----------------|-----------------------|------------------|
| habitations | habitations | |
| Arsenic | 15,795 | 0.9% |
| Fluoride | 9,655 | 0.6% |
| Heavy Metal | 2,106 | 0.1% |
| Iron | 18,939 | 1.1% |
| Nitrate | 1,562 | 0.1% |
| Salinity | 13,494 | 0.8% |
| Total | 61,551 | 3.6% |
The National Water Quality Sub-Mission (NWQSM) was launched in March 2017 to provide safe drinking water to 27,544 Arsenic/Fluoride affected rural habitations in the country, over a span of four years.31 The Standing Committee on Drinking Water and Sanitation (2019-20) observed that out of these, 11,884 habitations (43%) have been covered under the scheme. 4,100 habitations (15%) have been found with quality improved on retesting or have been covered under state plan schemes.31
## Ground Water Depletion
Currently, 245 Billion Cubic Meter (BCM) of the
398 BCM of net annual ground water availability (62%) is being utilised.32 However, note that ground water development is not uniform across
http://mowr.gov.in/about-us/functions. 3 Climate, Climate Change and Agriculture, Economic Survey 2016-17, https://mofapp.nic.in/economicsurvey/economicsurvey/pdf/082- 101_Chapter_06_ENGLISH_Vol_01_2017-18.pdf. 4 Lok Sabha Unstarred Question No.2045, Ministry of Jal Shakti, July 4, 2019, http://164.100.24.220/loksabhaquestions/annex/171/AU2054.pd f. 5 Website, Pradhan Mantri Krshi Sinchaee Yojna, last accessed on February 4, 2020, https://pmksy.gov.in/.
states in India. It has exceeded 100% in some states such as Haryana (133%), Delhi (137%), and Punjab (172%). This implies that the annual ground water utilisation in these states is higher than the net annual ground water availability.
The Ground Water Management and Regulation scheme was launched in 2008 with the aim to regulate and control the development of ground water resources of the country.33
Note: Values for 2019-20 are revised estimates and 2020-21 are budget estimates. Sources: Union Budgets 2011-12 to 2020-21; PRS.
Over the past ten years, the expenditure on the scheme increased at an annual growth rate of 9%. In 2020-21, the estimated expenditure is 13% more than the revised expenditure estimates of 2019-20.
These trends are illustrated in **Figure 9**.
The Standing Committee on Water Resources (2019-20) recommended the Ministry to increase the budgetary support for the scheme and formulate short term and long term policies and programmes in consultation with states. The Committee also recommended the Ministry to constitute an Expert Committee for identifying specific regions with rapidly depleting groundwater levels.
8 Dashboard, Pradhan Mantri Krshi Sinchaee Yojna - Accelerated Irrigation Benefit Programme, Ministry of Jal Shakti, last accessed on February 4, 2020,http://pmksymowr.nic.in/aibp/. 9 Salient features, Pradhan Mantri Krshi Sinchaee Yojna, Ministry of Jal Shakti, http://mowr.gov.in/programmes/salientfeatures. 10 Dashboard, Common Area Development Programme, Ministry of Jal Shakti, last accessed on February 4, 2020, http://cadwm.gov.in/cadwm-dashboard/. 11 National Water Policy (2012), Ministry of Water Resources, http://mowr.gov.in/sites/default/files/NWP2012Eng6495132651 _1.pdf. 12 Lok Sabha Starred Question No.251, Ministry of Jal Shakti, December 5, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AS251.pdf.
20 Review of Sanitation Programme in Rural Areas, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.pdf. 21 Swachh Bharat Mission- Gramin, Ministry of Jal Shakti, last accessed on February 9, 2020, http://sbm.gov.in/sbmdashboard/IHHL.aspx. 22 Open Defecation Free (ODF) Sustainability Guidelines, Ministry of Drinking Water and Sanitation, http://swachhbharatmission.gov.in/sbmcms/writereaddata/images/pdf/guidelines/Guidelines-ODF-sustainability.pdf. 23 Swachh Bharat Mission- Gramin Guidelines, Ministry of Jal Shakti, last accessed on February 9, 2020, https://jalshaktiddws.gov.in/sites/default/files/SBM%28G%29_Guidelines.pdf 24 Swachh Bharat Mission- Gramin Dashboard, last accessed on February 4, 2020, https://sbm.gov.in/sbmdashboard/ODF.aspx. 25 Status of Declared and Verified villages, Swachh Bharat Mission- Gramin Dashboard, Ministry of Jal Shakti, last accessed on February 4, 2020, https://sbm.gov.in/sbmReport/Report/Physical/SBM_VillageODFMarkStatus.aspx. 26 Background on Jal Jeevan Mission, Ministry of Jal Shakti, https://jalshakti-ddws.gov.in/sites/default/files/JJM_note.pdf. 27 Lok Sabha Starred Question No. 351, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, answered on December 12, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AS351.pdf. 28 Lok Sabha Unstarred Question No. 2990, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, answered on December 5, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AU2990.pdf. 29 Evaluation of Rural Drinking Water Programmes, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_2.pdf. 30 Rajya Sabha Unstarred Question No. 2738, Ministry of Drinking Water and Sanitation, Rajya Sabha, answered on January 7, 2019. for Grants (2019-20), http://164.100.47.193/lsscommittee/Water%20Resources/17_Water_Resources_2.pdf. 32 Review of Ground Water Scenario, need for a comprehensive policy', Standing Committee on Water Resources, Ministry of Water Resources, December 2015, http://164.100.47.193/lsscommittee/Water%20Resources/16_Water_Resources_5.pdf. 33 Lok Sabha Unstarred Question No.737, Ministry of Jal Shakti, November 21, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AU737.pdf.
## Annexure
| Total | Total | Total Verified |
|------------------------|----------|--------------------|
| State | | |
| Total | | |
| Villages | declared | Verified |
| % Verified | | |
| 2nd level | | |
| Andaman and Nicobar | | |
| Islands | | |
| 192 | 192 | 192 |
| Andhra Pradesh | 18,841 | 18,841 |
| Arunachal Pradesh | 5,389 | 5,389 |
| Assam | 25,503 | 25,503 |
| Bihar | 38,691 | 38,691 |
| Chandigarh | 13 | 13 |
| Chhattisgarh | 18,769 | 18,769 |
| Dadar and Nagar Haveli | 69 | 69 |
| Daman and Diu | 26 | 26 |
| Goa | 365 | 365 |
| Gujarat | 18,261 | 18,261 |
| Haryana | 6,908 | 6,908 |
| Himachal Pradesh | 15,921 | 15,921 |
| Jammu and Kashmir | 7,263 | 7,263 |
| Jharkhand | 29,564 | 29,564 |
| Karnataka | 27,044 | 27,044 |
| Kerala | 2,027 | 2,027 |
| Ladakh | 302 | 302 |
| Lakshadweep | 9 | 9 |
| Madhya Pradesh | 50,228 | 50,228 |
| Maharashtra | 40,505 | 40,505 |
| Manipur | 2,556 | 2,556 |
| Meghalaya | 6,028 | 6,028 |
| Mizoram | 696 | 696 |
| Nagaland | 1,451 | 1,451 |
| Odisha | 46,785 | 46,785 |
| Puducherry | 265 | 265 |
| Punjab | 13,726 | 13,726 |
| Rajasthan | 42,860 | 42,860 |
| Sikkim | 442 | 442 |
| Tamil Nadu | 12,524 | 12,524 |
| Telangana | 14,200 | 14,200 |
| Tripura | 1,178 | 1,178 |
| Uttar Pradesh | 97,640 | 97,640 |
| Uttarakhand | 15,473 | 15,473 |
| West Bengal | 41,461 | 41,461 |
| Total | 6,03,175 | 6,03,175 |
Sources: Management Information System Reports of SBM; PRS. Note: The total number of villages is taken from Census 2011.
| Partially covered | Habitations with |
|----------------------|---------------------|
| State | |
| Total | |
| habitations | |
| Fully covered | |
| habitations | habitations |
| Andaman & Nicobar | |
| Islands | |
| 400 | 324 |
| Andhra Pradesh | 48,663 |
| Arunachal Pradesh | 7,525 |
| Assam | 88,076 |
| Bihar | 1,10,218 |
| Chhattisgarh | 74,753 |
| Goa | 347 |
| Gujarat | 35,996 |
| Haryana | 7,655 |
| Himachal Pradesh | 54,469 |
| Jammu & Kashmir | |
| (including Ladakh) | |
| 14,625 | 8,750 |
| Jharkhand | 1,20,591 |
| Karnataka | 59,774 |
| Kerala | 21,520 |
| Madhya Pradesh | 1,28,231 |
| Maharashtra | 99,641 |
| Manipur | 2,976 |
| Meghalaya | 10,470 |
| Mizoram | 720 |
| Nagaland | 1,450 |
| Odisha | 1,57,013 |
| Puducherry | 266 |
| Punjab | 15,190 |
| Rajasthan | 1,21,526 |
| Sikkim | 2,337 |
| Tamil Nadu | 1,00,014 |
| Telangana | 24,597 |
| Tripura | 8,723 |
| Uttar Pradesh | 2,60,018 |
| Uttarakhand | 39,311 |
| West Bengal | 1,07,328 |
| Total | 17,24,423 |
Sources: Starred Question No. 351, Ministry of Jal Shakti, Lok Sabha; PRS.
## Prs Legislative Research
Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya,
212, Deen Dayal Upadhyaya Marg, New Delhi-110002
Tel: (011) 4343-4035, 2323-4801
www.prsindia.org
|
65c43cfe57bc5671070682a5 | budget_reports |
## Demand For Grants 2020-21 Analysis Food And Public Distribution
The Ministry of Consumer Affairs, Food and Public Distribution has two Departments: (i) Food and Public Distribution, and (ii) Consumer Affairs. Allocation to the Ministry accounts for 4% of the budget of the central government in 2020-21.1
Department of Food and Public Distribution is responsible for ensuring food security through procurement, storage, and distribution of food grains, and for regulating the sugar sector.2 In 2020- 21, the Department has been allocated Rs 1,22,235 crore (98% of the Ministry's allocation).3 This is 6% higher than the revised estimate of 2019-20.
Department of Consumer Affairs is responsible for spreading awareness among consumers about their rights, protecting their interests, implementing standards, and preventing black marketing.4 In 2020-21, the Department has been allocated Rs 2,300 crore, which is 12% higher than the revised estimate of 2019-20.5 This note examines the allocations to the Department of Food and Public Distribution. It also looks at the broad issues in the sector, along with key observations and recommendations made by expert committees over the years.
## Overview Of Finances
% change
in 2020-21
Department
2018-19
Actuals
2019-20
Revised
2020-21
Budgeted
over
2019-20
Food & Public Distribution
1,07,078
1,15,240
1,22,235
6.1%
Consumer Affairs
1,770
2,050
2,300
12.2%
Total
1,08,848
1,17,290
1,24,535
6.2%
Sources: Expenditure Budget, Union Budget 2020-21; PRS.
In 2020-21, allocation to the Department of Food and Public Distribution has increased by Rs 6,995 crore (6.1%) over the revised estimate of 2019-20. However, the estimated expenditure for 2019-20 has reduced by 40% from Rs 1,92,240 crore at the budgeted stage to Rs 1,15,240 crore at the revised stage. This is due to a Rs 75,532 crore cut in the allocation to food subsidy for the year 2019-20. Since 2016-17, the Department's expenditure has been much lower than the funds allocated to it in the budget (Figure 1) as an increasing portion of food subsidy was replaced by borrowings by the Food Corporation of India (FCI). As a result, the payment due to FCI by the end of 2019-20 is estimated to be Rs 2.4 lakh crore.6
In 2018-19, the Department utilised 61% of the
allocation, while Rs 67,081 crore remained unspent.
Due to this underspending trend, in 2020-21, the
Department's allocation is Rs 18,285 crore less than
what it spent five years ago (2015-16).
Note: Figures for 2019-20 are revised estimates. Sources: Expenditure Budget, Union Budgets (2010-20); PRS.
## Food Subsidy
Food subsidy is the largest component of the
Department's expenditure. It accounts for 95% of
the allocation to the Department in 2020-21 (details
of other expenditure heads are given in Annexure).3
The subsidy is given to the Food Corporation of
India (FCI) and states for procuring food grains
from farmers at government notified prices and
selling them at lower subsidised prices (known as
Central Issue Prices), under the National Food
Security Act, 2013.3 The Act mandates coverage of
75% of the population in rural areas and 50% in
urban areas, and currently covers 81 crore people.7,8
The subsidy also covers the storage cost incurred by
FCI in maintaining buffer stocks in order to ensure
food security in the country.3 Table 2 (on the next
page) shows the expenditure on food subsidy during
2010-21.
The expenditure on food subsidy increased from Rs
63,844 crore in 2010-11 to Rs 1,39,419 crore in
2015-16. The Standing Committee (2016-17) on
Food, Consumer Affairs and Public Distribution
noted that the reasons for increase in food subsidy
include: (i) increase in the procurement cost of food
grains, (ii) non-revision of the Central Issue Prices
since 2002, and (iii) implementation of the National
Food Security Act, 2013 in all states.9
##
| % increase | % of |
|---------------|----------|
| Year | |
| Food | |
| over the | |
| subsidy | |
| previous year | |
| allocation | |
| utilised | |
| 2010-11 | 63,844 |
| 2011-12 | 72,822 |
| 2012-13 | 85,000 |
| 2013-14 | 92,000 |
| 2014-15 | 1,17,671 |
| 2015-16 | 1,39,419 |
| 2016-17 | 1,10,173 |
| - 21% | |
| 82% | |
| 2017-18 | 1,00,282 |
| - 9% | |
| 69% | |
| 2018-19 | 1,01,327 |
| 1% | |
| 60% | |
| 2019-20 | 1,08,688 |
| 7% | |
| 59% | |
| 2020-21 | 1,15,570 |
| 6% | |
| - | |
Note: Figures for the years 2019-20 and 2020-21 are estimates. Sources: Expenditure Budget, Union Budgets (2011-21); PRS.
However, since 2016-17, spending on food subsidy by the Department has comparatively decreased, as a major part of the funds allocated for food subsidy remain unspent (40% of the budget allocation was not utilised in 2018-19). This underspending by the Department has increased over the years, even though the actual requirement of funds for food subsidy being higher than the amount it spends.10 This gap can be bridged if more funds are spent by the Department for food subsidy. To fill this gap in the meanwhile and meet the cost incurred each year in subsidising food, FCI relies on borrowings.
## Components Of Food Subsidy
Expenditure on food subsidy can be classified under three heads (break-up in Table 3):
Subsidy to FCI: The Food Corporation of
India (FCI) receives subsidy for procuring food grains from farmers at government notified
prices and selling them at lower subsidised prices. It also receives subsidy for the storage cost incurred in maintaining buffer stocks.
Subsidy to states: Under the decentralised
procurement scheme, states may choose to undertake the operations of procurement, storage, and distribution on behalf of FCI, for which they are provided with subsidy.
Sugar subsidy: Sugar subsidy is provided for
giving one kg of sugar per month at subsidised rates to families covered under the Antyodaya Anna Yojana (i.e. poorest of the poor families).
Majority of the budget for food subsidy is allocated to FCI. However, subsidy released to FCI by the Department has decreased from Rs 1.12 lakh crore in 2015-16 to Rs 70,098 crore in 2018-19. This is due to a consistent cut in FCI's share of the food subsidy budget (for instance, Rs 68,025 crore, or 49%, cut in 2018-19 from the budgeted stage).
% change in
2020-21 over
Subsidy
2018-19
Actuals
2019-20
Revised
2020-21
Budgeted
2019-20
Subsidy to FCI
70,098
75,000
77,983
4.0%
31,029
33,508
37,337
11.4%
Subsidy to states (decentralised procurement) Sugar subsidy
200
180
250
38.9%
Total
1,01,327 1,08,688
1,15,570
6.3%
Sources: Demand no. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2020-21; PRS.
## Issues In The Sector
FCI and state agencies procure food grains from
farmers at the government notified Minimum
Support Prices (MSPs). These food grains are
provided to the economically weaker sections at
subsidised prices through fair price shops under the
public distribution system. The central and state
governments provide food grains to beneficiaries
under the National Food Security Act, 2013 as well
as certain other welfare schemes such as the Mid-
Day Meal scheme. In this section, we examine
some issues relating to the: (i) pending dues of FCI,
(ii) provision of food subsidy, (iii) Public
Distribution System (PDS), and (iv) sugarcane dues
to farmers.
## Pending Dues Of Fci
The central government provides food subsidy to
FCI as reimbursement of the loss it incurs in its
procurement, storage, and distribution operations.
The CAG (2019) observed that when the budget for
food subsidy is not sufficient to clear the dues of
FCI, such dues are carried over to the next year.11
As a result of such carryovers each year, payment
due to FCI for food subsidy has increased from Rs
41,517 crore at the end of 2015-16 to Rs 2.4 lakh
crore at the end of 2019-20.6 Note that the subsidy
paid to FCI by the Department has decreased from
Rs 1.12 lakh crore in 2015-16 to Rs 75,000 crore in
2019-20. Although the Department had received a
much higher allocation during the period 2016-20
for payment to FCI, due to budget cuts made during
the year, the actual amount paid to FCI decreased.
Sources: Food Corporation of India; PRS.
For instance, in 2019-20, subsidy to FCI has been cut by 50% from Rs 1.51 lakh crore at the budgeted stage to Rs 75,000 crore at the revised stage. As the subsidy dues of FCI increased significantly vis-à-vis the budget expenditure, since 2017-18, all the payments being made to FCI by the Department are going towards clearing past dues.
Due to this delay in clearing dues by the Department, FCI has to borrow money from various sources for giving subsidy and funding its operations. When FCI uses such borrowings, the Department has to provide additional funds for payment of interest on these borrowings. The CAG observed that the central government has adopted this off-budget method of financing the subsidy dues, thereby deferring the payment to FCI.12 This understates a particular fiscal year's expenditure by keeping deferred expenditure off-budget, and prevents transparent depiction of fiscal indicators.12 For instance, if the central government had to clear all the subsidy dues of FCI in the year 2019-20 itself, its fiscal deficit (borrowings) for the year 2019-20 would increase from 3.8% of GDP to 5% of GDP. Note that in November 2019, the Union Cabinet approved increasing the equity of FCI from Rs 3,500 crore to Rs 10,000 crore.13 As per the revised estimates for 2019-20, an amount of Rs 1,000 crore has been allocated for this purpose. Further, Rs 1,000 crore has been budgeted for 2020-21. This increased equity could be leveraged by FCI to borrow from the market.
## Provision Of Food Subsidy
The Targeted Public Distribution System (TPDS), through which food grains are distributed at subsidised prices, seeks to provide food security to people below the poverty line. Over the years, while the spending on food subsidy has increased, the ratio of people below the poverty line has decreased from 54.9% in 1973-74 to 21.9% in 2011- 12 (Table 4).
| Year | Poverty ratio (in %) | No. of Poor (in crore) |
|---------|-------------------------|---------------------------|
| 1973-74 | 54.9% | 32.1 |
| 1977-78 | 51.3% | 32.9 |
| 1983-84 | 44.5% | 32.3 |
| 1987-88 | 38.9% | 30.7 |
| 1993-94 | 36.0% | 32 |
| 2004-05 | 27.5% | 30.2 |
| 2011-12 | 21.9% | 26.9 |
Note: Figures from 1973-74 to 2004-05 have been computed using the Lakdawala methodology, and figures for 2011-12 have been computed using the Tendulkar methodology. Sources: Planning Commission; PRS.
A similar trend can also be seen in the proportion of undernourished persons in India, which reduced from 23.7% in 1990 to 15.2% in 2014 (Table 5).
Number of
undernourished
Year
Proportion of
population
persons (in
undernourished (in %)
crore)
1990-92
23.7%
21.0
2000-02
17.5%
18.6
2005-07
20.5%
23.4
2010-12
15.6%
19.0
2014-16
15.2%
19.5
Note: Figures for 2014-16 are provisional estimates. Sources: Food and Agriculture Organisation, 2015: Table 5.14, Chapter 5, Volume II, Economic Survey 2015-16; PRS.
Nutritional balance: The National Food Security
Act, 2013 guarantees five kg of food grains per
person per month to entitled beneficiaries at
subsidised prices. Further, Antyodaya Anna Yojana
households, which constitute the poorest of the poor,
are entitled to 35 kg per household per month at
subsidised prices. Presently, the food items
provided by the central government for distribution
under PDS are rice, wheat, and sugar.14
As can be seen in Figure 3 and Figure 4, there has
been a change in the pattern of nutritional intake
among people in both rural and urban areas (details
given in Tables 9 and 10 in the Annexure).
Although cereals or food grains contain only 10%
protein, their share as a percentage of the total
protein intake has been over 50% in both rural and
urban areas.15 However, other foods such as meat
and pulses contain more than 20% protein but
contribute to only 15% of the total protein intake of
the country.15
The share of cereals in calorie intake has reduced by
10% in rural areas and 7% in urban areas, whereas that of milk, eggs, fish, and meat has increased (Table 9 in the Annexure).15 This indicates a reduced preference for wheat and rice, and a rise in preference towards other protein-rich food items.
The National Food Security Act, 2013 requires the central and state governments to undertake steps to diversify commodities distributed under PDS.7
Imbalance in farm production: Minimum Support Price (MSP) is the price at which the government agencies purchase farmers' produce of certain notified crops. Typically, MSP is higher than the market price and seeks to incentivise farmers to grow crops on which the support is offered. As wheat and rice (paddy) are major food grains provided under the PDS, the focus of procurement is on these crops. While a significant proportion of these two crops are procured at MSP, there is very limited procurement of other crops (Figure 5).16,17,18 This skews the production of crops in favour of wheat and paddy, and does not offer an incentive for farmers to produce other items such as pulses.19 Further, this puts pressure on the water table as these crops and sugarcane (which also has an assured procurement price- see page 6 and 7) are water-intensive crops.20 As procurement of wheat and paddy is done at MSP (which is often above market prices), its stocks have grown. At the end of 2018-19, the stocks of these crops were more than the offtake for a full year (see Table 12 in the Annexure).
## Revision Of Central Issue Price (Cip)
Under the National Food Security Act, 2013 (NFSA), food subsidy is given to beneficiaries at the CIP, which was last revised in 2002. CIP for wheat and rice can be found in Table 6.
Table 6: Central Issue Price (Rs/Kg)
Commodity
AAY
BPL
APL
Rice
3.00
5.65
7.95
Wheat
2.00
4.15
6.10
Note: AAY - Antyodaya Anna Yojana, BPL - Below Poverty Line, APL - Above Poverty Line. Sources: Food Grain Bulletin (December 2019), Department of Food and Public Distribution; PRS.
In comparison to the CIP, the economic cost
(including procurement, stocking, distribution) for
wheat is Rs 27/kg and for rice is Rs 37/kg as of
February 2020.21 Food subsidy is calculated as the
difference between the economic cost of procuring
food grains, and their CIP.
While the economic cost for rice has increased from
Rs 1,098/quintal (Rs 11/kg) in 2001-02 to Rs
3,727/quintal (Rs 37/kg) in 2020-21, and of wheat
from Rs 853/quintal (Rs 9/kg) to Rs 2,684/quintal
(Rs 27/kg) over the same period, the CIP has not
been revised.21 This has led to an increasing gap
between the economic cost and CIP, leading to an
increase in expenditure on food subsidy.29 Trends in
economic cost, CIP and subsidies for wheat and rice
can be found in Figure 6 and Figure 7.
In 2018-19, the Ministry had stated that increasing
the CIP could be one of the measures to bridge the
gap between the funds it requires, and the funds it is
actually allocated. Details related to the
procurement of food grains, off-take and stock can
be found in Table 12 of the Annexure.
## Delivery Of Food Subsidy
Leakages in PDS: Leakages refer to food grains
not reaching intended beneficiaries. Note that
recent public data on leakage is not available. The
latest available data is for 2011. According to the
2011 data, leakages in PDS were estimated to be
46.7% (see Table 11 in the Annexure).22,23
Leakages may be of three types: (i) pilferage or
damage during transportation of food grains, (ii)
diversion to non-beneficiaries at fair price shops
through issue of ghost cards, and (iii) exclusion of people entitled to food grains but who are not on the beneficiary list.24,25 Studies have shown that targeting mechanisms such as TPDS are prone to large exclusion and inclusion errors.26
Exclusion errors occur when entitled beneficiaries do not get food grains. It refers to the percentage of poor households that are entitled to but do not have PDS cards. Exclusion errors had declined from 55% in 2004-05 to 41% in 2011-12 (Figure 8).
Inclusion errors occur when those that are ineligible get undue benefits. Inclusion errors increased from 29% in 2004-05 to 37% in 2011-12. Declining exclusion errors and increasing inclusion errors are due to two reasons. First, increase in the coverage of TPDS has reduced the proportion of poor who do not have access to PDS cards. Second, despite a decline in poverty rate, non-poor are still identified as poor by the government thus allowing them to continue using their PDS cards.27
Sources: Evaluation study on the role of PDS in shaping households and nutritional security in India, NITI Aayog, December 2016; PRS.
Note that under NFSA, states are responsible for the identification of beneficiaries. In 2016, the Comptroller and Auditor General of India (CAG) found that this process had not been completed by the states, and 49% of the beneficiaries were yet to be identified.28
Alternative subsidy systems: Over the years, several solutions that have been suggested include: (i) DBT of food subsidy, and (ii) end-to-end computerisation of the entire system.22,46
The NFSA states that the centre and states should introduce schemes for cash transfers to beneficiaries.7 Various experts and bodies have also suggested replacing TPDS with a Direct Benefit Transfer (DBT) system.29,30 Advantages and disadvantages of these methods of delivering benefits have been discussed below.
TPDS: TPDS assures beneficiaries that they
would receive food grains, and insulates them against inflation and price volatility. Further, food grains are delivered through fair price shops in villages, which are easy to access.31,32
However, high leakages have been witnessed in
the system, both during transportation and
distribution. These include pilferage and errors
of inclusion and exclusion from the beneficiary
list. In addition, it has also been argued that the
distribution of wheat and rice may cause an
imbalance in the nutritional intake.7
Beneficiaries have also reported receiving poor
quality food grains as part of the system.
Cash Transfers: Cash transfers seek to
increase the choices available with a beneficiary, and provide financial assistance. It has been argued that the costs of DBT may be lesser than TPDS, owing to lesser costs incurred on transport and storage. These transfers may also be undertaken electronically.31,32
On the other hand, it has been argued that cash
received as part of DBT may be spent on non-
food items. Further, such a system may expose
beneficiaries to inflation. In this regard, one
may need to consider the low penetration and
access to banking in rural areas.33
In 2015, the Department released two notifications:
The Cash Transfer of Food Subsidy Rules and The
Food Security (Assistance to State Governments)
Rules.34,35 As per these notifications, the central
government offers state governments two choices
for reforming their respective PDS machinery:
(i) replacing the existing PDS with DBT, or (ii) Fair
Price Shop automation, which involves installation
of Point of Sale devices, for authentication of
beneficiaries and electronic capturing of
transactions.
So far, more than 4.3 lakh (82%) Fair Price Shops
have been automated across the country.36 Details
regarding the status of computerisation of PDS can
be found in Table 13 of the Annexure.
The High-Level Committee on Restructuring of FCI
in 2015 had suggested that switching to DBT for
food subsidy would reduce the food subsidy bill of
the government by more than Rs 30,000 crore.22
While making this recommendation, the Committee
illustrated this by taking the case of subsidy given
on rice (Table 7). It assumed that as part of DBT,
the government would transfer Rs 22/Kg for rice to
a beneficiary.
| 1. CIP | Rs 3/Kg |
|--------------------------------------------|------------|
| 2. MSP | Rs 20/Kg |
| 3. Subsidy (3=2-1) | Rs 17/Kg |
| Rs 27/Kg | |
| 4.Cost to government | |
| (Subsidy + Costs on procurement, storage | |
| and distribution) | |
| 5. Cash subsidy to beneficiaries | Rs 22/Kg |
| 6. Government saving (6=5-4) | Rs 5/Kg |
| 7. Increase in beneficiary benefit (7=5-3) | Rs 5/Kg |
Sources: High-Level Committee Report on Reorienting FCI, January 2015; PRS.
Aadhaar: The High-Level Committee (2015) had also recommended the introduction of biometrics and Aadhaar to plug leakages in PDS. Such transfers could be linked to Jan Dhan account, and be indexed to inflation.22 As of December 2017, 119 crore Aadhaar cards have been issued, covering
98% of the population.37
In February 2017, the Ministry made it mandatory for beneficiaries under NFSA to use Aadhaar as proof of identification for receiving food grains.38 This was aimed to facilitate the removal of bogus ration cards, check leakages and ensure better delivery of food grains.22,39,40 Note that beneficiaries may face issues with Aadhaar authentication while availing PDS benefits. According to data submitted by UIDAI to the Supreme Court in Justice K. S. Puttaswamy vs Union of India, the Aadhaar authentication failure rate (across all purposes) was 8.5% for iris scans and 6% for fingerprints.41 However, in the judgement, the Court had held that services cannot be denied due to Aadhaar authentication failure. Further, as of July 2017, while 100% ration cards had been digitised, the seeding of these cards with Aadhaar was at 79%.42 Between 2016 and 2018, around 1.5 crore ration cards were deleted due to detection of bogus, fake, and duplicate cards during Aadhaar seeding (see Table 15 of the Annexure for the state-wise breakup).
## Current Challenges In Pds
Storage: The Department allocates funds for the construction of godowns to increase storage capacity. This includes allocations for the Warehousing Development and Regulatory Authority (WADA). In 2019-20, Rs 60 crore has been allocated for storage and godowns, and Rs eight crore has been allocated to WADA. As of December 2017, the total storage capacity in the country is 725 lakh tonnes, of which 359 lakh tonnes is with the FCI and 366 lakh tonnes is with the state agencies.43 The total stock of food grains in the country as of July 2017 was 555 lakh tonnes.
The CAG in its performance audit found that the available storage capacity in states was inadequate for the allocated quantity of food grains.44 For example, as of October 2015, of the 233 godowns sanctioned for construction in Maharashtra, only 93 had been completed. In Assam, although the storage capacity was enough for the state's allocation, the conditions of the godowns were found to be too damp for storage. Some of the storage in Jharkhand was also found to be unfit, either because of its remote location or the damaged condition of the godowns. The CAG also noted that in four of the last five years, the stock of food grains in the central pool had been higher than the storage capacity available with the FCI (see Figure 9).33
Sources: CAG Performance Audit on Preparedness for Implementation of National Food Security Act, 2013; PRS.
As seen in Figure 9, it was only in 2015 that the
stock of food grains was lower than the storage
capacity. According to the CAG, this was owing to
an increase in procurement under Decentralised
Procurement (DCP), and less food grains in the
central pool.33 Under DCP, the state governments
undertake procurement, storage and distribution of
food grains on behalf of the central government.
The states are reimbursed by the centre for the
expenditure incurred by them.45
The Standing Committee on Food, Consumer
Affairs and Public Distribution (2017) has
recommended increasing the procurement
undertaken by states, and reducing the expenditure
on centralised procurement by the FCI.9 They noted
that this would drastically reduce the transportation
cost borne by the government as states would
distribute the food grains to the targeted population
within their respective states. As on December
2019, only 17 states have adopted decentralised
procurement.36
Fair Price Shops: Fair Price Shops are licensed
ration shops which provide food grains and kerosene
under the public distribution system. They may also
sell certain other goods in some states. It has been
observed by various experts and the Ministry that
the margins on which the Fair Price Shops operate
are low.46 Further, in the absence of economic
viability, there may be cases where the dealer resorts
to unfair practices. In order to make these shops
viable, some states have taken steps such as:
Chhattisgarh provided seed capital of Rs 75,000 to each fair price shop free of any interest for 20 years. It also increased the commission on food grains from Rs 8/quintal to Rs 30/quintal.
States such as Assam and Delhi have permitted the sale of non-PDS items at these fair price shops. Such items include oil, potatoes, onion, tea, and mobile recharge coupons.
## Sugarcane Dues
The Department is also responsible for formulation of policies and regulations for the sugar sector. In 2020-21, Rs 2,602 crore has been allocated for providing assistance to sugar mills through various measures, which is 97% higher than the revised estimate of 2019-20. These measures include: (i) direct assistance to mills for clearing sugarcane dues of farmers, (ii) reimbursing the mills for maintaining buffer stocks, (iii) facilitating exports, and (iv) improving ethanol production capacity. The assistance is being provided with the aim of improving the liquidity of sugar mills in order to facilitate payment of sugarcane dues of farmers.47,48 Note that as on September 15, 2019, payment of Rs 11,784 crore is pending with sugar mills as dues for 2018-19 and earlier years.49 State-wise details of the dues are given in Table 16 of the Annexure. These sugarcane dues accumulate due to delay in payments to farmers for their produce. In years of surplus production, the sugar prices fall impacting the sale of sugar and liquidity of mills.50 As a result, mills are unable to pay farmers leading to delay in payments and accumulation of dues. Note that sugar mills are obligated to purchase sugarcane from all farmers within their specified area at a price fixed by the government. Conversely, farmers are bound to sell to the respective mills. Rationalisation of sugarcane pricing has been recommended as one of the steps for improving the
Crores.) as on 27.01.2020", Website of Food Corporation of India, as accessed on February 5, 2020, http://fci.gov.in/finances.php?view=22. 7 The National Food Security Act, 2013, Ministry of Consumer Affairs, Food and Public Distribution, http://www.egazette.nic.in/WriteReadData/2013/E_29_2013_429 .pdf. 8 Lok Sabha Unstarred Question No. 1378, Ministry of Consumer Affairs, Food and Public Distribution, December 18, 2018, http://164.100.24.220/loksabhaquestions/annex/16/AU1378.pdf. 9 Report no. 15, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demands for Grants (2017-18), Department of Food and Public Distribution', Lok Sabha, March
2017, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa irs%20&%20Public%20Distribution/16_Food_Consumer_Affair s_And_Public_Distribution_15.pdf.
10 Report no. 20, Standing Committee on Food, Consumer Affairs and Public Distribution: 'Demands for Grants (2018-19), Department of Food and Public Distribution', Lok Sabha, March
2018,
efficiency of the sugar industry. The central
government fixes the Fair and Remunerative Price
(FRP) for sugarcane, which is the minimum price
that must be paid by sugar mills to farmers.51 The
FRP is fixed based on the recommendations of the
Commission for Agricultural Costs and Prices
(CACP). It is recommended taking into
consideration: (i) the cost of production, (ii) rate of
recovery of sugar, (iii) availability of sugar to
consumers at a fair price, (iv) returns to farmers
from alternative crops and the general trend of
prices of agricultural commodities, (v) realisation
from sale of by-products, and (vi) reasonable
margins for farmers on account of risks and profits.
