Centre’s Coal Block Auction: Legal Angle

Reading time: 8-10 minutes.

Prime Minister Narendra Modi recently announced the launch of auction of coal mines for commercial purposes thus, inviting private companies to participate in the coal mining sector, which has been dominated by the State-owned Coal India Limited until now.

The auction process is for 41 coal blocks across Jharkhand, Madhya Pradesh, Chhattisgarh, Maharashtra and Orissa. The Prime Minister further added that this move was a step towards the goal of “Atma Nirbhar Bharat” (‘self-reliant’ India). However, the very next day Jharkhand Government approached the Apex Court in a challenge against the Centre’s decision on various grounds including, inadequate assessment of impact on people who are likely to be affected by such mining, destruction of forests and distortion of lives of adivasis and tribals who live and depend upon such forests. Following Jharkhand, the Maharashtra and Chhattisgarh Governments too moved the Supreme Court three days later opposing the auction on grounds of prevention of destruction of the abundant wildlife and biodiversity which is charatceristic of the locations of most of these coal blocks. The Supreme Court issued notice to the Centre against the Jharkhand Government’s plea challenging the auction and listed the matter after four weeks for further consideration.

Facts of the Issue

The Central Government launched the auction process of 41 coal blocks out of which 11 are located in Madhya Pradesh, 9 each in Chhattisgarh, Jharkhand and Odisha and the remaining 3 in Maharashtra. This step by the Prime Minister ends the State monopoly in the coal mining sector and also allows commercial mining for the first time. The decision has been justified by the Prime Minister on the grounds of potential investment, as well as employment generation for more than 2.8 lakh people both directly and indirectly, and upto Rs. 20,000 crores in revenue to State Governments annually. However, these incentives did not appease the State Governments, who instead, opposed the decision by pleading that the negative effect on the value of scarce natural resources outweighs the reasonable returns expected from the projects. Maharashtra’s Environment Minister Aaditya Thackrey strongly opposed the Centre’s proposed auction of mine sites located near Tadoba- Andhari tiger reserve located in Chandrapur District, and also cited the survey by ex- environment Minister Jairam Ramesh that led to scrapping of 2011 auction of the same mine site, for the reason that the site is unsuitable for mining. He further questioned the auction of the mentioned mine site on the ground that it can potentially destroy the wildlife corridor of Tadoba- Andhari. Chhattisgarh Environment Minister approached the Supreme Court seeking removal of 5 out of the 9 coal blocks citing rising human- elephant conflicts in these areas, which was identified as a ‘no-go’ zone in the past to preserve its biodiversity. The States also expressed concern over the displacement of tribals and destruction of their livelihood as reasons for opposition.

Legal Provisions Involved

Mines and Minerals (Development and Regulation) Act, 1957 deals with development and regulation of mines under the Union’s control. It provides that the union should take in its control, the regulation of mines if it is expedient in the public interest.

The Ministry of Environment and Forests (MoEF) issued the Environment Impact Assessment (EIA) Notification of 2006, to assess the impact of any mining project on the environment. The Rules are issued in accordance with the relevant provisions of the Environment (Protection) Act, 1986.

The Forest (Conservation) Act, 1980 was passed for the purpose of protection of forests from rampant deforestation. The Act prohibits deforestation by the States and other authorities, unless with the prior permission of the Central Government.

Critical Analysis

The Central Government’s ambitious decision has faced recurrent backlash from most of the States where the proposed auction sites are located. Besides, the former Environment Minister, Jairam Ramesh and the Jharkhand Janadhikar Mahasabha have criticized the decision.

India’s pledge under the Paris Agreement in 2015 to create a cumulative sink of 2.5-3 billion tonnes of carbon dioxide equivalent by 2030 and its goal of bringing the forest cover to 33% from the current 24% seems incompatible with the auction of sites, which comprises the densest forests of Hasdeo forest, known as the lungs of Chhattisgarh, spread over 1.7 lakh hectares. Similarly, 50% of the Chakla and Pilatund Tilaiya coal block in Jharkhand is forest area. The Chattisgarh Bachao Andolan has opposed the auction and 20 Gram sabhas in Chhattisgarh alone have written to the Prime Minister regarding the same.

Coal India has estimated that the number of mines that it has, with the current growth rate, is capable of meeting India’s energy requirement for a decade according to its Coal Vision Report. The monetisation of natural resources by the Prime Minister for an ‘Atma Nirbhar Bharat’ does not justify the negative impact that it would have on the environment and people who live and depend upon these forests. The decision is also violative of the Supreme Court’s decision in Samatha vs. State of Andhra Pradesh & Ors wherein it was held that all entities including the State are ‘non-Adivasis’, and Adivasi co-operatives alone have the right to undertake mining in their land, if they so wish. Later, in Orissa Mining Corporation Ltd vs. Ministry of Environment & Forest, the Apex Court upheld the constitutional right of Gram Sabhas to consider whether mining in their areas can be undertaken or not. Thus, the decision disregarding various judicial pronouncements, fifth schedule areas and environment protection laws has had the effect of negatively impacting the climate, forests, and people subsisting with it.

