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Daily CUrrent Affairs 23.03.2022 (Sri Lankan Tamil families flee to India citing economic crisis, No illegality in floating LIC IPO through Money Bill: Madras HC, Needed, an Indian Legislative Service, SC clarifies on BS-VI vehicles’ registration, The National Land Monetisation Corporation)

Daily CUrrent Affairs 23.03.2022 (Sri Lankan Tamil families flee to India citing economic crisis, No illegality in floating LIC IPO through Money Bill: Madras HC, Needed, an Indian Legislative Service, SC clarifies on BS-VI vehicles’ registration, The National Land Monetisation Corporation)

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16 people clandestinely reach Rameswaram in two batches

1. Sri Lankan Tamil families flee to India citing economic crisis

The economic crisis in Sri Lanka has forced at least 16 Tamils to flee the country illegally and seek shelter in coastal Rameswaram in Tamil Nadu on Tuesday.

The first batch comprising two families — six members including an infant — arrived at Arichalmunai near Dhanushkodi early Tuesday morning. Another batch of 10 persons, including women and children, arrived at Dhanushkodi later in the night.

A Coast Guard patrol spotted and detained the Sri Lankan citizens.

They told officials that they left their country due to rising prices of essential goods and lack of jobs.

2. No illegality in floating LIC IPO through Money Bill: Madras HC

Speaker’s decision should be treated as final, say judges

There is no constitutional illegality in Parliament having amended the Life Insurance Corporation (LIC) Act of 1956 by way of a ‘Money Bill’ for floating an Initial Public Offering (IPO) and parting with its shareholding in the corporation to raise ₹65,000 crore to ₹70,000 crore initially to the Consolidated Fund of India, the Madras High Court has ruled.

The First Division Bench of Chief Justice Munishwar Nath Bhandari and Justice D. Bharatha Chakravarthy held that a challenge to the Finance Act of 2021, through which the LIC Act was amended, could not be accepted in the absence of a challenge to a certificate issued by the Lok Sabha Speaker classifying the Finance Bill 2021 as a Money Bill.

The judges said, the Speaker’s decision should be treated as final as per Article 110(3) of the Constitution, unless a judicial review of it had been prayed for. They dismissed a writ petition filed by an insurance policyholder L. Ponnammal who had contended that the subject matter would not fall within the definition of Money Bill.

The Bench pointed out that Article 109 lays down special procedures in respect of Money Bills. Such Bills could be introduced only in the Lok Sabha and not in the Rajya Sabha. After the Lok Sabha passes them, they should be transmitted to the Rajya Sabha for the latter to make its recommendations within 14 days.

If the recommendations were not made within 14 days, the Bill should be deemed to have been passed by both the Houses and if any recommendations were made, the Lok Sabha could take a call on accepting or rejecting the recommendations. After such decision, the Bill would be deemed to have been passed by both the Houses.

Issues related to payment or withdrawal of money either from the Consolidated Fund or Contingency Fund of India would fall under the definition of Money Bill and if any question arises as to whether a Bill was a Money Bill or not, the decision of the Lok Sabha Speaker would be final as per Article 110(3) of the Constitution.

3. Needed, an Indian Legislative Service

A common service can help strengthen the many legislative bodies in India, from the panchayat level to Parliament

The appointment of Dr. P.P.K. Ramacharyulu as the Secretary-General of the Upper House by M. Venkaiah Naidu, Chairman of the Rajya Sabha, on September 1, 2021, was news that drew much attention. Ramacharyulu was the first-ever Rajya Sabha secretariat staff who rose to become the Secretary-General of the Upper House. A precedent — appointing the Secretary-General from ‘outside’ or bureaucracy, often retired — very hard to unfollow was made possible by the Chairman. It was both a well-deserving signal for long-serving staff of the Parliament secretariat and course correction to restore the legitimacy of their long-time demand. However, it was a fleeting gesture — Ramacharyulu was replaced, bizarrely, by a former bureaucrat, P.C. Mody, in less than three months. It is said that the Chairman had given in to political pressures.