State governments can also intervene in sugarcane
pricing by announcing a State Advised Price (SAP).
SAPs are usually much higher than the FRP. This
creates a distortion in the industry as SAP is neither
linked to sugar recovery nor it takes into account
domestic and global prices and other relevant
parameters. As a result, when sugar prices are low,
mill owners are unable to pay farmers resulting in
delayed payment and accumulation of dues. The
CACP (2018) recommended that the FRP must be
implemented in all states and the announcement of
SAP by states should be stopped immediately.51
In case state governments decide to continue with
SAP, the difference between SAP and FRP should
be paid by the state governments directly to farmers.
http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa
irs%20&%20Public%20Distribution/16_Food_Consumer_Affair
s_And_Public_Distribution_20.pdf.
11 Report no. 20 of 2018, 'Compliance of the Fiscal
Responsibility and Budget Management Act, 2003 for the year
2016-17', Comptroller and Auditor General of India, January
2019,
https://www.cag.gov.in/sites/default/files/audit_report_files/Repo
rt_No_20_of_2018_Compliance_of_the_Fiscal_Responsibility_a
nd_Budget_Management_Act_2003_Department_of_Economic_
Affairs_Minis.pdf.
12 Report no. 20, Standing Committee on Food, Consumer
Affairs and Public Distribution: 'Demands for Grants (2018-19),
Department of Food and Public Distribution', Lok Sabha, March
2018,
http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affa
irs%20&%20Public%20Distribution/16_Food_Consumer_Affair
s_And_Public_Distribution_20.pdf.
13 "Cabinet approves big increase in the authorized capital of
Food Corporation of India from Rs. 3,500 crore to Rs. 10,000
crore", Press Information Bureau, Cabinet Committee on
Economic Affairs, November 27, 2019.
14 Public Distribution System, Department of Food and Public
Distribution, https://dfpd.gov.in/public-distribution.htm.
15 "Nutritional Intake in India 2011-12, NSS 68th Round, National
Sample Survey Office, Ministry of Statistics and Programme
Implementation, October 2014,
http://mospi.nic.in/sites/default/files/publication_reports/nss_repo
rt_560_19dec14.pdf.
16 Volume II, Economic Survey of India 2015-16,
http://indiabudget.nic.in/es2015-16/echapvol2-05.pdf.
17 Task Force on Agricultural Development, NITI Aayog,
http://niti.gov.in/mgov_file/Raising%20Agricultural%20Producti
vity%20and%20Making%20Farming%20Remunerative%20for%
20Farmers.pdf.
23 Third Report of the Standing Committee on Food, Consumer Affairs and Public Distribution: Demands for Grants 2015-16, Department of Food and Public Distribution, http://164.100.47.193/lsscommittee/Food,%20Consumer%20Affairs%20&%20Public%20Distribution/16_Food_Consumer_Affairs_And_P ublic_Distribution_3.pdf. 24 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf. 25 Performance Evaluation of Targeted Public Distribution System, Planning Commission of India, March 2005, http://planningcommission.nic.in/reports/peoreport/peo/peo_tpds.pdf. 26 Report of the Expert Group to advise the Ministry of Rural Development in the methodology for conducting the Below Poverty Line (BPL) Census for 11th Five Year Plan, August 2009, http://rural.nic.in/sites/downloads/circular/ReportofExpertGroupChaired- Dr.N.C.Saxena.pdf. 27 Evaluation Study on the Role of Public Distribution System in shaping household and nutritional security in India, NITI Aayog, December 2016, http://niti.gov.in/writereaddata/files/document_publication/Final%20PDS%20Report-new.pdf. 28 Audit on the Preparedness for Implementation of National Food Security Act, 2013 for the year ended March, 2015, Report No. 54 of 2015, Comptroller and Auditor General of India, http://cag.gov.in/sites/default/files/audit_report_files/Union_Civil_National_Food_Security_Report_54_of_2015.pdf. 29 "Prices, Agriculture and Food Management", Chapter 5, Economic Survey 2015-16, http://unionbudget.nic.in/budget2016-2017/es2015- 16/echapvol2-05.pdf. 30 Working Paper 294, "Leakages from Public Distribution System", January 2015, ICRIER, http://icrier.org/pdf/Working_Paper_294.pdf. http://www.epw.in/system/files/pdf/2011_46/44-45/Revival_of_the_Public_Distribution_System_Evidence_and_Explanations.pdf. 32 The Case for Direct Cash Transfers to the Poor, Economic and Political Weekly, April 2008, http://www.epw.in/system/files/pdf/2008_43/15/The_Case_for_Direct_Cash_Transfers_to_the_Poor.pdf. 33 'Report of the Internal Working Group on Branch Authorisation Policy', Reserve Bank of India, September 2016, https://rbidocs.rbi.org.in/rdocs/PublicationReport/Pdfs/IWG99F12F147B6E4F8DBEE8CEBB8F09F103.PDF. 34 "The Cash Transfer of Food Subsidy Rules, 2015", Ministry of Consumer Affairs, Food and Public Distribution, September 3, 2015, http://dfpd.nic.in/writereaddata/Portal/News/32_1_cash.pdf. http://dfpd.nic.in/fgAvAHcAcgBpAHQAZQByAGUAYQBkAGQAYQB0AGEALwBQAG8AcgB0AGEAbAAvAE0AYQBnAGEAegBp AG4AZQAvAEQAbwBjAHUAbQBlAG4AdAAvAA==/1_135_1_Food-Security.pdf.
ublic_Distribution_2.pdf. http://egazette.nic.in/WriteReadData/2017/174131.pdf. http://164.100.47.190/loksabhaquestions/annex/11/AU844.pdf.
non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The
## Annexure
2018-19
Actuals
2019-20
Budgeted
2019-20
Revised
2020-21
Budgeted
% change in BE
of 2020-21 over
RE of 2019-20
Food subsidy
1,01,327
1,84,220
1,08,688
1,15,570
6.3%
Subsidy to Food Corporation of India (FCI)
70,098
1,51,000
75,000
77,983
4.0%
Subsidy to states (decentralised procurement)
31,029
33,000
33,508
37,337
11.4%
Sugar subsidy payable under PDS
200
220
180
250
38.9%
Assistance to state agencies for intra-state movement of food grains and for margin of fair price shops' dealers
3,884
4,102
1,679
3,983
137.2%
Investment in equity capital of FCI
500
1,000
1,000
1,000
0%
Assistance to sugar mills for the 2017-18 season
376
100
63
-
-
Assistance to sugar mills for the 2018-19 season
-
1,000
2,000
200
-90%
Assistance to sugar mills for the 2019-20 season
-
-
100
500
400%
Scheme for defraying expenditure towards internal transport, freight, handling and other charges on export
-
501
551
200
-63.7%
Scheme for creation and maintenance of buffer stock of sugar
200
350
550
200
-63.6%
Scheme for extending soft loan to sugar mills
-
200
100
120
20%
Financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity
-
100
50
50
0%
Schemes for development of sugar industries
443
351
221
172
-22.2%
Department
1,07,078
1,92,240
1,15,240
1,22,235
6.1%
Sources: Demand no. 15, Department of Food and Public Distribution, Expenditure Budget, Union Budget 2020-21; PRS.
Vegetables &
Meats,
eggs, &
Cereals
Pulses, nuts,
& oilseeds
fruits
Milk & milk
products
Miscellaneous
fish
Rural
1993-94
71.0
4.9
2.0
0.7
6.2
15.2
1999-00
67.6
5.5
2.0
0.8
6.2
17.9
2004-05
67.5
5.0
2.2
0.8
6.4
18.1
2009-10
64.2
4.5
1.8
0.7
6.8
22.0
2011-12
61.1
5.2
1.9
0.8
7.1
23.9
Urban
1993-94
58.5
6.1
3.3
1.0
8.0
23.1
1999-00
55.1
6.9
2.9
1.1
8.2
25.8
2004-05
56.1
6.7
3.2
1.1
8.6
24.3
2009-10
55.0
5.9
2.6
1.0
9.4
26.1
2011-12
51.6
6.4
2.6
1.1
9.1
29.2
Sources: Table T18, Nutritional Intake in India, 2011-12, NSSO; PRS.
Year
Cereals
Pulses
Milk and milk products
Egg, fish, and meat
Other food
Rural
1993-94
69.4
9.8
8.8
3.7
8.4
1999-00
67.4
10.9
9.2
4.0
8.4
2004-05
66.4
9.5
9.3
4.0
10.8
2009-10
64.9
9.1
10.0
4.0
12.0
2011-12
62.5
10.6
10.6
4.7
11.7
Urban
1993-94
59.4
11.5
11.7
5.3
12.1
1999-00
57.0
13.1
12.4
6.0
11.5
2004-05
56.2
11.0
12.3
5.5
15.0
2009-10
56.4
11.3
13.8
5.6
13.0
2011-12
53.7
12.4
13.6
6.4
13.9
Sources: Table T21, Nutritional Intake in India, 2011-12, NSSO; PRS.
| State/UT | Total consumption from PDS | Offtake (2011-12) | Leakage | % leakage |
|-------------------|-------------------------------|----------------------|------------|--------------|
| Andhra Pradesh | 36.1 | 40.7 | 4.6 | 11.3% |
| Arunachal Pradesh | 0.8 | 1.0 | 0.2 | 20.0% |
| Assam | 9.5 | 24.4 | 14.9 | 61.1% |
| Bihar | 11.3 | 36.2 | 24.9 | 68.8% |
| Chhattisgarh | 16.7 | 16.7 | 0.0 | 0.0% |
| Goa | 0.4 | 0.8 | 0.4 | 50.0% |
| Gujarat | 4.4 | 15.7 | 11.3 | 72.0% |
| Haryana | 2.2 | 7.3 | 5.1 | 69.9% |
| Himachal Pradesh | 4.9 | 6.3 | 1.4 | 22.2% |
| Jammu and Kashmir | 8.8 | 9.1 | 0.3 | 3.3% |
| Jharkhand | 3.1 | 12.4 | 9.3 | 75.0% |
| Karnataka | 16.2 | 30.1 | 13.9 | 46.2% |
| Kerala | 11.4 | 20.1 | 8.7 | 43.3% |
| Madhya Pradesh | 15.5 | 30.7 | 15.2 | 49.5% |
| Maharashtra | 19.3 | 42.7 | 23.4 | 54.8% |
| Manipur | 0.0 | 2.0 | 2.0 | 100.0% |
| Meghalaya | 0.8 | 2.5 | 1.7 | 68.0% |
| Mizoram | 0.9 | 1.1 | 0.2 | 18.2% |
| Nagaland | 0.1 | 2.0 | 1.9 | 95.0% |
| Odisha | 15.4 | 24.4 | 9.0 | 36.9% |
| Punjab | 3.4 | 8.7 | 5.3 | 60.9% |
| Rajasthan | 10.1 | 29.8 | 19.7 | 66.1% |
| Sikkim | N/A | N/A | - | - |
| Tamil Nadu | 39.5 | 45 | 5.5 | 12.2% |
| Tripura | 2.7 | 3.3 | 0.6 | 18.2% |
| Uttar Pradesh | 43.2 | 82.9 | 39.7 | 47.9% |
| Uttarakhand | 4.6 | 6.6 | 2.0 | 30.3% |
| West Bengal | 13.4 | 43.9 | 30.5 | 69.5% |
| Total | 295.5 | 554.5 | 259 | 46.7% |
Note: Data from National Sample Survey 2011-12. Sources: Table 1, Working Paper 294, "Leakages from Public Distribution System", ICRIER, January 2015; PRS.
| Procurement | Offtake | | Stocks | |
|----------------|-----------|-----------|----------|-------|
| Year | | % Offtake | | |
| Rice | Wheat | Total | Rice | Wheat |
| 2003-04 | 22.9 | 15.8 | 38.7 | 25.0 |
| 2004-05 | 24.7 | 16.8 | 41.5 | 23.2 |
| 2005-06 | 27.6 | 14.8 | 42.4 | 25.1 |
| 2006-07 | 25.1 | 9.2 | 34.3 | 25.1 |
| 2007-08 | 28.7 | 11.1 | 39.9 | 25.2 |
| 2008-09 | 34.1 | 22.7 | 56.8 | 24.6 |
| 2009-10 | 32.0 | 25.4 | 57.4 | 27.4 |
| 2010-11 | 34.2 | 22.5 | 56.7 | 29.9 |
| 2011-12 | 35.0 | 28.3 | 63.4 | 32.1 |
| 2012-13 | 34.0 | 38.2 | 72.2 | 32.6 |
| 2013-14 | 31.9 | 25.1 | 56.9 | 29.2 |
| 2014-15 | 31.6 | 28.0 | 59.6 | 30.7 |
| 2015-16 | 34.1 | 28.1 | 62.2 | 31.8 |
| 2016-17 | 36.5 | 23.6 | 60.1 | 32.8 |
| 2017-18 | 37.6 | 30.6 | 68.2 | 35.0 |
| 2018-19 | 42.7 | 35.0 | 77.7 | 34.4 |
Sources: Handbook of Statistics on Indian Economy (2019), Reserve Bank of India; PRS.
| Online Allocation of | Computerisation of |
|-------------------------|-----------------------|
| State/ UT | |
| Digitisation of | |
| Ration Cards | |
| Aadhaar Seeding | |
| with Ration Cards | Food grains |
| % of Fair Price Shops | |
| with Operational ePoS | |
| Andhra Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Arunachal Pradesh | |
| 100% | |
| 57% Implemented | - |
| Assam | |
| 100% | |
| 0% Implemented | - |
| Bihar | |
| 100% | |
| 78% Implemented | Implemented |
| Chhattisgarh | |
| 100% | |
| 98% Implemented | Implemented |
| Goa | |
| 100% | |
| 98% Implemented | Implemented |
| Gujarat | |
| 100% | |
| 99% Implemented | Implemented |
| Haryana | |
| 100% | |
| 100% Implemented | Implemented |
| Himachal Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Jammu and Kashmir | |
| 100% | |
| 82% Implemented | - |
| Jharkhand | |
| 100% | |
| 95% Implemented | Implemented |
| Karnataka | |
| 100% | |
| 100% Implemented | Implemented |
| Kerala | |
| 100% | |
| 99% Implemented | Implemented |
| Madhya Pradesh | |
| 100% | |
| 90% Implemented | Implemented |
| Maharashtra | |
| 100% | |
| 97% Implemented | Implemented |
| Manipur | |
| 100% | |
| 79% Implemented | - |
| Meghalaya | |
| 100% | |
| 0% Implemented | - |
| Mizoram | |
| 100% | |
| 93% Implemented | - |
| Nagaland | |
| 100% | |
| 65% Implemented | - |
| Odisha | |
| 100% | |
| 96% Implemented | Implemented |
| Punjab | |
| 100% | |
| 99% Implemented | Implemented |
| Rajasthan | |
| 100% | |
| 96% Implemented | Implemented |
| Sikkim | |
| 100% | |
| 90% Implemented | Implemented |
| Tamil Nadu | |
| 100% | |
| 100% Implemented | Implemented |
| Telangana | |
| 100% | |
| 99% Implemented | Implemented |
| Tripura | |
| 100% | |
| 100% Implemented | Implemented |
| Uttar Pradesh | |
| 100% | |
| 100% Implemented | Implemented |
| Uttarakhand | |
| 100% | |
| 93% Implemented | Implemented |
| West Bengal | |
| 100% | |
| 64% Implemented | Implemented |
| Andaman and Nicobar | |
| Islands | |
| 100% | |
| 97% Implemented | Implemented |
| Chandigarh | |
| 100% | |
| 100% NA | NA |
| Dadra and Nagar Haveli | |
| 100% | |
| 100% Implemented | Implemented |
| Daman and Diu | |
| 100% | |
| 100% Implemented | Implemented |
| Delhi | |
| 100% | |
| 100% Implemented | Implemented |
| Lakshadweep | |
| 100% | |
| 100% Implemented | NA |
| Puducherry | |
| 100% | |
| 100% NA | NA |
| Total | |
| 100% | |
| 88% | 34 |
Sources: Report no. 2, Standing Committee of Food, Consumer Affairs and Public Distribution, Lok Sabha, December 10, 2019; PRS
| Year | Paddy (common) | % increase over last year | Wheat | % increase over last year |
|---------|-------------------|------------------------------|----------|------------------------------|
| 2009-10 | 1,000 | 17.6% | 1,100 | 1.9% |
| 2010-11 | 1,000 | 0.0% | 1,120 | 1.8% |
| 2011-12 | 1,080 | 8.0% | 1,285 | 14.7% |
| 2012-13 | 1,250 | 15.7% | 1,350 | 5.1% |
| 2013-14 | 1,310 | 4.8% | 1,400 | 3.7% |
| 2014-15 | 1,360 | 3.8% | 1,450 | 3.6% |
| 2015-16 | 1,410 | 3.7% | 1,525 | 5.2% |
| 2016-17 | 1,470 | 4.3% | 1,625 | 6.6% |
| 2017-18 | 1,550 | 5.4% | 1,735 | 6.8% |
| 2018-19 | 1,750 | 12.9% | 1,840 | 6.1% |
| 2019-20 | 1,815 | 3.7% | 1,925 | 4.9% |
Sources: Commission for Agricultural Costs and Prices, Ministry of Agriculture and Farmers' Welfare; PRS.
| States/UTs | 2016 | 2017 | 2018 | State-wise Total |
|---------------------------|-----------|-----------|----------|---------------------|
| Andhra Pradesh | 4,75,023 | 5,449 | - | 4,80,472 |
| Andaman & Nicobar Islands | - | - | - | 0 |
| Arunachal Pradesh | 4,396 | 56 | - | 4,452 |
| Assam | 1,08,681 | 42,077 | 1,35,250 | 2,86,008 |
| Bihar | 6,291 | - | - | 6,291 |
| Chandigarh | - | 88 | - | 88 |
| Chhattisgarh | 1,50,000 | 1,50,000 | - | 3,00,000 |
| Dadra & Nagar Haveli | 549 | - | - | 549 |
| Daman & Diu | 101 | 272 | 4,898 | 5,271 |
| Delhi | 22,696 | 3,969 | 486 | 27,151 |
| Goa | 10,115 | - | - | 10,115 |
| Gujarat | 22,119 | 18,965 | 95,659 | 1,36,743 |
| Haryana | 19,648 | 29,686 | 2,91,926 | 3,41,260 |
| Himachal Pradesh | 1,148 | 172 | 56,858 | 58,178 |
| Jammu and Kashmir | 50,709 | 664 | - | 51,373 |
| Jharkhand | 4,46,025 | - | - | 4,46,025 |
| Karnataka | 1,44,432 | 3,26,382 | 4,572 | 4,75,386 |
| Kerala | - | - | 3,314 | 3,314 |
| Lakshadweep | 442 | - | - | 442 |
| Madhya Pradesh | 3,89,124 | 1,84,673 | - | 5,73,797 |
| Maharashtra | 11,55,908 | - | - | 11,55,908 |
| Manipur | - | 336 | - | 336 |
| Meghalaya | - | - | 370 | 370 |
| Mizoram | 101 | 559 | - | 660 |
| Nagaland | - | 8,521 | - | 8,521 |
| Odisha | 6,50,471 | 35,740 | - | 6,86,211 |
| Puducherry | 9,886 | - | - | 9,886 |
| Punjab | - | 69,945 | 34,972 | 1,04,917 |
| Rajasthan | 13,71,230 | 73,110 | 8,016 | 14,52,356 |
| Sikkim | 11,714 | 1,126 | - | 12,840 |
| Tamil Nadu | 84,470 | 9,089 | - | 93,559 |
| Telangana | 5,21,790 | - | - | 5,21,790 |
| Tripura | 92,728 | - | - | 92,728 |
| Uttar Pradesh | 25,86,541 | 44,41,748 | - | 70,28,289 |
| Uttarakhand | 89,984 | 3,18,718 | 1,26,268 | 5,34,970 |
| West Bengal | | | | |
| $ | | | | |
| | - | - | - | 0 |
| Total | 84,26,322 | 57,21,345 | 7,62,589 | 1,49,10,256 |
Note: *Cards deleted due to detection of ghost/fraudulent/duplicate/ineligible/migration /deaths etc. during the process of digitisation, deduplication, Aadhaar seeding in run-up /implementation of National Food Security Act. $West Bengal has individual Ration Cards system. Sources: Second Report, Standing Committee on Food, Consumer Affairs and Public Distribution (2019-20); PRS.
| State | 2016-17 & Earlier | 2017-18 | 2018-19 | Total Arrears |
|----------------|----------------------|------------|------------|------------------|
| Andhra Pradesh | 1 | 5 | 132 | 138 |
| Bihar | 39 | 8 | 478 | 524 |
| Chhattisgarh | 0 | 2 | 39 | 41 |
| Goa | 0 | 0 | 5 | 5 |
| Gujarat | 35 | 2 | 804 | 841 |
| Haryana | 0 | 0 | 80 | 80 |
| Karnataka | 33 | 0 | 225 | 258 |
| Madhya Pradesh | 8 | 8 | 9 | 25 |
| Maharashtra | 174 | 62 | 396 | 632 |
| Odisha | 3 | 0 | 19 | 21 |
| Puducherry | 22 | 0 | 0 | 22 |
| Punjab | 0 | 26 | 589 | 615 |
| Rajasthan | 0 | 0 | 0 | 0 |
| Tamil Nadu | 1,529 | 65 | 346 | 1,940 |
| Telangana | 0 | 0 | 46 | 46 |
| Uttar Pradesh | 144 | 41 | 5,990 | 6,174 |
| Uttarakhand | 25 | 109 | 286 | 420 |
| West Bengal | 0 | 0 | 0 | 0 |
| Total | 2,014 | 326 | 9,444 | 11,784 |
Sources: Second Report, Standing Committee on Food, Consumer Affairs and Public Distribution (2019-20); PRS. |
65c43cfe57bc5671070682b8 | budget_reports |
## Demand For Grants 2019-20 Analysis Drinking Water And Sanitation
The Department of Drinking Water and Sanitation
is the nodal agency responsible for policy planning,
funding and coordination of programs for safe
drinking water and sanitation in rural areas of the
country. It is responsible for the monitoring and
implementation of Swachh Bharat Mission-Gramin
(SBM-G) and the National Rural Drinking Water
Programme (NRDWP).1 The Department was an
independent ministry from 2011 to 2019. In 2019,
it was integrated within the newly constituted
Ministry of Jal Shakti.
## Overview Of Finances
In the Union Budget 2019-20, the Department has
been allocated Rs 20,016 crore. This is an increase
of Rs 23 crore (0.1%) over the revised estimates of
2018-19.
Over the past ten years, the allocation to the
Department of Drinking Water and Sanitation has
seen an annual average increase of 6.6%. The
department saw the highest increase of 49% in
2016-17, over the previous year. This year the
estimated expenditure has seen a marginal decrease
of 0.1%, over the revised expenditure estimates of
2018-19. These trends are illustrated in Figure 1.
Expenditure by the Department is primarily
towards the two major schemes, the National Rural
Drinking Water Program (NRDWP), and the
Swachh Bharat Mission-Gramin (SBM-G). Table
1 provides the trends in budgetary allocation
towards these schemes in the last three years.
SBM-G has seen a 31% decrease in its allocation in
2019-20, over the revised estimates of 2018-19.
Anurag Vaishnav [email protected]
3rd Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi - 110002
Tel: (011) 43434035-36, 23234801-02 www.prsindia.org On the other hand, NRDWP has seen an increase of nearly 82% in its allocation in 2019-20, over the revised estimates of 2017-18.
% change
Revised
Budgeted
Major head
Actual
17-18
18-19
19-20
(2019-20 BE/
2018-19 RE)
SBM-G
16,888
14,478
9,994
-31.0%
NRDWP
7,038
5,500
10,001
81.8%
Secretariat
13
15
22
45.1%
Total
23,939
19,993
20,016
0.1%
Note: RE is Revised Estimates, BE is Budget Estimates. Sources: Demands for Grants 2019-20, Department of Drinking Water and Sanitation; PRS.
In the last 10 years, the Department's expenditure
has witnessed a gradual shift towards higher
allocation to rural sanitation, as proportion of total
expenditure of the Department. The expenditure on
rural sanitation as a proportion of the total
expenditure of the department increased from 13%
in 2009-10 to 72% in 2018-19. The expenditure on
drinking water as a proportion of the total
expenditure of the department decreased from 87%
in 2009-10 to 28% in 2018-19.
Sources: Union Budgets 2009-10 to 2018-19; PRS.
However, for 2019-20, the expenditure on both
drinking water and rural sanitation is estimated be
nearly equal (approximately Rs 10,000 crore or
50% of the total expenditure of the department).
This implies a realigned focus towards the drinking
water component in allocation (allocation for
NRDWP has increased by nearly 82% in the budget
estimates for 2019-20).
Figure 3 shows the actual expenditure as a % of the budgeted expenditure for the department for the last 10 years. Between 2009-15, the utilisation of expenditure was lower than the budgeted expenditure. Since then, the Department has been spending more than the allocated amount. The actual expenditure in 2015-16 was 177% of the budgeted expenditure. However, as per the revised estimates of 2018-19, the expenditure was 11% less than the budgeted estimate for the year.
Note: The expenditure figure for 2018-19 is the revised estimate. Sources: Union Budgets 2009-10 to 2018-19; PRS.
## Key Issues And Analysis
In this section, we discuss the major issues regarding the implementation of the Swachh Bharat Mission-Gramin and the National Rural Drinking Water Programme.
## Swachh Bharat Mission - Gramin
The rural sanitation programme in India was introduced in the year 1954 as a part of the first five-year plan of the government of India. The 1981 Census revealed rural sanitation coverage was only 1%.2 In 1999, the Total Sanitation Campaign (TSC) was launched to increase awareness and generate demand for sanitary facilities in the country. In 2012, Nirmal Bharat Abhiyan was launched as a successor to the TSC to accelerate the sanitation coverage in rural areas.3 The Nirmal Bharat Abhiyan (NBA) was restructured into Swachh Bharat Mission (Gramin) in September 2014.4 The Mission was officially launched on October 2, 2014 with an aim to achieve universal sanitation coverage, improve cleanliness and eliminate open defecation in the country by October 2, 2019.5 In 2019-20, the Mission has been allocated Rs 9,994 crore, which is a decrease of 31% from the revised estimate of 2018-19. The allocation for
rural sanitation schemes increased from Rs 1,280
crore in 2009-10 to Rs 16,888 crore in 2017-18.
Since then, the allocation towards the Mission has
seen a decrease (Rs 14,478 crore in 2018-19 and Rs
9,994 crore in 2019-20). Figure 4 illustrates the
expenditure on rural sanitation scheme for the last
10 years, and the expenditure as a proportion of the
total allocation to the Department.
Note: Values for 2018-19 and 2019-20 are revised estimates and budget estimates respectively. Sources: Union Budgets 2009-10 to 2019-20; PRS.
Expenditure on rural sanitation has increased at an
annual growth rate of 20.3% over the last 10 years.
The increase has been most significant from 2015-
16 onwards, after the launch of SBM-G.
The rural and urban component of the scheme
together got the tenth highest allocation (Rs 12,644
crore) among all the centrally sponsored schemes
in Union Budget 2019-20. However, while the
allocation to the rural component witnessed a
decline of 31%, the urban component saw an
increase of 6% in the budget estimates for 2019-20,
as compared to the revised estimates of 2018-19.
The required central fund as estimated in SBM-G
for the five year period from 2014-15 to 2018-19 is
Rs 1,00,447 crore.6 Of this, so far Rs 61,388 (61%)
has been allocated for the scheme. This implies
that 39% of the funds are still left to be released.
Utilisation of expenditure: Table 2 shows the
trends in budget allocation and actual expenditure
on rural sanitation over the past 10 years. Note that
in the past few years, actual expenditure on SBM-G
has overshot the budget estimates a few times. In
2016-17, it was 116% and in 2017-18, it was 121%.
However, in 2018-19, the revised expenditure was
94% of the budgeted expenditure.
rural sanitation (Rs crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2009-10 | 1,080 | 1,200 | 111% |
| 2010-11 | 1,580 | 1,580 | 100% |
| 2011-12 | 1,650 | 1,500 | 91% |
| 2012-13 | 3,500 | 2,474 | 71% |
| 2013-14 | 3,834 | 2,244 | 59% |
| 2014-15 | 4,260 | 2,841 | 67% |
| 2015-16 | 3,625 | 6,703 | 185% |
| 2016-17 | 9,000 | 10,484 | 116% |
| 2017-18 | 13,948 | 16,888 | 121% |
| 2018-19 | 15,343 | 14,478 | 94% |
Note: The 'utilised' figure for 2018-19 is the revised estimate. Sources: Union Budgets 2009-10 to 2018-19; PRS.
Construction of Individual Household Latrines
(IHHLs): The cost for constructing a household toilet was increased from Rs 10,000 to Rs 12,000 in September 2014 when the Nirmal Bharat Abhiyan was restructured into SBM-G.7 This cost for constructing toilets is shared between the centre and the state in the ratio of 60:40. As of June 2019, a total of 9.69 crore toilets have been constructed. Table 3 shows the construction of household toilets since the inception of the scheme. Although the number of toilets constructed each year has increased, a year-on-year growth rate indicates that the pace of construction of toilets has come down.
Table 3: Toilets constructed since 2014-15
Year
Toilets
Total toilets
constructed
Yearly %
change
Constructed
in the year
2014-15
48,93,946
48,93,946
-
2015-16
1,25,51,903
1,74,45,849
156%
2016-17
2,18,01,807
3,92,47,656
74%
2017-18
2,97,95,687
6,90,43,343
37%
2018-19
2,78,99,480
9,60,42,823
-6%
Sources: Management Information System Reports of SBM; PRS.
As per the Department, 38.7% of the rural households had access to toilets in October 2014, which has increased to 99.4% in June 2019.8 Nearly all states have achieved 100% coverage for construction of toilets. The only states without full coverage are Goa (76.2% coverage), Odisha (88.1% coverage) and Telangana (98.6% coverage). State-wise coverage of household toilets is provided in Table 6 in the Annexure. Figure 5
illustrates the total coverage of household toilets since the inception of the SBM programme.
Sources: Management Information System Reports of SBM; PRS.
Open Defecation Free (ODF) villages: Under
SBM-G, a village is declared as ODF when: (i)
there are no visible faeces in the village, and (ii)
every household as well as public/community
institution uses safe technology options for faecal
disposal.9
After a village declares itself as ODF, states are
required to verify the ODF status of such a village.
Since sanitation is a state subject, the department
has set some broad guidelines for ODF verification.
This includes indicators that are in accordance with
the ODF verification definition, such as access to a
toilet facility and its usage, and safe disposal of
faecal matter through septic tanks
Note that as per the National Family Health
Survey-4 (2015-16), only 37% of households in
rural areas were using improved sanitation
facility.10 Such a facility implies that toilets have a
faecal disposal system that could include flush to
piped sewer system, or flush to septic tank, or flush
to pit latrine, and is not shared with any other
household.
As per the Management Information System of
SBM-G, a total of 5,68,700 villages across 622
districts in 30 states and union territories have been
declared as ODF as of June 2019. Of these,
5,11,052 villages (89.9%) have been verified as
ODF. Figure 6 illustrates the number of villages
declared as ODF, number of villages verified as
ODF and the proportion of villages verified as ODF
since the inception of the scheme in 2014.
The proportion of villages which have been
verified as ODF has increased from 37.9% in 2015-
16 to 89.9% in June 2019. Note that the proportion
of ODF verified villages has only increased by 1%
in the last year.
Sources: Management Information System Reports of SBM; PRS. The total number of villages is taken from Census 2011.
State-wise details on the number of villages declared and verified ODF is presented in Table 7 in annexure. The National Annual Rural Sanitation Survey (NARSS) 2018-19, conducted by an independent verification agency under the World Bank support project to SBM-G confirmed 90.7% of the surveyed villages to be ODF.11 The NARSS was conducted between November 2018 and February 2019 and covered 92,040 households in 6,136 villages across the country. It also found that 96.5% of the households in rural India who have access to a toilet use it.12
Budget Announcement: The Union Budget 2019-
20 announced that Swachh Bharat Mission will be expanded to undertake sustainable solid waste management in every village of the country.13
## National Rural Drinking Water Programme
The National Rural Drinking Water Programme (NRDWP) aims at assisting states in providing adequate and safe drinking water to the rural population in the country. 14 Rural drinking water programs have existed in various forms since 1972- 73, starting with the Accelerated Rural Water Supply Programme, followed by a Technology Mission in 1986.15 Subsequently, the Sector Reform Project was initiated in 1999-2000, with an aim to involve the rural community in planning, implementation and management of drinking water schemes. From 2009, it has been renamed as the National Rural Drinking Water Programme.
Fund sharing pattern: Rural water supply is a state subject. The centre-state fund sharing pattern within the scheme for the components of coverage of habitations, quality of water and operation and maintenance of projects is: (i) 50:50 for all states, and (ii) 90:10 for north-east and Himalayan states.16
The Programme also has provision for SCs and STs
(22% and 10% of the funds are earmarked for use
in SC and ST dominated areas respectively) and
north-eastern states (10% of the funds are
earmarked for the north-eastern states). Further,
2% of allocation of funds is earmarked for 60 high
priority Japanese Encephalitis (JE) / Acute
Encephalitis Syndrome (AES) affected district
identified by the Ministry of Health and Family
Welfare.17
For the components of monitoring and surveillance
of water quality, sustainability of water sources,
and support activities like awareness generation,
the centre-state fund sharing pattern within the
scheme is: (i) 60:40 for all states, and (ii) 90:10 for
north-east and Himalayan states. The centre funds
the scheme entirely for union territories.18
NRDWP accounts for 50% of the department's
finances this year. In 2019-20 it has been allocated
Rs 10,001 crore, which is an increase of 81.8%
from the revised estimates of 2018-19. In 2018-19,
the scheme was allocated Rs 7,000 crore.
However, the expenditure on the scheme for 2018-
19 was only Rs 5,500 crore (1,500 crore less than
the budget estimate). Figure 7 shows the
expenditure on NRDWP over the years.
Values for 2017-18 and 2018-19 are revised estimates and budget estimates respectively. Sources: Union Budgets 2009-10 to 2018-19; PRS.
As can be noted from the figure above, from 2009-
10 to 2013-14, the expenditure on NRDWP
accounted for about 80%-90% of the department's
budget. From 2013-14 onwards, the allocation to
the scheme has been reducing.