Conclusion

With the increasing importance of sustainable growth by nations and international organizations and the negative impact of climate change caused due to burning of fossil fuels, there is a need to reduce the dependence on such fuels and to increase the use and development of renewable sources of energy for meeting the growing energy requirements. However, the Centre’s decision to auction mining sites at the cost of destruction of forest cover and displacement of tribals, even when the energy demands can easily be met with current mines and other renewable resources, doesn’t seem to be in the general public interest. To capitalise the destruction of biodiverse areas should not be the stepping-stone for a ‘self-reliant’ India; rather the focus should be on growth and development of renewable sources of energy to shift towards a sustainable development policy.

Author: Ashray Singh from School of law, NMIMS Mumbai.

Editor: Astha Garg, Junior Editor, Lexlife India

Aatma Nirbhar Bharat: Reforms in power sector

Reading time: 8-10 minutes.

The Indian government announced a special economic package worth 20 lakh crore rupees which amounts to about 10% of the country’s GDP (Gross-Domestic-Product) in 2019-2020. The package includes measures which were earlier announced by the finance ministry and steps taken by the RBI. The package is focused mainly on the sectors of land, labour, liquidity and laws. The ‘Atmanirbhar Bharat package’ was explained by Finance Minister Nirmala Sitharaman in the course of five days following the PM’s announcement.

The Finance Minister’s explanation articulated the pillars of the scheme to be the Economy, Demand, Vibrant Demography, Infrastructure, Tech-driven system and also introduced reforms in various sectors such as agriculture, tax system, simplification of laws, human resource and the financial system in order to promote business, attract investment and further strengthen the resolve for ‘Make In India’.

What are the reforms introduced?

The package is divided into five tranches; the first tranche focuses on MSMEs (Micro, Small and Medium Enterprises), NBFCs (Non-Banking Financial Company), salaried workers and contractors which has a budget outlay of 5.94 lakh crores. The second tranche focuses on migrant workers, extension of credit facilities to urban housing, street vendors and interest-subvention for small businesses, this has a budget outlay of 3.1 lakh crore; the third tranche focuses to strengthen Infrastructure logistics, capacity building, governance and administrative reforms for the agriculture sector, fisheries and the food processing sector, this has a budget outlay of 1.5 lakh crores; the fourth and fifth tranches collectively have a budget outlay of 48,100 crore, and focuses on the coal, mineral, defence, civil aviation, power distribution companies, atomic energy, measures for providing employment, support to businesses and increase ease of doing business and also reforms in the education and health sectors.

The scheme also revised the definition of MSME which had been pending for long, now the micro enterprises are defined as businesses having investment of less than 1 crore and a turnover of lesser than 5 crores, similarly the small enterprises are businesses with an investment lesser than 10 crores and a turnover of lesser than 50 crores, and the medium enterprises are businesses with investment of less than 20 crores and a turnover of less than 100 crores.

The Atmanirbhar Bharat scheme introduces policy reforms to fast-track investment through the Empowered Group of Secretaries, Project Development Cell in each ministry to prepare investable projects and coordinate with investors and the government.

The scheme also introduces reforms that aim at upgradation of industrial infrastructure by challenge mode implementation for the industrial cluster through the upgrade of common infrastructure facilities and connectivity.

The government also seeks to introduce competition, transparency and private sector participation in the Coal sector as the government introduces Commercial mining in the sector. The government seeks to achieve this through revenue sharing mechanism instead of the regime of fixed rupee per ton and the liberalization of entry norms.

Relevant legal provisions and their basis:

The article 41 of the constitution of India specifies the government to take sufficient measures and effective provisions within the limits of its economic capacity and development for securing right to work, to education, and to public assistance in cases of unemployment, etc.

The article 43A of the Constitution states that 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 organizations engaged in any industry.  

The section 35 of the Disaster Management Act, 2005 allows for the Central/Union Government to take measures it deems necessary or expedient for the purpose of the disaster management, in this case the economic downfall caused due to the corona virus (COVID-19) pandemic.

The ministries of the Departments under Government of India also has responsibilities under section 36 of the Disaster Management Act such as taking measures for prevention of disasters and respond effectively and promptly to any threatening disaster situation in this case the disaster of going into recession. 

The whole plan/scheme can be considered as following section 37 of the disaster management act, 2005, as the government has prepared a disaster management plan specifying the measures to be taken by it for the prevention and mitigation of disasters, its roles and responsibilities in relation to preparedness and capacity building to deal with the threatening disaster of being in recession once the pandemic can be said to have ended which would trigger a domino of loss of employment, opportunity, livelihood and competence.

The section 101 (a) of the Consumer Protection Act allows for the Central Government to make rules without prejudice to the generality of the foregoing power, such rules may provide for classes including public utility entities.  The section 106 of the Consumer protection act provides for the removal of difficulties that may arise in giving effect to the provisions of the Act, in this case reduce/eradicate the deficiency in service.

Objective of the Reforms:

As mentioned earlier, the package helps to indemnify the losses caused due to this pandemic. It mainly uses this long lockdown period to achieve economic self- reliance in the country. The intention involves mainly fiscal policy and the industries undertake certain relief measures to overcome the situation. The PM of India during his address to the nation concentrated on the promotion of local products and also to fill the critical economic gaps. The package also focuses on providing service to the agricultural sectors by issuing Kisan credit cards with concessional credit access to the farmers.