Since the first Parliament in 1952, 11 Secretaries-General had served in the Rajya Sabha before Ramacharyulu. Except for some of the lateral entry staff, who could become Secretaries-General, all the others were parachuted from the civil services or other services from time to time.

In the first Parliament, the Rajya Sabha opted for the first Secretary (General) S.N. Mukherjee, a civil servant, despite India having a legacy of the Legislative Assembly Department (Secretariat) attached to the Central Legislative Assembly since 1929. However, S.N. Mukherjee’s appointment as Secretary (General) could be justified as he had served in the Constituent Assembly Secretariat as Joint Secretary and chief draftsman of the Constitution. S.S. Bahlerao joined the Rajya Sabha Secretariat as Deputy Secretary in 1958 and rose to become the third Secretary (General) in 1976. Before his Rajya Sabha stint, he had served as Assistant Secretary in the erstwhile Hyderabad Legislative Assembly and as Secretary in the Maharashtra Legislative Assembly.

Similarly, Sudarshan Agarwal joined the Rajya Sabha as Deputy Secretary and became the fourth Secretary-General in 1981. Since 1993, all the Secretaries-General of the Rajya Sabha were from the civil service till the appointment of Ramacharyulu as the 12th Secretary-General. The appointment of P.C. Mody, a retired IRS officer as the 13th Secretary-General in the Upper House was for the first time.

Independent of the executive

Article 98 of the Constitution provides the scope of separate secretariats for the two Houses of Parliament. The principle, hence, laid in the Article is that the secretariats should be independent of the executive government. In the Constituent Assembly, R.K. Sidhwa, an eminent member, emphasised the need for an independent secretariat. He cited an illustration: “When the Speaker’s secretariat wanted pencils for the members, the executive refused to give them.” It figuratively marked the significance of an independent secretariat. A separate secretariat marks a feature of a functioning parliamentary democracy.

The Secretary-General, with the rank equivalent to the Cabinet Secretary, is the third most key functionary of the Rajya Sabha after the Chairman and the Deputy Chairman. The Secretary-General also enjoys certain privileges such as freedom from arrest, immunity from criminal proceedings, and any obstruction and breach of their rights would amount to contempt of the House. The Secretaries-General of both the Houses are mandated with many parliamentary and administrative responsibilities. One of the prerequisites that demand the post of the Secretary-General is unfailing knowledge and vast experience of parliamentary procedures, practices and precedents. Most of the civil servants lack precisely this aspect of expertise.

In the Lok Sabha

Unlike the Rajya Sabha, the Lok Sabha had nine of its staff (including the lateral-entry officers) raised to become Secretaries-General to date. The first Secretary (General) of the Lok Sabha, M.N. Kaul (1952-64), was Secretary to the Constituent Assembly Secretariat (1947-50) and the Provisional Parliament (1950-52). S.L. Shakdhar (1964-77), the second Secretary-General of the Lok Sabha, who was the Secretary of the Department of Parliamentary Affairs in 1949, was later appointed as the OSD to M.N. Kaul, and succeeded Kaul as the Secretary (General) of the Lok Sabha subsequently. The nine Secretaries-General (from the Secretariat) were Avtar Singh Rikhy, Subhash Kashyap, C.K. Jain, R.C. Bhardwaj, G.C. Malhotra, P.D.T. Achary, S. Bal Shekar, P. Sreedharan and P.K. Grover. The precedent of promoting the senior-most secretary to the post of Secretary-General of the Lok Sabha has met with pause and resume. Also, some of them got the Secretary-General position after their retirement.

Constituting a breach

Serving civil servants or those who are retired come with long-held baggage and the clout of their past career. When civil servants are hired to the post of Secretary-General, this not only dishonours the purpose of ensuring the independence of the Secretariat but also leads to a conflict of interests. It breaches the principle of separation of power. The officials mandated with exercising one area of power may not expect to exercise the others.

In a parliamentary polity, one of the roles of Parliament is to watch over the executive’s administrative behaviour. In other words, Parliament has all the reasons for its surveillance of administration. Parliament must have the technical and human resource competency that is on a par with the executive to be an effective body for providing meaningful scrutiny and to make the executive accountable. A strong Parliament means a more answerable executive. However, the bureaucracy persistently does not allow Parliament to be a competent and robust legislative institution.