The Standing Committee (2016-17) examining the
scheme had observed that reduction in budget for
NRDWP will affect the coverage and tackling of
water quality problems in rural areas.19,20 In 2019-
20, however, the expenditure on NRDWP has seen
an 81.8% increase.
Budgeted versus actual expenditure: Table 4
shows the trends in allocation and actual expenditure on NRDWP over the past ten years. The actual expenditure saw a decline in 2014-15, which could be a reason for the reduction of funds at the budget estimates stage in 2015-16. However, the actual expenditure in 2015-16 was 167% more than the budget estimates. Note that during 2015- 18, the actual expenditure on NRDWP has overshot the budget estimates significantly.
Table 4: Budgeted versus actual expenditure on NRDWP (Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2009-10
8,120
7,996
98%
2010-11
9,000
8,985
100%
2011-12
9,350
8,493
91%
2012-13
10,500
10,489
100%
2013-14
11,426
9,691
85%
2014-15
11,000
9,243
84%
2015-16
2,611
4,369
167%
2016-17
5,000
5,980
120%
2017-18
6,050
7,038
116%
2018-19
7,000
5,500
79%
Note: The 'utilised' figure for 2018-19 is the revised estimate. Sources: Union Budgets 2009-10 to 2018-19; PRS.
CAG report on 'Performance Audit of National Rural Drinking Water Programme' (2018) noted that of the Rs 89,956 crore of available funds (central funds + state funds) under the programme for the years 2012-17, nearly 10% (Rs 8,788 crore) remained untilised.21 Further, Rs 359 crore of scheme funds was diverted for ineligible purposes. The report also pointed out that poor programme management resulted in work remaining incomplete, abandoned or non-operational.
Target versus achievements: In 2011, the Ministry came out with a strategic plan for the period from 2011-22.22 It set out a goal that by 2022, every person in rural areas in the country will have access to 70 Litres Per Capita Per Day (LPCD) of water within their household premises or at a distance of not more than 50 metres. It identified three standards of service:
i.
Piped water supply with all metered, household connections (designed for 70 LPCD);
ii.
Basic piped water supply with a mix of household connections, public taps and handpumps (designed for 55 LPCD); and
iii.
Handpumps, protected open wells, protected ponds, etc. (designed for 40 LPCD).
The revised guidelines of the NRDWP in 2015 raised the drinking water supply norms from 40 LPCD to 55 LPCD.23
As of July 2019, a total of 13,87,480 habitations
(81%) were fully covered under the programme,
and a total of 2,69,465 habitations (15.6%) were
partially covered under the programme.24 Hence,
96.6% of the rural households have access to safe
drinking water under the programme. State-wise
details on habitations covered under NRDWP are
listed in Table 8 in annexure.
Source: Starred Question No. 199, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, Lok Sabha; PRS.
Note that while the coverage under NRDWP has
improved, the coverage of piped-water-supply
(PWS) remains low. As of July 2019, only 18.33%
of rural households have PWS connections.25 The
proportion of households with PWS connections
for different states is listed in Table 9 in annexure.
Sources: Integrated Management Information System Reports 2014-15 to 2018-19, National Rural Drinking Water Programme; PRS.
Budget Announcement: The Union Budget 2019-
20 has announced that the government will ensure
'Har Ghar Jal', or piped-water-supply (PWS) to all
rural households by 2024, under the Jal Jeevan
Mission.26 This implies that the remaining 81.7%
of the households will have to be covered under the
PWS in the next five years.
Contamination of drinking water: The Estimates
Committee in its report on 'Evaluation of Rural
Drinking Water Programmes' (2015) noted that
NRDWP is over-dependant on ground water.27 The
Committee also noted that ground water is affected
by arsenic and other contaminants in several
districts of the country. Table 5 shows the number of habitations affected due to the presence of Flouride, Arsenic, Iron, Nitrate and other contaminants. As of January 1, 2019, 3.6% of the total habitations were affected by contamination of ground water.28
of groundwater (as of January 1, 2019)
| Contaminants | Number of affected | % of affected |
|-----------------|-----------------------|------------------|
| habitations | habitations | |
| Arsenic | 15,795 | 0.9% |
| Fluoride | 9,655 | 0.6% |
| Heavy Metal | 2,106 | 0.1% |
| Iron | 18,939 | 1.1% |
| Nitrate | 1,562 | 0.1% |
| Salinity | 13,494 | 0.8% |
| Total | 61,551 | 3.6% |
2 Background of Sanitation in India, Guidelines for Swachh Bharat Mission-Gramin, http://swachhbharatmission.gov.in/sbmcms/writereaddata/image s/pdf/Guidelines/Complete-set-guidelines.pdf. 3 Background of Sanitation in India, Guidelines for Swachh Bharat Mission-Gramin, http://swachhbharatmission.gov.in/sbmcms/writereaddata/image s/pdf/Guidelines/Complete-set-guidelines.pdf. 4 Review of Sanitation Programme in Rural Areas, 8th Report, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 5 About SBM, Swachh Bharat Mission-Gramin, http://swachhbharatmission.gov.in/SBMCMS/about-us.htm. 6 Review of Sanitation Programme in Rural Areas, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 7 Review of Sanitation Programme in Rural Areas, Committee on Estimates 2014-15, Lok Sabha, http://164.100.47.193/lsscommittee/Estimates/16_Estimates_8.p df. 8 Swachh Bharat Mission- Gramin, http://sbm.gov.in/sbmdashboard/IHHL.aspx. 9 Open Defecation Free (ODF) Sustainability Guidelines, Ministry of Drinking Water and Sanitation, http://swachhbharatmission.gov.in/sbmcms/writereaddata/image s/pdf/guidelines/Guidelines-ODF-sustainability.pdf. 10 India Fact Sheet, National Family Health Survey - 4, 2015-16, Ministry of Health and Family Welfare, http://rchiips.org/NFHS/pdf/NFHS4/India.pdf. 11 'Independent Verification of Swachh Bharat Grameen confirms over 96% usage of toilets', Press Information Bureau, Ministry of Rural Development, March 5, 2019. 12 'Independent Verification of Swachh Bharat Grameen confirms over 96% usage of toilets', Press Information Bureau, Ministry of Rural Development, March 5, 2019. 13 'Key Highlight of Union Budget 2019-20', Press Information Bureau, Ministry of Finance, July 5, 2019. 14 About NRDWP, National Rural Drinking Water Programme, Department of Drinking Water and Sanitation, Ministry of Jal Shakti, https://nrdwp.gov.in/about-nrdwp. 15 Evaluation Study on Rajiv Gandhi National Drinking Water Mission, November 2010, Sources: Unstarred Question No. 2738, Ministry of Drinking Water and Sanitation, Rajya Sabha, PRS.
The National Water Quality Sub-Mission was
launched in March, 2017 to provide safe drinking
water to arsenic and fluoride affected habitations
over a span of 4 years.29
Chemical contamination of ground water has also
been reported due to deeper drilling for drinking
water sources. It has been recommended that out
of the total funds for NRDWP, allocation for water
quality monitoring and surveillance should not be
less than 5%.30 Presently, it is 3% of the total
funds. It has also been suggested that water quality
laboratories for water testing should be set up
throughout the country.
http://planningcommission.nic.in/reports/peoreport/peoevalu/pe
o_rgndwm.pdf.
16 About NRDWP, National Rural Drinking Water Programme,
Department of Drinking Water and Sanitation, Ministry of Jal
Shakti, https://nrdwp.gov.in/about-nrdwp.
17 Annual Report 2017-18, Department of Drinking Water and
Sanitation, Ministry of Jal Shakti, https://jalshakti-
ddws.gov.in/sites/default/files/Annual_Report_2017-
18_English.pdf.
18 About NRDWP, National Rural Drinking Water Programme,
Department of Drinking Water and Sanitation, Ministry of Jal
Shakti, https://nrdwp.gov.in/about-nrdwp.
19 Demand for Grants 2016-17, Ministry of Drinking Water and
Sanitation, Standing Committee on Rural Development 2015-
16,
http://164.100.47.193/lsscommittee/Rural%20Development/16_
Rural_Development_23.pdf.
20 Demand for Grants 2017-18, Ministry of Drinking Water and
Sanitation, Standing Committee on Rural Development 2016-
17,
http://164.100.47.193/lsscommittee/Rural%20Development/16_
Rural_Development_35.pdf.
21 Report of the Comptroller and Auditor General of India on
Performance Audit of National Rural Drinking Water
Programme, Report No. 15 of 2018,
https://cag.gov.in/sites/default/files/audit_report_files/Report_N
o_15_of_2018_-
_Performance_Audit_on_National_Rural_Drinking_Water_Prog
ramme_in_Ministry_of_Drinking_Water_and_Sanitation.pdf.
22 "Ensuring Drinking Water Security in Rural India", Strategic
Plan 2011-12, Department of Drinking Water and Sanitation,
Ministry of Rural Development,
http://mdws.gov.in/sites/default/files/StrategicPlan_2011_22_W
ater.pdf.
23 National Rural Drinking Water Programme Guidelines 2013,
http://www.mdws.gov.in/sites/default/files/NRDWP_Guidelines
_2013_0.pdf.
24 'Drinking Water Coverage', Starred Question No. 199,
Department of Drinking Water and Sanitation, Ministry of Jal
Shakti, Lok Sabha, answered on July 4, 2019. 25 'Piped Water Supply', Unstarred Question No. 2055,
Department of Drinking Water and Sanitation, Ministry of Jal
Shakti, Lok Sabha, answered on July 4, 2019.
26 'Providing access to safe and adequate drinking water to all
Indians is a priority of the Government', Press Information
Bureau, Ministry of Finance, July 5, 2019.
27 Evaluation of Rural Drinking Water Programmes, Committee
on Estimates 2014-15, Lok Sabha,
http://164.100.47.193/lsscommittee/Estimates/16_Estimates_2.p
df.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
## Annexure Table 6: State-Wise Coverage Under Ihhl (June 2019)
| Sr. No. | State | % households under IHHL |
|-------------|-------------------|-----------------------------|
| 1 | A & N ISLANDS | 100 |
| 2 | ANDHRA PRADESH | 100 |
| 3 | ARUNACHAL PRADESH | 100 |
| 4 | ASSAM | 100 |
| 5 | BIHAR | 100 |
| 6 | CHANDIGARH | 100 |
| 7 | CHHATTISGARH | 100 |
| 8 | D & N HAVELI | 100 |
| 9 | DAMAN & DIU | 100 |
| 10 | GOA | 76.22 |
| 11 | GUJARAT | 100 |
| 12 | HARYANA | 100 |
| 13 | HIMACHAL PRADESH | 100 |
| 14 | JAMMU & KASHMIR | 100 |
| 15 | JHARKHAND | 100 |
| 16 | KARNATAKA | 100 |
| 17 | KERALA | 100 |
| 18 | LAKSHADWEEP | 100 |
| 19 | MADHYA PRADESH | 100 |
| 20 | MAHARASHTRA | 100 |
| 21 | MANIPUR | 100 |
| 22 | MEGHALAYA | 100 |
| 23 | MIZORAM | 100 |
| 24 | NAGALAND | 100 |
| 25 | ODISHA | 88.14 |
| 26 | PUDUCHERRY | 100 |
| 27 | PUNJAB | 100 |
| 28 | RAJASTHAN | 100 |
| 29 | SIKKIM | 100 |
| 30 | TAMIL NADU | 100 |
| 31 | TELANGANA | 98.59 |
| 32 | TRIPURA | 100 |
| 33 | UTTAR PRADESH | 100 |
| 34 | UTTARAKHAND | 100 |
| 35 | WEST BENGAL | 100 |
Sources: Sources: Management Information System Reports of SBM; PRS.
| State | Total Villages | Total declared | Total Verified | % Verified |
|----------------|-------------------|-------------------|-------------------|---------------|
| A & N Islands | 192 | 192 | 192 | 100.0% |
| Andhra Pradesh | 18,841 | 18,841 | 18,841 | 100.0% |
| Arunachal | | | | |
| Pradesh | 5,389 | 5,389 | 5,389 | 100.0% |
| Assam | 25,503 | 25,503 | 17,939 | 70.3% |
| Bihar | 38,759 | 33,345 | 11,532 | 34.6% |
| Chandigarh | 13 | 13 | 13 | 100.0% |
| Chhattisgarh* | 18,769 | 18,769 | 18,769 | 100.0% |
| D & N Haveli | 69 | 69 | 69 | 100.0% |
| Daman & Diu | 26 | 26 | 26 | 100.0% |
| Goa | 378 | 22 | - | 0.0% |
| Gujarat | 18,261 | 18,261 | 18,261 | 100.0% |
| Haryana | 6,908 | 6,908 | 6,908 | 100.0% |
| Himachal | | | | |
| Pradesh | 15,921 | 15,921 | 15,921 | 100.0% |
| Jammu & | | | | |
| Kashmir | 7,565 | 7,565 | 7,493 | 99.0% |
| Jharkhand | 29,564 | 29,564 | 25,091 | 84.9% |
| Karnataka | 27,044 | 27,044 | 26,890 | 99.4% |
| Kerala | 2,027 | 2,027 | 2,027 | 100.0% |
| Lakshadweep | 9 | 9 | - | 0.0% |
| Madhya | | | | |
| Pradesh | 50,228 | 50,228 | 49,504 | 98.6% |
| Maharashtra | 40,503 | 40,501 | 40,501 | 100.0% |
| Manipur | 2,556 | 2,556 | 2,556 | 100.0% |
| Meghalaya | 6,028 | 6,028 | 6,028 | 100.0% |
| Mizoram | 697 | 697 | 697 | 100.0% |
| Nagaland | 1,451 | 1,451 | 1,142 | 78.7% |
| Odisha | 47,227 | 23,863 | 16,605 | 69.6% |
| Puducherry | 265 | 265 | 265 | 100.0% |
| Punjab | 13,726 | 13,726 | 13,700 | 99.8% |
| Rajasthan | 42,869 | 42,869 | 42,869 | 100.0% |
| Sikkim | 442 | 442 | 442 | 100.0% |
| Tamil Nadu | 12,524 | 12,524 | 12,524 | 100.0% |
| Telangana | 10,993 | 8,331 | 5,957 | 71.5% |
| Tripura | 1,178 | 1,178 | 554 | 47.0% |
| Uttar Pradesh | 97,641 | 97,641 | 85,501 | 87.6% |
| Uttarakhand | 15,473 | 15,473 | 15,473 | 100.0% |
| West Bengal | 41,461 | 41,459 | 41,373 | 99.8% |
| Total | 6,00,500 | 5,68,700 | 5,11,052 | 89.9% |
Sources: Management Information System Reports of SBM; PRS. Note: The total number of villages is taken from Census 2011.
| No of fully coverered | No of partially covered |
|--------------------------|----------------------------|
| State | |
| Total no of | |
| habitations | habitations |
| ANDAMAN AND | |
| NICOBAR | |
| 400 | 324 |
| ANDHRA PRADESH | |
| 48,895 | 34,673 |
| ARUNACHAL | |
| PRADESH | |
| 7,525 | 3,303 |
| ASSAM | |
| 88,076 | 55,171 |
| BIHAR | |
| 1,10,218 | 70,982 |
| CHATTISGARH | |
| 74,753 | 72,775 |
| GOA | |
| 347 | 345 |
| GUJARAT | |
| 35,996 | 35,996 |
| HARYANA | |
| 7,655 | 7,305 |
| HIMACHAL | |
| PRADESH | |
| 54,469 | 42,583 |
| JAMMU AND | |
| KASHMIR | |
| 15,778 | 9,481 |
| JHARKHAND | |
| 1,20,591 | 1,19,724 |
| KARNATAKA | |
| 59,774 | 34,342 |
| KERALA | |
| 21,520 | 6,144 |
| MADHYA PRADESH | |
| 1,28,231 | 1,28,076 |
| MAHARASHTRA | |
| 99,641 | 84,709 |
| MANIPUR | |
| 2,976 | 2,050 |
| MEGHALAYA | |
| 10,470 | 4,124 |
| MIZORAM | |
| 720 | 490 |
| NAGALAND | |
| 1,450 | 742 |
| ODISHA | |
| 1,57,013 | 1,54,461 |
| PUDUCHERRY | |
| 266 | 153 |
| PUNJAB | |
| 15,190 | 10,406 |
| RAJASTHAN | |
| 1,21,526 | 61,641 |
| SIKKIM | |
| 2,337 | 861 |
| TAMIL NADU | |
| 1,00,014 | 96,796 |
| TELANGANA | |
| 24,597 | 15,405 |
| TRIPURA | |
| 8,723 | 4,992 |
| UTTAR PRADESH | |
| 2,60,018 | 2,56,865 |
| UTTARAKHAND | |
| 39,311 | 23,156 |
| WEST BENGAL | |
| 1,07,328 | 59,405 |
| Total | |
| 17,25,808 | 13,97,480 |
Sources: Starred Question No. 199, Ministry of Jal Shakti, Lok Sabha; PRS.
% of total household
State
Total Rural households
Household PWS Connections
(as on 07/07/2019)
connections with PWS
ANDAMAN & NICOBAR
65,096
6,604
10.2%
ANDHRA PRADESH
91,29,939
30,60,696
33.5%
ARUNACHAL PRADESH
2,20,826
19,998
9.1%
ASSAM
57,92,987
1,27,962
2.2%
BIHAR
1,78,46,077
3,36,178
1.9%
CHHATTISGARH
43,17,108
3,85,296
8.9%
GOA
1,61,459
0
0.0%
GUJARAT
64,77,917
50,82,540
78.5%
HARYANA
32,88,145
17,58,292
53.5%
HIMACHAL PRADESH
13,48,841
7,59,047
56.3%
JAMMU & KASHMIR
16,36,151
4,91,152
30.0%
JHARKHAND
50,28,402
2,88,692
5.7%
KARNATAKA
80,72,422
35,36,334
43.8%
KERALA
91,75,250
15,36,707
16.8%
MADHYA PRADESH
1,08,90,226
13,26,738
12.2%
MAHARASHTRA
1,32,03,245
50,74,816
38.4%
MANIPUR
4,38,943
24,512
5.6%
MEGHALAYA
4,60,527
4,359
1.0%
MIZORAM
1,03,949
16,359
15.7%
NAGALAND
3,17,975
15,559
4.9%
ODISHA
81,25,852
3,19,955
3.9%
PUDUCHERRY
82,258
41,418
50.4%
PUNJAB
33,01,599
17,57,459
53.2%
RAJASTHAN
92,84,150
11,49,036
12.4%
SIKKIM
88,013
87,431
99.3%
TAMIL NADU
98,62,767
29,33,243
29.7%
TELANGANA
54,09,686
18,13,791
33.5%
TRIPURA
8,59,052
27,358
3.2%
UTTAR PRADESH
2,58,81,064
3,45,452
1.3%
UTTARAKHAND
15,09,758
2,16,182
14.3%
WEST BENGAL
1,63,35,210
2,14,683
1.3%
TOTAL
17,87,14,894
3,27,57,849
18.3%
Sources: Integrated Management Information System Reports 2019-20, National Rural Drinking Water Programme; PRS. |
65c43cfe57bc5671070682c0 | budget_reports |
## Demand For Grants 2018-19 Analysis Railways
The Railways finances were presented on February 1, 2018 by the Finance Minister Mr. Arun Jaitley along with the Union Budget 2018-19. The Ministry of Railways manages the administration of Indian Railways and policy formation through the Railway Board. Indian Railways is a departmental commercial undertaking of the government.1 This note looks at the proposed expenditure of the Ministry of Railways for the year 2018-19, its finances over the last few years, and issues with the same.
## Key Highlights
Outlay: The total proposed capital outlay (or
capital expenditure) for 2018-19 is Rs 1,48,528 crore which is a 24% increase from the 2017-18 revised estimates (Rs 1,20,000 crore).
Revenue: Railways' revenue for 2018-19 is
estimated at Rs 2,01,090 crore which is a 7% increase from the revised estimates of 2017-18.
Traffic revenue: Total revenue from traffic for
2018-19 is estimated at Rs 2,00,840 crore, which is a 7% increase from the revised estimates of 2017- 18. Revenue from both freight and passenger traffic is expected to grow by 4% each. In 2017-18 (revised estimates), the revenue from freight traffic increased by 13%, while revenue from passenger traffic increased by 4%.
Expenditure: Total expenditure for 2018-19 is
projected at Rs 1,88,100 crore which is a 4% increase from the revised estimates of 2017-18. In
2017-18 (revised estimates), total expenditure increased by 13%.
## 2018-19 Budget Announcements
Key announcements and proposals related to Railways made in Budget 2018-19 include:
Railway infrastructure: A large part of the
proposed capital expenditure will be devoted to capacity creation. 18,000 km of doubling, third and fourth line works and 5,000 km of gauge conversion will be undertaken to eliminate capacity issues and transform the entire network into broad gauge.
About 12,000 wagons, 5,160 coaches and approximately 700 locomotives will be procured during 2018-19 for the Eastern and Western Dedicated Freight Corridors. A major programme has also been initiated to strengthen infrastructure at the goods sheds and fast track commissioning of private sidings.
Tel: (011) 2323 4801-02, 4343 4035-36
4,267 unmanned level crossings in the broad gauge network will be eliminated in the next two years.
Modern train-sets with state-of-the-art amenities and features are being designed at the Integrated Coach Factory, Perambur. The first train set will be commissioned this year.
A specialised Railways university will be set up at Vadodara. The University will train manpower required for high speed projects.
Station development: All stations with more than
25,000 footfalls will have escalators. All railway stations and trains will be progressively provided with wi-fi. CCTVs will be provided at all stations and on trains to enhance passenger security.
Suburban Railways: In the Mumbai suburban
network, 150 km of additional suburban network is being planned at a cost of over Rs 40,000 crore, including elevated corridors on some sections. A suburban network of 160 km at an estimated cost of Rs 17,000 crore is being planned for Bengaluru.
## Overview Of Finances2,3 Sustainability Of Railways Finances
In the last few years, Railways has been struggling to run
its transportation business, and generate its own revenue.
The growth rate of Railways' earnings from its core
business of running freight and passenger trains has been
declining. This is due to a decline in the growth of both
freight and passenger traffic (see Figure 1). Railways is
also slowly losing traffic share to other modes of
transport. The share of Railways in total freight traffic
has declined from 89% in 1950-51 to 30% in 2011-12.4
% Growth in passenger volume
Note: RE - Revised Estimates; BE - Budget Estimates.
Sources: Railways Budget Documents; PRS. On the other hand, Railways' primary expenditure, which is towards the payment of salaries and pension, has been gradually increasing (with a jump in 2016-17
due to implementation of Pay Commission recommendations). There is an increasing expenditure on pension too, which is unproductive, as this does not generate any revenue for the Railways. The pension bill is expected to increase further in the years to come, as about 40% of the Railways staff was above the age of 50
years in 2016-17.5
A decline in internal revenue generation has meant that Railways funds its capital expenditure through budgetary support from the central government and external borrowings. While the support from central government has mostly remained consistent, Railways' external borrowings have been increasing. Various committees have noted that an increased reliance on borrowings will further exacerbate the financial situation of Railways.6,7
## Railways' Revenue
Indian Railways has three primary sources of revenue: (i) its own internal resources (revenue from freight and passenger traffic, leasing of railway land, etc.), (ii) budgetary support from the central government, and (iii) extra budgetary resources (such as market borrowings, institutional financing).8
## Gross Budgetary Support (Gbs)
The central government supports Railways in the form of GBS, in order to expand its network and invest in capital expenditure. In 2018-19, the gross budgetary support from central government is proposed at Rs 55,088 crore. This is a 38% increase from the revised estimates of 2017-18 (Rs 41,813 crore). However, note that, in 2017- 18 (revised estimates) GBS decreased by 12%. That is, the central government gave Railways Rs 5,231 crore less than what it had allocated in 2016-17.
## Internal Resources
Railways earns its internal revenue primarily from passenger and freight traffic. In 2016-17, freight traffic contributed to about 63% of the internal revenue. In comparison, passenger traffic contributed to about 28% of the internal revenue. In 2018-19, Railways expects to earn 61% of its internal revenue from freight and 26% from passenger traffic. The remaining 10% is earned through other miscellaneous sources such as parcel service, coaching receipts, and platform tickets.
Passenger traffic and revenue: In 2018-19, Railways expects to earn Rs 52,000 crore from passenger traffic, an increase of 4% over the revised estimates of 2017-18. The growth in passenger traffic for 2018-19 is estimated at 0.2%. In 2017-18 (revised estimates), revenue from passenger traffic increased by 4%, and passenger traffic increased by 0.7%.
Freight traffic and revenue: In 2017-18, revenue from freight traffic was Rs 1,17,500 crore (revised estimates). In 2018-19, Railways expects to earn Rs 1,21,950 crore from goods traffic, an increase of 4% from the revised estimates. In 2016-17 (latest actuals available), Railways generated most of its freight revenue from the transportation of coal (43%), followed by cement (8%), and foodgrains (7%) (see Figure 2).
In order to improve freight traffic, in 2017-18, the
Railways Ministry implemented several policies such as:
(i) liberalising automatic freight rebate scheme in empty
flow directions (routes with low freight traffic), (ii)
getting into long term tariff contracts with key freight
customers, and (iii) introducing double stack dwarf
containers as a new delivery model to increase
loadability of trains.9
Sources: Statement of Revenue Receipts and Expenditure 2018-19, Ministry of Railways; PRS.
## Extra Budgetary Resources (Ebr)
EBR includes market borrowings, financing from banks,
external investments, etc. External investments in Indian
Railways could be in the form of public private
partnerships (PPPs), joint ventures (JVs), or market
financing by attracting private investors to buy bonds or
equity shares in Railways. Most of Railways EBR
comes in the form of market borrowings from the Indian
Railways Finance Corporation (IRFC).6
In 2018-19, Rs 81,940 crore is estimated to be raised
through EBR, which is an increase of 19% over revised
estimates of 2017-18 (Rs 69,100 crore).
## Capital Outlay
The total proposed capital outlay (amount spent on
capital expenditure) for 2018-19 is Rs 1,48,528 crore.
This is about 24% higher than the revised plan outlay for
2017-18 (Rs 1,20,000 crore).
2016-17
Actuals
2017-18
Revised
2018-19
Budget
% Change
(BE 2018-
19/ RE
2017-18)
52,579
69,100
81,940
19%
Extra Budgetary Resources
45,232
40,000
55,088
38%
Gross Budgetary Support
12,125
10,900
11,500
6%
Internal Resources Total
109,935
120,000
148,528
24%
Note: RE - Revised Estimates; BE - Budget Estimates. Sources: Notes on Demand for Grants for Ministry of Railways, 2018- 19; PRS.
Majority of this capital expenditure will be financed through extra budgetary resources (55%), followed by the budgetary support from the central government (37%). Railways will fund only 8% of this capital expenditure from its own internal resources. Figure 3
below shows the trends in capital outlay over the last decade. Railways continues to operate as a commercial undertaking, but its capability to increase its own revenue stream has been declining.
Note: RE - Revised Estimates, BE - Budget Estimates.
Sources: Railways Budget documents 2009-18; PRS.
## Challenges In Raising Revenue
The Committee on Restructuring Railways (2015) had observed that raising revenue for Railways is a challenge because: (i) investment is made in projects that do not have traffic and hence do not generate revenue, (ii) the unbalanced mix of passenger and freight traffic does not help generate revenue, (iii) the efficiency improvements do not result in increasing revenue, and (iv) delays in projects results in cost escalation, which makes it difficult to recover costs.6
## Social Service Obligations Of The Railways
The NITI Aayog (2016) had noted that Indian Railways carries out various activities in national interest which are not driven strictly by commercial principles.10
Railways' passenger business faced losses of about Rs
33,000 crore in 2014-15 due to its social service obligations.10 Such social service obligations include: (i) pricing essential commodities lower than cost, (ii) low fares (cheaper tickets for second class travel) and passenger concessions (such as cheaper tickets for senior citizens, army veterans), (iii) uneconomic branch lines, and (iv) new lines not yet profitable. However, NITI Aayog had also noted that the data related to the cost of running passenger business is not scientific and accurate. Therefore, it is difficult to compute accurately the levels of under-recoveries. The calculation of social costs does not factor the efficiency of various expenditures (whether fuel consumption is optimal, maintenance practices and costs are reasonable, etc.).10 The calculation also does not factor in Railways' potential to leverage existing assets (such as stations, land banks) that could increase its revenue sources.10
The Standing Committee on Railways (2017) had
recommended that the Ministry of Finance should
reimburse the Ministry of Railways on losses made on
all strategically important lines.11 Till 2016-17, the
Ministry of Finance was reimbursing Railways for
operational losses on six strategic lines.
## Railways' Expenditure
In 2016-17 (latest actuals available), Indian Railways
spent most of its money on staff (41%), followed by
expenses on pension fund (21%), and fuel (17%). In
2018-19, the total expenditure is estimated at Rs
1,88,100 crore which is a 4% increase over the revised
estimates of 2017-18.
## Staff Wages And Pension
Staff wages and pension together comprise more than
half of the Railways' expenditure. As per the revised
estimates of 2017-18, the expenditure on Railway staff
(Rs 72,706 crore) was higher than the expenditure in
2016-17 by 4%, and the expenditure in 2015-16 by 28%.
This was due to the implementation of the Seventh Pay
Commission in 2016-17.
In 2017-18 (revised estimates), Rs 44,200 crore was
allocated to the Pension Fund. Therefore, the total
expenditure on staff and pension in 2017-18 was Rs
1,16,906 crore, which is about 65% of the total
expenditure that year.
For 2018-19, the expenditure on staff is estimated at Rs
76,452 crore. Allocation to the Pension Fund is
estimated at Rs 47,600 crore. These would constitute
about 66% of the Railways' expenditure in 2018-19.
The Committee on Restructuring Railways (2015) had
observed that the expenditure on staff is extremely high
and unmanageable. This expense is not under the
control of Railways and keeps increasing with each Pay
Commission revision.6 It has also been observed that
employee costs (including pensions) is one of the key
components that reduces Railways' ability to generate
surplus, and allocate resources towards operations.6
## Fuel And Electricity
The expense on fuel and electricity increased by 5%,
from Rs 28,300 crore in 2016-17 to Rs 29,808 crore in
2017-18 (revised estimates). In 2018-19, the expense on
fuel and electricity is estimated to be Rs 30,328 crore.
## Depreciation Reserve Fund (Drf)
Appropriation to the DRF is made annually based on the
recommendations of the Railways Convention
Committee, and is intended to finance the costs of new
assets replacing the old ones.7 The Standing Committee
on Railways (2015) had observed that appropriation to
the DRF is obtained as a residual after payment of the
dividend and appropriation to the Pension Fund, instead
of the actual requirement for maintenance of assets.7
In the last few years, appropriation to the DRF has
decreased significantly. In 2016-17, appropriation to the
DRF was Rs 5,200 crore. This means that Railways
spent Rs 5,200 crore on asset maintenance in 2016-17, as
compared to Rs 7,775 and Rs 5,500 in 2014-15 and 2015-16 respectively. Under-provisioning for the DRF has been observed as one of the reasons behind the decline in track renewals, and procurement of wagons and coaches.6,7
In 2018-19, appropriation to the DRF is estimated at Rs 500 crore, 90% lower than the revised estimates of 2017- 18 (Rs 5,000 crore). Provisioning Rs 500 crore towards depreciation might be an extremely small amount considering the scale of infrastructure managed by the Indian Railways.
## Improving Railways Infrastructure
In this Budget Speech, the Finance Minister announced that a large part of the proposed capital expenditure will be devoted to capacity creation, and track improvement. The Railways Convention Committee (2017) had noted that while rail traffic has increased more than 14 times between 1950 and 2014, the track infrastructure has not increased at an equivalent pace. This has been attributed to significant under-investment in the Railways. Tracks are subjected to heavy wear and tear, and need to be maintained and upgraded periodically. The Sam Pitroda Committee on Railway Modernisation (2012) had recommended modernisation of 19,000 km of tracks between 2012 and 2017. Poor track infrastructure also leads to safety concerns. Majority of Railway accidents (about 60%) are caused due to derailments. The Standing Committee on Railways (2016) had noted that one of the reasons for derailments is defect in the track or rolling stock. It had recommended that 4,500 km of track length should be renewed annually. However, in 2015-16, 2,828 km of track length was commissioned which included 813 km of new lines, 1,043 km of gauge conversion and 972 km of doubling. The achievements were expected to be on similar lines for 2016-17. For 2017-18, Railways had set a target of 3,500 km for network expansion.
Sources: 16th Report: Track Upgradation and Modernisation, Railway
Convention Committee, August 10, 2017; 13th Report: Demands for Grants
(2017-18)", Standing Committee on Railways, March 10, 2017; 12th Report:
Safety and security in Railways", Standing Committee on Railways,
December 14, 2016; PRS.
## Safety
Last year, the Rashtriya Rail Sanraksha Kosh was created to provide for passenger safety in Railways. It was to have a corpus of Rs one lakh crore over a period of five years (Rs 20,000 crore per year). The central government was to provide a seed amount of Rs 1,000 crore, and the remaining amount would be raised by the Railways from their own revenues or other sources. As per the revised estimates of 2017-18, no money was allocated towards this fund. In 2018-19, Rs 5,000 crore has been allocated for it. With the Railways struggling to meet its expenditure and declining internal revenues, it is unclear how Railways will fund the Rail Sanraksha Kosh. The fund will require an allocation of Rs 94,000 crore (minus the central government's proposed contribution, and this year's allocation) for the next three years (considering a five-year period for the corpus).
Railways used to have a Railway Safety Fund which
received about 3% of allocation in the capital outlay. In
2015-16 (actuals), Rs 2,661 crore was allocated to this
fund. Since 2016-17, no allocations have been made to
this fund.
## Dividend
Railways used to pay a return on the budgetary support it
received from the government (GBS) every year, known
as dividend. The rate of this dividend was determined by
the Railways Convention Committee, and was about 5%
in 2016-17.7 From 2016-17, the requirement of paying
dividend was waived off. The last dividend amount paid
was in 2015-16, which was Rs 8,722 crore.
The Standing Committee on Railways (2017) had noted
that part of the benefit from dividend is being utilised to
meet the shortfall in the traffic earnings of Railways.11 It
had noted that this defeats the purpose of removing the
dividend liabilities since they are not utilised in creating
assets or increasing the net revenue of Railways.
## Surplus And Operating Ratio
Railways' surplus is calculated as the difference between
its total revenue (total traffic receipts and other
miscellaneous receipts) and total expenditure (working
expenses and appropriation to pension and depreciation
funds). In 2018-19, Railways expects to generate a
surplus of Rs 12,990 crore. This is a 102% increase
from the revised estimates of 2017-18 (Rs 6,425 crore).