The scheme helps in the reduction of dependency level with the international trading sectors and increases the production and development within the Indian Economy. The target of the package is to provide utmost benefit to the cottage sectors, MSMEs, labourers, farmers and economically unstable people and also the industries. This package specifying fiscal policy includes the steps taken by the RBI and the actions of Central Bank. The country instead of borrowing money from other foreign sources, can park with the RBI for the enforcement of any particular schemes.

Relevance in law

The growing population in India led to consumption of more power in domestic households and industries. Earlier the laws relating to the power sector were governed by the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948.  Later, the reforms in power sectors necessitate the Enactment of the Electricity Act, 2003 – A consolidated laws relating to generation, transmission, distribution, trading and use of electricity.  It also provided for promoting competition, rationalization of the tariffs to all areas, ensuring transparent policies regarding subsidies.

The tariff policy brought towards the power sector is in accordance with the Electricity Act, 2003 paved way to protect the consumer rights by penalising the DISCOMs.  Amendments relating to the Electricity Act were drafted in 2014 and 2018. The Electricity Amendment of 2014 Bill introduced a number of measures to promote the generation of renewable energy and also proposed an amendment in the role of distribution companies.  Finally this amendment led to an increase in the penalty rates for the non-compliance with any provisions relating to the act. However, these amendments were rejected on the ground as only few critical issues were targeted which led to the weakening of the commercial and investment activities.

The DISCOMs which utilised lesser power than provided and any the non- compliance with the provisions were penalised under Section 142 and 146 of the Act. Further for the promotion of Industries in this sector, recommending a progressive reduction in cross subsidies and grant of licenses and open access shall be presented to maintain an efficient and co-ordinated development of the economy (Section 42). Privatisation of the power sector to the Union Territories and recommendation of new tariff plans and National Electricity Policies by the Central Government are made in conformity with section 3 of the Act. Several contingencies were faced by the Distributed Companies (DISCOMs) and the Power Project Agreements (PPAs), where they were forced to pay money as fixed costs, when they do not use even a single unit of power.

This prompted to amend certain guidelines and provide clear definitions to certain vague terms in the Electricity Amendment Bill, 2020. Later the Electricity Amendment Bill of 2020 was introduced by Ministry of Power on 17th April 2020. It focuses on improving the enforcement of contracts by establishing the Electricity Contract Enforcement Authority (ECEA) to boost the enforceability of Power Purchase Agreements (PPA) and to make the laws more stringent for usage.

Critical analysis:

The economic crisis triggered by the Covid-19 pandemic is much like the 1991 economic crisis, which was a harbinger of a shift in paradigm via liberalization, privatization and globalization. If implemented properly the post Covid-19 era promises to usher unprecedented plethora of opportunities to industry, infrastructure, social and developmental infrastructure, etc.

Any stimulus package would fail to reflect the trickle-down effect, until it is backed by reforms in various sectors. The Atmanirbhar plan encompasses the unfinished agenda of holistic reforms which would include Civil services, Education, Skill, Labour, etc.

The package of 20 lakh crores comprises both fiscal and monetary measures, the monetary ones being in the nature of credit guarantees and liquidity infusions into banks and other financial institutions in the sector rather than the economy itself. The lockdown has initiated a lowering of aggregate demand and thus, fiscal stimulus is the need of the hour. The government also claims that the stimulus package is around 10% of India’s GDP. However, financing it would be difficult as the government is worried about containing the fiscal deficit. 

For financing the stimulus package, the country’s foreign reserves are supposed to be at an all-time high which could be strategically used to finance its needs. The rest of the amount may have to be raised through privatization, taxation, loans and international aid.

Conclusion:

The reforms to the tariff policy essentially promotes consumer rights by creating penalties for the DISCOMs for load-shedding or any other deficiencies in service hence, reducing burden on the consumers i.e. the customers. This makes leaps and bounds in the field of consumer rights as it reduces deficiency in service which would normally result in various consumer complaints and cases filed before the court.

The competitive selection of the transmission project developers and offering of incentives to DISCOMs such as reduction in cross subsidies to promote participation in the industry thus reducing barriers to the entry into the industry meaning increased entrants to the industry promoting competition in the industry leading to higher efficiency. Enhancing products such as smart prepaid meters and ensuring timely payment to generation companies to ensure long term sufficient and sustainability of the sector and avoid downfall of the sector’s returns.

The privatization of the power distribution services in the Union territories would certainly provide higher man power and lesser time taken for decisions to be made about essential instruments of business such as efficiency and quality of service. What does privatization in these sectors mean for the management of these sectors? It means the implied sharing of power between the private and the public sector where the public sector provides the facilities and the private sector manages the services. This sharing of power turns a new leaf in the division of power for the public and private sector by giving the private sector a higher role.

Authors: Abinaya Sankaran from School of Law, Sastra Deemed to be University, Thanjavur and Prajwal V and School of Law, Christ (Deemed to be University), Bengaluru.

Editor: Anmol Mathur from Symbiosis Law School, NOIDA.