An all-India service is a must

There are thousands of legislative bodies in India, ranging from the panchayat, block panchayat, zila parishad, municipal corporations to State legislatures and Union Parliament at the national level. Despite these mammoth law-making bodies, they lack their own common public recruiting and training agency at the national level. Parliament and State legislative secretariats recruit their pool of bureaucrats separately. Ensuring competent and robust legislative institutions demands having qualified and well-trained staff in place. The growth of modern government and expansion of governmental activities require a matching development and laborious legislative exercise. Creating a common all-India service cadre — an Indian Legislative Service — is a must. A common service can build a combined and experienced legislative staff cadre, enabling them to serve from across local bodies to Union Parliament. The Rajya Sabha can, under Article 312, pass a resolution to this effect, in national interest, to create an all-India service common to both the Union and the States, and enables Parliament to create such a service by law.

In the United Kingdom, the Clerk of the House of Commons has always been appointed from the legislative staff pool created to serve Parliament. It is high time that India adapts and adopts such democratic institutional practices.

4. SC clarifies on BS-VI vehicles’ registration

The Supreme Court on Tuesday permitted the registration of BS-VI light and heavy diesel vehicles used for public utility and essential services.

A Bench led by Justice L. Nageswara Rao ordered authorities to not insist on the production of court orders for registration of vehicles in this category.

“We are of the considered view that the registration can be permitted in respect of BS-VI light and heavy diesel vehicles used for public utility and essential services. The registering authorities are directed not to insist on any order passed by this court to be produced for registration of such vehicles,” the court observed. The order was passed after perusing the report of amicus curiae, advocate A.D.N Rao, who told the court that vehicles used for public utility and essential services may be permitted to be registered.

5. The National Land Monetisation Corporation

Why has the NLMC been set up by the Union government? How will it generate revenue and employment?

The NLMC will be a firm, fully owned by the government, to carry out the monetisation of government and public sector assets.

There are different reasons why the government monetises its assets. One of them is to create new sources of revenue. Another is to unlock the potential of unused or underused assets by involving institutional investors or private players. Monetisation is also done to generate capital for future asset creation.

According to the Economic Survey 2021-2022, CPSEs have put nearly 3,400 acres of land on the table for potential monetisation. In terms of government land, the Railways and Defence Ministries own the bulk majority.

The story so far: The Union Cabinet on March 9 approved the creation of the National Land Monetisation Corporation (NLMC), the Special Purpose Vehicle (SPV) that Finance Minister Nirmala Sitharaman had announced in the Union Budget 2021-22, to carry out monetisation of government and surplus land holdings of public sector undertakings (PSU).

 What is the NLMC and what will it do? 

The National Land Monetisation Corporation will be a firm, fully owned by the government, to carry out the monetisation of government and public sector assets in the form of surplus, unused or underused land assets. It will fall under the administrative jurisdiction of the Ministry of Finance and will be set up with an initial authorised share capital of ₹5,000 crore and a paid-up capital of ₹150 crore.

Apart from monetising underutilised or unused land parcels of Central Public Sector Enterprises (CPSEs), the Corporation will also facilitate the monetisation of assets belonging to PSUs that have ceased operations or are in line for a strategic disinvestment, with the aim of unlocking the value of these land holdings.

The surplus land and building assets of such enterprises are expected to be transferred to the NLMC, which will then hold, manage and monetise them.

According to an official statement released after a recent Cabinet meeting chaired by Prime Minister Narendra Modi, the setting of the NLMC “will speed up the closure process of the CPSEs and smoothen the strategic disinvestment process.”

The statement said it “will also enable productive utilisation of these under-utilised assets” by setting in motion private sector investments, new economic activities such as industrialisation, boosting the local economy by generating employment and generating financial resources for potential economic and social infrastructure.

Besides managing and monetising, the NLMC will act as an advisory body and support other government entities and CPSEs in identifying their surplus non-core assets and monetising them in an efficient and professional manner, maximising the scope of value realisation.