In 2017-18, Railways' surplus increased by 31% (Rs
1,512 crore).
Operating Ratio is the ratio of the working expenditure
(expenses arising from day-to-day operations of
Railways) to the revenue earned from traffic. Therefore,
a higher ratio indicates a poorer ability to generate
surplus that can be used for capital investments such as
laying new lines, deploying more coaches, etc.
The Operating Ratio for 2018-19 is projected at 92.8%.
In 2017-18 (revised estimates), the Operating Ratio was
96% (see Figure 4).
Notes: Numbers for 2017-18 are Budget Estimates vs Revised Estimates. Sources: Railways Budget documents 2009-2018; PRS.
http://164.100.47.134/lsscommittee/Railways/16_Railways_4.pdf. 8 Railways Budget documents for the years 2005-2018. 9 "Year End Review 2017 of Ministry of Railways", Press Information Bureau, Ministry of Railways, December 29, 2017. 10 Reviewing the Impact of "Social Service Obligations" by Indian Railways, NITI Aayog, September 2016, http://niti.gov.in/writereaddata/files/document_publication/Social-Costs.pdf. 11 "13th Report: Demands for Grants (2017-18)", Standing Committee on Railways, March 10, 2017, http://164.100.47.193/lsscommittee/Railways/16_Railways_13.pdf. DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for noncommercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
## Annexure Appendix I: Railways Budget 2018-19 Summary
Table 2: Railways Revenue and Expenditure for 2018-19 (in Rs crore)
2016-17
Actuals
2017-18
Budget
% Change
(2017-18 RE/
2018-19
Budget
Estimates
2017-18
Revised
Estimates
2016-17 Actuals)
Estimates
% Change
(2018-19 BE/
2017-18 RE)
Receipts
1
Gross Traffic Receipts
165,289
188,998
187,225
13%
200,840
7%
2
Miscellaneous
90
500
200
122%
250
25%
3
Total Revenue (1+2)
165,382
189,498
187,425
13%
201,090
7%
Expenditure
4
Ordinary Working Expenses
118,830
129,750
130,200
10%
138,000
6%
5,200
5,000
5,000
-4%
500
-90%
5
Appropriation to Depreciation Reserve Fund
6
Appropriation to Pension Fund
35,000
43,600
44,100
26%
47,500
8%
7
Total Working Expenditure (4+5+6)
159,030
178,350
179,300
13%
186,000
4%
8
Miscellaneous
1,440
2,200
1,700
18%
2,100
24%
9
Total Expenditure (7+8)
160,469
180,550
181,000
13%
188,100
4%
10
Net Surplus (3-9)
4,913
8,948
6,425
31%
12,990
102%
2,515
2,000
1,500
-40%
1,000
-33%
11
Appropriation to Railway Development Fund
12
Appropriation to Capital Fund
2,398
5,948
4,925
105%
6,990
42%
13
Appropriation to Debt Service Fund
-
-
-
-
-
-
0
1,000
0
0%
5,000
-
14
Appropriation to Rashtriya Rail Sanraksha Kosh
15
Operating Ratio
96.5%
94.57%
96.0%
-
92.8%
-
Note: RE - Revised Estimate, BE - Budget Estimate. Sources: Statement of Revenue Receipts and Expenditure, Railways Budget 2018-19; PRS.
## Explanatory Notes Performance Parameters
1.
'Net Surplus' represents excess of receipts over expenditure after the Dividend liability (payment for investment in Railway capital) of General Revenues has been paid off.
2.
'Operating Ratio' is the ratio of operating expenses to receipts. A lower ratio indicates higher surplus availability for investments.
## Railway Funds
3.
Depreciation Reserve Fund - Finances the cost of new assets replacing old assets including the cost of any improved features.
Appropriation to this fund are made on the recommendations of the Railway Convention Committee (RCC).
4.
Pension Fund - Finances all pension payments to retired Railway staff.
## Appendix Ii: Details Of Freight And Passenger Traffic
Table 3: Freight traffic details (NTKM in millions; Earnings in Rs crore)
2016-17 Actuals
2017-18 Revised
2018-19 Budget
% Change 2018-19
Estimates
% Change 2017-18
RE/ 2016-17 Actuals
Estimates
BE/ 2017-18 RE
Commodity
NTKM
Earnings
NTKM
Earnings
NTKM
Earnings
NTKM
Earnings
NTKM
Earnings
Coal
249,615
45,229
253,261
49,907
1%
10%
263,304
51,820
4%
4%
12,461
2,062
12,092
2,122
-3%
3%
12,811
2,204
6%
4%
Raw materials for steel plants except iron Pig Iron & finished steel
44,027
7,672
46,296
8,646
5%
13%
47,909
8,842
3%
2%
Iron Ore
39,743
8,176
47,959
10,485
21%
28%
49,763
10,753
4%
3%
Cement
54,600
8,630
59,504
9,969
9%
16%
61,596
10,163
4%
2%
Foodgrains
57,809
7,506
61,386
8,453
6%
13%
66,250
9,017
8%
7%
Fertilisers
39,216
5,561
39,572
5,951
1%
7%
41,900
6,229
6%
5%
Petroleum & Lubricants
28,518
5,686
27,378
5,788
-4%
2%
28,575
5,973
4%
3%
Container Service
44,294
4,716
49,013
5,587
11%
18%
51,923
5,894
6%
5%
Other Goods
49,891
6,790
55,779
8,050
12%
19%
59,130
8,435
6%
5%
Miscellaneous earnings
-
2,311
-
2,543
0%
10%
-
2,620
0%
3%
Total
620,174
104,339
652,240
117,500
5%
13%
683,161
121,950
5%
4%
Notes: NTKM - Net Tonne Kilometre (1 NTKM is the net weight of goods carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates. Sources: Statement of Revenue Receipts and Expenditure, Railways Budget 2018-19; PRS.
| | | 2016-17 Actuals |
|---------------------|----------------|--------------------|
| 2017-18 Revised | 2018-19 Budget | % Change 2018-19 |
| Estimates | | |
| % Change 2017-18 | | |
| RE/ 2016-17 Actuals | Estimates | BE/ 2017-18 RE |
| | PKM | Earnings |
| Suburban | | |
| | | |
| First Class | 8,783 | 356 |
| 136,634 | 2,334 | 137,347 |
| Second Class | | |
| (Ordinary) | | |
| Total Suburban | 145,417 | 2,689 |
| Non Suburban | | |
| | | |
| AC First class | 1,796 | 497 |
| AC Sleeper | 23,806 | 3,494 |
| AC 3 Tier | 72,315 | 9,263 |
| Executive Class | 463 | 145 |
| AC Chair Car | 11,546 | 1,539 |
| First Class (M&E) | 85 | 14 |
| 345 | 13 | 367 |
| First Class | | |
| (ordinary) | | |
| 289,015 | 13,194 | 289,047 |
| Sleeper Class | | |
| (M&E) | | |
| 3,842 | 152 | 3,646 |
| Sleeper Class | | |
| (ordinary) | | |
| 341,182 | 9,886 | 350,699 |
| Second Class | | |
| (M&E) | | |
| 260,024 | 5,394 | 261,436 |
| Second Class | | |
| (Ordinary) | | |
| 1,004,419 | 43,591 | 1,011,597 |
| Total Non- | | |
| Suburban | | |
| Total Passenger | 1,149,836 | 46,280 |
Notes: PKM - Passenger Kilometre (One PKM is when a passenger is carried for a kilometre); RE - Revised Estimates; BE - Budget Estimates. Sources: Statement of Revenue Receipts and Expenditure, Railways Budget 2018-19; PRS. |
65c43cfe57bc5671070682a3 | budget_reports |
## Demand For Grants 2020-21 Analysis Telecommunications
The Department of Telecommunications under the Ministry of Communications is responsible for making policies, licensing, monitoring, regulation, research and international co-operation in the field of telecommunications. The Department operates several Public Sector Undertakings involved in providing telecommunication services, consultancy, and equipment manufacturing. This note presents the trends in expenditure and discusses some of the issues in the sector.
## Overview Of Finances Expenditure1,2
In 2020-21, the Department has been allocated Rs 66,432 crore, a 184% increase over the revised estimates of 2019-20. 61% of the allocation is towards revenue expenditure and the remaining 39% is towards capital expenditure. As shown in Table 1, in 2020-21, capital expenditure and revenue expenditure have increased by 422% and 121% over the revised estimates of 2019-20, respectively. The significant increase in allocation is to provide for the revival plan for BSNL and MTNL, which was approved by the Union Cabinet in October, 2019.3 A
total of Rs 37,268 crore has been allocated for this purpose (56% of total allocation). The revival plan provides for: (i) capital infusion for allotment of the 4G spectrum (capital expenditure), and (ii) costs to be incurred towards voluntary retirement scheme.3
Excluding the revival plan, total expenditure is budgeted to grow at 25% over the revised estimates of
2019-20, with growth in revenue expenditure at 30%
and that in capital expenditure at 7%.
| 2019-20 | 2020-21 |
|------------|------------|
| | |
| 2018-19 | |
| Actuals | RE |
| % change | |
| (RE 2019- | |
| 20 to BE | |
| 2020-21) | |
| Revenue | 18,492 |
| Capital | 2,114 |
| Total | 20,606 |
Sources: Demand No. 13, Department of Telecom, 2020-21, PRS.
Figure 1 shows the trend in actual expenditure during the 2010-21 period. During the 2010-20 period, actual expenditure has increased at an annual average growth rate of 13.8%. The higher increase in expenditure since 2015-16 as compared to previous years is due to allocation towards BharatNet (a scheme to connect all gram panchayats by broadband), and Optical Fibre Network for Defence Services scheme.
Saket Surya [email protected] Tel: (011) 43434035, 23234801 www.prsindia.org As seen in Figure 2, funds allocated to the Department have been underutilised in general, except in 2015-16 and 2016-17, where actual expenditure exceeded budget estimates by 52% and 29% respectively. In 2015-16, the increased expenditure was mainly due to allocation for a refund of upfront charges to BSNL and MTNL towards surrender of certain spectrum. In 2016- 17, it was due to increased allocation towards BharatNet at the revised stage. In 2018-19, actual expenditure was 27% less than the budgeted expenditure. As per the revised estimates of 2019-20, 85% of the allotted funds will be utilised.
Note: Revised Estimates used for 2019-20. Budget Estimates used for 2020-21. Sources: Demands of Department of Telecom, 2010-21; PRS.
Note: BE: Budget Estimates; Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2010-20; PRS.
## Major Expenditure Heads
In 2020-21, 57% of the total allocation is towards support to PSUs (Rs 38,045 crore). This is mainly to provide for the revival plan of BSNL and MTNL (Table 3). Expenditure on pensions continues to be a high proportion of the Department's expenditure (Figure 3). In 2020-21, 21% of the total allocation is towards pension (Rs 13,982 crore). Rs 6,000 crore has been allocated towards the BharatNet scheme (9% of the total allocation). Under the expenditure head "Compensation to Telecom Service Providers", funds are being provided to finance various schemes for the creation and augmentation of telecom infrastructure and services in rural and remote areas.
Head
Actuals
RE
BE
2018-19
2019-20
2020-21
% Change
(RE 2019-
20 to BE
2020-21)
437
1,284
38,045
2863%
Total support to PSUs Pension
11,991
13,190
13,982
6%
BharatNet
4,316
2,000
6,000
200%
1,927
4,725
5,000
6%
Network for defence services
473
1,000
2,000
100%
Compensation to TSPs Others
1,056
1,211
1,265
4%
Total
20,606
23,350
66,432
184%
Budget Estimates. Sources: Demand No. 13, Department of Telecom, 2020-21, PRS.
% of the
Expenditure Head
2020-21
total
BE
allocation
Capital infusion in BSNL for 4G spectrum
14,115
21%
Capital infusion in MTNL for 4G spectrum
6,295
9%
Ex-gratia for retiring employees of BSNL/MTNL
9,890
15%
Implementation of VRS (BSNL/MTNL)
3,295
5%
Grants-in-aid to BSNL for payment of GST
2,541
4%
Grants-in-aid to MTNL for payment of GST
1,133
2%
Financial Infusion to ITIL
405
1%
Others
372
1%
Total
38,045
57%
Note: ITIL: Indian Telephone Industries Limited. Sources: Demand No. 13, Department of Telecom, 2020-21, PRS.
## Universal Service Obligation Fund
The Universal Service Obligation Fund (USOF) was established to provide widespread, non-discriminatory, and affordable access to quality information and communication technology services to people in rural and remote areas. Resources for this fund are raised through a Universal Access Levy (UAL) which is 5% of the Adjusted Gross Revenue (AGR) earned by all the operators under various licenses currently.4 Adjusted Gross Revenue is the value of gross revenue after deduction of taxes and roaming/PSTN charges from Gross Revenue. UAL is first credited to the Consolidated Fund of India and then disbursed to the USOF. The ongoing schemes funded through USOF include: (i) BharatNet, (ii) setting up of towers in left-wing extremism affected areas, and (iii) comprehensive telecom development plan for the north-east region. A total expenditure of Rs 8,000 crore from this fund has been planned for 2020-21. This is an increase of 167% over the revised estimates of 2019-20. However, note that in 2019-20, only 36% (Rs 3,000 crore) of the budgeted allocation (Rs 8,350 crore) is estimated to be utilised (revised estimates). During the 2011-21 period, expenditure from the USOF has grown at an annual average growth rate of 18.9%.
Note: Revised Estimates used for 2019-20. Budget Estimates used for 2020-21. Sources: Demands of Department of Telecom, 2011-21; PRS. Note: Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2011-20; PRS.
Figure 5 depicts the trend in fund utilisation under the USOF during the 2011-20 period. The fund utilisation has been low in the last three years. In the years 2017- 18 and 2018-19, only 60% and 48% of the allocation was utilised respectively. As per the revised estimates, in 2019-20, only 36% of the allocation from USOF will be utilised. Balance of Funds under USOF: In its audit report of the Ministry of Communications for the FY 2017-18, the Comptroller and Auditor General of India (CAG) observed that a large amount earned as Universal Access Levy (UAL) is yet to be transferred to the Universal Service Obligation Fund (USOF).5 By the end of 2019-20, a total of Rs 51,552 crore remains to be transferred to the USOF by the central government.6
The disbursal to the USOF has been only a small fraction of UAL over the years. A total of Rs 70,198 crore has been earned as UAL during the 2010-20 period, out of which only Rs 32,465 crore has been disbursed (46%).6
As shown in Figure 6, the gap between disbursal and UAL has been high over the years, which has led to a rise in balance. In January 2015, the Telecom Regulatory Authority of India (TRAI) had observed that the Department has not been able to devise enough schemes to utilise the earnings of UAL.7 It also recommended reducing UAL from 5% to 3%.7
Note: UAL: Universal Access Levy; Disbursal: Amount transferred to USOF; Balance: Balance at the end of that Financial Year. Sources: USOF Website as accessed on February 7, 2020; PRS.
In March 2018, the Standing Committee on Information Technology noted that with increasing outlay on schemes including BharatNet, Mobile Towers in Left Wing Extremism Affected Areas and Comprehensive Telecom Development Plan for the North-East, utilisation of USOF funds will improve.4
Progress of comprehensive telecom development plan for the north-east region: The comprehensive development plan for the north-east region was approved in September 2014 to: (i) install 6,673 mobile towers at 8,621 identified uncovered villages, (ii) install 321 mobile towers along the national highways, and
(iii) strengthen the transmission network in the region.8
The Standing Committee on Information Technology (2019) made following observations regarding the plan:
In 2018-19, no amount was utilised from the budget allocation of Rs 400 crore. Similarly, in 2019-20, no amount has been proposed by the
Department at the revised estimates stage as compared to Rs 1,100 crore at the budget stage.
A total of 2004 towers were to be set up by October 2019, however, only 878 towers (44%) were installed as of October 22, 2019.
The Committee recommended forming an inquiry committee to establish responsibility for the
implementation failure of the plan so far.8
## Bharatnet
BharatNet aims to create a network to connect all the Gram Panchayats (approximately 2.5 lakh) by broadband by laying around 6.5 lakh km of optical fibre. It seeks to provide non-discriminatory access to the network to all the telecom service providers. These service providers include mobile operators, Internet Service Providers (ISPs), Cable TV operators, content providers. Bharat Broadband Network Limited (BBNL) is a special purpose vehicle to create, operate, maintain and manage the BharatNet infrastructure. The project is financed through the USOF. The estimated total cost of the project is Rs 42,068 crore.4
BharatNet is divided into three phases. Phase-I to connect 1.2 lakh panchayats was completed in December 2017. Phase-II to connect the remaining panchayats is underway, and phase-III is earmarked for future purposes. The scheme also aims to provide lastmile connectivity through Wi-Fi by creating five access points per GP (12.5 lakh Wi-Fi hotspots).9
As seen in Table 2, In 2020-21, the budget allocation of the scheme has increased by 200% over the revised estimates of the previous year. Note that, as per the revised estimates, only 33% of the allotted funds were utilised in 2019-20 (Figure 7). The corresponding figure for 2017-18 and 2018-19 was 44% and 53% respectively.
Note: BE: Budget Estimates; Revised Estimates used for 2019-20. Sources: Demands of Department of Telecom, 2015-20; PRS.
Delay in Completion: In March 2018, the Standing Committee on Information Technology noted that although approved in 2011, the initial target of BharatNet had to be revised in 2014 due to inadequate planning and design, and unpreparedness to address the issues.10 Under the revised deadline, phase-I was due by March 2017 but could be completed by December
2017.10 Phase-II, which was to be completed by March
2019, is not near completion and the target was revised to March 2020.10,11 Table 4 shows the status of BharatNet as of February 2020.12,13
| | Parameter | Target | Achievement In % |
|-----------------------|--------------|--------------|----------------------|
| Length of OFC laid* | 6.5 lakh km | 4.14 lakh km | 64% |
| 2.5 lakh | 1.48 lakh | 59% | Number of panchayats |
| where OFC laid* | | | |
| 2.5 lakh | 1.35 lakh | 54% | Number of panchayats |
| which are service- | | | |
| ready* | | | |
| 2.5 lakh | 0.45 lakh | 18% | Number of panchayats |
| where Wi-Fi installed | | | |
| # | | | |
| 2.5 lakh | 0.18 lakh | 7% | Number of panchayats |
| where Wi-Fi | | | |
| operational | | | |
| # | | | |
Note: *as of February 7, 2020, #as of February 10, 2020. Sources: Website of BBNL as accessed on February 10, 2020; PRS.
Under-utilisation of BharatNet network: The Standing Committee on Information Technology (2019) observed that efforts are required towards improving the uptime and utilisation of network infrastructure created under BharatNet.8 As on February 10, 2020, BharatNet had 12,91,780 users and total data used per month was 89,224 GB.13 This implies that average data consumption per user per month was around 71 MB.
## Network For Defence Services
This project aims to provide a dedicated pan-India optical fibre cable-based network for use by defence services. The original total sanctioned cost of the project is Rs 13,334 crore.4 In May 2018, the central government announced that the budget of the project has been increased to Rs 24,664 crore.14 BSNL is the implementing agency for the project. A total of 60,000 km of the optical fibre network is to be laid under this project. In 2020-21, the allocation to the scheme (Rs 5,000 crore) has increased by 6% over the revised estimates of the previous year (Table 2). The revised estimates of 2019-20 for the scheme was the same as the budget estimates of that year. Figure 8 shows the trend in fund utilisation under this scheme during 2015-20. In 2018- 19, only 43% of the budgeted fund was utilised. Delay in completion: The project was to be completed by July 2015.4 As of December 2019, 94% of the
60,000 km of optical fibre network has been laid.8 The revised deadline for completion was set for May 2020, however, the project is now estimated to be completed by December 2020.14 The Standing Committee on Information Technology (2018) observed that the delay has resulted in huge cost overruns from the initial estimation of Rs 8,098 crore in 2009 to Rs.24,664 crore in 2018.4
## Receipts15, 16
Communication services are one of the major sources of non-tax revenue of the central government. In 2016- 17, the non-tax revenue from communication services was the largest contributor to the non-tax revenue of the central government, accounting for 26% of the total non-tax revenue.17 This includes receipts from spectrum auctions, one-time fee from new operators and recurring license fees and spectrum charges from telecom service providers which is a percentage share of the Adjusted Gross Revenue (AGR) of the operators.
## Non-Tax Revenue
The projected non-tax revenue for 2020-21 from communication services is Rs 1,33,027 crore, 126% higher than the revised estimates of 2019-20 (Rs 58,990 crore). Although budget documents do not provide clarity, this increase may be due to anticipated recovery of past dues from the service providers as per a recent Supreme Court decision on the definition of gross revenue. It could also come from spectrum auction in the coming financial year. In 2019-20, the non-tax revenue from communication services is estimated to be 17% higher than the budget estimates. Note that the actual revenue in 2018-19 was 16% less than the budget estimates of that year.
| 2019-20 | 2020-21 | % |
|------------|------------|----------|
| | | |
| 2018-19 | | |
| Actuals | RE | BE |
| Total | | |
| 40,816 | 58,990 | 1,33,027 |
Note: RE: Revised Estimates; BE: Budget Estimates.
As shown in Figure 9, during the 2017-2020 period, non-tax revenue from communication services was lower as compared to earlier years in absolute terms. There was a decrease in the revenue of the telecom sector owing to stiff competition and aggressive pricing war.4 As per the budget estimates of 2020-21, the revenue is expected to show an upward trend. At the end of 2018-19, the arrears of non-tax revenue from communication services is 30% of the total arrears of non-tax revenue of the central government (Table 6).
Of the arrears of non-tax revenue overdue by less than a year, the arrears of communication services comprise of a major portion of the total arrears (80%).
| Duration | Arrears- |
|-------------|----------------|
| % share* | |
| (Year) | Communications |
| Arrears of | |
| non-tax | |
| revenue | |
| Total | |
| 0-1 | 66,832 |
| 1-2 | 4,533 |
| 2-3 | 8,660 |
| 43-5 | 520 |
| >5 | 985 |
| Total | 81,530 |
Note: * % share indicates the share of non-tax revenue from communication services in the total arrears of non-tax revenue of the central government. Sources: Union Budget Documents, 2020-21; PRS.
## Issues For Consideration State Of Finances Of Telecom Sector
In March 2018, the Standing Committee on Information Technology observed that after entry of a new private player in 2016, the sector has seen a stiff competition and aggressive pricing war.4 This has led to reduced tariffs and a notable decline in revenue. In the aftermath, the weaker players have exited the market and consolidation among other companies is ensuing. The telecom sector has large capital expenditure requirements. The near-term implication has been a serious drop in profitability and a problem of high debt.
Trends in subscriber base: With the introduction of 4G, the telecom sector has shifted from the 'voicecentric' to 'data-centric' market.18 Between the fourth quarter of 2016 and the third quarter of 2019, the total number of internet subscribers has increased from 39.1
crore to 68.7 crore.19, 20 Between the fourth quarter of
2016 and the third quarter of 2019, the price of per GB
data has gone down from Rs 163.8 to seven rupees.19, 20
The data consumption per user per month during the same period has grown from 878.6 MB to 10.4 GB.19, 20
At the end of the third quarter of 2019, the total internet subscribers per 100 population are 52.1 in India.20 The total urban internet subscribers per 100 population are 104.3 whereas the total rural internet subscribers per
100 population are 27.6.20 As per the International Telecommunications Union Report, in 2019, the number of internet users per 100 inhabitants was 53.6 in the world, 82.5 in Europe, 77.2 in Americas and 48.4
in Asia-Pacific.21
Trends in revenue: Even though consumption has increased manifold and the subscriber base continues to grow, due to a steep reduction in tariffs, the gross revenue of the telecom sector has seen an adverse effect
(Figure 10).4 The Adjusted Gross Revenue fell by
18.9% between 2016 and 2017 and by 10.2% between 2017 and 2018. Adjusted Gross Revenue is the value after deduction of taxes and roaming/PSTN charges from Gross Revenue. During the first three quarters of 2019, the Adjusted Gross Revenue has seen a 3.7% increase as compared to the first three quarters of the previous year.
Sources: TRAI Performance Indicator Reports, 2009-18; PRS.
Figure 11 shows the trend in Average Revenue Per User (ARPU) between 2011 and 2019. ARPU has dropped from Rs 110-140 levels seen between 2013
and 2016 to Rs 70-80 levels between 2018 and 2019.22
Sources: TRAI Performance Indicator Reports, 2011-19; PRS.
Trends in debt: As of October 2017, the total debt of the telecom sector stood at Rs 7.9 lakh crore.4 This is more than three times the gross revenue of the sector in 2018. This included Rs 2.6 lakh crore of total borrowings out of which Rs 1.8 lakh crore was domestic borrowing.4 This also included deferred liability worth Rs 3.0 lakh crore to the Department of Telecommunications on account of spectrum fees.4 In July 2017, the Inter-Ministerial Group on Stressed Assets noted that some operators are facing financial stress due to low operating cash flows, inadequate equity infusion and unsustainable debt.4 As of December 2019, gross domestic bank credit to the telecom sector stood at 1.34 lakh crore, an increase of 16% as compared to 1.20 lakh crore at the end of
2018-19.23
Impact of a recent Supreme Court judgement: Since 2003, there has been a dispute between telecom service providers and the Department regarding what constitutes gross revenue.24 Over these years, service providers have paid a lower license fee and spectrum usage charges as compared to the demands raised by the Department. In October 2019, the Supreme Court in its judgement upheld the demands of the Department.24 The Court also held that the service providers are liable to pay the interest, penalty, and penalty on interest on these dues.24
As a result, the service providers are required to pay an additional amount of Rs 92,642 crore as license fee and Rs 55,055 crore as spectrum usage charges on account of dues for years between 2003 and 2019.24 This amount is provisional and subject to revision for updation of interest and penalty. As per the judgement, the service providers have been given three months to pay these dues from the date of the judgement.24 This is likely to increase the financial burden of the service providers. They will also be required to pay a higher license fee and spectrum usage charges going forward as compared to what they have been paying so far. This will further impact their profit margins. Note that in November 2019, the Union Cabinet approved deferred payment of spectrum auction instalments due for years 2020-21 and 2021-22.25
This measure is expected to ease the cash outflow of financially stressed service providers and facilitate payment of statutory liabilities and interest on bank loans.25 The telecom service providers will have the option to defer payments due for the years 2020-21 and 2021-22, for one or both years. The deferred payment will be spread equally in the remaining instalments to be paid by the service providers. Interest charges will be applicable as per the provisions under the terms and conditions of the spectrum allotment. Trends in foreign investment: During 2010-2019, the telecom sector has been the third-largest recipient sector of FDI equity inflow.26 The FDI equity inflow in the Financial Year 2017-18 was Rs 39,748 crore whereas the FDI equity inflow in the Financial Year
2018-19 was Rs 18,337 crore, a decrease of 54%.26, 27
## Spectrum Fees And Taxes
The Economic Survey of India (2017-18) noted that the telecom sector is facing an issue of higher spectrum charges.28 It observed that lower spectrum charges will augment the spread of telecommunication services and will help in socio-economic transformation.28
In January 2015, Telecom Regulatory Authority of India (TRAI) in its report observed that the total effective rate of the license-related levy has gone up significantly in the recent past and that spectrum prices in the country are amongst the highest in the world.7
The total taxes and levies are as high as 30% of the revenue of an operator.7 This adversely impacts the need to continue a low tariff regime in the country. It had recommended that the license fee should be reduced from 8% to 6% by reducing Universal Access Levy from 5% to 3%.7 As of December 2019, the license fee is 8%.19 In 2017, TRAI, as well as the Department of Telecommunications, had recommended lowering Goods and Services Tax (GST) from 18% to
5% and 12% respectively for the telecom sector.29
## Spectrum Management
One of the key functions of the Department of Telecommunications is to allocate, monitor and manage spectrum. The Comptroller and Auditor General of India (CAG) in its audit report for FY 2017-18 had noted that the National Frequency Register was not being properly maintained and was not the correct reflection of spectrum assignments.5 National Frequency Register (NFR) is the basic record for all frequency assignments and is referred to identify assignable frequency for any new applicant.30
A substantial amount of spectrum identified for commercial use was allotted to Railways and Defence. Due to limited use by these departments, such spectrum was left unused and its commercial potential remained unutilised.5
There were serious deficiencies in the effective monitoring of the spectrum.5 The updated database of wireless licenses was not being provided to monitoring stations thereby reducing the whole monitoring process in an ineffective exercise. There was inattention towards maintenance of monitoring equipment.5
Ineffective monitoring could lead to unauthorised uses or misuse of the spectrum by undesirable entities.5
## 5G Readiness
5G is the next technology frontier in the telecom sector. According to the High-Level Forum of the Department on 5G, 5G is predicted to create a cumulative economic impact of USD one trillion in India by 2035.31 As of December 2019, 5G services are being rolled out on a commercial basis in countries like South Korea, USA, Spain and Italy, although on a limited scale.
TRAI has observed that spectrum availability is one of the most important issues in full realization of the potential of 5G.18 In August 2018, the High-Level Forum of the Department on 5G recommended that fresh spectrum should be allocated for 5G services.31
As of January 2020, the auction of spectrum for 5G is yet to be completed. As per TRAI's white paper on 5G, an additional investment of 4.0-4.5 lakh crore rupees will be required by the telecom sector to seamlessly implement 5G
networks.18 3.5 GHz spectrum band is likely to be the first band to be globally used for 5G deployment.18 The Department is yet to auction spectrum in that band. The telecom service providers are likely to incur an additional investment initially while launching 5G
services on account of spectrum cost.18
## Promotion Of Domestic Manufacturing Of Telecom Equipment
The Standing Committee on Information Technology (2019) observed that India is highly dependent on the import of telecom equipment.8 During 2017-18 and
2018-19, India imported telecom equipment worth Rs
1.4 lakh crore and 1.2 lakh crore, respectively.8 The Committee observed that this indicates a lack of requisite ecosystem for the promotion of domestic manufacturing.8 The Committee noted that some of the reasons for the dependence on import are: (i) import of telecom equipment at zero duty as agreed in international treaties, (ii) low investment in research and development and creation of intellectual property rights, and (iii) lack of market access for indigenous manufacturers.8 The Committee noted that imports are likely to increase substantially with the introduction of newer technology such as 5G.8
## State Of Psus Telecom Service Providers
BSNL and MTNL are the public sector undertakings (PSUs) engaged in providing telecommunication services in the country. BSNL and MTNL have been incurring losses continuously since FY 2009-10.32 As per the Department of Public Enterprises guidelines, both these PSUs have been declared as 'Incipient Sick'.32 A PSU is considered 'Incipient Sick' if its net worth is less than 50% of its paid-up capital in any financial year, or if it had incurred losses for three consecutive years.33 In 2018-19, as against the revenue target of Rs 26,000 crore, actual revenue of the two PSU operators was Rs 17,761 crore.8 In 2018-19, BSNL and MTNL posted a net loss of Rs 14,904 crore and Rs 3,390 crore respectively (Table 7).8
| Parameter | BSNL | MTNL |
|-------------------|---------|---------|
| Income Target | 23,150 | 2,850 |
| Actual Income | 19,321 | 2,607 |
| Total Expenditure | 34,225 | 5,997 |
| Net Profit/Loss | -14,904 | -3,390 |
| Total asset* | 135,482 | 14,677 |
| Total liability* | 35,729 | 24,412 |
| Net worth* | 74,734 | -9,735 |
| Outstanding debt* | -15,983 | 19,750 |
Note: * as of March 31, 2019. Outstanding debt of BSNL does not include overdraft. That of MTNL does not include bonds worth Rs 4,533 crore. Sources: First Report of the Standing Committee on Information Technology (2019); PRS.
The Standing Committee on Information Technology (2019) noted that challenges for the PSU operators in earning revenue include: (i) absence of 4G services (except in few places for BSNL) in data-centric telecom market, (ii) lack of cash flows hindering capital outlay and expansion, (iii) sharp decline in average revenue per user across all services due to competition in the sector, and (iv) rapid decline in landline business due to changing market needs.8
The market share of PSU operators in the number of total subscribers as well as revenue share has seen a decline. The share of PSU operators in total
subscribers declined from around 13%-14% during 2012-13 to 10%-11% levels during 2017-19. The share of PSU operators in Adjusted Gross Revenue of the sector declined from around 12%-13% during 2012-13 to 9%-10% levels between 2017-19.
BSNL and MTNL spend a significant share of their income on staff salaries. As of June 2019, the employee cost for BSNL and MTNL was 75% and 87%
of their total income respectively.34 In comparison, the employee cost for private telecom service providers varied between 5%-7% of their total income.8
In March 2018, the Standing Committee on Information Technology noted that there has been continuous underperformance by telecom PSUs in meeting Internal and External Budgetary Resources (IEBR) targets.4
IEBR is an important revenue source for implementing various schemes of the PSUs and it constitutes the resources raised by PSUs through profits, loans and equity.35 The shrinking revenue has hampered its capabilities to generate resources.4 Only 26.6%, 39.0%
and 24.1% of the IEBR target was met in 2014-15,
2015-16 and 2016-17 respectively.4
Revival plan for BSNL and MTNL: In October 2019, the Union Cabinet approved a revival plan for BSNL
and MTNL.3 The plan also provided in-principle approval for the merger of both PSUs. Key features of the plan are as follows: (i) allotment of 4G spectrum with funding from central government of Rs 23,814 crore, (ii) sovereign guarantee for raising long-term bonds of Rs 15,000 crore for restructuring debt and meeting expenditure requirements, (iii) funding of Rs 17,169 crore for offering voluntary retirement scheme to employees aged 50 years and above, along with coverage of cost towards pension and gratuity.3
## Indian Telephone Industries Limited (Itil)
Indian Telephone Industries Limited is involved in telecom equipment manufacturing. A package worth Rs 4,157 crore was approved for ITIL as part of a revival plan in 2014.17 ITIL has seen a consistent increase in its turnover since 2015-16.4 Its total income has increased from Rs 620 crore in 2014-15 to Rs 2,005
crore in 2018-19.8 The company posted a net profit of Rs 93 crore in 2018-19.8 The Standing Committee on Information Technology (2018) observed that ITIL's turnover is mainly coming from government business and recommended that it should work toward increasing its share in private business.4
Funds allocated to ITIL for capital upgradation have not been in line with demand.8 For instance, against a request of Rs 405 crore in 2019-20, ITIL received only Rs 105 crore.8 This affected the projects undertaken by ITIL under the revival plan.8 Out of Rs 2,264 crore for capital expenditure under the revival plan, ITIL
received only Rs 769 crore as of December 2019.8
4 "47th Report: Demands for Grants (2018-19) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, March 13, 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_Information_Technology_47.pdf.