PM Ujjwala Yojana

Reading time: 8-10 minutes.

The Government of India, at all levels, announces Welfare Schemes for a cross section of the society from time to time. These schemes could be either Central, State specific or a joint collaboration between the Centre and the States. The Pradhan Mantri Ujjwala Yojana (PMUY), a Central scheme of the Ministry of Petroleum & Natural Gas, was launched by Hon’ble Prime Minister Narendra Modi on 1st May, 2016 in Ballia, Uttar Pradesh. The objective of the scheme is to provide women from below poverty line (BPL) households with connections of Liquified Petroleum Gas (LPG), a clean cooking fuel, in order to safeguard the health of women and children and prevent health hazards posed by smoky kitchens and visits to unsafe areas for firewood collection. The scheme was expected to be beneficial for the ‘Make in India’ campaign as the cylinders, gas stoves, regulators and gas hoses are to be manufactured domestically. Moreover, a boost in employment opportunities was also expected as the scheme was likely to provide business opportunity of at least ₹ 10,000 Cr.

Recently, amidst the coronavirus pandemic, the PMUY Scheme completed four years of operation. In response to these challenging times, free cooking gas cylinders under the scheme were announced by the Finance Minister as part of the Pradhan Mantri Garib Kalyan Package for coronavirus relief to the poor. Herein, more than 8 crore beneficiaries of the PMUY scheme would be provided with three free 14.2-kg LPG cylinders between April to June. As of mid-May i.e., halfway through the 3-month scheme, 6.8 crore free cylinders have been distributed to over 8 crore PMUY beneficiaries.

Salient features and main provisions

Aim of PMUY: The PMUY aims at replacing unclean cooking fuels used in the poorest households with clean and more efficient LPG (Liquefied Petroleum Gas). When launched in 2016, its objective was to provide 5 crore LPG connections to women from BPL households by 2019. Subsequently, its target has been revised to cover 8 crore households by 2020.

Need for PMUY: According to WHO estimates, about 5 lakh deaths in India are due to polluting cooking fuels. Moreover, having an open fire in the kitchen has been held to be equivalent of burning 400 cigarettes an hour. Therefore, the primary reason behind the PMUY Scheme was to end the drudgery of the Indian rural women who cook on firewood and eliminate the health hazards faced by them. Furthermore, it also empowers women by issuing LPG connections under their name and provides employment opportunities in the cooking gas supply chain to the rural youth. Lastly, the switch to cleaner fuels also aids in reduction of environmental pollution.

Target Beneficiaries: Initially, the PMUY Scheme covered BPL families from the Socio Economic Caste Census (SECC) 2011 List after due verification, KYC seeding, NIC & internal duplication checks and finally distribution of the connections through public melas. The second phase of PMUY expanded the scope of the scheme and introduced seven new categories of beneficiaries –   Scheduled Caste/ Scheduled Tribe Households, Pradhan Mantri Awas Yojana (PMAY), Antyodaya Anna Yojana (AAY), Forest Dwellers, Most Backward Classes, Tea & Ex-Tea Garden Tribes and People residing in River Islands and Islands.

Benefits provided under PMUY: Under the scheme, an LPG connection is released in the name of the adult woman of the family provided that no connection exists in the name of any member of the family. PMUY provides beneficiaries with one-time cash assistance of ₹ 1,600 per LPG connection to help poor households with the high initial cost of purchasing LPG connection. The cost of ₹ 1600 borne by the Government includes a cylinder, pressure regulator, booklet, safety hose, etc. Although, the cost of Hot Plate and purchase of first refill is to be borne by the beneficiary, the scheme provides for the option to take the Hot Plate or the first refill or both on loan basis from Public Sector Oil Marketing Companies (OMCs) at zero interest rate.

Implementation of modalities

  • A woman of the BPL household, that does not have access to LPG connection can apply for a new LPG connection (in the prescribed format) to the LPG distributor.
  • Details of BPL Card, Address, Jandhan/ Bank Account and Aadhar number are to be provided with the application form.
  • The BPL family has choice to choose as per their requirement from three packages based on life and recurring cost for using LPG. The three options are 5 kg SBC, 14.2 kg SBC and 5 kg DBC.
  • The LPG connection will be issued by OMCs to beneficiaries after due verification of their eligibility from the documents submitted by them.
  • OMCs will organize ‘Melas’ at various locations to release the LPG connections.
  • OMCs have to create a revolving fund using their own resources for providing EMIs to the beneficiaries.
  • OMCs are not obliged to entertain connection transfer requests. However, in case of death, connection along with the outstanding loan is to be transferred preferably to women legal heir. 
  • When a connection is surrendered, the security amount towards cylinder is to be deposited in a separate account by the OMC and additional LPG connections are to be released from this account.