What does monetisation mean?

When the government monetises its assets, it essentially means that it is transferring the revenue rights of the asset (could be idle land, infrastructure, PSU) to a private player for a specified period of time. In such a transaction, the government gets in return an upfront payment from the private entity, regular share of the revenue generated from the asset, a promise of steady investment into the asset, and the title rights to the monetised asset.

There are multiple ways to monetise government assets; in the case of land monetisation of certain spaces like offices, it can be done through a Real Estate Investment Trust (REIT) — a company that owns and operates a land asset and sometimes, funds income-producing real estate. Assets of the government can also be monetised through the Public Private Partnerships (PPP) model.

There are different reasons why the government monetises its assets. One of them is to create new sources of revenue. The economy has already been hit due to the coronavirus pandemic and revenues are essential to fulfil the Narendra Modi government’s target of achieving a $5 trillion economy.

Monetisation is also done to unlock the potential of unused or underused assets by involving institutional investors or private players.

Thirdly, it is also done to generate resources or capital for future asset creation, such as using the money generated from monetisation to create new infrastructure projects.

How will the NLMC function? 

The firm will hire professionals from the private sector with a merit based approach, similar to other specialised government companies like the National investment and infrastructure Fund (NIIF) and Invest India. This is because asset monetisation of real estate requires expertise in valuation of property, market research, investment banking, land management, legal diligence and other related skill sets.

The NLMC will undertake monetisation as an agency function and is expected to act as a directory of best practices in land monetisation.

How much land is currently available for monetisation? 

According to the Economic Survey 2021-2022, as of now, CPSEs have put nearly 3,400 acres of land on the table for potential monetisation. They have referred this land to the Department of Investment and Public Asset Management (DIPAM).

As per the survey, monetisation of non-core assets of PSUs such as MTNL, BSNL, BPCL, B&R, BEML, HMT Ltd, Instrumentation Ltd etc are at different stages. In March 2020, for instance, BSNL had identified a total of ₹24,980 crore worth of properties for monetisation. The Railways and Defence Ministries, meanwhile, have the largest amount of government land in the country. The Railways have over 11 lakh acres of land available out of which 1.25 lakh acres is vacant. The Defence Ministry has in its possession 17.95 lakh acres of land. Out of this, around 1.6 lakh acres fall inside the 62 military cantonments while over 16 lakh acres are outside the cantonment boundaries.

What are the possible challenges for NLMC?

The performance and productivity of the NLMC will also depend on the government’s performance on its disinvestment targets. In FY 2021-22, the government has just been able to raise ₹12,423.67 crore so far through various forms of disinvestment. In the budget 2021-22, the government had initially set a disinvestment target of ₹1.75 lakh crore which was later brought down to ₹78,000 crore. The Life Insurance Corporation IPO, which was supposed to raise ₹60,000 crore is now shrouded in uncertainty owing to the Russia-Ukraine crisis making stock markets volatile. If the IPO does not hit the markets by the end of March, the government would be missing its disinvestment targets by a wide margin.

The procedure to find a bidder for state-owned carrier Air India also took a considerable amount of time and negotiations before the Tata Group came in.

Besides, the process of asset monetisation does not end when the government transfers revenue rights to private players, identifying profitable revenue streams for the monetised land assets, ensuring adequate investment by the private player and setting up a dispute-resolution mechanism are also important tasks. Posing as another potential challenge would be the use of Public Private Partnerships (PPPs) as a monetisation model. For instance, the results of the Centre’s PPP initiative launched in 2020 for the Railways were not encouraging.

It had invited private parties to run 150 trains of the Indian Railways but when bids were thrown open, nine clusters of trains saw no bidders while there were only two interested bidders for three clusters. Even for these three clusters, IRCTC — the Railways’ own firm, was the single serious bidder. The presence of just a few serious bidders would also give rise to the possibility of a less competitive space, meaning a few private entities might create a monopoly or duopoly in operating surplus government land. For instance, questions were raised when the government removed the cap on the number of airports a single entity could bid for, resulting in the Adani Group taking possession of six city airports for ₹2,440 crore from the Airports Authority of India.

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