5 "Report No 21 of 2018, Compliance and Performance Audit of Ministry of Communications and Ministry of Electronics & Information Technology", CAG, 2018, https://www.cag.gov.in/sites/default/files/audit_report_files/Report_No_21_of_2018_Compliance_and_Performance_Audit_of_Union_Gov ernment_Ministry_of_Communications_.pdf.
6 "Statement showing the balance of UAL amount available as potential fund under USO as on 31.03.2019", Universal Service Obligation Fund, Department of Telecommunications, website as accessed on February 7, 2020, http://www.usof.gov.in/usof-cms/usof-fund-statustable.jsp.
7 "Recommendations on Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges", TRAI, January 6, 2015, https://main.trai.gov.in/sites/default/files/Reco-AGR-Final-06.01.2015_0.pdf.
8 "First Report: Demands for Grants (2019-20) of Department of Telecommunications (Ministry of Communications)", Standing Committee on Information Technology, December 2019, http://164.100.47.193/lsscommittee/Information%20Technology/17_Information_Technology_1.pdf.
9 "Telecom at a Glance", Department of Telecommunications Website as accessed on July 1, 2019, http://dot.gov.in/sites/default/files/Telecom%20at%20a%20Glance.pdf?download=1.
10 "50th Report: Progress of Implementation of BharatNet", Standing Committee on Information Technology, August 2018, http://164.100.47.193/lsscommittee/Information%20Technology/16_Information_Technology_50.pdf.
11 Unstarred Question No 621, Rajya Sabha, Ministry of Communications, June 27, 2019, https://164.100.158.235/question/annex/249/Au621.pdf.
12 "BharatNet Status as on January 31, 2020", Website of BBNL as accessed on February 7,2020, http://bbnl.nic.in/BharatNet.pdf. 13 "BharatNet Usage Statistics as on 03.02.2020", Website of BBNL as accessed on February 7, 2020, http://www.bbnl.nic.in/usage2.pdf.
14 "Cabinet approves enhancement of budget for implementation of Network for Spectrum for Defence Services", Cabinet, Press Information Bureau, May 16, 2018, http://www.pib.nic.in/PressReleseDetail.aspx?PRID=1532262. 15 Non-Tax Revenue, Union Budget, 2020-21, https://www.indiabudget.gov.in/doc/rec/ntr.pdf. 16 Arrears of Non-Tax Revenue, Union Budget, 2020-21, https://www.indiabudget.gov.in/doc/rec/annex6.pdf. 17 "Annual Report 2017-18", Department of Telecommunications, http://dot.gov.in/sites/default/files/Telecommunications%20Annual%20Report%202018%20ENGLISH_0.pdf. 18 "A White Paper on Enabling 5G in India", TRAI, February 2019, https://main.trai.gov.in/sites/default/files/White_Paper_22022019_0.pdf. 19 "The Indian Telecom Services Performance Indicators October-December 2016", TRAI, April 7, 2017, https://main.trai.gov.in/sites/default/files/Indicator_Reports_Dec_16_07042017.pdf.
20 "The Indian Telecom Services Performance Indicators July-September 2019", TRAI, January 8, 2020, https://main.trai.gov.in/sites/default/files/PIR_08012020_0.pdf.
21 ITU World Telecommunications/ICT Indicators Database, International Telecommunications Union, https://www.itu.int/en/ITU-
D/Statistics/Documents/statistics/2017/ITU_Key_2005-2017_ICT_data.xls.
22 "The Indian Telecom Services Performance Indicators April-June 2016", TRAI, December 12, 2016, https://main.trai.gov.in/sites/default/files/Indicator_Reports_April_June_01_12_2016.pdf.
23 Sectoral Deployment of Bank Credit, Reserve Bank of India, January 31, 2020, https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR1842E397CCE37974402499F5A6DA08B575E4.PDF.
24 Starred Question No 329, Lok Sabha, Ministry of Communications, December 11, 2019, http://164.100.24.220/loksabhaquestions/annex/172/AS329.pdf.
25 "Cabinet approves proposal for Mitigating financial stress being faced by the Telecom Services Sector", Cabinet, Press Information Bureau, November 20, 2019, https://pib.gov.in/PressReleseDetail.aspx?PRID=1592553.
26 Quarterly Factsheet for Quarter Ending March 2019, Department for Promotion of Industry and Internal Trade, https://dipp.gov.in/sites/default/files/FDI_Factsheet_27May2019.pdf. 27 Unstarred Question No 789, Lok Sabha, Ministry of Communications, June 26, 2019, http://164.100.24.220/loksabhaquestions/annex/171/AU789.pdf. non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The |
65c43cfe57bc567107068266 | budget_reports | The Finance Minister, Ms Nirmala Sitharaman presented the Interim Budget for 2024-25 on February 1, 2024. This will provide funding for the government for a part of the financial year until the main budget is passed after the general elections.
## Budget Highlights
-
Expenditure: The government is estimated to spend Rs 47,65,768 crore in 2024-25, 6% higher than the revised
estimate of 2023-24. Interest payments account for 25% of the total expenditure, and 40% of revenue receipts.
-
Receipts: The receipts (other than borrowings) in 2024-25 are estimated to be Rs 30,80,274 crore, about 12% higher than the revised estimate of 2023-24. Tax revenue which forms major part of the receipts is also expected to increase by
12% over the revised estimate for 2023-24.
-
GDP: The government has estimated a nominal GDP growth rate of 10.5% in 2024-25 (i.e., real growth plus inflation).
-
Deficits: Revenue deficit in 2024-25 is targeted at 2% of GDP. This is lower than the revised estimate of 2.8% in 2023-
24. Fiscal deficit in 2024-25 is targeted at 5.1% of GDP, lower than the revised estimate of 5.8% of GDP in 2023-24.
-
New Schemes: Rs 70,449 crore has been allocated to the Department of Economic Affairs for New Schemes (details not
available). The allocation is for capital expenditure, and accounts for 7.5% of the total capital outlay.
## Main Tax Proposals In The Finance Bill
-
Tax rates unchanged: Direct and indirect tax rates have remained unchanged.
-
Tax benefits to certain entities extended by another year: Certain direct tax benefits to following entities have been
extended until March 2025: (i) startups, (ii) sovereign wealth funds and pension funds, and (iii) some IFSC units. These benefits would have expired in March 2024.
## Policy Highlights
-
Railways: Three major economic railway corridor programs will be implemented. These are: (i) energy, mineral and
cement corridors, (ii) port connectivity corridors and (iii) high traffic density corridors. Forty thousand normal rail bogies will be upgraded to Vande Bharat standards to ensure passenger safety and comfort.
-
Housing: An additional two crore houses will be built over the next five years under Pradhan Mantri Awas Yojana-
Grameen. A new scheme will be launched to help sections of the middle-class living in rented houses, slums, and unauthorised colonies, to buy or build their own houses.
-
Health: Vaccination to prevent cervical cancer will be encouraged for girls between nine and 14 years of age. A new
platform, U-WIN, will be rolled out for managing immunisation across the country. Healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, and Anganwadi workers and helpers.
-
Energy: Rooftop solarisation of one crore households will be taken up. To achieve net-zero by 2070, blending of
compressed biogas in CNG and PNG will be mandated in a phased manner. Coal gasification and liquefaction capacity
of 100 metric tonnes will be installed by 2030.
-
Environment: EV manufacturing and charging infrastructure will be strengthened and expanded. Adoption of E-buses
for public transport will be encouraged. Blue economy 2.0 scheme will be launched to restore coastal aquaculture and mariculture. A new scheme will be launched to provide environment friendly alternatives such as biodegradable
polymers, bio-plastics and bio-pharmaceuticals.
-
Agriculture: Public and private investment will be promoted in post-harvest activities including aggregation, storage,
supply chain, processing and marketing. Application of the Nano DAP fertiliser will be expanded in all agro-climatic zones. A programme for supporting dairy farmers will be formulated. PM Matsya Sampada Yojana will be expanded to: (i) enhance aquaculture productivity from three to five tonnes per hectare, (ii) double seafood exports to one lakh crore rupees, and (iii) generate 55 lakh employment opportunities.
-
Demographic changes: A high-powered committee will be set up to address challenges arising out of fast population
growth and demographic changes.
-
Research: To encourage the private sector to scale up research and innovation, a corpus of one lakh crore rupees will be
set up. This corpus will provide long-term loans at low or nil interest rates.
## Budget Estimates Of 2024-25 As Compared To Revised Estimates Of 2023-24
-
Total Expenditure: The government is estimated to spend Rs 47,65,768 crore in 2024-25. This is an increase of 6% over
the revised estimate of 2023-24.
-
Revenue expenditure is estimated to grow at 3.2% and capital expenditure at 16.9%. The revenue expenditure growth has
been kept in check due to pension, defence expenditure, subsidies, and major schemes (MGNREGS, Jal Jeevan Mission, and PM-KISAN) together being allotted roughly the same as the revised estimate for 2023-24.
-
Total Receipts: Government receipts (excluding borrowings) are estimated to be Rs 30,80,274 crore, 11.8% higher than
the revised estimates of 2023-24. The gap between these receipts and the expenditure will be plugged by borrowings, budgeted to be Rs 16,85,494 crore, 2.8% lower than the revised estimate of 2023-24.
-
Transfer to states: The central government will transfer Rs 22,74,541 crore to states and union territories in 2024-25, an
increase of 8.4% over the revised estimates of 2023-24. Transfer to states includes devolution of Rs 12,19,783 crore out of the divisible pool of central taxes, grants worth Rs 8,90,858 crore, and special loans worth Rs 1,30,000 crore for capital expenditure.
-
Deficits: Revenue deficit is targeted at 2% of GDP, lower than the 2.9% budgeted in 2023-24. Fiscal deficit is targeted at
5.1% of GDP in 2024-25, lower than the revised estimates for 2023-24 (5.9% of GDP). The lower fiscal deficit is on account of receipts growing at 11.8%, which is higher than the expenditure growth of 6%.
-
GDP growth estimate: The nominal GDP is estimated to grow at a rate of 10.5% in 2024-25.
| Budgeted | Budgeted |
|-------------------------------------------|-------------|
| | |
| Actuals | |
| 2022-23 | 2023-24 |
| Revised | |
| 2023-24 | 2024-25 |
| % change (2023-24 | |
| RE to 2024-25 BE) | |
| Revenue Expenditure | 34,53,132 |
| Capital Expenditure | 7,40,025 |
| of which: | |
| Capital Outlay | 6,24,757 |
| Loans and Advances | 1,15,268 |
| Total Expenditure | 41,93,157 |
| Revenue Receipts | 23,83,206 |
| Capital Receipts | 72,196 |
| of which: | |
| Recoveries of Loans | 26,161 |
| Other receipts (including disinvestments) | 46,035 |
| Total Receipts (excluding borrowings) | 24,55,402 |
| Revenue Deficit | 10,69,926 |
| % of GDP | 3.9% |
| Fiscal Deficit | 17,37,755 |
| % of GDP | 6.4% |
| Primary Deficit | 8,09,238 |
| % of GDP | 3.0% |
Sources: Budget at a Glance, Union Budget Documents 2024-25; PRS.
Expenditure which brings a change to the government's assets or liabilities (such as construction of roads or recovery of loans) is capital expenditure, and all other expenses are revenue expenditure (such as payment of salaries or interest payments). In 2024-25, capital expenditure is expected to increase by about 17% over the revised estimates of 2023-24. **Revenue expenditure** is expected to increase by 3.2% over the revised estimates of 2023-24. Disinvestment is the government selling its stakes in Public Sector Undertakings (PSUs). In 2023-24, the government is estimated to meet 49% of its disinvestment target. The disinvestment target for 2024-25 is Rs 50,000 crore, lower than the budget target of 2023-24 (Rs 61,000 crore). Disinvestment targets have reduced for the fourth consecutive year, from 2020-21 onwards.
Note: Actual data for 2023-24 is revised estimate.
Sources: Union Budget Documents (various years); PRS.
## Receipts Highlights For 2024-25
-
Receipts (excluding borrowings) in 2024-25 are estimated to be Rs 30,80,275 crore, an increase of 11.8% over the revised
estimates of 2023-24. This is mainly on account of centre's net tax revenue growing by 11.9%.
-
Gross tax revenue is budgeted to increase by 11.5% in 2024-25, over the revised estimates of 2023-24. This is greater than
the estimated nominal GDP growth of 10.5% in 2024-25. Corporation tax and income tax are estimated to grow at about 13%. GST revenue is budgeted to increase by 11.6%.
-
Devolution to states from centre's tax revenue is estimated to be Rs 12,19,783 crore in 2024-25, an increase of 10.4% over the revised estimates of 2023-24. In 2023-24, devolution to states is estimated to be higher by Rs 83,045 crore, from an initial estimate of Rs 10,21,448 crore.
-
Net tax revenue (excluding states' share in taxes) is estimated to be Rs 26,01,574 crore in 2024-25, which is about 12%
higher over the revised estimate for 2023-24. The revised estimate for net tax revenue in 2023-24 is roughly same as the budget estimate for the year.
-
Non-tax revenue consists mainly of interest receipts on loans given by the centre, dividends, license fees, tolls, and charges
for government services. It is estimated at Rs 3,99,701 crore in 2024-25, an increase of 6.4% over the revised estimate of 2023-24.
-
Capital receipts (excluding borrowings) are targeted at Rs 79,000 crore, an increase of 41% over the revised estimates of
2023-24. Note that the 2023-24 revised estimate for capital receipts is estimated to be 33% lower than the budgeted amount. Lower receipts were on account of disinvestment targets not being met.
Budgeted
Budgeted
Actuals
2022-23
2023-24
Revised
2023-24
2024-25
% change (2023-24
RE to 2024-25 BE)
A. Gross Tax Revenue
30,54,192
33,60,858
34,37,211
38,30,796
11.5%
of which
Corporation Tax
8,25,834
9,22,675
9,22,675
10,42,830
13.0%
Taxes on Income
8,33,260
9,00,575
10,22,325
11,56,000
13.1%
Goods and Services Tax
8,49,133
9,56,600
9,56,600
10,67,650
11.6%
Customs
2,13,372
2,33,100
2,18,680
2,31,310
5.8%
Union Excise Duties
3,19,000
3,39,000
3,03,600
3,18,780
5.0%
Service Tax
431
500
500
100
-80.0%
B. Devolution to States
9,48,407
10,21,448
11,04,493
12,19,783
10.4%
C. Centre's Net Tax Revenue
20,97,786
23,30,631
23,23,918
26,01,574
11.9%
D. Non-Tax Revenue
2,85,421
3,01,650
3,75,795
3,99,701
6.4%
of which:
Interest Receipts
27,852
24,820
31,778
33,107
4.2%
Dividend
99,913
91,000
1,54,407
1,50,000
-2.9%
Other Non-Tax Revenue
1,53,577
1,81,382
1,85,642
2,12,640
14.5%
E. Capital Receipts (without borrowings)
72,196
84,000
56,000
79,000
41.1%
of which:
Disinvestment
46,035
61,000
30,000
50,000
66.7%
Receipts (without borrowings) (C+D+E)
24,55,403
27,16,281
27,55,713
30,80,275
11.8%
Borrowings
17,37,755
17,86,816
17,34,773
16,85,494
-2.8%
Total Receipts (including borrowings)
41,93,158
45,03,097
44,90,486
47,65,769
6.1%
Sources: Receipts Budget, Union Budget Documents 2024-25; PRS.
-
Indirect taxes: The total indirect tax collections are estimated to be Rs 16,17,840 crore in 2024-25. Of this, the
government has estimated to raise Rs 10,67,650 crore from GST. Out of the total tax collections under GST, 86% is expected to come from CGST (Rs 9,17,650 crore), and 14% from the GST compensation cess (Rs 1,50,000 crore).
-
Corporation tax: The collection from taxes on companies is expected to increase by 13% in 2024-25.
-
Income tax: The collections from income tax are also expected to increase to Rs 11,56,000 crore in 2024-25 (13%). The
revised estimate for 2023-24 is 13.5% higher than the amount budgeted in the year (Rs 9,00,575 crore).
-
Non-tax receipts: In 2024-25, non-tax revenue is expected to increase by 6.4% over the revised estimates of 2023-24.
Non-tax revenue is estimated to increase by about 25% at the revised stage in 2023-24. This is mainly on account of higher dividend/surplus of RBI, nationalised banks and financial institutions.
## Expenditure Highlights For 2024-25
-
Total expenditure in 2024-25 is expected to be Rs 47,65,768 crore, which is an increase of 6.1% over the revised
estimate of 2023-24. Out of this: (i) Rs 14,94,296 crore is proposed to be spent on central sector schemes (3.3% increase over the revised estimate of 2023-24), and (ii) Rs 5,01,788 crore is proposed to be spent on centrally
sponsored schemes (8.9% increase over the revised estimate of 2023-24).
-
The government has estimated to spend Rs 2,39,612 crore on pension in 2024-25, which is 0.7% higher than the revised estimate of 2023-24. In addition, expenditure on interest payment in 2024-25 is estimated to be Rs 11,90,440 crore, which is 25% of the government's total expenditure. In 2024-25, interest payments are expected to increase by 12.8% as compared to revised estimates of 2023-24. Other grants, loans, and transfers (Rs 3,50,255 crore) include Rs 1,30,000 crore as special loans to states for capital expenditure.
| Budgeted | Budgeted |
|----------------------------------------|-------------|
| | |
| Actuals | |
| 2022-23 | 2023-24 |
| Revised | |
| 2023-24 | 2024-25 |
| % change (2023-24 | |
| RE to 2024-25 BE) | |
| Central Expenditure | 32,65,163 |
| Establishment Expenditure of Centre | 7,14,650 |
| Central Sector Schemes | 14,45,958 |
| Other expenditure | 11,04,555 |
| of which interest payments | 9,28,517 |
| Grants for CSS and other transfers | 9,27,995 |
| Centrally Sponsored Schemes (CSS) | 4,37,556 |
| Finance Commission Grants | 1,72,760 |
| of which: | |
| Rural Local Bodies | 45,578 |
| Urban Local Bodies | 17,779 |
| Disaster Management Grants | 19,893 |
| Post Devolution Revenue Deficit Grants | 86,201 |
| Other grants, loans and transfers | 3,17,679 |
| Total Expenditure | 41,93,157 |
Sources: Budget at a Glance, Union Budget Documents 2024-25; PRS.
## Expenditure By Ministries
In 2024-25, the top 13 ministries in terms of allocations account for 54% of the estimated total expenditure (Table 4). Of these, the Ministry of Defence has the highest allocation in 2024-25, at Rs 6,21,541 crore. It accounts for 13% of the total budgeted expenditure of the central government. Other ministries with high allocation include: (i) Road Transport and Highways (5.8% of total expenditure), (ii) Railways (5.4%), and (iii) Consumer Affairs, Food and Public Distribution (4.5%).
| Budgeted | Budgeted | % change (2023-24 RE to |
|------------------------------------------------|-------------|----------------------------|
| | | |
| Actuals | | |
| 2022-23 | 2023-24 | |
| Revised | | |
| 2023-24 | 2024-25 | 2024-25 BE) |
| Defence | 5,73,098 | 5,93,538 |
| Road Transport and Highways | 2,17,089 | 2,70,435 |
| Railways | 1,62,410 | 2,41,268 |
| Consumer Affairs, Food and Public Distribution | 2,83,954 | 2,05,765 |
| Home Affairs | 1,86,839 | 1,96,035 |
| Rural Development | 1,77,840 | 1,59,964 |
| Chemicals and Fertilisers | 2,53,563 | 1,78,482 |
| Communications | 1,40,976 | 1,23,393 |
| Agriculture and Farmers' Welfare | 1,08,277 | 1,25,036 |
| Education | 97,196 | 1,12,899 |
| Jal Shakti | 71,618 | 97,278 |
| Health and Family Welfare | 75,731 | 89,155 |
| Housing and Urban Affairs | 77,310 | 76,432 |
| Other Ministries | 17,67,256 | 20,33,419 |
| Total Expenditure | | |
| 41,93,157 | 45,03,097 | 44,90,486 |
Sources: Expenditure Budget, Union Budget 2024-25; PRS.
-
Department of Economic Affairs (Ministry of Finance): Rs 70,449 crore has been allocated to a new item of
expenditure 'New Schemes' (details not available). This accounts for about 84% of the Department's total allocation. The entire allocation is for capital expenditure.
-
Ministry of Communications: Allocation is estimated to increase by Rs 14,507 crore (11.8%) in 2024-25, over the
revised estimate of 2023-24. This is mainly on account of capital infusion into BSNL, which is estimated to be Rs 82,916 crore in 2024-25. This capital infusion is 28% higher than the revised estimates of 2023-24.
-
Ministry of Defence: Allocation is estimated to decrease by Rs 2,348 crore (0.4%) in 2024-25, over the revised estimate
of 2023-24. This is mainly on account of a decrease in the allocation towards across Stores. The aggregate allocation
towards Stores in 2024-25 across services is estimated to be Rs 16,873 crore, lower than the revised estimates of 2023-24
(26% decrease).
## Expenditure On Subsidies
In 2024-25, the total expenditure on subsidies is estimated to be Rs 4,09,723 crore, a decrease of 7% from the revised estimate of 2023-24 (Table 5).
-
Food subsidy: Allocation for food subsidy is estimated at Rs 2,05,250 crore in 2024-25, a 3.3% decrease over the revised
estimate of 2023-24. A higher level of food subsidy was budgeted in 2021-22 and 2022-23. This was mainly on account of PMGKAY, which provides free additional foodgrains to eligible beneficiaries to mitigate the impact of COVID. This additional benefit ended in December 2022.
-
Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 1,64,000 crore in 2024-25. This is a decrease of
Rs 24,894 crore (13.2%) from the revised estimate of 2023-24. Fertiliser subsidy was increased substantially in 2022-23 due to a sharp increase in the international prices of raw materials used in the manufacturing of fertilisers.
-
Expenditure on other subsidies includes interest subsidies for various government schemes and LPG subsidy. In 2024-25, expenditure on these subsidies is estimated to increase by 3% over the revised estimate of 2023-24.
## Table 5: Subsidies In 2024-25 (Rs Crore)
| Budgeted | Budgeted |
|--------------------|-------------|
| | |
| Actuals | |
| 2022-23 | 2023-24 |
| Revised | |
| 2023-24 | 2024-25 |
| % change (2023-24 | |
| RE to 2024-25 BE) | |
| Food subsidy | 2,72,802 |
| Fertiliser subsidy | 2,51,339 |
| Interest subsidy | 41,676 |
| LPG subsidy | 6,817 |
| Other subsidies | 5,281 |
| Total | 5,77,916 |
Sources: Expenditure Profile, Union Budget 2024-25; PRS.
## Expenditure On Major Schemes Table 6: Scheme Wise Allocation In 2024-25 (Rs Crore)
| Budgeted | Budgeted |
|----------------------------------------------------------|-------------|
| | |
| Actuals | |
| 2022-23 | 2023-24 |
| Revised | |
| 2023-24 | 2024-25 |
| % change (2023-24 | |
| RE to 2024-25 BE) | |
| MGNREGS | 90,806 |
| Pradhan Mantri Awas Yojana | 73,615 |
| Jal Jeevan Mission/National Rural Drinking Water Mission | 54,700 |
| PM-KISAN | 58,254 |
| National Health Mission | 33,803 |
| National Education Mission | 32,875 |
| Modified Interest Subvention Scheme | 17,998 |
| Saksham Anganwadi and POSHAN 2.0 | 19,876 |
| National Livelihood Mission-Ajeevika | 12,083 |
| Pradhan Mantri Fasal Bima Yojana | 10,296 |
| Reform Linked Distribution Scheme | 2,738 |
| PM POSHAN | 12,681 |
| Swachh Bharat Mission | 6,851 |
| Pradhan Mantri Gram Sadak Yojana | 18,783 |
| Pradhan Mantri Krishi Sinchai Yojana | 6,380 |
Sources: Expenditure Profile, Union Budget 2024-25; PRS.
-
MGNREGS has the highest allocation in 2024-25 at Rs 86,000 crore. This amount is the same as the revised estimate for 2023-24. In 2023-24, allocation on the scheme is estimated to increase by 43% over the budget estimate.
-
The Pradhan Mantri Awas Yojana has the second highest allocation in 2024-25 at Rs 80,671 crore, an increase of 49.1% over the revised estimate of 2023-24. In 2023-24, expenditure for the scheme is expected to be lower by 32% as compared to the budget estimates. This was mainly on account of the rural component falling short of original plans. The allocation for 2024-25 is similar to the budget estimate for 2023-24.
-
The Jal Jeevan Mission has the third highest allocation in 2024-25 at Rs 70,163 crore, an increase of 0.2% over the
revised estimate of 2023-24. PM KISAN has been allocated Rs 60,000 crore in 2024-25, which is the same as the revised estimate of 2023-24.
## Loans To States For Capital Expenditure
-
The Centre has budgeted Rs 1,30,000 crore for special interest-free loans to states for capital expenditure in 2024-25. The
same amount had been budgeted in 2023-24, which has been reduced to Rs 1,05,551 crore in the revised estimates.
## Expenditure On Scheduled Caste And Scheduled Tribe Sub-Plans And Schemes For The Welfare Of Women, Children, And The North Eastern Region (Ner)
% change
Budgeted
Actuals
2022-23
Revised
2023-24
2024-25
(2023-24 RE to
2024-25 BE)
Welfare of Women
2,17,423
2,60,095
3,09,690
19.1%
Welfare of Children
86,510
93,221
1,09,493
17.5%
-
Programmes for the welfare of women and children have been allocated Rs 4,19,183 crore in 2024-25, an increase of 18.6% over the revised estimate of 2023- 24. These allocations include programmes being implemented across all ministries.
| Scheduled Castes | 133,008 | 146,861 | 165,598 | 12.8% |
|----------------------|------------|------------|------------|----------|
| Scheduled Tribes | 92,176 | 109,242 | 121,023 | 10.8% |
| North Eastern Region | - | 91,785 | 96,858 | 5.5% |
Note: Actual expenditure on the NER is not available for 2022-23.
Sources: Expenditure Profile, Union Budget 2024-25; PRS.
-
Allocation towards the welfare of women is expected to increase due to a higher allocation towards the Pradhan Mantri Awas Yojana. Under the Awas Yojana, the female head of the family must be the owner or co-owner of the house.
-
Allocation towards the welfare of children is expected to increase due to a higher allocation towards school education.
## Fiscal Responsibility And Budget Management Targets
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively reduce its outstanding debt, revenue deficit and fiscal deficit, and to give three year rolling targets for these. Note that the Medium-Term Fiscal Policy Statement has not provided rolling targets for budget deficits since 2021-22. In the Budget speech, the Finance Minister reiterated the government's aim to reduce fiscal deficit to below 4.5% of GDP by 2025-26.
Budgeted
Actuals
2022-23
Revised
2023-24
2024-25
Fiscal deficit is an indicator of borrowings by the government for financing its expenditure. The estimated fiscal deficit for 2024-25 is 5.1% of GDP.
| Fiscal Deficit | 6.4% | 5.8% | 5.1% |
|-------------------|---------|---------|---------|
| Revenue Deficit | 3.9% | 2.8% | 2.0% |
| Primary Deficit | 3.0% | 2.3% | 1.5% |
Sources: Medium Term Fiscal Policy Statement, Union Budget 2024-25; PRS.
Revenue deficit is the excess of revenue expenditure over revenue receipts. Such a deficit implies that the government needs to borrow funds to meet recurring expenses which may not provide future returns. The estimated revenue deficit for 2024-25 is 2% of GDP. This is lower than the revised estimates of 2023-24 (2.8%). Revenue receipts are estimated to increase by 11% in 2024-25, while revenue expenditure is estimated to increase by 3%. Growth in revenue receipts is driven by corporate tax and income tax, which is estimated to grow by 13% each.
## Primary Deficit Is Fiscal Deficit Less Interest Payments. It Is Estimated To Be 1.5% Of Gdp In 2024-25.
Note: Data for 2023-24 is revised estimate. Sources: Budget at a Glance, Union Budget (various years); PRS.
-
Outstanding liabilities is the accumulation of borrowings over the years. A higher debt implies that the government has
a higher loan repayment obligation over the years.
-
Centre's outstanding liabilities in 2024-25 are estimated to be 57% of the GDP. Outstanding liabilities had declined from 51% in 2013-14 to 48% in 2018-19. From 2019-20 onwards, outstanding liabilities have been increasing, and had reached a high of 61% in 2020-21, and have moderated thereafter.
-
Interest payments as a percentage of revenue receipts increased from 37% in 2013-14 to 42% in 2020-21. It is estimated to be 40% of revenue receipts in 2024-25.
Outstanding Liabilities (% of GDP)
Interest Payments as % of Revenue Receipts
Note: RE is revised estimate and BE is budget estimate. Sources: Economic Survey 2022-23, Union Budget Documents 2024-25; PRS.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
65c43cfe57bc567107068269 | budget_reports |
## Demand For Grants 2023-24 Analysis Housing And Urban Affairs
Indian cities are expanding both in terms of size and number. As per the 2011 census, 31% (377 million) of India's population was living in urban areas, and by 2050 more than 50% of India's population is estimated to be urban. Urbanisation is the process of growth of cities (either through a natural increase in population, or migration, or physical expansion). Urban centres offer opportunities and attract people, capital, and technology due to improved access to services, capital, and knowledge pool. However, the rapid influx of population and dense settlements leads to several issues in cities such as traffic congestion, environmental pollution, and housing shortage. The Ministry of Housing and Urban Affairs formulates policies, coordinates activities of various agencies (at the state and municipal level), and monitors programmes in the area of urban development. It also provides states and urban local bodies (ULBs) with financial assistance through various centrally supported schemes. Over the past few decades, several schemes have been introduced to ensure that urbanisation is better planned and services provided in cities are of adequate quality. However, Indian cities continue to face issues mentioned above along with poor infrastructure. One of the key reasons for poor urban infrastructure is the poor capacity of ULBs and their inability to collect revenue. The High-Powered Expert Committee for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031 for upgrading urban infrastructure. Hence, budgetary outlays by the centre and states may not be enough to cater to growing demands of urbanisation. Further, with the current allocation, the funds are not getting utilised by the Ministry. This affects the implementation of schemes, and consequently the service levels in cities. There is a need to empower ULBs both in terms of governance and financial capacity. This would help them decide what projects to prioritise and how to raise the revenue for them, and help improve city governance. Urban transportation governance is also fragmented at the city level, which leads to issues related to coordination between different agencies and land use planning. The central government funds metro rail projects in cities. Several high-level bodies have suggested that before setting up such capital-intensive projects, there may be a need to rethink modes of urban transport based on the spatial pattern of a city.
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi - 110002
Tel: (011) 43434035, 23234801 ◼ www.prsindia.org
This note looks at the expenditure incurred by the
Ministry, the status of the various schemes
implemented by it, and the issues faced with investment
required for urban planning.
## 2023-24 Budget Speech Highlights1
-
An Urban Infrastructure Development Fund will be established for the development of urban infrastructure by public agencies in tier-2 and tier-3 cities. The Fund will be managed by the National Housing Bank and is expected to have an annual allocation of Rs 10,000 crore.
-
Cities will be incentivised to improve their credit worthiness for municipal bonds through property tax reforms and setting aside user charges.
-
States and cities will be encouraged to undertake urban planning reforms such as efficient use of land resources, transit-oriented development, and enhanced availability and affordability of urban land.
-
All cities and towns will be enabled for 100%
mechanical desludging of septic tanks and sewers.
Enhanced focus will be given to scientific
management of dry and wet waste.
## Overview Of Finances2
The total expenditure on the Ministry of Housing and
Urban Affairs for 2023-24 is estimated at Rs 76,432
crore. This is an increase of 2.5% over the revised
estimates for 2022-23. In 2023-24, the revenue
expenditure of the Ministry is estimated at Rs 50,434
crore (66% of the total expenditure) and the capital
expenditure is estimated at Rs 25,997 crore (34% of the
total budget). The capital expenditure is mainly on
metro projects (Rs 23,056 crore).
## 2023-24 Budgetary Allocation (In Rs Crore)
| 2022-23 | 2023-24 | 2021-22 |
|---------------|------------|------------|
| Actuals | RE | BE |
| % change (RE | | |
| 2022-23 to BE | | |
| 2023-24) | | |
| Revenue | 80,894 | 50,865 |
| Capital | 25,946 | 23,681 |
| Total | 1,06,840 | 74,546 |
Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS.
## Expenditure Across Schemes
The Ministry implements several schemes to improve
service delivery in urban areas. These include: (i)
Pradhan Mantri Awas Yojana - Urban (PMAY-U), (ii)
Atal Mission for Rejuvenation and Urban
Transformation (AMRUT), (iii) 100 Smart Cities Mission, (iv) Swachh Bharat Mission - Urban (SBM-
U), and (iv) PM Street Vendor's Atmanirbhar Nidhi (PM SVANIDHI). The Ministry also implements metro projects across states/UTs.
2021-22 Actuals
2022- 23 RE
2023-24 BE
% change (RE 2022-23 to BE 2023- 24)
PMAY (Urban)
59,963
28,708
25,103
-12.6%
MRTS and Metro
23,473
20,401
23,175
13.6%
AMRUT
7,280
6,500
8,000
23.1%
Smart Cities
6,588
8,800
8,000
-9.1%
SBM (Urban)
1,952
2,000
5,000
150.0%
PM-SVANIDHI
298
434
468
7.8%
DAY-NULM
794
550
0.01
-100.0%
Others
6,492
7,153
6,686
-6.5%
Total
1,06,840
74,546
76,432
2.5%
Note: BE- Budget Estimates; RE- Revised Estimates. Sources: Demand No. 60, Ministry of Housing and Urban Affairs, Union Budget 2023-24; PRS. The 2023-24 allocation of the Ministry is lower than the amount spent two years earlier by Rs 30,408 crore; the reduction is mainly due to a cut in PMAY-U by Rs 34,860 crore. The 2021-22 spending on PMAY-U is significantly higher than the earlier years (and 7.5 times the budget estimate for that year). See Page 5 for a detailed discussion on PMAY-U. Deendayal Antyodaya Yojana-National Urban Livelihood Mission (DAY-NULM) has been allocated a token amount of Rs 10 lakh, compared to Rs 550 crore in 2022-23 revised estimate; this was also 39% lower than the originally budgeted amount of Rs 900 crore in 2022-23.