Progress under PMUY Scheme

The programme, launched in 2016, soon gained traction and in 2018 its ambit was expanded to include 8 crore poor households by 2020 with an additional allocation of ₹ 4,800 crore to the initial allocation of 8,000 crore. The 8 crore target was achieved seven months ahead of schedule in September 2019. So far, the PMUY scheme has benefitted 1.46 crore BPL families in Uttar Pradesh, 88 lakh in West Bengal, 85 lakhs in Bihar, 71 lakh in Madhya Pradesh and 63 lakh in Rajasthan. Notwithstanding the tremendous increase in LPG connections across India, only three States (Haryana, Punjab and Andhra Pradesh) and five Union Territories (Delhi, Chandigarh, Daman & Diu, Dadar & Nagar Haveli, Andaman & Nicobar Island and Puducherry) are kerosene-free.

Implementation of PMUY Scheme resulted in an increased nationwide LPG coverage of 96.9% (except Jammu & Kashmir). In light of the same, the Petroleum Ministry has stated that the scheme is no longer running and present allocation of funds is to meet the arrears in the reimbursement of expenditure. Further, it was stated no proposal to extend the scheme to cover the remaining 3% of population has been tabled yet. The Parliamentary Committee on Petroleum, distraught with the closure of the scheme, suggested that the scheme should be extended to poor households in urban and semi-urban slum areas to achieve higher LPG coverage of the population by providing connections to households that do not have LPG.

Critical analysis

In order to critically analyze the provisions of the scheme and its impact, it is essential to bear in mind that access to LPG connection does not necessarily imply its usage. Usage of LPG is based on various factors like upfront connection costs, recurring costs, service delivery and supply security at the household-level, geography (ease of access to traditional biomass or solid fuels), etc.

The implementation modality of the PMUY scheme primarily focused on eliminating the upfront connection cost or the high cost of entry, which is the most significant impediment to using liquefied petroleum gas (LPG) for poor households in India, by providing cash assistance. The recurring cost incurred in refilling LPG cylinders is not adequately subsidized by the scheme. When it comes to the cylinder refill rate under the scheme, the average was found to be 3 refills per annum as opposed to the national average of 7 refills. Furthermore, it has been stated by the Petroleum Ministry that high cost of refills for 14.2 kg cylinder is one of the primary reasons for the low usage. Since 5 kg cylinders provide an affordable refill option, the government was quick to introduce 5 kg cylinders to tackle the low usage issue.   

Furthermore, with respect to supply security, the time taken to refill a cylinder ranges from a few days to around two weeks. Moreover, doorstep delivery is not done in rural areas thereby increasing the costs of the customers. Additionally, women in rural areas become dependent on men for transportation of cylinder as they are not allowed to travel alone. The supply insecurity, therefore, can deter the use of LPG in rural areas. The Scheme provides for new connections to be installed within 7 days from the day of providing of details. However, report of the Comptroller and Auditor General of India on Pradhan Mantri Ujjwala Yojana states that only 19% of the connections were installed within 7 days and 47% connections were installed in more than 30 days.

India being the third largest emitter of greenhouse gases, the PMUY was viewed as an instrument to help reduce pollution. However, reports indicate that about half of the population of India still uses solid fuels. Moreover, in 2019, household air pollution accounted for 80% of the deaths caused by air pollution.  It is, therefore, clear that households are shifting from LPG to other unclean fuels. Additionally, the Scheme does not provide for performance indicators to evaluate its outcomes in terms of improvement in health of women and decrease in air pollution. It is, therefore, suggested that the Ministry of Petroleum and Natural Gas formulate these indicators to enable assessment of the scheme’s outcomes. Based on the consumption patterns, the issue of diversion of cylinders for commercial uses is also prominent. Therefore, high consumption cases must be reviewed regularly to curb such misuse through diversion of cylinders.

Conclusion

Prime Minister Ujjwala Yojana (PMUY), NDA government’s flagship program, has provided great relief to families below poverty line (BPL), especially women in terms of their health and empowerment. However, despite the increase in LPG connections, the continued heavy reliance on solid fuels indicates the shortcomings of the PMUY Scheme in terms of subsidizing refill cost and improving delivery. The focus of the government, therefore, must now shift from accessibility of LPG to usage of LPG and also sustain continued use of LPG in PMUY beneficiaries’ households. Furthermore, performance indicators to assess the outcomes of the Scheme in terms of its aim and objective must also be developed by the Ministry of Petroleum and Natural Gas. With only three States and five Union Territories being kerosene-free, there is a dire need for a reformed PMUY Scheme with amended provisions and objectives aiming at sustained LPG usage in poor households.

Author: Priyanshi Rastogi from Symbiosis Law School, NOIDA.

Editor: Priyanshu Grover from Symbiosis Law School, NOIDA, Uttar Pradesh.

Aatma Nirbhar Bharat: Reforms in mineral sector

Reading time: 8-10 minutes.

On the eve of May 12th, the Prime Minister, brought tidings and an exceptional present for the sluggish Indian Economy. The PM announced a relief package worth 20 lakh crore rupees with an aim to uplift the economy and provide relief to those most battered by the onslaught of the fiscal crisis brought about by the fear inspiring COVID-19. This package, as per the PM, was aimed towards making India ‘Atma Nirbhar’ i.e. Self-Reliant without becoming a ‘self-centered’ economy. The PM zealously stated that this monument of self-reliance will stand tall upon the five pillars of demand, demography, infrastructure, technology and economy. The PM stated that the goal of the government was of ensuring the holistic development of the economy by leaps and bounds. He also added that this relief package would focus mainly upon the parameters of law, labour, land and liquidity.

