Sep-2012-National

NATIONAL AFFAIRS

  North-Eastern Areas (Reorganisation) Amendment Bill, 2011
This Bill provides for separate High Courts for Manipur, Meghalaya and Tripura. At present the Gauhati High Court is common court of the three States. The Bill also seeks to bifurcate the civil services cadres of Manipur and Tripura.

12th Plan Document approved
Full Planning Commission, chaired by Prime Minister Manmohan Singh on September 15, 2012, approved 12th Five Year Plan (2012-17) document that proposes to lower annual average economic growth rate target during the period to 8.2 per cent, from 9 per cent envisaged earlier in view of fragile recovery.

The draft document will now be vetted by Cabinet and thereafter placed before the National Development Council (NDC) for final approval.

The 12th Plan seeks to raise the economic growth rate to 8.2 per cent from 7.9 per cent recorded in the previous Plan. This, however, is lower than the 9 per cent target envisaged in 2011.

The 12th Plan strategy seeks to provide flexibility to States to utilise funds provided under various centrally sponsored scheme and allow them to make State-specific guidelines under these programmes for incurring expenditure.

As regards rationalisation of subsidies, the Commission would take follow-up action on the suggestion on cash transfers towards food, fuel and fertiliser subsidies. The exercise of cash transfer of subsidies is hoped to be completed by March 2017, the end of the 12th Plan period.
Protection of Women against Sexual Harassment at Workplace Bill, 2010
India moved one step closer to protecting millions of its working women from sexual harassment by passing a new Bill to tackle unwelcome behaviour such as sexual advances, requests for sexual favours and sexual innuendoes made at work.

The Protection of Women against Sexual Harassment at Workplace Bill was passed by Lok Sabha on September 3, 2012, and aims to ensure a safe environment for women working in both the public and private sector. The Bill still has to be passed by Rajya Sabha, a move that is expected in the coming months.

This Bill will contribute to realisation of a woman's right to equality, life and liberty in working conditions everywhere.

The Bill protects not only the employees but also any woman entering a workplace as a client, customer, apprentice, daily-wager or in ad-hoc capacity. Students, research scholars, hospital patients and domestic help are also covered.

Kelkar Committee Recommendations
The Kelkar committee, headed by former Finance Secretary Vijay Kelkar, has recommended to the government to eliminate various subsidies in phases, by hiking prices of LPG, kerosene, diesel and foodgrains  by one-third by 2014-15 to deal with the deteriorating fiscal situation.

On disinvestment side, the Committee said that in absence of adequate steps the government will be able to raise around Rs 10,000 crore, as against the target of Rs 30,000 crore. The budget target of Rs 30,000 crore, the panel said, could be met by the government by selling minority stakes in companies like SUUTI, Hindustan Zinc and Balco.

It further said that the funds from the monetisation of surplus government land could be made available to fund infrastructure needs of the country.

The Committee also wants the government to pursue reforms in other sector, like infrastructure, finance, taxation and regulation to improve business climate and spur investment.

The committee further said the fertiliser and food subsidies are expected to exceed the budget estimates by Rs 10,000 crore each. In the 2012-13 Budget, the fertilizer subsidy was pegged at Rs 60,974 crore and the food subsidy at Rs 75,000 crore.

It cautioned that in absence of these measures, the fiscal deficit of the government could shoot up to 6.1 percent of the Gross Domestic Product (GDP) in the current financial year. It can be contained to 5.2 percent with the proposed reforms.

With regard to fertiliser subsidy the Committee said that there was urgent need to increase urea price saying it would close the wide gap between nitrogenous fertiliser and P&K fertiliser to encourage efficient use and improve farm productivity.

The Committee said that the issue price of food grains at ration shops should be increased in tandem with hike in Minimum Support Price (MSP). The panel wants government to do away with sugar subsidy, which account for just 10 per cent of total consumption.

It also wants that implementation of the Food Security Bill to provide cheap grains to persons below poverty line, be “appropriately phased” in view of difficult fiscal challenges.

Policy interventions, the panel said, is also needed to limit the shortfall in the tax-GDP ratio in 2012-13 to 10.3 per cent, from 10.1 percent in the previous fiscal. In absence of reforms it could deteriorate to 10.1 per cent on account of shortfall in collections.

The Kelkar panel has also cautioned that absence of quick credible steps to correct fiscal situation is likely to result in sovereign credit downgrade and flight of foreign capital.

The government has not yet taken a view on the recommendations of the Kelkar Committee. It has invited comments of stakeholders on the Kelkar panel report. The guarded reaction to the recommendations came in wake of widespread protest against the decision to raise price of diesel by Rs 5 per litre and capping of subsidised LPG to six per family a year.

Coal Block Scandal—A Primer
Parts of Orissa, Jharkhand, Chhattisgarh, pockets of Central and South India that have coal are divided into blocks and leased to miners.    

In 1973 the Union government nationalized coal mining and took over all coal mines and blocks. However, in 1976, private steel producers were allowed to own coal mines.

Between 1993 and 2005, 41 private companies and 29 PSUs got licences to mine coal. In 2004, however, the UPA government realised that Coal India is not in position to produce enough coal to meet the rising demand and decided to allot more captive mines to private and State-owned players.

Between 2006 and 2009, licences for 75 blocks were given to private firms and 70 blocks to government owned companies.

Coal ministry, under Prime Minister Manmohan Singh, gave licences to State and private companies through a screening committee set up in 1992. The criteria for giving licences was, however, modified in 2005, 2006 and 2008 and the CAG felt that the guidelines allowed “windfall gain” to firms that got captive blocks. CAG said that there was “substantial difference” between high market price of coal sold by CIL and lower cost of coal produced by captive blocks, as also the process of bringing transparency in allocation process was delayed at various stages to benefit private players.

Some private players got coalfields which had more deposits than needed for generating their own power. Several firms allegedly sold coal meant for internal use in open market, thus defeating the objective to boost coal production to meet demand from new power plants. Besides, out of 86 blocks which were to produce coal by 2010-11, only 28 (including 15 in private sector) started production as of March 31, 2011. The argument given by the Union government is that the development of coal blocks involves three to seven year gestation.

In 2004 the Union government did moot auction of the coal blocks, but attempts to move towards auction hit a block as power companies feared increase in coal price.

Finally, in October 2008, the government did introduce a Bill in the Parliament to enable auction of blocks. This became a law in September 2010. The flip side is that the auction, while bringing more revenue to the government, hurts the consumers as it makes coal more expensive.