## Trends In Expenditure
During 2013-14 to 2023-24, the Ministry's expenditure
has increased at an annual average rate of 22% (See
Figure 2). While allocation to the Ministry has been
increasing, the Ministry has not been able to utilise all
the funds allocated (See Figure 3). The Standing
Committee on Urban Development (2021) also
highlighted this issue and recommended the Ministry to
avoid such underutilisation of funds.3 Consistent
underutilisation may affect progress of key schemes, as
well as future allocation of funds.
Note: For the years 2012-13 till 2015-16, the figures are a
combination of the erstwhile Ministry of Housing and Urban Poverty
Alleviation, and the Ministry of Urban Development. Values for
2022-23 and 2023-24 are Revised and Budget Estimates respectively.
All other figures are Actuals.
Sources: Demand for Grants of Ministry of Housing and Urban
Poverty Alleviation, and the Ministry of Urban Development from
2011-12 to 2015-16; Demand for Grants of Ministry of Housing and
Urban Affairs from 2013-14 to 2023-24; PRS.
In 2016-17, the actual expenditure on metro projects,
AMRUT, and Smart Cities Mission were higher than
the budget estimates. Further, in 2021-22 the actual
expenditure on PMAY-U was 650% higher than the
estimates (Budget Estimates- Rs 8,000 crore and
Actuals- Rs 59,963 crore).
Note: For the years 2012-13 till 2015-16, the figures are a
combination of the erstwhile Ministry of Housing and Urban Poverty
Alleviation, and the Ministry of Urban Development.
Sources: Demand for Grants (2012-13 to 2023-24), Ministry of
Housing and Urban Affairs; PRS.
## Financing Required
Urban infrastructure projects tend to be capital intensive and not only require upfront capital investment but also annually recurring operations and maintenance expenditures. With the current rate of urbanisation, the High-Powered Expert Committee (HPEC) for Estimating the Investment Requirements for Urban Infrastructure Services (2011) had estimated a requirement of Rs 39 lakh crore (at 2009-10) prices for the period 2012-2031.4 As per their framework, the investment in urban infrastructure should increase from 0.7% of GDP in 2011-12 to 1.1% of GDP by 2031-32. In 2021-22, total expenditure on urban development by states and centre is estimated to be 0.7% of GDP.5,6 The Ministry of Finance (2017) had noted that only budgetary outlays will not be enough to cater the growing demands on local governments for improving their infrastructure.7 Allocation by the central government will have to be supported with other sources of financing to meet the funding gap. There have been attempts to explore alternative measures for meeting expenditure requirements. Schemes such as Smart Cities Mission, AMRUT seek to meet their financing requirements through a mix of sources such as municipal bonds and public private partnership. The Ministry of Housing and Urban Affairs also provides financial incentives to ULBs for issuance of municipal bonds.8 The Standing Committee on Housing and Urban Affairs (2022) noted that some municipal corporations like Lucknow and Ghaziabad have undergone credit rating evaluation and have successfully raised funds from the market.9
## Several Cities Not Credit Worthy
One of the reforms under AMRUT is to have credit ratings for cities. Credit rating is a pre-requisite for ULBs to raise money from the market and financial institutions.10 The Ministry (2018) noted that the municipal bond market has great potential to fulfil the financial requirements of cities.10 However, it remains untapped. As of December 2022, credit rating work has been completed in 470 cities and 164 cities (35%) have received investible credit rating (enables ULBs to float municipal bonds).11
## High Reliance On Government Transfers
ULBs in India are amongst the weakest globally in terms of fiscal autonomy with state government control on their authority to levy taxes.12 The 74th Constitutional Amendment allows state governments to authorise ULBs to levy, collect and appropriate certain taxes, duties, tolls and fees. Such funds collected by the state government must be assigned to ULBs. States are also required to constitute State Finance Commissions (SFCs) to recommend devolution of tax revenues and grants-in-aids to ULBs.13 However, RBI (2022) noted that transfer of revenue collecting powers from states to ULBs has been limited.12 Sources of revenue for ULBs include user fees, property sales, and licenses and permits. The share of own revenue (tax
and non-tax) in total revenue of ULBs has declined
over time indicating fiscal dependency on government
transfers.12 With GST subsuming certain taxes earlier
levied by ULBs (such as octroi tax, local body tax),
there is greater dependence on transfers. Property tax
remains the only major tax source for ULBs. Among
the BRICS nations, local governments in Brazil and
Russia mostly rely on government grants while those in
China and South Africa are less dependent on transfers
for their finances.12
## Sfcs And Ulbs
Article 243I of the Constitution requires the state governments to appoint SFC from 1994 after every five years.14 The 15th Finance Commission observed that most state governments did not constitute SFCs in time and have not given due importance to the recommendations of the SFCs.15 In states where SFCs have recommended devolution to ULBs, there have been variations among states.16 For instance, 4th SFC of Karnataka recommended 10.7 of the divisible pool for ULBs while the 5th SFC of Kerala recommended 5.5% and 1% by the 4th SFC of West Bengal.
Total own revenue
Year
Total Municipal Expenditure
Share of own revenue in total expenditure
2010-11
64,193
37,304
58%
2011-12
70,380
42,633
61%
2012-13
82,702
52,543
64%
2013-14
93,298
58,249
62%
2014-15
1,06,917
63,418
59%
2015-16
1,18,938
70,223
59%
2016-17
1,24,007
72,067
58%
2017-18
1,32,553
73,331
55%
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS.
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS.
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS.
## Low Property Tax Collection
Property tax for local governments is one of the most important sources for raising revenue globally (See Figure 7).12 In India it was around 60% of the municipal tax revenue in 2017-18.16 Compared to other countries, property tax collection in India is much lower due to several reasons such as property undervaluation and ineffective administration. Smaller municipal corporations, lack institutional capacity to undertake reforms to increase property tax collection and may require state government's assistance.12 For larger corporations, expansion of tax base and increasing efficiency of tax collection can be done through use of technologies such as satellite photography.12 The 15th Finance Commission (2021-26) has recommended grants worth Rs 1.21 lakh crore over five years for urban local bodies.15 To receive grants from the year 2022-23 onwards, states will need to show consistent improvement in property tax collection. To meet the eligibility criteria, the property tax in the previous year should grow in tandem with the average growth rate of the state's own GSDP in the most recent five years.
Sources: State of Municipal Finances in India, ICRIER, A Study commissioned by 15th Finance Commission; PRS.
Sources: World Bank; PRS.
## Absence Of Financial Transparency In Ulbs
RBI (2022) observed that the balance sheets of most
municipalities in India are not publicly available and
many of them continue to follow cash accounting
system.12 Municipal laws do not prescribe any uniform
accounting standards to be followed, resulting
municipal accounts incomparable across states and
within states.12 In order to ensure correct, complete,
and accurate record keeping of municipal transactions
and to produce financial reports, a Task Force for ULBs
was constituted by Comptroller and Auditor General of
India (CAG) in February 2022, based on
recommendations of the 11th Finance Commission.12
The Task Force recommended an accounting system
which led to the National Municipal Accounts Manual
(NMAM) in December 2004. RBI noted that only in 9
of the 14 states (for which information pertaining to
adoption of State municipal accounts manual is
available in the CAG reports), a municipal accounts
manual has been approved by the respective state
government.12 Thus, there is a need to implement a
uniform accounting framework across states.12
## Capacity For Municipal Governance
ULBs play a key role in city governance by providing
essential services like housing, water, sanitation,
electricity, and transportation. The HPEC for
Estimating the Investment Requirements for Urban
Infrastructure Services (2011) had noted that the state
of service delivery in Indian cities and towns is
inadequate compared to desirable levels. The Standing
Committee on Urban Development (2021) highlighted
that while ULBs have done reasonably well in
implementing targeted schemes like SBM-U, they have
not been able to implement schemes like Smart Cities
Mission where most planning decisions are left to
them.3 The Committee highlighted that ULBs are not
ready to take up such projects like Smart Cities
Mission.
## Ulbs Not Empowered
While the Ministry has introduced several schemes for
improving service delivery such as Smart Cities
Mission, and PMAY-U, the quality of such services
still remains inadequate. One of the key reasons behind
such state of affairs may be lack of capacity of ULBs.
The 74th Constitutional Amendment allowed state
governments to devolve certain functions relating to
urban development (such as urban sanitation, water supply, and roads and bridges) to ULBs.17 HPEC
(2011) noted that the Amendment left it to the discretion of the state legislature to devolve these functions to ULBs.4 It had observed that states have only partially complied with devolution.
For instance, the CAG (2020 and 2021) noted that Karnataka and Rajasthan had transferred 17 and 16 functions out of 18 functions (specified in the 12th Schedule) respectively.18,19 In Karnataka, of the functions devolved, ULBs had no role in urban planning and slum improvement which are functions to be devolved to them. For functions like water supply, public health, and urban amenities, ULBs had either a minimal role or overlapping jurisdictions with other agencies. In Rajasthan, ULBs had a minimal role or overlapping jurisdictions for water supply, urban planning, roads and bridges, and public health sanitation. The CAG recommended respective state governments to ensure that ULBs have adequate degree of autonomy with respect to functions assigned to it.
## Housing Pmay-U
The central government had launched PMAY-U in June 2015 to provide 'housing for all' within urban areas. The scheme was earlier applicable till March 31, 2022. In August 2022, the scheme was extended up to December 31, 2024, due to some states submitting proposals for constructing houses in the last two years of the scheme. In 2023-24, PMAY-U has been allocated Rs 25,103 crore (highest allocation of the Ministry) which is a decrease of 12.6% from 2022-23 revised estimates. In 2021-22, the actual allocation towards PMAY-U was Rs 59,963 crore, which is an increase of 650% from 2021-22 budget estimates (Rs 8,000 crore). This is on account of a sharp increase of 4,447% of expenditure (Rs 33,329 crore) on 'other items of central component' which includes establishment expenses, capacity building, and other expenses for PMAY-U. The scheme comprises four components: (i) in-situ rehabilitation of existing slum dwellers (using the existing land under slums to provide houses to slum dwellers) through private participation, (ii) credit linked subsidy scheme (CLSS) for Economically Weaker Sections (EWS), Lower Income Groups (LIG), and middle-income group (MIG), (iii) affordable housing in partnership (AHP), and (iv) subsidy for beneficiary-led individual house construction.
Several houses grounded but not completed: The Standing Committee on Housing and Urban Affairs (2022), while analysing the progress of PMAY-U, observed that no strict timelines have been provided for the completion of houses.9 In some states, even the land required for construction has not been acquired. The number of houses grounded for construction (construction going on) are more than the completed houses. For instance, in Andhra Pradesh, as on January 23, 2023, out of 21 lakh sanctioned houses, 19 lakh houses were grounded (93%), and about 7 lakh houses
were completed/ delivered (32%).20 In Maharashtra.
out of 15 lakh sanctioned houses, 10 lakh (69%) were
grounded and 7 lakh (49%) were completed/ delivered.
It recommended the Ministry to provide strict timelines
for completion of under construction houses.
Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS.
Poor quality of houses: As per PMAY-U guidelines,
all houses constructed under slum rehabilitation and
AHP components, should have basic civic
infrastructure like water, sanitation, sewerage, and
electricity.21 ULBs should ensure that individual
houses under CLSS and beneficiary-led verticals have
access to basic services. The Standing Committee on
Housing and Urban Affairs (2022) highlighted that
several houses constructed under PMAY-U are not in
liveable condition with windows and doors missing.9
As a response to houses not being liveable, Ministry
stated that about 96,000 houses under the erstwhile
Jawaharlal Nehru National Urban Renewal Mission
(JnNURM) are lying vacant due to which they are in a
bad shape.31 The Ministry has requested respective
states/UTs to repair these houses and allot them to
beneficiaries or convert them into Affordable Rental
Housing Complexes (ARHCs) for rental purposes for
urban migrants/poor. The CAG (2022) while auditing
houses constructed under PMAY(U) in Karnataka
observed that some houses constructed under AHP
vertical were unoccupied due to lack of facilities such
as water, sewerage, and electricity.22 This was due to
non-release of funds by the concerned ULBs.
## Implementation Issues In Allocating Houses
PMAY-U guidelines prescribe certain standards to identify eligible beneficiaries such as a beneficiary family should comprise husband, wife and unmarried sons and/ or unmarried daughters.23 Further, the family should not own a pucca house. There have been some irregularities in identification of beneficiaries. For instance, in Madhya Pradesh 16 beneficiaries who were provided the benefit of PMAY-U were not approved by the District Collector.24 The beneficiaries later returned the grant amount given to them to the concerned ULB. Further, the CAG (2022) noted several issues related to allocation of beneficiaries under PMAY-U in Karnataka which include (i) beneficiaries getting multiple benefits under same/ different verticals, and (ii) benefits extended to ineligible people.25
## Urban Transportation Fragmented Approach To Urban Transport
The Ministry of Housing and Urban Affairs is the nodal ministry for looking after urban transport at the central level. As urban development being a state subject, the primary responsibility for urban transport infrastructure and service delivery lies with state governments and local bodies.
The National Transport Development Policy Committee (NTDPC), 2013 observed that India's transport policy is fragmented between different level of government.26 Such an arrangement adversely affects intermodal planning and execution at all levels of government and has led to several inefficiencies. These include: (i) rail networks not linking with road networks for last-mile delivery of goods, (ii) bus and metro systems in urban areas not exchanging people, and (iii) ports not always having infrastructure for evacuation of goods. At the city level, several agencies are involved in managing components of urban transportation.27 For instance, Mumbai's transportation system is overseen by a combination of municipal/metropolitan authorities, state and central government agencies. For instance, the road system is managed by multiple agencies including the Mumbai Metropolitan Development Authority and Maharashtra State Road Development Corporation. The lack of an integrated approach to urban transport also affects prospects for coordinated land use planning. The National Urban Transport Policy, 2006, noted that the current system governing transport does not provide for coordination among agencies.28 It recommended setting up Unified Metropolitan Transport Authority (UMTA) in all million-plus cities to facilitate coordinated planning and implementation of urban transport programs and projects, and integrated management of urban transport systems. The Metro Rail Policy, 2017 provides that state governments should constitute UMTAs as statutory bodies.29 The Standing Committee on Housing and Urban Affairs (2022) had noted that only a few cities such as Bengaluru, Kochi, Pune, and Chennai have set up their respective UMTAs.30
## Urban Transport Focused On Metro Projects
Investment in metro projects in cities forms one of the biggest expenditures made by the Ministry on urban transport. Some of the major metro projects include Chennai, Delhi, Bangalore, and Mumbai metros. Investments in these projects are made in various forms including grants, equity investments, debt, and passthrough assistance (grants given to the government which can be awarded to other organisations) for externally aided projects. In 2023-24, metro projects have been allocated Rs 23,175 crore, an increase of 13.6% over the revised estimates of 2022-23.
Need to enhance revenue from non- fare sources:
Sources of revenue for metro projects are of two typesfare box (sale of tickets) and non-fare box (such as commercial development of land, advertising revenues). The Metro Rail Policy, 2017 provides that the Detailed Project Report for metro projects must provide for enhancing non-fare box revenue.29 The respective state government should provide a policy framework and required permissions, and licenses for enabling metro projects to explore various types of nonfare box revenue.29
A major portion of the total revenue generated by
Indian metro rail systems consists of fare revenue. For
instance, the proportion of total revenue generated from
fare box by Delhi Metro ranged from 24% in 2005-16
to 57% in 2019-20. For Kochi Metro it was 78% in
2017-18 and 60% in 2019-20.30 Mumbai Metro Line 1
generated 86-89% of its revenue from fare box since
2014-15 from fares (barring COVID-19 year).30
According to the Standing Committee on Housing and
Urban Affairs (2022), maximising revenue from fare
collection may negatively impact ridership and it may
prevent metro from becoming a mass transportation
system.30 It recommended the Ministry to persuade
metro projects to explore avenues of non-fare box
collection. Property development and setting up
commercial establishments at stations has been a key
source of revenue for metro projects.30 Notable
examples of using property development and
commercial establishments for generating revenue are
Hong Kong and Tokyo.29
In the case of Delhi Metro, the Committee (2022) noted
that it is incurring net losses despite meeting targets for
average daily earnings required for breakeven and
increase in average daily ridership (See Figure 9).30 It
recommended the Delhi Metro to enhance non-fare
revenue. The Ministry informed the Committee (2022)
that it has requested metro rail corporations to increase
revenue from non-fare sources.31 It also informed the
Committee that Delhi Metro has taken and is planning
several measures which include: (i) co-branding of
metro stations, (ii) licensing of spaces at stations for
shops, ATMs, kiosks, offices, and (iii) exploring digital
advertisement panels inside tunnels.31
Sources: Report No. 12: Implementation of Metro Rail Projects - An Appraisal, Standing Committee on Housing and Urban Affairs, April 7, 2022; PRS.
Highly capital-intensive nature of Metro: Metro
projects are highly capital intensive in nature. Capital
expenditure on metro projects in 2023-24 is estimated
to be Rs 23,056 crore which is 89% of the total capital
expenditure by the Ministry (Rs 25,997 crore). The per
km cost of constructing metro ranges from Rs 37 crore
to Rs 1,126 crore depending on the metro system.30
While observing the losses made by Delhi Metro, the
Standing Committee on Housing and Urban Affairs
(2022) noted that metro projects should not be assessed
only on economic considerations given the benefits it
has such as reducing pollution and traffic, and
providing affordable transport solutions.30
The Metro Policy 2017, notes that before setting up metro, an unbiased analysis of different alternatives should be carried out.29 Cities with a well spread-out spatial pattern may not have sufficient number of corridors with adequate density to justify investments in metro. Cities with a linear spatial pattern are more suited for metro projects. Indian cities have developed in a way that allow neighbourhoods to provide for residences, workplaces, and social and educational facilities.27 This results in minimising trip lengths leading to less dependency on motorised urban transport.27 The average trip length in medium and small Indian cities is less than 5 km making nonmotorised transport the preferred mode of commute. Metro rail systems are efficient when the average trip distance is greater than 12 km.27 The Standing Committee on Housing and Urban Affairs (2022) recommended the Ministry to promote MetroLite and MetroNeo systems in smaller cities due to their lesser capital, operation, and maintenance costs.30 These systems can be constructed at about 25-40% cost of regular metro. Further, it recommended the Ministry to approve and fund only those projects that are using the most feasible metro technology (such as MetroLite and MetroNeo) for a city taking into account its population and traffic needs.30 NTDPC recommended that metro rail projects should initially be limited to cities with population more than five million. These cities should be able to cover all costs through user charges or fiscal costs. Further it recommended that Indian cities should focus on improving their existing bus systems, adding bus rapid transit systems, and improving non-motorised transport. However, over the past few years, metro projects have expanded from the larger metropolises such as Delhi and Mumbai to other relatively smaller cities such as Kochi, Lucknow, Bhopal, Jaipur, and Indore.
Sources: Report No. 12: Implementation of Metro Rail Projects - An Appraisal, Standing Committee on Housing and Urban Affairs, April 7, 2022; PRS.
## Basic Services Atal Mission For Rejuvenation And Urban Transformation (Amrut)
AMRUT, launched in June 2015 in select 500 cities, seeks to focus on developing basic infrastructure related to several services such as water supply, sewerage, and non-motorised urban transport.32 AMRUT 2.0 was launched in October 2021 for five years (2021-22 to
2025-26). AMRUT 2.0 seeks to provide water supply
to households. In 2023-24, AMRUT has been allocated
Rs 8,000 crore, an increase of 23% over 2022-23
revised estimates.
Irregularities in implementation: The Standing
Committee on Urban Development (2019, 2020) has
highlighted several irregularities with the scheme. For
instance, tenders for projects being continuously
awarded to a single person, unnecessary projects being
taken up, and tenders being awarded at high cost when
cheaper options were available.3,33 In 2020, the
Committee noted that implementation of projects has
been below target. As of December 2022, 134 lakh
(96%) water tap connections and 102 lakh (70%) sewer
connections have been provided against the target of
139 lakh and 145 lakh respectively.32
Table 4: Allocation to AMRUT (in Rs crore)
Year
Budget
Actuals
Utilised
2015-16
3,919
2,702
69%
2016-17
4,080
4,864
119%
2017-18
5,000
4,936
99%
2018-19
6,000
6,183
103%
2019-20
7,300
6,391
88%
2020-21
7,300
6,448
88%
2021-22
7,300
7,280
100%
2022-23
7,300
6,500
89%
2023-24
8,000
-
-
Total
56,199
45,304
81%
Note: Actuals for 2022-23 are Revised Estimates. Sources: Demand for Grants, Ministry of Housing and Urban Affairs (2015-16 to 2023-24); PRS.
Table 5: Progress under AMRUT (as of December 2022)
Total
Completed
%
Ongoing
%
Projects
5,873
4,676
80
1,197
20
Cost (Rs crore)
82,222
32,793
40
49,430
60
Sources: Unstarred Question No. 1424, Lok Sabha, Ministry of Housing and Urban Affairs, December 15, 2022; PRS.
## Smart Cities Mission
The Smart Cities Mission, launched in June 2015 for
five years, seeks to promote 100 smart cities that
provide core infrastructure (such as water and
electricity supply, sanitation, and public transport). The
scheme has been extended to June 2023.34 In 2023-24,
the Mission has been allocated Rs 8,000 crore, a
decrease of 9% over 2022-23 revised estimates (Rs
8,800 crore). The Standing Committee on Urban
Development (2021) noted that the amount allocated to
the Smart Cities Mission has been less than the
proposed amount (See Table 6).
Table 6: Budgeted allocation less than proposed amount for Smart Cities Mission (in Rs crore)
Year
Proposed
Budgeted
2017-18
13,648
4,000
2018-19
9,810
6,169
2019-20
13,971
6,450
2020-21
13,543
6,450
2021-22
10,000
6,450
Sources: Report No.5: Ministry of Housing and Urban Affairs, Demand for Grants 2021-22, Standing Committee on Urban Development, March 8, 2021; PRS.
Capacity of ULBs to implement the Mission: Each smart city has a Special Purpose Vehicle (SPV), responsible for the implementation of the Mission at the city level. ULBs are responsible for planning and implementing the projects and also providing funds (alongside the central government). The Standing Committee on Urban Development (2021) observed that economically backward states have not been able to provide their share of financial contribution under the Mission.3 The Committee also highlighted that ULBs have not been able to implement schemes like Smart Cities Mission where everything is left to them (such as making plan, choosing projects). It remarked that ULBs may not be ready to take up such Missions. This may be due to the limited technical and financial capacity of ULBs, as discussed on Page 3 and 4.
Deficiencies in implementation: Under the Mission, multiple projects related to infrastructure and service delivery such as sanitation, water supply, are taken up in the select cities. Seven years since the launch of the Mission, 33% of projects are still ongoing (See Table 7). The Standing Committee on Urban Development (2021) also highlighted the slow pace of project completion. It recommended the Ministry to ensure timely completion to avoid cost overruns. The Committee also highlighted several irregularities in implementation of Smart Cities works which include: (i) frequent dropping of projects after finalising proposals, (ii) redoing of the same work again, and (iii) project costs being higher than market rate. Further, the Committee observed that the Geospatial Management Information System (real time monitoring system) has not been able to adequately monitor projects.
| Total | Completed | % | Ongoing | % | |
|----------|--------------|------|------------|------|----------|
| Projects | | | | | |
| 7,804 | 5,322 | 68 | 2,558 | 33 | |
| 1,81,322 | 1,00,273 | 55 | 82,526 | 46 | Cost (Rs |
| crore) | | | | | |
Sources: Smart Cities Mission Dashboard (as on January 30, 2023), as accessed on February 4, 2023; PRS.
## Swachh Bharat Mission - Urban (Sbm-U)
SBM-U has been allocated Rs 5,000 crore in 2023-24, an increase of 150% over 2022-23 revised estimates. Launched in October 2014, SBM-U seeks to: (i) make all urban areas open defecation free (ODF), and (ii) achieve 100% scientific management of municipal solid waste (MSW). SBM-U 2.0 was launched in October 2021. It focuses on source segregation of solid waste at source, scientific processing of waste, and improving dumpsites for solid waste management.
Progress may not be adequate: In 2019, all urban areas were declared open defecation free (ODF).35
However, according to the National Family Health Survey 5 (2019-21), 19.5% of urban households do not have access to an improved sanitation facility (includes flush to piped sewer system, flush to septic tank, twin pit/composting toilet, which is not shared with any other household).36 Under the Mission, individual
household and community toilets are constructed across
states. However, the construction varies across states.
In some states like Maharashtra and Gujarat, targets
have been overshot, and some such as West Bengal and
Meghalaya where the targets have not been met. For
instance, as on January 25, 2023, in West Bengal 55%
of individual household latrines have been constructed
and 22% public toilets have been constructed (See
Table 8 in the Annexure for state wise details on
number of toilets constructed).
Sources: SBM (U) Dashboard, Ministry of Housing and Urban Affairs, as accessed on January 25, 2023; PRS.
Underutilisation of funds for inducing behavioural
change: Apart from constructing toilets, SBM-U also
focuses on behavioural change to eradicate open
defecation, and spreading awareness around hygiene
practices, proper use and maintenance of toilets etc.37
Accordingly funds are allocated for advertisement and
publicity of the mission. However, the Standing
Committee on Housing and Urban Affairs (2022)
highlighted that there has been underutilisation of funds
for advertising and publicity (See Figure 12).38
Advertising and publicity are key factors for inducing
behavioural change. In 2020-21 and 2021-22, almost
none of the funds allocated were utilised. The Standing
Committee on Housing and Urban Affairs (2022) noted
that declaring cities as ODF is not enough and the
Ministry must persist in spreading awareness about the
Mission.9 The Ministry highlighted that such
underutilisation of funds is due to the Ministry not
receiving demand proposals from states for advertising
and publicity.
Note: Data for 2021-22 is as on December 31, 2021.
Sources: Report No. 12: Ministry of Housing and Urban Affairs
Demand for Grants (2022-23), Standing Committee on Housing and
Urban Affairs, March 24, 2022; PRS.
| | | |
|-------------------|-------------------|-----------------------|
| State/UT | Target | Constructed |
| | | |
| Individual | Community and | Individual |
| Household | | |
| Community | | |
| and Public | | |
| Individual | | |
| Household | | |
| Community | | |
| and Public | household latrine | public toilets target |
| Latrine | Toilets | Latrine |
| 336 | 126 | 336 |
| Nicobar Islands | | |
| Andhra Pradesh | 1,93,426 | 21,464 |
| Arunachal Pradesh | 12,252 | 387 |
| Assam | 75,720 | 3,554 |
| Bihar | 3,83,079 | 26,439 |
| Chandigarh | 4,282 | 976 |
| Chhattisgarh | 3,00,000 | 17,796 |
| Delhi | 5,000 | 11,138 |
| Goa | 8,020 | 507 |
| Gujarat | 4,06,388 | 31,010 |
| Haryana | 71,000 | 10,393 |
| Himachal Pradesh | 11,266 | 876 |
| 59,600 | 3,585 | 51,246 |
| Kashmir | | |
| Jharkhand | 1,61,713 | 12,366 |
| Karnataka | 3,50,000 | 34,839 |
| Kerala | 29,578 | 4,801 |
| Ladakh | 400 | 194 |
| Madhya Pradesh | 5,12,380 | 40,230 |
| Maharashtra | 6,29,819 | 59,706 |
| Manipur | 43,644 | 620 |
| Meghalaya | 5,066 | 362 |
| Mizoram | 16,441 | 491 |
| Nagaland | 23,427 | 478 |
| Odisha | 1,32,509 | 17,800 |
| Puducherry | 5,681 | 1,204 |
| Punjab | 1,02,000 | 10,924 |
| Rajasthan | 3,61,753 | 26,364 |
| Sikkim | 1,587 | 142 |
| Tamil Nadu | 4,37,543 | 59,921 |
| Telangana | 1,63,508 | 15,543 |
| Tripura | 19,464 | 586 |
| Uttar Pradesh | 8,28,237 | 63,451 |
| Uttarakhand | 27,640 | 2,611 |
| West Bengal | 5,15,000 | 26,484 |
| Total | 58,97,759 | 5,07,368 |
Sources: Swachh Bharat Mission (Urban) Dashboard, as accessed on January 25, 2023; PRS.
Table 9: Progress of PMAY-U as on January 23, 2023
State/ UT
Physical Progress of Houses
Financial Progress (in Rs crore)
Sanctioned
Grounded*(under
Completed/ Delivered*
Investment
Central Assistance
construction)
Sanctioned
Released
378
378
47
96
6
2
Andaman and Nicobar Island Andhra Pradesh
20,74,765
19,25,908
6,67,334
89,212
31,622
17,803
Arunachal Pradesh
9,002
8,570
5,610
511
190
146
Assam
1,61,476
1,50,799
71,466
4,931
2,446
1,314
Bihar
3,27,315
3,09,603
1,01,567
18,540
5,153
2,571
Chandigarh
1,271
1,202
1,202
262
29
28
Chhattisgarh
3,06,034
2,61,890
1,60,957
13,833
4,850
3,513
Delhi
30,194
28,709
28,683
5,645
697
660
10,480
9,852
8,368
941
222
192
Dadra and Nagar Haveli and Daman and Diu Goa
3,150
2,995
2,987
692
75
71
Gujarat
10,60,376
9,40,724
7,92,574
1,05,706
21,913
17,126
Haryana
1,66,671
91,982
58,697
15,750
2,954
1,426
Himachal Pradesh
13,249
12,880
8,863
910
241
179
Jammu and Kashmir
49,146
47,376
16,673
2,695
756
369
Jharkhand
2,34,369
2,08,787
1,17,559
11,646
3,687
2,535
Karnataka
7,06,320
5,72,101
2,94,209
51,984
11,588
6,257
Kerala
1,66,661
1,34,089
1,06,998
8,928
2,760
1,936
Ladakh
1,366
1,015
647
68
31
22
Madhya Pradesh
9,60,256
9,05,806
5,93,867
54,059
15,823
12,894
Maharashtra
15,11,989
10,38,133
7,34,673
1,88,340
27,691
16,356
Manipur
56,037
47,352
9,427
1,446
841
436
Meghalaya
4,759
3,780
1,101
187
72
30
Mizoram
40,756
38,710
6,102
950
625
206
Nagaland
32,335
31,880
11,339
1,050
511
307
Odisha
2,13,845
1,70,518
1,19,377
9,874
3,344
2,091
Puducherry
16,394
16,036
7,662
948
258
173
Punjab
1,32,895
1,05,882
63,851
9,240
2,339
1,546
Rajasthan
2,76,746
2,00,245
1,58,326
23,429
5,263
3,780
Sikkim
704
592
209
35
12
7
Tamil Nadu
6,88,854
6,32,765
4,93,176
48,883
11,253
8,885
Telangana
2,49,465
2,40,454
2,18,362
30,701
4,466
3,146
Tripura
94,162
82,643
63,038
2,988
1,514
1,146
Uttar Pradesh
16,89,673
15,39,266
11,99,343
83,665
26,638
21,018
Uttarakhand
62,762
48,453
27,292
4,885
1,159
732
West Bengal
6,91,146
5,42,425
3,09,258
38,339
11,094
6,627
Total
120 lakh**
108 lakh*
68 lakh*
8 lakh crore.
2 lakh crore
1 lakh crore
Note: * includes completed (3.41 lakh)/ grounded (4.01 lakh) houses of Jawaharlal Nehru National Urban Renewal Mission during mission period; ** Out of 122.69 lakh houses sanctioned as on March JNU31, 2022, 2.24 lakh non-starter houses have been curtailed by some sates against which States to put up new proposals by March 2023. Sources: Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023; PRS.
## Table 10: Status Of Devolution Of Functions (As Of March 2020)
| State/UT | No. of functions | State/UT | No. of functions |
|------------------------------|---------------------|----------------|---------------------|
| devolved | devolved | | |
| Andhra Pradesh | 17 | Madhya Pradesh | 18 |
| Arunachal Pradesh | 13 | * | |
| Assam | 12 | Manipur | 07 |
| Bihar | 7 | Meghalaya | 16 |
| Chandigarh | 13 | * | |
| Chhattisgarh | 18 | Nagaland | 03 |
| Dadra and Nagar Haveli | 11 | Odisha | 18 |
| Daman and Diu | 16 | Puducherry | 17 |
| Delhi | 13 | Punjab | 18 |
| Goa | 10 | * | |
| Gujarat | 16 | Sikkim | 6 |
| Haryana | 18 | Tamil Nadu | 17 |
| Himachal Pradesh | 16 | Telangana | 18 |
| Jammu and Kashmir and Ladakh | 18 | Tripura | 15 |
| Jharkhand | 14 | Uttar Pradesh | 8 |
| Karnataka | 17 | Uttarakhand | 14 |
| Kerala | 18 | West Bengal | 16 |
Note: * as per the Reform Appraisal Reports Jawaharlal Nehru National Urban Renewal Mission, March 2014. Sources: Unstarred Question No. 4211, Lok Sabha, Ministry Housing and Urban Affairs, March 19, 2020; PRS.
1 Budget 2023-24, Speech of Nirmala Sitharaman Minister of Finance, February 1, 2023, https://www.indiabudget.gov.in/doc/Budget_Speech.pdf. 2 Note on Demands for Grants 2023-24, Demand No. 60, Ministry of Housing and Urban Affairs, https://www.indiabudget.gov.in/doc/eb/sbe60.pdf.
3 Report No. 5: Ministry of Housing and Urban Affairs, Demand for Grants 2021-22, Standing Committee on Urban Development, March 8,
2021, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban%20Affairs/17_Urban_Development_5.pdf. 4 "Report on Indian Infrastructure and Services", High Powered Expert Committee for estimating the investment requirement for urban infrastructure services, March 2011, https://icrier.org/pdf/FinalReport-hpec.pdf. 5 Annual Financial Statement of the central government, 2022- 23, Government of India, https://www.indiabudget.gov.in/doc/AFS/allafs.pdf. 6 State Finances: A Study of Budgets 2021-22, Reserve Bank of India, November 30, 2021, https://rbi.org.in/Scripts/AnnualPublications.aspx?head=State%20Finances%20:%20A%20Study%20of%20Budgets. 7 "Guidance on use of Municipal Bond Financing for Infrastructure projects", Department of Economic Affairs, Ministry of Finance, September 2017, https://www.pppinindia.gov.in/documents/20181/33749/Guidance+on+use+of+Municipal+Bonds+for+PPP+projects.pdf/037cb143-8305- 4c57-8f3c-32e5a329297f. 8 Unstarred Question No. 559, Lok Sabha, Ministry of Housing and Urban Affairs, July 22, 2021, https://pqals.nic.in/annex/176/AU559.pdf. https://fincomindia.nic.in/ShowContentOne.aspx?id=27&Section=1. 17 Article 243W, The Constitution of India, https://legislative.gov.in/sites/default/files/COI.pdf. 18 "Performance audit of Implementation of 74th Constitutional Amendment Act", Government of Karnataka Report No. 2 of the year 2020, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2020/Full%20report%20%20English- 05f757c1f8c7e46.52858465.pdf. 19 "Performance Audit on Efficacy of implementation of 74th Constitutional Amendment Act," Government of Rajasthan Report No. 5 of the year 2021, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2021/Full%20Report-English- 74th%20CAA-0622b24e8505c47.07308141.pdf.