True to his words, the Finance Minister appeared before the inquisitive lenses, the very next day, to discuss the first of five tranches of the anodyne economic policies. The Government thus presented before the world the details of the relief package which in totality amounted to 10% of the Indian GDP, making it one of the most inspiring packages around the globe. The Finance Minister brought relief for many sectors such as the MSMEs, the NBFCs, the migrant labourers, the DISCOMs, the Corporate Employees and Employers, the mining industry and the others, to name a few. These reliefs were distributed amid well-structured and detailed tranches consisting of one or the other sectors. The relief package had been thought on for quite some time, making certain sections call it ‘too late’. However, the details and orientation of the package are self-evident and praiseworthy.

In this explanatory we would be focusing upon the mineral sector aspect of the fourth tranche of the relief package presented by the Finance Minister on the 16th of May 2020. The fourth tranche entailed a stimulus of a little over Rs. 63,000 crore, of which, surprisingly, the cost to the exchequer is only about Rs. 8,100 crore. The focus was more on industrial reforms but it should be mentioned that many of these measures have already been mired in implementation issues. This set of the assuaging policies focused upon 8 sectors including mineral mining, civil aviation, space exploration, defence investment, social infrastructure, atomic energy, coal and power distribution. The mineral sector was in much need of attention and reformation. This pending reformation was required at the present instance for increasing foreign investment to bolster the economy. 

What are the reforms which have been introduced?

While delivering the fourth tranche of the relief package the Finance Minister had remarked that, “Many sectors need policy simplification. Once we decongest sectors, we can also provide the necessary boost for growth and employment.”

Through this stimulus package, the government not only aims towards the recovery of a somewhat stagnant economy but also the reformation of many outdated laws and processes. In such tiring times, the government wishes to open up the economy and smoothen the creases for foreign investors. Just like the panacea of the 1990s economic crisis was the opening of the market to the world, similarly the government is planning to rein in the free hand of the market or the laissez faire. The government has opted for privatizing the mineral sector.

Through the fourth tranche, the government has introduced commercial mining of coal on a revenue sharing basis in India. The companies in the private sector have also been allowed to carry out exploration. This has effectively ended the government monopoly on coal.  For the aforementioned purpose, the government has decided to auction nearly 50 blocks of coal. On the mineral front, the government has announced composite exploration cum mining cum production regime. To rein in the free market in the mineral sector, the government has decided to auction nearly 500 mining blocks of certain major minerals.

The government had also said that coal gasification and liquefaction will be incentivized through rebate in revenue share. Infrastructure worth 50,000 crore has been promised by the government for these purposes. On the liberalization announced for other minerals, as per rules, all concessions will have to be granted by the respective state governments through e-auctions. The mineral index happens to be a creative new proposal with an already prepared base as the data for mineral-wise, state-wise reserves in leasehold and freehold areas is already available in the voluminous National Mineral Inventory compiled by the Indian Bureau of Mines. The government has also removed all differences between the captive and non-captive mineral mines to allow transfer of mining leases and transfer of surplus mineral.

Relevant legal provisions

The mining sector in India operates as a federal structure ensuring the efficiency of work and the grass root level implementation of laws and policies. Under the seventh schedule to the Constitution, the administration of mining sector falls under entry 54 of the union list to the extent, necessary in public interest, as declared by the Parliament. However, the same topic is mentioned under entry 23 of the state list subject to the power of the center.

Under entry 54, the Parliament enacted the Mines & Minerals (Development and Regulation) Act in 1957. The MMDR Act happens to be the principal legislation governing the mineral sector exclusive of petroleum and natural gas in India and governs the development of minerals and the regulation of mines. This Act was amended as recently as 2015 and 2016 to bring about a transparent and non-discretionary regime regarding the process of acquisition of mineral concessions.

As per Article 294 and 295 of the Constitution of India, the State governments hold the rights and obligations attached to the properties and assets of the governments that previously ruled the area within the boundaries of the State. However in the case of Threesiamma Jacob v. Geologist, Department of Mining and Geology, the Apex court had recognized the rights of private land owners to own subsoil and mineral wealth. The issue of mineral ownership is not completely answered as issues relating to payment of loyalties by private landowners are pending before the Supreme Court. These judgments can however form the basis of private ownership of mineral blocks and shift focus from the previous captive consumer end user ownership.

The legal relevance

It can be said that most of the reformations announced by the government recently are but an assimilation of previously discussed and enacted legislations. The renewed push for commercial mining happens to be a proposal over two years old. A way to auction coal mines/blocks for sale of coal has already been provided under the provisions of the Coal Mines (Special Provisions) Act, 2015, and the Mines and Minerals (Development and Regulation) Act, 1957. This Act was approved by the government in early 2018 and an order was issued on February 27, 2018. Subsequently, the Coal Ministry had informed that it had identified “15 large coal blocks” for the pilot round of bidding in December that year. As early as in January this year, the Cabinet cleared an ordinance to introduce the amendments needed to relax conditions in the two laws to open up the sector to commercial mining.