20 Pradhan Mantri Awas Yojana (Urban) - Housing for All (HFA) States/UTs wise Progress, as on January 23, 2023. 21 Starred Question No. 58, Rajya Sabha, Ministry of Housing and Urban Affairs, December 12, 2022, https://pqars.nic.in/annex/258/AS58.pdf. 22 Report of the Comptroller and Auditor General of India, Performance Audit of Implementation of Housing Schemes for Urban Poor in Karnataka, Comptroller and Auditor General of India, https://cag.gov.in/uploads/download_audit_report/2021/HFA%20ENGLISH- 06334255952f936.86422917.pdf. 23 Pradhan Mantri Awas Yojana (Urban), Scheme Guidelines, January 2021, Ministry of Housing and Urban Affairs, https://pmayhttps://pib.gov.in/PressReleasePage.aspx?PRID=1885837#:~:text=Atal%20Mission%20for%20Rejuvenation%20and,and%20towns%20acr oss%20the%20country. March 3, 2020, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban%20Affairs/17_Urban_Development_2.pdf. 34 "3,131 Smart City projects worth ₹ 53,175 crore have been completed", Press Information Bureau, Ministry of Housing and Urban Affairs, November 29, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1776077.
35 "Cabinet approves the continuation of Swachh Bharat Mission (Urban) (SBM U) till 2025-26 for sustainable outcomes" Press Information Bureau, Union Cabinet, October 12, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1763354. 36 National Family Health Survey - 5 2019-21, India Fact Sheet, Ministry of Health and Family Welfare, http://rchiips.org/nfhs/NFHS- 5_FCTS/India.pdf. http://swachhbharaturban.gov.in/writereaddata/SBM_Guideline.pdf. Affairs', Standing Committee on Housing and Urban Affairs, Standing Committee on Housing and Urban Affairs, August 8, 2022, https://loksabhadocs.nic.in/lsscommittee/Housing%20and%20Urban%20Affairs/17_Housing_and_Urban_Affairs_15.pdf. DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
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## Demand For Grants 2022-23 Analysis Health And Family Welfare
In the last two years, the COVID-19 pandemic and its aftermath has highlighted the importance of a robust public health system. In India, states have the primary responsibility of managing the public health system. The Ministry of Health and Family Welfare sets the overall policy and regulatory framework of the health sector. It also implements the National Health Mission and various other schemes which deal with all levels of healthcare systems in the country. Last year, one of the focus areas in the union budget was health and well-being. This translated into announcement of the PM AtmaNirbhar Swasth Bharat Yojana which seeks to improve healthcare systems at the primary, secondary and tertiary levels; allocating Rs 35,000 crore towards the COVID-19 vaccination programme; and allocating additional grants to states for health, water and sanitation. While these programmes and schemes have helped in improving the status of the public health system in the country, there is still a long way to go. India's overall investment in its public health system is one of the lowest in the world. The physical infrastructure of health systems is still fairly poor, especially in rural areas. There is shortage of human resources (both doctors and support staff). People continue paying high amounts out of their own pocket implying that access to public health care, quality of public health care and overall insurance coverage needs to improve. The National Health Profile (2020) recognises that health financing is one the key ways to achieve universal health coverage, which is one of the goals under the National Health Policy, 2017.1 Appropriate health financing will also help ensure adequate funds for health care, provide equitable access to all population groups and reduce barriers to utilise health services. In this note we examine the trends in the financial allocation towards the Ministry of Health and Family Welfare, issues with health financing and key issues with the health sector.
## Overview Of Finances
In 2022-23, the Ministry of Health and Family Welfare has been allocated Rs 86,201 crore.2 This is a marginal 0.2% increase over the revised estimates of
2021-22. The Department of Health and Family Welfare accounts for 96% of the Ministry's allocation at Rs 83,000 crore, while the Department of Health Research has been allocated Rs 3,201 crore (4% of the allocation).
Tel: (011) 43434035, 23234801 www.prsindia.org
## Highlights Of The Budget Speech 2022-23
An open platform will be rolled out for the National Digital Health Ecosystem. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
To improve access to quality mental health counselling and
care services, a 'National Tele Mental Health Programme' will
be launched. This will include a network of 23 tele-mental
health centres of excellence, with NIMHANS as the nodal
centre and International Institute of Information Technology,
Bangalore providing technology support.
The Department of Health and Family Welfare is
broadly responsible for: (i) implementing health
schemes, and (ii) regulating medical education and
training. The Department of Health Research is
broadly responsible for conducting medical research.
Health and Family Welfare (in Rs crore)
| 2021-22 | 2022-23 |
|---------------|------------|
| % Change (RE | |
| 2021-22 to BE | Item |
| 2020-21 | |
| Actuals | RE |
| 2022-23) | |
| 77,569 | 82,921 |
| Health & | |
| Family | |
| Welfare | |
| Health | |
| Research | |
| 3,125 | 3,080 |
| Total | 80,694 |
Note: BE - Budget Estimate; RE - Revised Estimates. Sources: Demand Number 46 and 47, Expenditure Budget 2022-23; PRS.
COVID-19 related expenditure: In 2022-23, the only COVID-19 specific allocation under this Ministry is Rs 226 crore allocated towards the Insurance Scheme for Health Care Workers fighting COVID-19. In addition, the Ministry of Finance has allocated Rs 5,000 crore towards COVID-19 vaccination. As per the revised estimates of 2021-22, the Ministry of Health and Family Welfare has allocated Rs 16,545 crore towards COVID-19 related expenditure. This includes Rs 14,567 crore allocated towards the second phase of the COVID-19 Emergency Response and Health System Preparedness Package, and Rs 1,165 crore towards phase I (includes Rs 526 crore allocated to the Indian Council of Medical Research (ICMR) for procurement of testing kits, equipment). In 2021-22, the Ministry of Finance had estimated expenditure of Rs 35,000 crore towards COVID-19 vaccination. As per the revised estimates of 2021-22, this amount is estimated to increase to Rs 39,000 crore.
In 2020-21 (actuals), the Ministry spent Rs 11,941
crore on COVID-19 which includes expenditure towards the Emergency Response and Health System Preparedness Package (Rs 10,529 crore), allocation to ICMR (Rs 1,275 crore), and vaccination for healthcare workers and frontline workers (Rs 137 crore). Table 2
details the main heads of expenditure under the Ministry allocated for the year 2022-23.
| 2021-22 | 2022-23 |
|------------------|-------------|
| % Change (RE | |
| 2021-22 to BE | Major Heads |
| 2020-21 | |
| Actuals | RE |
| 2022-23) | |
| National Health | |
| Mission (total) | |
| 37,080 | 34,447 |
| 12,197 | 13,979 |
| AIIMS, ICMR, | |
| CGHS and other | |
| autonomous and | |
| statutory bodies | |
| PMSSY | 6,840 |
| PMJAY | 2,681 |
| PM ABHIM | |
| 2,815 | 2,350 |
| National AIDS & | |
| STD Control | |
| Programme | |
| Family Welfare | |
| Schemes | |
| 462 | 306 |
| COVID-19 | 11,941 |
| Others | 6,679 |
| Total | 80,694 |
Note: Expenditure on COVID includes allocation towards both phases of COVID-19 emergency response, vaccination of healthcare and frontline workers, insurance for healthcare workers, and procurement of COVID-19 testing kits; BE - Budget Estimate; RE - Revised Estimates; AIIMS - All India Institute of Medical Sciences (New Delhi); ICMR - Indian Council of Medical Research; CGHS - Medical Treatment of CGHS Pensioners; PMJAY - Pradhan Mantri Jan Arogya Yojana; PMSSY - Pradhan Mantri Swasthya Suraksha Yojana; PM ABHIM - Pradhan Mantri Ayushman Bharat Health Infrastructure Mission. Sources: Expenditure Budget 2022-23; PRS.
## Issues To Consider Investment In Public Health Has Been Low
India's public health expenditure (centre and states) was 1.8% of the GDP in 2020-21.3 This is higher than the trend in the last decade when public health expenditure as percentage of GDP was between 1.1% - 1.5%.4,5 However, this allocation is much lower as compared to other countries.4,6,7,8 The Economic Survey 2020-21 observed that India ranks 179th among 189 countries in prioritising healthcare in the government budget.4 The National Health Policy, 2017 aims to increase public health expenditure to 2.5% of the GDP by 2025.1 The National Health Policy, 2017 noted that while general taxation would remain the largest means for financing health care, the government could consider imposing taxes on specific commodities such as tobacco, alcohol and foods having negative impact on health, and also levy taxes on extractive industries and pollution cess.1 In 2018-19, the central government announced a 4% Health and Education Cess in place of the 3% Education Cess on Income Tax and Corporation Tax, to cater to the education and health needs of the poor and rural families.9 In 2022-23, Rs 53,846 crore is estimated to be collected through the health and education cess, which is an 14% increase over the amount collected in 2021-22 (RE).10 In 2020-21, the central government introduced a 5% health cess which is imposed as customs duty on certain medical equipment.11 This was to be utilised for financing health infrastructure and services in aspirational districts. In 2022-23, Rs 870 crore is estimated to be collected under this health cess (customs), which is a 12% increase over the amount collected in 2021-22 (RE).10 The 15th Finance Commission noted that the health sector faces multiple challenges such as low investment, inter-regional disparities especially in nutrition levels and hunger, shortage of doctors, paramedics, hospitals, and inadequate numbers of primary healthcare centres.12 It recommended unconditional grants amounting to one lakh crore rupees for the health sector (for the time period 2021- 26). In addition, it suggested that by 2022, states should spend more than 8% of their budget on health. In 2021-22, as per budget estimates, states have allocated only 6% of their budget towards health.
## Allocation Towards The Department Of Health And Family Welfare Has Been Low Despite High Utilisation
Between 2006 and 2022, the allocation to the Department of Health and Family Welfare has increased at a CAGR of 13%. (Compound Annual Growth Rate (CAGR) is the annual growth rate over a certain period of time.) Over the past few years, the Standing Committee on Health and Family Welfare has noted that the allocation towards the Department has been lower than the amount sought by the Department. This is despite budget utilisation being 100% or higher (post 2015-16). In 2020-21, the Department spent Rs 77,569 crore which was 19% more than what was estimated at the budget stage. In 2021-22 also, the Department is expected to exceed the budget estimate by 16%.
Note: For 2021-22, % change in allocation is 2021-22 RE over
2021-22 BE; BE - Budget Estimate; RE - Revised Estimate.
## Primary Healthcare Is Lacking And Requires More Investment
Depending on the level of care required, healthcare in India is broadly classified into three types: primary care (provided at primary health centres), secondary care (provided at district hospitals), and tertiary care institutions (provided at specialised hospitals like AIIMS). Primary health care infrastructure provides the first level of contact between health professionals and the population.13 Based on the population served and the type of services provided, primary health infrastructure in rural areas consists of a three-tier system. This includes Sub-Centres (SCs), Primary Health Centres (PHCs), and Community Health Centres (CHCs).14 Primary healthcare systems are managed and administered by states (since public health is a state subject). The Ministry provides states with technical and financial assistance to help improve their public healthcare delivery systems. In the union budget 2017-18, it was announced that 1.5 lakh SCs and PHCs will be transformed into Health and Wellness Centres (HWCs) by December, 2022.15
Primary healthcare system: As on March 31, 2020,
1,55,404 SCs, 24,918 PHCs and 5,183 CHCs were functioning in rural areas.16 In urban areas, there were 2,517 SCs, 5,895 PHCs, and 466 CHCs.16
Ayushman Bharat- Health and Wellness Centres Scheme (AB-HWC): HWCs provide a range of services beyond maternal and child healthcare services. These include: (i) care for non - communicable diseases, (ii) rehabilitative care, (iii) mental health services, (iv) first level care for emergencies and trauma, and (v) free essential drugs and diagnostic services.17 As on February 6, 2022, 90,030 HWCs were operational across the country.18 Note that the target is to create 1.5 lakh HWCs by December 2022. The number and distribution of SCs, PHCs and CHCs in rural areas is based on population norms. However, the Standing Committee on Health (2021) had noted that there are shortfalls of 23% in SCs, 28% in PHCs, and 37% in CHCs.19 The 15th Finance Commission also noted that there are critical gaps with respect to sub centres, PHCs, CHCs and wellness centres in some states.20 It noted that as of March 31, 2020, 885 PHCs and 33,886 SCs did not have the necessary infrastructure to meet the targets of the National Health Policy, 2017.12
As per the Rural Health Statistics 2019, SCs, PHCs, and CHCs still do not meet the required coverage targets (see Table 3).
| Norm | | Average rural | Health |
|--------------------------------------------|-------------------|--------------------|-----------|
| Facility | | population covered | |
| SC | 300 - 5,000 | 5,729 | |
| PHC | 20,000 - 30,000 | 35,730 | |
| CHC | 80,000 - 1,20,000 | 1,71,779 | |
| Source: Rural Health Statistics 2019; PRS. | | | |
The Standing Committee on Health (2021) also noted that inadequate primary health infrastructure in several areas and absence of an organised primary healthcare system in urban areas were some of the issues that led to poor management of the COVID-19 outbreak.21 The 15th Finance Commission observed that prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level.12 It recommended that the focus of healthcare provision in the country should be towards providing primary healthcare. The 15th Finance Commission noted that India is estimated to have 1.4 hospital beds per 1,000 people, which is half the global average of 2.9 beds (World Bank estimate in 2017).22 Over 60% of these beds are in the private sector.12 In comparison, China has over four beds per 1,000 people, Sri Lanka, the United Kingdom and the United States all have around three beds per 1,000 people, while Thailand and Brazil have more than two beds per 1,000 persons.12 The National Health Policy, 2017 aims to increase the availability to two beds per 1,000 people. This could be achieved by creating 3,000 to 5,000 hospitals with 200 beds each by 2025.12
National Health Mission: The National Health Mission (NHM) provides states with financial assistance towards interventions focused on strengthening primary and secondary healthcare. It comprises of a rural sub mission, the National Rural Health Mission (NRHM) and an urban sub-mission, National Urban Health Mission (NUHM). Key program components of the NHM include health system strengthening in rural and urban areas, Reproductive-Maternal- Neonatal-Child and Adolescent Health (RMNCH+A), and Communicable and Non-Communicable Diseases. States have the flexibility to plan and implement state specific action plans within these broad national parameters and priorities. They are provided with technical and
financial assistance based on these plans, subject to availability of resources. In 2022-23, NHM has been allocated Rs 37,000 crore. Of this, Rs 22,317 crore has been allocated towards the Flexible Pool for RCH and Health System Strengthening, National Health programme and NUHM. Rs 6,343 crore has been allocated towards infrastructure maintenance. The allocation for NHM in 2022-23 is 7.4% higher than the revised estimates of 2021-22.
Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM ABHIM): PM ABHIM
was launched in October 2021 (renaming the Prime Minister Atmanirbhar Swasth Bharat Yojana that was announced in Budget 2021).23 It is a Centrally Sponsored Scheme (with some Central Sector component) spread over five years from 2021-22 to 2025-26. The Mission focuses on developing capacities of health systems and institutions across primary, secondary and tertiary healthcare levels, to prepare health systems in responding effectively to the current and future pandemics. One of the components seeks to enable early detection of diseases through HWCs. These HWCs will also provide medical consultation, test facilities and medicine free of cost. Further, 35,000 new critical care beds will be added in 600 districts, and referral facilities (transferring patients from one health care facility to other) will be provided in 125 districts. Under the second component, integrated public health laboratories will be created in 730 districts. Block level public health units will be created in 3,000 blocks. The network for diagnostic facilities will be strengthened by using five regional national centres for disease control, 20 metropolitan units, and 15 biosafety level labs. The Mission has been allocated Rs 5,846 crore in
2022-23. In 2021-22 (RE), the Mission was allocated Rs 1,040 crore.
## Poor Investment In Primary Health Care
Allocation towards NHM and PM ABHIM form just about half of the Ministry's budget. The National Health Policy, 2017 suggests allocating up to twothirds or more of the budget to primary care, followed by secondary and tertiary care. The 15th Finance Commission also recommended that by 2022, twothirds of the total health expenditure should be on primary healthcare. Low investment in public health impacts the ability of the government to invest in primary health infrastructure, in increasing the human resources available, and ensuring that all citizens have access to basic health care. It has also resulted in citizens preferring to use private health facilities over government ones, and spending more from their pocket on basic health care.
As per the 75th NSS survey (July 2017 and June
2018), about 33% ailments in rural areas and 26% in urban areas were treated in government hospitals.24 The remaining were treated in private hospitals (21% in rural, 27% in urban), or by private doctors/clinics
(41% in rural, 44% in urban), and the rest with informal health care providers and charitable hospitals.24 This is despite higher average expense for treatment (without hospitalisation) in private hospitals (Rs 1,062) as compared to government hospitals (Rs 331).25 The 15th Finance Commission noted that private health care in India is expensive, and also lacks trained and skilled manpower. The 15th Finance Commission has recommended grants of Rs 70,051 crore, over the period of five years (2021-2026) through local governments, for strengthening the primary healthcare system. These grants will provide for: (i) conversion of rural SCs and PHCs to HWCs, (ii) support for diagnostic infrastructure for primary healthcare activities, and (iii) support for urban HWCs, SCs, PHCs, and public health units at the block level. The Commission also recommended that centrally sponsored schemes (CSS) in health should be flexible enough to allow states to adapt and innovate, and the focus of these schemes should shift from inputs to outcome. It also recommended strengthening local governments in terms of resources, health infrastructure and capacity building which would enable them to play an enhanced role in health care delivery, including in crisis times.
## Out-Of-Pocket Spending By Individuals Is High
Poor public spending, and poor public health infrastructure has led to individuals spending higher amounts on healthcare services. Out-of-pocket expenditure is the payment made directly by individuals at the point of service where the entire cost of the health service is not covered under any financial protection scheme. The Economic Survey 2020-21 noted that in India out-of-pocket expenditure by households is one of the highest in the world.4 According to the National Health Accounts estimates, in 2017-18, out-of-pocket expenditure on health as a percentage of total health expenditure in the country was 48.8%.26 This has reduced from 69.4% in 2004- 05.26 In several cases, this expenditure is paid out through borrowings. As per the NSS Survey on Health in India (2018), in rural areas, 13.4% of the hospitalisation cases were financed by individuals through borrowings. In urban areas, this share was at 8.5%.27 Between 3-4% people in both rural and urban areas required support from friends and relatives.27 In 2017-18, private sector health expenditure was 5.8% of the total health expenditure. Government health expenditure (both centre and states) including capital expenditure was 40.8 % of the total health expenditure.
The Ministry introduced the Ayushman Bharat -
Pradhan Mantri Jan Arogya Yojana (PMJAY) to provide health insurance coverage to poor and vulnerable families, for accessing secondary and tertiary healthcare services through empanelled public and private healthcare facilities.28 While PMJAY
provides coverage for secondary and tertiary levels of healthcare. Of the health expenditure in 2017-18, 47% was towards primary care, 34% towards secondary care, and 14% towards tertiary care (the remaining is towards governance and supervision).26 The 15th Finance Commission noted that about 60 million Indians are pushed into poverty each year due to out-of-pocket payments for health. This implies that health insurance or any kind of financial protection measures must cover expenses at all levels of healthcare. The Economic Survey 2020-21 noted that increasing government spending on public health from 1% of the GDP to 2.5-3% of GDP will help in reducing out-of-pocket expenditure from 60% to 30%.3,4 It also noted that Indian states that have higher per capita spending on health have lower outof-pocket expenditure, which is also true at global level.
## Insurance Schemes To Help Reduce Out Of Pocket Spending
Under PMJAY, insurance cover up to five lakh rupees per family per annum is provided to around 10.74 crore poor and vulnerable families, whose eligibility is determined as per the Socio-Economic Caste Census (2011).28 The insured families can access secondary and tertiary healthcare services through empanelled public and private facilities. The scheme subsumed two centrally sponsored schemes, namely, Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme. The scheme provides coverage for 1,573 procedures, and pre and post-hospitalisation expenses as well.
Allocation: In 2022-23, PMJAY has been allocated Rs 6,412 crore, which is double the revised estimates of 2021-22 (Rs 3,199 crore). Experts have noted that this amount may be low considering the expenditure required on PMJAY. A study by the 15th Finance Commission on Ayushman Bharat (2019) estimated the demand and expenditure on PMJAY for the next five years.20 It stated that the total costs (centre and states) of PMJAY for 2019 could range from Rs 28,000 crore to Rs 74,000 crore. This estimate considers: (i) the assumption that all targeted beneficiaries will be covered (approximately 50 crore people), (ii) hospitalisation rates over time, and (iii) average expenditure on hospitalisation. These costs could go up to between Rs 66,000 crore and Rs 1,60,089 crore in 2023 (accounting for inflation).
Implementation: The Economic Survey 2020-21
noted that PMJAY enhanced health insurance coverage. The proportion of health insured households increased by 54% in states that implemented PMJAY and decreased by 10% for states which did not implement it.4 However, utilisation of the amount allocated to the scheme has also been poor. While 83% of budget allocation was utilised in 2018-19, the utilisation decreased to 50% in 2019-20, and to 42% in 2020-21. In 2021-22, the allocation towards the scheme has been halved at the revised stage. This could imply gaps in implementation of the scheme.
Table 4: Status of implementation of PMJAY (April 1, 2021 to November 28, 2021)
Indicators
All India
Total footfalls
82.6 crore*
Ayushman cards issued
17.2 crore
Funds disbursed to states/UTs for implementation
Rs 2,544 crore
Total hospital admissions authorised
74.7 lakh
Rs 2,450 crore*
Claims paid towards authorised hospital admissions (COVID-19 and Non- COVID-19 treatment) Claims paid for authorised hospital admissions for COVID-19 treatment
Rs 1,056 crore*
Health and Wellness Centres
90,030*
Note: *As on February 6, 2022. Sources: Lok Sabha Starred Question No. 95, Ministry of Health and Family Welfare, answered on December 3, 2021; HWC Portal, Ayushman Bharat; PRS.
The Standing Committee on Health and Family Welfare (2020) noted that PMJAY faces various implementation challenges.29 One of the key issues is identification of beneficiaries. The scheme allows only those persons to avail insurance who have been included in the SECC 2011. This database is more than a decade old and hence may not capture the entire population in need of such insurance. The Standing Committee on Health (2021) had recommended that the Ministry should expand the list of beneficiaries under PMJAY.19 The Committee (2021) also noted that the utilisation of PMJAY was also adversely impacted due to COVID-19. Note that, the Standing Committee on Health (2018) and a study report of the 15th Finance Commission (2019) had noted that PMJAY is just an extension of RSBY which provided for coverage of up to Rs 30,000 per family per annum.20,30 Hence, to ensure proper implementation of the scheme, an analysis of the failures and inadequacies of RSBY should be done. This would look at whether: (i) RSBY covered all potential beneficiaries, (ii) hospitalisation rates increased under the scheme, and (iii) insurance companies were profitable under the scheme. The key challenges identified in the implementation of RSBY include: (i) low rate of enrolment of beneficiaries, (ii) increase in out-of-pocket expenditure, and (iii) issues in empanelment of healthcare service providers.31
## Shortfall In Human Resources
The Economic Survey 2020-21 observed that the aggregate density of health workers is closer to 23 per 10,000 population, which is the lower threshold recommended by the World Health Organisation (WHO).4 This is significantly lower than the adequate density of 44.5 health workers per 10,000 population, recommended by WHO to achieve the Sustainable Development Goals (SDG) targets by 2030. As of 2019, there is one doctor per 1,511 people, which is lower than the WHO standard of one doctor per 1,000 people.12 There is one nurse per 670 people, which is lower than the WHO standard of one nurse per 300 people.12 In December 2021, in response to a question on shortage of doctors, the Minister had replied that as of November 2021, the doctor-population ratio in the country is 1:834.32 This is assuming 80% availability of registered allopathic doctors and 5.65 lakh AYUSH doctors. As on March 31, 2020, there was a 2% shortage (based on the minimum requirement as per the norms) in the sanctioned posts of female health workers/ ANMs, and a 65.5% shortage of male health workers/ ANMs (at SCs and PHCs).16 With regard to allopathic doctors at PHCs, there was a shortfall of 6.8% of the total requirement for existing infrastructure.16 Further, there were vacancies even in these sanctioned posts. Vacancies for female health workers/ ANMs were at 14.1%, for of male health workers/ ANMs at 37% (at SCs and PHCs), and for doctors at PHCs at 24.1%.16 The 15th Finance Commission noted that there is regional and state-wide disparity in the availability of doctors. It recommended that an All India Medical and Health Service must be constituted under the All- India Services Act, 1951.
Medical and Allied Healthcare education: In the last three years Parliament has passed various laws which seek to improve the regulation of medical education and profession in India. The National Medical Commission Act, 2019 sets up the NMC and replaces the Medical Council of India (MCI).33 The NMC will oversee medical education and practice in India. The National Commission for Allied and Healthcare Professions Act, 2021 seeks to regulate and standardise the education and practice of allied and healthcare professionals.34
Pradhan Mantri Swasthya Suraksha Yojana
(PMSSY): PMSSY was introduced in 2003 with the objective of: (i) correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, and (ii) augmenting facilities for quality medical education in the country.35 This included establishing institutions like AIIMS and upgrading certain state government hospitals. The scheme covers 20 new AIIMS and 71 state government hospitals.35
In 2018, the Comptroller and Auditor General (CAG)
noted that all new AIIMs overshot their completion time by almost five years.36 There were similar delays observed in the upgradation of state government hospitals. Further, it was found that the Ministry had estimated the capital cost for setting up six new AIIMS in Phase 1 to be Rs 332 crore per institute. After four years, this cost was revised to Rs 820 crore per institute, on account of shortcomings in planning and assessment of requirements. The Standing Committee on Health and Family Welfare (2017 and 2018) noted that this indicates poor assessment of time and cost which have left the allocated funds unused.30,37
Notes: Values for 2021-22 and 2022-23 are revised estimate and budget estimate respectively
Sources: Union Budget 2010-11 to 2022-23; PRS. In 2022-23, PMSSY has been allocated Rs 10,000 crore. This is an increase of 35% over the revised estimates of 2021-22 (Rs 7,400 crore). The central government also provides grants to autonomous bodies such as AIIMS, New Delhi, Post Graduate Institute of Medical Education and Research, Chandigarh, and Jawaharlal Institute of Post Graduate Medical Education and Research, Puducherry. In 2022-23, these autonomous bodies have been allocated Rs 10,022 crore, which is an increase of 14% over the revised estimates of 2021-22.
## Key Health Indicators Have Improved But Still Far From Ensuring Overall Better Health Of Citizens
While health financing as a percentage of GDP is a good metric to understand how much is a country investing in its health infrastructure, performance across certain key indicators is a reflection of how healthy the overall population is, and whether health services are accessible to all citizens. The results of National Family Health Survey-5 (NFHS-5) (2019-20) indicate several improvements in health indicators as compared to NHFS-4 (2015-16).38 These include: (i) reduction in infant mortality rate, (ii) improvement in immunisation coverage, (iii) increase in households with improved sanitation facility and clean cooking fuel, and (iv) increase in institutional births.39
Table 5: Status of some key targets of NHM
Indicator
Target (2012-20)
Latest Status
IMR
25
35 (2019-21) 113 (2016-18)
MMR
100 per 1,00,000 live births
TFR
2.1
2.0 (2019-21)
< .001
0.02 (2019)
Annual Malaria incidence Annual prevalence and mortality from Tuberculosis
Reduce by half
Incidence reduced from 300 per lakh in 1990 to 204 per lakh in 2017.
Note: IMR-Infant Mortality Rate; MMR-Maternal Mortality Rate; TFR-Total Fertility Rate. Sources: Health and Family Welfare Statistics 2019-20; Special Bulletin on maternal Mortality in India 2016-18; National Family Health Survey-5 (2019-21); Unstarred Question No.711, Ministry of Health and Family Welfare, Lok Sabha, July 23, 2021; PRS.
The Economic Survey 2020-21 noted that information asymmetry is one of the key reasons which exposes the healthcare sector to market failures. It noted that patients in India rarely know the value of information they receive in the healthcare sector. For example, in case of certain medical services such as preventive care or mental health, patients may never know about the quality of the services they received. The Survey recommended setting up a sectoral regulator (in private healthcare): (i) for supervision and regulation of the healthcare sector, and (ii) to prevent information asymmetry in the sector. Further, the Survey noted that mitigating information asymmetry in the healthcare sector will help achieve lower insurance premiums and better welfare of people.
## Health Research Is Still Lagging
In 2021-22, the Department of Health Research has been allocated Rs 3,201 crore, which is a 4% increase over the revised estimates of 2021-22, and a 2% increase over the actual expenditure in 2020-21. The Standing Committee on Health and Family Welfare (2020) noted that the allocation to Department of Health Research is low compared to the requirement of funds needed for health research.39 It recommended that at least 10% of the budget for the Ministry of Health and Family Welfare should be earmarked towards health research. However, in 2021, the Committee recommended that the allocation towards the health research should be 5% of the total expenditure of the Ministry.40 As per the budget estimates of 2022-23, allocation towards the Department of Health Research is 4% of the total allocation of the Ministry. The Standing Committee on Health and Family Welfare (November 2020) noted that the allocation to Department of Health Research was one of the lowest in 2019-20 (Rs 1,861 crore) as compared to the allocation of other departments involved in scientific research.21 The Committee reiterated its recommendations to increase the budgetary outcomes of the Department of Health Research. The Committee noted that shortfall of funds may adversely impact the establishment of new Viral Research and Diagnostic Laboratories; Multi-Disciplinary Research Units in Medical Colleges, and Model Rural Health Research Units in states. Further, the Committee noted that there is inadequate investment on public health research, as India invests only 0.65% of GDP on overall research and development activities in the country across various sectors.21 It recommended that the Ministry of Health and Family Welfare should at least increase its spending on health research to the world average of 1.72% of GDP within two years. The Standing Committee on Health and Family Welfare (2017, 2018, 2021) had noted the persistent recurring mismatch between the projected demand for funds and actual allocation to the Department of Health Research.40,41,42 The Committee (2018) also noted that the Department had reported shortfall of funds for implementation of projects and on the other hand, there was underutilisation of funds released. This mismatch between demand and allocation has led to impact in terms of restrictions in the sanctioning of new labs, providing recurring grants to the ongoing projects, and upgradation of health research infrastructure.41 This also led to repercussions in the medical research output. For example, in 2019, only 799 research papers have been published by the ICMR and 25 patents have been filed.40 Under PM ABHIM, a national institution for One Health, four new National Institutes for Virology, a Regional Research Platform for WHO South East Asia Region, nine Biosafety Level III laboratories, five new Regional National Centre for Disease Control will be set up.43 Further, Integrated Public Health Labs will be set up in all districts.
## Digital Health Ecosystem
The National Health Policy, 2017 had proposed setting up a National Digital Health Authority (NDHA) to regulate, develop and deploy digital health across the healthcare systems. The Policy suggested using digital tools extensively to improve the efficiency and outcomes of the healthcare system. It proposed an integrated health information system which serves the needs of all stake-holders and improves efficiency, transparency, and citizen experience.
Ayushman Bharat Digital Mission: The Mission was launched in September 2021.44 It seeks to create a system of personal health records and ensure national portability in provision of health services. Under the Mission, every citizen will be provided with a digital health identity. Health records of citizens will be stored digitally to avoid the loss of any health records. Citizens will have an option to give their
consent for sharing their health records with medical practitioners. In July 2021, the National Health Authority (NHA) had published a consultation paper to invite comments on the design and functionality of the Unified Health Interface (UHI).45 UHI is proposed to be a foundational layer of the National Digital Health Mission (NDHM) and is envisioned to expand interoperability of health services in India through open protocols. UHI aims at streamlining the digital health service experience by technology pathways that enable such services. The National Digital Health Mission has been allocated Rs 200 crore in 2022-23. As per the revised estimates of 2021-22, the Mission had been allocated Rs 75 crore.
## Covid-19: Financing The Additional Expenditure And Vaccination Developing Infrastructure To Manage Covid-19
In April 2020, the central government announced an investment of Rs 15,000 crore as COVID-19 Emergency Response and Health System Preparedness Package.46 The funds will be utilised over next four years for strengthening health system in the country. This includes: (i) setting up of diagnostic laboratories, (ii) strengthening existing health facilities (such as hospitals), and (iii) welfare of health workers (such as insurance for health workers). As on February 3, 2022, 3,249 operational laboratories (1,411 government, and 1,838 private) were reporting to ICMR.47 This is significantly higher than that in March 2020 (79).48 ICMR has setup 12 mentor institutes to expedite the approval process for labs applying for COVID-19 testing.49 The central government has also established an Indian SARS-
CoV-2 Genomic Surveillance Consortium (INSACOG) for genomic sequencing and tracking the evolution of variant strains of SARS-CoV-2.50 As of December 21, 2021, INSACOG has 38 Genome Sequencing Laboratories across the country.50 The Standing Committee on Home Affairs (2020) noted that there is huge disparity in the infrastructure and services in public and private hospitals.51 This includes disproportionate availability of ICU beds in both public and private hospitals. It further noted that during the pandemic the largest share of burden was on government hospitals as private hospitals are either inaccessible or unaffordable for everyone. The Committee recommended that more funds should be allocated to public hospitals to strengthen the public health infrastructure. This will help the public hospitals to prepare appropriately for such pandemics in future. The Standing Committee on Health and Family Welfare (2020) on the outbreak of pandemic COVID- 19 and its management noted that there is shortage of healthcare providers in state run hospitals.21 Further, it noted that many hospitals and medical colleges across India are functioning below the sanctioned strength of faculty and speciality Departments are non-functional due to lack of required faculty. The Committee recommended the central and state governments to fill up the vacancies at the earliest.
## Table 6: Allocation For Covid-19 Related Expenditure
| 2021-22 | 2022-23 |
|--------------------------|------------|
| Major Heads | |
| 2020-21 | |
| Actuals | RE |
| 13,079 | 1,691 |
| COVID-19 Emergency | |
| Response and Health | |
| System Preparedness | |
| Package | |
| | 14,567 |
| COVID-19 Emergency | |
| Response and Health | |
| System Preparedness | |
| Package (Phase-II) | |
| | 814 |
| PM Garib Kalyan Package | |
| - Insurance Scheme for | |
| Health Care Workers | |
| fighting COVID-19 | |
| 137 | |
| | |
| COVID-19 vaccination for | |
| healthcare workers and | |
| frontline workers | |
| Support for COVID | |
| Vaccination * | |
| | 39,000 |
Note: * Allocation under Demand No. 42 (Transfer to states) of Ministry of Finance. Sources: Demand Numbers 42, 46, 47, Expenditure Budget 2022- 23; PRS.
## Covid-19 Vaccination
Currently three vaccines are being administered in India - (i) Covishield, developed by the Serum Institute of India, (ii) Covaxin, developed by Bharat Biotech and (iii) Sputnik V, developed by Dr Reddy's Laboratories and Sputnik LLC. Covaxin was given emergency use authorisation (EUA) for children aged between 12-18 years in December 2021 and is being administered in the age group of 15-18 years since January 3, 2022.52,53,54,55 Further, priority groups who have already received two doses of vaccines will be given another precautionary dose from January 10, 2022. EUA refers to: (i) approving the use of unapproved medical products, or (ii) unapproved uses of approved medical products during public health emergencies (such as the COVID-19 pandemic).52 As of February 5, 2022, about 95 crore people had received the first dose of a vaccine, of which 73 crore people had been fully vaccinated.56 1.47 crore people have received a precautionary dose. The Drug Controller General of India (DCGI) has approved more vaccines for restricted emergency use in India. These include: (i) Moderna COVID-19 vaccine, (ii) Janssen (developed by Johnson and Johnson), (iii) ZyCov-D (developed by Zydus Cadila), (iv) Corbovax (developed by Biological E) and (v) Covovax developed by Serum Institute of India and ICMR).57,58,59,60 All these vaccines may be administered to all persons of 18 years of age and
above. ZyCov-D may be administered to all persons of 12 years of age and above.59 In December 2021, DCGI granted emergency use authorisation to an antiviral drug, Molnupiravir.
| Date | Group |
|---------------------------------------------------|---------------------------|
| January 16, | |
| 2021 | |
| Priority group including healthcare and frontline | |
| workers | |
| March 1, | |
| 2021 | |
| (i) People over the age of 60, and (ii) people | |
| older than 45 with co-morbidities* | |
| April 1, 2021 | People over the age of 45 |
| May 1, 2021 | People over the age of 18 |
| January 3, | |
| 2022 | |
| Children aged 15 to 18 years; precautionary | |
| dose for priority groups | |
Note: *Co-morbidities include heart failures, respiratory ailments, and lymphoma
Sources: Ministry of Health and Family Welfare; PRS.
Administration of vaccines: The central government constituted the National Expert Group on the COVID- 19 vaccine (NEGVAC) in August 2020 to advise on strategies to develop and distribute COVID-19 vaccine in India.62 The group is responsible for advising the government on matters such as: (i) prioritisation of population groups for vaccination, (ii) selection of vaccine candidates, (iii) inventory management and delivery, (iv) vaccine manufacturing, and (v) cold chain storage and associated infrastructure.62 For efficient and transparent administration of vaccine, the government: (i) prepared a database of healthcare and frontline workers, (ii) augmented cold chains, and (iii) procured syringes and needles.63 Further, the central government, in collaboration with state and district level authorities, developed a digital platform, COVID-19 Vaccine Information Network Co-WIN for vaccine administration and distribution.63
Production, procurement and pricing of vaccines:
In January 2021, the government began procuring vaccines from manufacturers of Covishield and Covaxin (Serum Institute of India and Bharat Biotech).64 The central government procured 50% of total vaccines to vaccinate: (i) healthcare and frontline workers, and (ii) people over the age of 45 free of cost.65 . The government allocated vaccines to states from its share, based on certain criteria (such as number of cases and wastage of vaccine). The remaining 50% of doses could be procured by state governments and the open market (25% each). In May 2021, the Ministry of Health and Family Welfare announced that 51 crore vaccine doses will be procured between May-July 2021.66 A new policy was operationalised on June 21, 2021, under which centralised procurement of vaccines was established.67 Under the revised policy, 75% of procurement is conducted by the central government, and the remaining 25% is open for the private sector (with a cap on pricing).68 Prices for procurement by the government are periodically negotiated with manufacturers. The central government provides vaccines to states free of cost. Private hospitals can charge up to Rs 150 over the price of a vaccine.67 Note that in the United States and United Kingdom all vaccines are administered free of cost.69,70
In 2021-22, the Ministry of Finance had estimated expenditure of Rs 35,000 crore towards COVID-19 vaccination. As per the revised estimates of 2021-22, this amount is estimated to increase to Rs 39,000 crore. In 2022-23, the Ministry has allocated Rs 5,000 crore towards COVID-19 vaccination. The Standing Committee on Chemicals and Fertilisers (March 2021) noted that 276 crore doses of vaccine would be required to vaccinate all adults in India.71 It estimated that this would cost approximately Rs 68,310 crore. As on December 9, 2021, the central government had incurred an expenditure of Rs 19,675 crore for procurement of COVID-19 vaccines to supply them free of cost to states/UTs.72 The Standing Committee on Health and Family Welfare (2020) noted that India lacks cold-chain storage infrastructure required for such a large vaccination programme. It recommended the Ministry of Health and Family Welfare to upgrade its coldchain storage system to facilitate easy distribution of vaccine across the country.73 It further recommended the central government to ensure development of cold storage infrastructure across the country to ensure efficient administration of vaccines.
| Name | Covishield | Covaxin |
|----------------|---------------|------------|
| Sputnik | | |
| V | | |
| 200 | 250*** | 995 |
| Price/dose for | | |
| government | | |
| procurement* | | |
| 600 | 1,200 | 948 |
| Price/dose | | |
| declared by | | |
| manufacturer | | |
| 180 | 210 | 197 |
| Price for | | |
| private | | |
| hospitals | | |
| GST and | | |
| service | | |
| charge** | | |
| Maximum | | |
| price of the | 780 | 1,410 |
| vaccine | | |
Note: *Prices established for government procurement have changed over the months, according to several news reports.74,75 The price/ dose here is based on guidelines from January 2021. ** This includes a levy of 5% GST and a service charge of up to Rs 150 that private hospitals may charge for administering vaccines. *** Note that Bharat Biotech, the manufacturer of Covaxin provided 16.5 lakh doses free of cost to the central government in January 2021. Health and Family Welfare, June 8, 2021; Press Information
## Annexure
2021-22
% Change between
2021-22 RE and 2022-
Major Heads
2020-21
Actuals
BE
2021-22 RE
2022-23 BE
23 BE
Department of Health and Family Welfare
77,569
71,269
82,921
83,000
0.1%
Department of Health Research
3,125
2,663
3,080
3,201
3.9%
Pradhan Mantri Swasthya Suraksha Yojana (PMSSY)
6,840
7,000
7,400
10,000
35.1%
National AIDS and STD Control Programme
2,815
2,900
2,350
2,623
11.6%
Family Welfare Schemes
462
387
306
484
58.2%
National Health Mission
37,080
36,577
34,447
37,000
7.4%
National Rural Health Mission
30,329
30,100
27,850
National Urban Health Mission
950
1,000
500
22,317
Flexible Pool for RCH and Health System Strengthening, National Health programme and National Urban Health Mission Infrastructure Maintenance
6,343
Strengthening national Programme Management of the NRHM
200
Tertiary Care Programs
301
501
431
501
16.1%
Strengthening of State Drug Regulatory System
115
175
65
100
53.8%
Human Resources for Health and Medical Education
5,386
4,800
5,600
7,500
33.9%
Autonomous Bodies (includes AIIMS, ICMR)
9,177
10,924
10,916
12,220
11.9%
Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PMJAY)
3,200
6,400
3,100
6,400
41%
Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PMABHIM)
1,040
5,846
462.1%
Medical Treatment of CGHS Pensioners (PORB)
2,794
2,300
2,750
2,645
-3.8%
Statutory and Regulatory bodies
226
316
314
335
6.9%
Infrastructure Development for Health Research
148
177
0
9%
Rashtriya Swasthya Bima Yojana (RSBY)
0
1
1
45
4400%
Others
6,011
7,127
6,654
8,377
26%
COVID-19 Emergency Response and Health System Preparedness Package
11,804
1,165
India COVID-19 Emergency Response and Health System Preparedness Package (Phase-II)
14,567
PM Garib Kalyan Package - Insurance Scheme for Health Care Workers fighting COVID-19
814
226
-72.2%
COVID-19 vaccination for healthcare workers and frontline workers
137
Total
80,694
73,932
86,001
86,201
0.2%
Sources: Demand Numbers 46 and 47, Demand for Grants, Ministry of Health and Family Welfare, Union Budget, 2022-23; PRS.
## State-Wise Numbers On The Health Sector
| | Infant | Life |
|-------------------------------------------------------------------------------------------------------------------------------------|--------------|-------------|
| Population | Crude | Expectancy |
| Under 5 | | |
| mortality | | |
| Maternal | | |
| Mortality | | |
| (Million) | Birth Rate | |
| Underweight | | |
| children (%) | | |
| Total | | |
| Fertility | | |
| Rate, | rate, | |
| 2011 | 2017 | |
| Mortality | | |
| Rate (per | | |
| 1000 live | 2015-16 | |
| 2019-21 | 2010-15 | |
| Ratio | | |
| 2016-18 | | |
| Births) 2020 | | |
| at Birth | | |
| (Years) | | |
| 2014-18 | | |
| State | | |
| Number | Number | |
| | | |
| of | % Children | of |
| Death | | |
| between | | |
| below 5 | | |
| 0-5 | | |
| Number of | | |
| infants who | | |
| die before | | |
| | years of age | |
| maternal | | |
| deaths, | | |
| years, | | |
| children | | |
| born to a | | |
| woman in | who are | per |
| reaching one, | | |
| per 1,000 live | | |
| Number of | | |
| live births | | |
| per 1,000 | | |
| in a | | |
| population. | her | underweight |
| per 1,000 | | |
| live births | births | |
| How long a | | |
| new-born | | |
| can expect | | |
| to live, on | | |
| existing | | |
| death rate | | |
| lifetime | | |
| 1,00,000 | | |
| live births | | |
| Andhra Pradesh | 49 | 16 |
| Assam | 31 | 21 |
| Bihar | 104 | 26 |
| Chhattisgarh | 26 | 23 |
| Gujarat | 60 | 20 |
| Haryana | 25 | 21 |
| Jharkhand | 33 | 23 |
| Karnataka | 61 | 17 |
| Kerala | 33 | 14 |
| Madhya Pradesh | 73 | 25 |
| Maharashtra | 112 | 16 |
| Odisha | 42 | 18 |
| Punjab | 28 | 15 |
| Rajasthan | 69 | 24 |
| Tamil Nadu | 72 | 15 |
| Telangana | 35 | 17 |
| Uttar Pradesh | 200 | 26 |
| West Bengal | 91 | 15 |
| Arunachal Pradesh | 1 | 18 |
| Delhi | 17 | 15 |
| Goa | 1 | 13 |
| Himachal Pradesh | 7 | 16 |
| Jammu & Kashmir | 13 | 15 |
| Manipur | 3 | 15 |
| Meghalaya | 3 | 23 |
| Mizoram | 1 | 15 |
| Nagaland | 2 | 14 |
| Sikkim | 1 | 16 |
| Tripura | 4 | 13 |
| Uttarakhand | 10 | 17 |
| Andaman & Nicobar | | |
| Islands | | |
| 0 | 11 | 1.3 |
| Chandigarh | 1 | 14 |
| Dadra & Nagar Haveli | 0 | 24 |
| Daman & Diu | 0 | 20 |
| Lakshadweep | 0 | 15 |
| Puducherry | 1 | 13 |
| All India | 1,211 | 20 |
| Sources: Census Data 2011; Sample Registration System 2019; Health and Family Welfare Statistics 2017; Special Bulletin on maternal | | |
| Mortality in India 2016-18; National Family Health Survey-5 (2019-21); PRS. | | |
| | | |
##
https://egazette.nic.in/writereaddata/2018/184302.pdf. 10 Receipt Budget 2022-23, Ministry of Finance, February 2022, https://www.indiabudget.gov.in/doc/rec/allrec.pdf. 11 Union Budget Speech 2020-21, https://www.indiabudget.gov.in/budget2020-21/doc/Budget_Speech.pdf; Finance Act 2020, https://egazette.nic.in/WriteReadData/2020/218938.pdf. 12 15th Finance Commission, http://finance.cg.gov.in/15%20Finance%20Commission/Report/XVFC-Complete_Report-E.pdf. 13 Chapter VIII: Public Health Care System, Planning Commission of India, http://planningcommission.nic.in/aboutus/committee/strgrp/stgp_fmlywel/sgfw_ch8.pdf. 14 Rural Health Statistics 2018, https://nrhmmis.nic.in/Pages/RHS2018.aspx?RootFolder=%2FRURAL%20HEALTH%20STATISTICS%2F%28A%29%20RHS%20- %202018&FolderCTID=0x01200057278FD1EC909F429B03E86C7A7C3F31&View=%7B09DDD7F4-80D0-42E3-8969- 2307C0D97DDB%7D. 15 Budget Speech, Union Budget 2017-18, https://www.indiabudget.gov.in/budget2017-2018/ub2017-18/bs/bs.pdf. 16 Rural Health Statistics 2019-20, Ministry of Health and Family Welfare, https://hmis.nhp.gov.in/downloadfile?filepath=publications/Rural-Health-Statistics/RHS%202019-20.pdf. 17 About HWC, Ayushman Bharat - Health and Wellness Centres, Ministry of Health and Family Welfare, https://ab-hwc.nhp.gov.in/#about. 18 Consolidate Report for the Week as on Date - 05-02-2022, Ayushman Bharat - Health and Wellness Centre, last accessed on February 2, 2022, https://ab-hwc.nhp.gov.in/home/Consolidated_Weekly_Report?state=0. 19 "Report no. 126: Demands for Grants 2021-22 (Demand No. 44) of the Department of Health and Family Welfare", Standing Committee on Health and Family Welfare, March 8, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/14/142/126_2021_7_15.pdf. 20 'Ayushman Bharat: Costs and Finances of the Prime Minister Jan Arogya Yojana', Institute of Economic Growth, Study Report for the 15th Finance Commission, https://fincomindia.nic.in/writereaddata/html_en_files/fincom15/StudyReports/Ayushman%20Bharat%20Costs%20and%20Finances.pdf. 21 Report No. 123: The Outbreak of Pandemic Covid-19 and its Management, Department-Related Parliamentary Standing Committee on Health and Family Welfare, Rajya Sabha, November 21, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/14/142/123_2020_11_15.pdf. 22 Hospital beds (per 1,000 people), Work Bank Database, last accessed on February 4, 2021, https://data.worldbank.org/indicator/SH.MED.BEDS.ZS.
2021.
3, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/14/121/119_2020_3_15.pdf. 40 Report No. 127 - Demand for Grants of the Department of Health Research, Standing Committee on Health and Family Welfare, March 8, 2021, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/14/142/127_2021_7_11.pdf. 41 "Report no. 100: Demands for Grants 2017-18 (Demand No.43) of the Department of Health Research", Standing Committee on Health and Family Welfare, March 20, 2017, http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Health%20and%20Family%20Welfare/100.pdf. 42 Report No. 107, Demand for Grants 2018-19 (Demand No. 43) of the Department of Health Research, Standing Committee on Health and Family Welfare, March 2018, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/14/100/107_2018_6_16.pdf, 43 "Pradhan Mantri Ayushman Bharat Health Infrastructure Mission", Press Information Bureau, Ministry of Health and Family Welfare, November 30, 2021. 44 "Prime Minister of India launches countrywide Ayushman Bharat Digital Mission", Press Information Bureau, Ministry of Health and Family Welfare, September 27, 2021. 45 Consultation Paper on Unified Health Interface, Ministry of Health and Family Welfare, July 23, 2021. 46 "Government Reforms and Enablers, Major announcements and policy reforms under Aatma Nirbhar Bharat Abhiyan", MyGov, May 17, 2020, https://blog.mygov.in/wp-content/uploads/2020/05/Aatma-Nirbhar-Bharat-Presentation-Part-5.pdf. 47 Total Operational (initiated independent testing) Laboratories reporting to ICMR, February 3, 2022, Indian Council of Medical Research, Ministry of Health and Family Welfare, https://www.icmr.gov.in/pdf/covid/labs/archive/COVID_Testing_Labs_03022022.pdf. 48 ICMR website, Accessed on November 17, 2021, https://www.icmr.gov.in/index.html. 49 Unstarred Question No. 2659, Rajya Sabha Questions, December 21, 2021, https://pqars.nic.in/annex/255/AU2659.pdf. 50 Unstarred Question No. 2661, Rajya Sabha Questions, December 21, 2021, https://pqars.nic.in/annex/255/AU2661.pdf. 51 "Report No. 229: Management of COVID-19 Pandemic and Related Issues", Standing Committee on Home Affairs, Rajya Sabha, December 21, 2020, https://rajyasabha.nic.in/rsnew/Committee_site/Committee_File/ReportFile/15/143/229_2020_12_18.pdf. 52 "Press Statement by the Drugs Controller General of India (DCGI) on Restricted Emergency approval of COVID-19 virus vaccine", Press Information Bureau, Ministry of Health and Family Welfare, January 3, 2021. 53 "The National Regulator grants Permission for Restricted Use in Emergency Situations to Sputnik-V vaccine", Press Information Bureau, Ministry of Health and Family Welfare, April 13, 2021. 54 Twitter, Ministry of Health and Family Welfare, March 24, 2021, last accessed on March 31, 2021, https://twitter.com/MoHFW_INDIA/status/1374639742499708930. 55 "Status of COVID-19 Vaccines within WHO EUL/PQ evaluation process", World Health Organisation, last accessed December 1, 2021, https://extranet.who.int/pqweb/sites/default/files/documents/Status_COVID_VAX_11Nov2021.pdf.
%7Ctwterm%5E1423915409791610886%7Ctwgr%5E%7Ct.
300-per-dose-adar-poonawalla/articleshow/82293116.cms?from=mdr. 75 "Govt to procure 66 crore more doses of Covishield, Covaxin at revised rates", The Hindu, July 17, 2021, https://www.thehindu.com/news/national/govt-to-procure-66-crore-more-doses-of-covishield-covaxin-at-revised-rates/article35378303.ece. DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it.
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65c43cfe57bc5671070682cb | budget_reports |
## Demand For Grants 2017-18 Analysis Drinking Water And Sanitation
The Ministry of Drinking Water and Sanitation is the nodal agency responsible for policy planning, funding and coordination for programs of safe drinking water and sanitation in rural areas. The Ministry was previously a department under the Ministry of Rural Development, and was made an independent Ministry in 2011.
## Overview Of Finances
In the Union Budget 2017-18, the Ministry has been allocated Rs 20,010 crore. This is an increase of Rs 3,499 (21%) over the revised estimates of 2016-17. Over the past ten years, the allocation to the Ministry of Drinking Water and Sanitation has seen an annual average increase of 10%. In 2013-14 and 2015-16, the allocation was reduced by 8% in comparison to the previous year. However, the Ministry saw the highest increase of 49% in the revised estimates of 2016-17, over the actuals of 2015-16. Figure 1 shows these trends. Table 1 provides the budgetary allocations to the two major schemes, the National Rural Drinking Water Program (NRDWP), and the Swachh Bharat Mission-Gramin (SBM-G) of the Ministry of Drinking Water and Sanitation.
| Revised | Budgeted | % | Major |
|------------|-------------|--------|----------|
| head | | | |
| Actual | | | |
| 15-16 | 16-17 | 17-18 | change |
| SBM-G | 6,703 | 10,500 | 13,948 |
| NRDWP | 4,369 | 6,000 | 6,050 |
| Total | 11,081 | 16,511 | 20,010 |
Sources: Demands for Grants 2017-18, Ministry of Drinking Water and Sanitation; PRS.
Tel: (011) 43434035-36, 23234801-02 www.prsindia.org Figure 2 represents the key expenditure heads of the Ministry. In 2017-18, 70% of the Ministry's expenditure is estimated to be on SBM-G and 30% on NRDWP.
Note: Values from 2007-08 to 2008-09 are revised estimates. Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively. Sources: Union Budgets 2007-08 to 2017-18; PRS.
## Financial Allocations To Outcomes
In this section, we discuss issues regarding the implementation of the SBM-G and NRDWP.
## Swachh Bharat Mission- Gramin
The Swachh Bharat Mission was launched on October 2, 2014 with an aim to achieve universal sanitation coverage, improve cleanliness and eliminate open defecation in the country by October 2, 2019. The Swachh Bharat Mission- Gramin (SBM-G) is the rural component of the program. SBM-G was previously referred to as the Nirmal Bharat Abhiyan or the Total Sanitation Campaign. In 2017-18 it has been allocated Rs 13,948 crore, which is an increase of 33% from the revised estimates of 2016-17. In 2016-17, the scheme was allocated Rs 9,000 crore, which was increased to Rs 10,500 crore at the revised estimates stage. Figure 3 shows the expenditure on rural sanitation schemes by the Ministry over the years.
Note: Values from 2007-08 to 2008-09 are revised estimates. Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively. Sources: Union Budgets 2007-08 to 2017-18; PRS.
Allocation to SBM-G has seen an increase over the years. However, the total money allocated to the scheme is low, when compared to other centrally sponsored schemes. The scheme got the seventh highest allocation among all the centrally sponsored schemes in Union Budget 2017-18. Allocation to some other schemes such as Mahatma Gandhi National Rural Employment Guarantee Scheme is Rs 48,000 crore, National Health Mission is Rs 27,131 and Sarva Shiksha Abhiyan is Rs 23,500 crore.
Budget estimates versus actual expenditure:
Table 2 shows the trends in allocation and actual expenditure on rural sanitation schemes over the past ten years.
rural sanitation schemes (in Rs crore)
| Year | Budgeted | Actuals | % of Budgeted |
|---------|-------------|------------|------------------|
| 2007-08 | 954 | 954 | 100% |
| 2008-09 | 1,080 | 1,080 | 100% |
| 2009-10 | 1,080 | 1,200 | 111% |
| 2010-11 | 1,580 | 1,580 | 100% |
| 2011-12 | 1,650 | 1,500 | 91% |
| 2012-13 | 3,500 | 2,474 | 71% |
| 2013-14 | 3,834 | 2,244 | 59% |
| 2014-15 | 4,260 | 2,841 | 67% |
| 2015-16 | 3,625 | 6,703 | 185% |
| 2016-17 | 9,000 | 13,948 | 155% |
Note: The 'utilised' figure for 2016-17 is a revised estimate. Sources: Union Budgets 2007-08 to 2016-17; PRS.
Note that in the past two years, actual expenditure on SBM-G has overshot the budget estimates significantly. In 2015-16, it was 185% and is expected to be 155% in 2016-17. This implies lack of adequate budgeting and planning in implementation of the scheme.
Construction of Individual Household Latrines
(IHHLs): For construction of IHHLs, the funds are shared between the centre and the state in the ratio of 60:40. Construction of IHHLs account for the largest share of total expenditure under the scheme. In 2014-15, it was 91%, and has been increased to 97% and 98% in 2015-16 and 2016- 17, respectively. Table 3 shows the target versus construction of IHHLs since the inception of the scheme. Note that while actuals overshot the budget estimates, the target for construction of toilets has remained in the range of 50%-60%.
| Year | Target | Constructed |
|---------|-----------|----------------|
| 2014-15 | 1.25 | 0.58 (46%) |
| 2015-16 | 2.31 | 1.27 (55%) |
| 2016-17 | 2.7 | 1.7 (61%) |
Note: Data for 2016-17 is updated till February 28, 2017. Sources: Management Information System Reports of SBM; PRS.
Information, Education and Communication
(IEC) Activities: 8% of funds earmarked for SBM-G in a year are to be utilised for IEC activities.1 These activities primarily aim to mobilise behavioural change towards the use of toilets among people. However, this has not been met. In 2014-15, Rs 157 crore was spent on such activities, accounting for 4% of the total scheme expenditure. This decreased to Rs 147 crore or 1% in 2015-16. In 2016-17, till the third quarter, Rs 56 crore has been spent, amounting to approximately 1% of total expenditure up to that month. Table 4 highlights these trends.
## (In Rs Crore)
| Year | SBM-G funds spent on IEC activities |
|---------|----------------------------------------|
| 2014-15 | 157 (4%) |
| 2015-16 | 147 (1%) |
| 2016-17 | 56 (1%) |
Note: Data for 2016-17 is updated till February 28, 2017. Sources: Management Information System Reports of SBM; PRS.
Open Defecation Free (ODF) villages: After a village declares itself ODF, states are required to carry out verification of the ODF status of such a village. Table 5 presents data on the differences between villages that have declared themselves ODF free and are verified.
| Year | Declared ODF | Verified ODF |
|---------|-----------------|-----------------|
| 2015-16 | 49,543 | 34,999 (71%) |
| 2016-17 | 1,67,226 | 66,777 (40%) |
Note: Data for 2016-17 is updated till February 28, 2017. Sources: Management Information System Reports of SBM; PRS.
The Comptroller and Auditor General of India (CAG) undertook an audit of the Total Sanitation Campaign or the Nirmal Bharat Abhiyan from 2009-10 to 2013-14 to review the functioning of the rural sanitation program in country.2
Key observations of the CAG with regard to the implementation of rural sanitation schemes include:
Project planning: Plans prepared at Gram
Panchayat level were not consolidated into Block plan and further into District plan in 73 (49%) test checked districts of 12 states. The Annual Implementation Plan did not indicate the District/Block/Gram Panchayat wise allocation of physical and financial targets.
Project implementation: The scheme had an
objective of construction of around 426 lakh and 470 lakh latrines for Below Poverty Line and Above Poverty Line families, respectively. However, project districts could construct 52% and 44% latrines from 2009-10 to 2013-14. Additionally, 13 lakh latrines involving an expenditure of Rs 186 crore were constructed by engaging contractors/NGOs, etc., in violation of the scheme guidelines.
Management of funds: The Ministry released
only 48% of the funds and 16 states did not release or released less funds during 2009-10 to 2013-14. As against the availability of funds of Rs 13,494 crore, Rs 10,157 crore or 75% of funds were spent on the implementation of the scheme.
Information, Education and
Communication (IEC): Being a demanddriven scheme, IEC is critical for creating awareness about the Nirmal Bharat Abhiyan. However, during 2009-10 to 2011-12, 25% of
budgeted allocated for IEC activities was incurred on activities unrelated to IEC.
Monitoring and Evaluation: The Ministry
only spent Rs 0.32 crore out of Rs 22.40 crore booked under monitoring during 2009-14 and spent the remaining amount on other activities.
## National Rural Drinking Water Programme
The National Rural Drinking Water Programme (NRDWP) aims at assisting states in providing adequate and safe drinking water to the rural population in the country.3 Rural drinking water programs have existed in various forms since 1972- 73, starting with the Accelerated Rural Water Supply Programme, followed by a Technology Mission in 1986. Subsequently, the Sector Reform Project was initiated in 1999-2000, with an aim to involve the rural community in planning, implementation and management of drinking water schemes. From 2009, it has been renamed as the National Rural Drinking Water Programme.
Fund sharing pattern: Rural water supply is a state subject. The centre-state fund sharing pattern within the scheme for the components of coverage of habitations, quality of water and operation and maintenance of projects is: (i) 50:50 for all states, and (ii) 90:10 for north-east and Himalayan states. For the components of monitoring and surveillance of water quality, sustainability of water sources, and support activities like awareness generation, the centre-state fund sharing pattern within the scheme is: (i) 60:40 for all states, and (ii) 90:10 for north-east and Himalayan states. The centre funds the scheme entirely for union territories.
NRDWP accounts for 30% of the Ministry's finances this year. In 2017-18 it has been allocated Rs 6,050 crore, which is an increase of 1% from the revised estimates of 2016-17. In 2016-17, the scheme was allocated Rs 5,000 crore, which was increased to Rs 6,000 crore at the revised estimates stage. Figure 4 shows the expenditure on NRDWP by the Ministry over the years.
Note: Values from 2007-08 to 2008-09 are revised estimates. Values for 2016-17 and 2017-18 are revised estimates and budget estimates respectively. Sources: Union Budgets 2007-08 to 2017-18; PRS.
As can be noted from the figure above, from 2007- 08 to 2013-14, the expenditure on NRDWP accounted for about 80%-90% of the Ministry's budget. However, from 2015-16 onwards, the allocation to the scheme has been reduced significantly.
Budgeted versus actual expenditure: Table 6
shows the trends in allocation and actual expenditure on NRDWP over the past ten years. The actual expenditure saw a decline in 2014-15, which could be a reason for the reduction of funds at the budget estimates stage in 2015-16. However, the actual expenditure in 2015-16 was 167% of the budget estimates. Given the inconsistency in the budget estimates of the scheme, it is unclear how the Ministry is planning the execution of the scheme.
Table 6: Budgeted versus actual expenditure on NRDWP (in Rs crore)
Year
Budgeted
Actuals
% of Budgeted
2007-08
6,606
6,506
98%
2008-09
7,420
7,420
100%
2009-10
8,120
7,996
98%
2010-11
9,000
8,985
100%
2011-12
9,350
8,493
91%
2012-13
10,500
10,489
100%
2013-14
11,426
9,691
85%
2014-15
11,000
9,243
84%
2015-16
2,611
4,369
167%
2016-17
5,000
6,000
120%
Note: The 'utilised' figure for 2016-17 is a revised estimate. Sources: Union Budgets 2007-08 to 2016-17; PRS.
The Standing Committee examining the scheme had observed that reduction in budget for NRDWP will affect the coverage and tackling of water quality problems in rural areas.4
Target versus achievements: In 2011, the Ministry came out with a strategic plan for the period from 2011-22.5 It set out a goal that by 2022, every person in rural areas in the country will have access to 70 Litres Per Capita Per Day (LPCD) of water within their household premises or at a distance of not more than 50 metres. It identified three standards of service:
i.
Basic piped water supply with a mix of household connections, public taps and handpumps (designed for 55 LPCD);
ii.
Piped water supply with all metered, household connections (designed for 70
LPCD); and
iii.
Handpumps, protected open wells, protected ponds, etc. (designed for 40 LPCD).
By 2022, the goal is to cover 90% of rural households with piped water supply and 80% of rural households with household tap connections. The revised guidelines of the NRDWP in 2015 raised the drinking water supply norms from 40 LPCD to 55 LPCD.6 Table 7 and table 8 highlights the targets and achievemnets under the scheme for the past five years. It can be observed from the table that as of February 2017, 97% of rural habitations have access to safe drinking water (measured on the basis of 55 LPCD). The interim goal of the Ministry is to cover 55% of all rural households with piped water supply and 35% of rural households with household tap connections by 2017. However, the Estimates Committee in its report in 2015 observed that piped water supply was available to 47% of rural habitations. This implied that only 15% people have access to piped water at their homes.7
habitations partially covered under NRDWP
| | | Number of partially covered habitations |
|---------|----------|--------------------------------------------|
| | Target | Achievement |
| 2009-10 | 1,10,721 | 99,312 (90%) |
| 2010-11 | 1,10,231 | 90,116 (82%) |
| 2011-12 | 94,257 | 83,713 (89%) |
| 2012-13 | 91,750 | 77,388 (84%) |
| 2013-14 | 83,805 | 91,496 (109%) |
| 2014-15 | 89,581 | 94,020 (105%) |
| 2015-16 | 52,061 | 64,487 (124%) |
| 2016-17 | 40,385 | 29,408 (73%) |
Note: Data pertain to habitations getting 55 LPCD of basic piped water supply with a mix of household connections, public taps and handpumps. Data for 2016-17 is updated till February 28, 2017. Souces: Integrated Management Information System Reports 2009-10 to 2016-17, National Rural Drinking Water Programme; PRS.
habitations fully covered under NRDWP
| | | Number of fully covered habitations |
|---------|--------|----------------------------------------|
| | Target | Achievement |
| 2009-10 | 51,106 | 49,567 (97%) |
| 2010-11 | 33,247 | 29,267 (88%) |
| 2011-12 | 36,837 | 32,533 (88%) |
| 2012-13 | 38,403 | 58,916 (153%) |
| 2013-14 | 38,454 | 45,277(118%) |
| 2014-15 | 25,112 | 26,507 (106%) |
| 2015-16 | 12,081 | 13,276 (110%) |
| 2016-17 | 10,002 | 7,900 (79%) |
Note: Data pertain to habitations getting 55 LPCD of basic piped water supply with a mix of household connections, public taps and handpumps. Data for 2016-17 is updated till February 28, 2017. Souces: Integrated Management Information System Reports 2009-10 to 2016-17, National Rural Drinking Water Programme; PRS.
Contamination of drinking water: It has been noted that NRDWP is over-dependant on ground water.7 However, ground water is affected by high arsenic contamination in 68 districts in 10 states.7 These states are Haryana, Punjab, Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, West Bengal, Assam, Manipur and Karnataka. Table 9 shows the number of states and districts where ground water is affected by various contaminants.
| Contaminants | Number of | Number of |
|-----------------|--------------|--------------|
| affected | | |
| states | | |
| affected | | |
| districts | | |
| Arsenic | 10 | 68 |
| Fluoride | 20 | 276 |
| Nitrate | 21 | 387 |
| Iron | 24 | 297 |
Sources: Central Ground Water Board; PRS.
http://www.mdws.gov.in/sites/default/files/SwachBharatGuidlin es.pdf. Drinking Water and Sanitation, http://indiawater.gov.in/IMISReports/MenuItems/AboutSite.asp x. 4 Demand for Grants 2016-17, Ministry of Drinking Water and Sanitation, Standing Committee on Rural Development 2015- 16, http://164.100.47.193/lsscommittee/Rural%20Development/16_ Rural_Development_23.pdf. 5 "Ensuring Drinking Water Security in Rural India", Strategic Plan 2011-12, Department of Drinking Water and Sanitation, Ministry of Rural Development, Chemical contamnation of ground water has also been reported due to deeper drilling for drinking water sources. It has been recommended that out of the total funds for NRDWP, allocation for water quality monitoring and surveillance hould not be less than 5%.7 Presently, it is 3% of the total funds.6 It hs also been suggested that water quality laboratories for water testing should be set up throughout the country.7
http://mdws.gov.in/sites/default/files/StrategicPlan_2011_22_W ater.pdf. 6 National Rural Drinking Water Programme Guidelines 2013, http://www.mdws.gov.in/sites/default/files/NRDWP_Guidelines _2013_0.pdf. on Estimates 2014-15, Lok Sabha, DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS"). The opinions expressed herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those who may receive it. |
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