The coal gasification and liquefaction projects had also already started in the form of revival of the Talcher unit of Fertilizer Corporation of India Limited via a Joint Venture/Special Purpose Vehicles of nominated PSUs for manufacturing of urea through Coal Gasification route. This project had already been cleared in December last year. Gas Authority of India Limited, Rashtriya Chemicals and Fertilizers Limited and Coal India Limited entrusted PDIL to carry out a feasibility report for the production of ammonia through the coal gasification route.

Thereby, it can be concluded that the legal adaptations and modifications had been initiated beforehand and the 2018 amendments are a base, necessary to understand the objective and reasoning of the later modifications. The 2018 rules were laid down to increase the efficiency of mining works by prescribing a timeline for general exploration. These rules were also aimed towards ensuring that the mineral extraction process is not affected due to lease time limits. The 2019 ordinance and the present day announcements construct upon this base by further simplifying laws. The now redundant provisions of the mining laws will have to be either modified or abrogated. As the monopoly of the government ends, some new rules and laws would be required to be enacted in the coming days to ensure the rule of law. Till such time, the judgments of the Apex court and the objectives and directions of these reform measures could be taken as a new base.

Critical analysis

It is not hard to decipher that the relief measures mentioned under the fourth tranche of the acclaimed relief package are in actuality reformation measures, privatizing the government dominated minerals sector. The labour unions have called the government out for this action and accused it of clandestinely passing such ordinances and reformations without having due discussions with various stake holders. They are of the view that the government, under the shadow of the ongoing pandemic, have modified the existing structure at this time to get away with it without any protest or accountability. To some extent, the concerns raised by these unions are valid and important. An elected government must show faith in the democratic process of due discussion. However, it can be argued that the time was for action and not discussion, which happens to be usually coloured with politics.

These reforms will not have an immediate effect upon the economy of the country and will take at least half a year to a year to accrue and be visible. Therefore this so called relief stimulus will not have any direct bearing on the present economic situation, which happens to be quite contradictory to its purpose. These reformations could have come at a later time and should not have used up the space and the opportunity in the relief stimulus. However, it can also be argued that the reformations were required at the present time due to the ongoing Sino-American trade war which could open up some interesting opportunities for India. The Chinese manufacturing hub might undergo a recession as companies decide to shift their base of operations. With lucrative and seamlessly efficient bureaucratic processes, these companies might set up their base in India.

The benefits of these reformations would also include transparency, increase in foreign investment, creation of more jobs, increase in government revenue and many more. The drawbacks would be the same as those that plagued the Free Market economies resulting in the Great Depression of the 1930s. The free forces of the market can at times result into the breakdown and collapse of the sectorial economy. It should always be remembered that India is a labour intensive market having a surplus of unskilled labourers. As a labour intensive sector is privatized, most of these labourers might become unemployed due to a rise in demand for skilled labourers. This unleashes its own Pandora’s Box in terms of macroeconomics. On the social front the rights and interests of these workers might also be threatened as such.     

Conclusion

Whilst it is indisputably true that the intricate web of mineral sector laws needed to be reformed for saving the economy, the same could have been done after taking the stakeholders into confidence, after following the due process of a democratic discussion. The timings of these reforms are also somewhat murky with many parties casting aspersions on the intention of the government. What fruits this move bears is yet to be seen, but what has always been known is that India has a resilient, adaptive economy with a modern age developing legal philosophy and system i.e. a very conducive environment for leading the global industrial front.

Author: Shivani Panda from Amity Law School, Delhi.

Editor: Avani Laad from Symbiosis Law School, Pune.

  

PM SAMPADA Yojana

Reading time: 8-10 minutes.

The Fisheries and Aquaculture Industry is one of the key employing Industries in India, providing livelihood to nearly 20 million fishers. This Industry has seen an immense increase in production from 102.51 lakh metric tonnes in 2014-15 to 137.58 lakh metric tonnes in the year 2018-19. This boom in production incidentally leads to India becoming one among the top 4 countries exporting fish. This Industry, thus, garnered more attention as it slowly took up a noticeable share of India’s Exports.

The Finance Minister Mrs. Nirmala Sitaraman, while presenting the Union budget 2019-20, announced a plan to regulate the Fishing Industry in India. In fulfillment of the same, it had created a Ministry for Fishing, Animal Husbandry, and Dairying from a prior ministry. A few days ago, Mrs. Sitaraman has announced a new scheme called the Pradhan Mantri Matsya Sampada Yojana (PMMSY) to promote processing in the fishery sector and had allocated Rs.20,050 Crores calling it a scheme to bring about ‘Blue Revolution through sustainable and responsible development in the fisheries sector in India’. The Scheme shall be implemented in five years from FY 2020-21 – 2024-25 through all States/Union Territories.

What is this Scheme?

Union Minister for Fisheries, Animal husbandry, and Dairying, Mr. Giriraj Singh, has through a Press Conference on 26.05.2020 released details of the framework of the scheme.

  • This is an umbrella scheme with two components namely the Central Sector Scheme (CS) and Centrally Sponsored Scheme (CSS). CSS is further segregated into Beneficiary and Non- Beneficiary Oriented sub-components or activities under three broad heads:
  • Enhancement of Production and Productivity
  • Infrastructure and Post-Harvest Management
  • Fisheries Management and Regulatory Framework.

Funding Pattern:  Out of the total approved amount of Rs. 20,050 crores, the Central share accounts to Rs.9,407 crores; State Share accounts to Rs.4,880 crores; and the Beneficiary share account to Rs.5,763 crores.

  • Central Sector Scheme (CS): the entire project/unit cost is borne by the central government, i.e., 100% central funding.
  • Centrally Sponsored Scheme (CSS):
  • Non- Beneficiary Oriented: sub-components or activities under CSS will be shared by the Centre and the State in the following ratios: the North Eastern States and Himalayan Areas: 90% Centre, 10% State; Other states: 60% Central Share, and 40% State Share. Union Territories: 100% Central share.
  • Beneficiary Oriented (i.e., Individual/Group activities): The Government Financial Assistance for this will be limited to 40% overall in General Category and 60% overall for SC/ST/Women. In that overall share, the further division of shares between the center and the state shall be done based on areas as done for Non-Beneficiary Oriented.
  • Under this scheme, the beneficiary will have to contribute an amount of Rs. 1,500 annually.
  • During the Fish ban/lean period i.e., which spans around 3 months every monsoon, assistance shall be provided to fishermen up to nearly an amount of Rs.4500/- per year, disbursed in amounts of Rs. 1,500 every month during the fish ban/lean period.
  • The PMMSY focuses on the development of fisheries in the states of Jammu and Kashmir, Ladakh, Islands, North East, and other aspirational districts.
  • The Scheme talks of investment in modern fishing villages, construction of fishing harbors and landing sectors, urban marketing infrastructure to deliver good quality and affordable fish.
  • The beneficiaries under this scheme are also eligible for modern fishing vessels for deep-sea fishing; the Ministry has said that the criteria for this eligibility shall be released soon.
  • A new but much-needed reform the PMMSY discusses is for the provision of insurance to fishing vessels and support for the safety of fishers at sea. During a prior Press release, BK Mishra, Managing Director of National fishers Cooperative said, “The social security, accidental insurance of fishers should be increased from Rs. 2 Lakhs to Rs. 5 Lakhs”.
  • Special focus on Coldwater fisheries development and expansion of aquaculture in brackish waters and saline areas. Promotion of high-value species, establishing a national network of Brood Banks for all commercially important species, Genetic improvement and establishing Nucleus Breeding Center for self-reliance in Shrimp Broodstock, organic aquaculture promotion and certification, good aquaculture practices, end to end traceability from ‘catch to consumer’, use of BlockChain Technology, Global Standards and Certification, Accreditation of Brood banks, Hatcheries, Farms, residues issues and aquatic health management supported by a modern laboratory network.
  • Mari Culture, Seaweed Cultivation, and Ornamental Fisheries which are known to generate high employment are heavily focussed on.

Aims and objectives of PMMSY

  • To address critical gaps between Fish Production and Productivity, Post-Harvest Infrastructure and Management, Modernization and strengthening of value chain.
  • Establishing robust fishery management framework and fishers welfare.
  • Addressing key issues like low productivity in Inland Aquaculture, diseases, and sustainability of marine fisheries.
  • It aims at achieving a target production output of 220 lakh Metric Tonnes by the end of 2024-25.
  • It is expected to generate nearly 55 lakh direct and indirect employment.

Relevant legal provisions

Fisheries fall under one of the prime priorities in the State List as per the Constitution of India. This being the case, the laws that apply to fish and fisheries heavily vary from one maritime state to another. This led to the formation of a grey area since there was no uniformity of laws throughout the country. The fishing industry had seen an increased production with the use of motorized boats, improved techniques, etc. The state governments started regulating this sector, like extending the nationwide fish ban during monsoons, regulating gear to reduce indiscriminate fishing, banning bull trawling, etc. Some southern states have also formulated rules on the legal size of fish to reduce the catch of juveniles before they can spawn and replenish the population.

The Hindu Businessline reported in February 2020, that the Government announced it was considering the formulation of a federal Fishing law for sustainable development and management of fisheries in the economic zone. Territorial waters, which are up to 12 nautical miles from the baseline, come under the jurisdiction of the coastal States and Union Territories. Waters from 12 to 200 nautical miles fall under EEZ.

Following the recommendation of the National Policy on Marine Fisheries, 2017, the government is “considering a uniform fishing law for sustainable development and management of fisheries in the Exclusive Economic Zone of India,” Minister of Fisheries, Animal Husbandry and Dairying Giriraj Singh said.

Critical analysis:

This Scheme is notably India’s first major step in improving the fisheries sector. Although, there have been other similar schemes, none could boast such massive funding. Albeit, having a coastline spanning roughly 7,000 km the fishing industry in India, has by and large been left to its own devices with little to no help from the government. The proposal of Insurance, deep-sea fishing vessels, constructions of harbors, etc under this scheme is a welcome move and would serve towards improving India’s long-term goal of becoming a developed nation that concentrates on all sectors and focuses on the well-being of its citizens. 

The incentives provided by the PMMSY at the outset are very promising. Its goal of producing 220 Lakh Metric Tonnes, on one-hand and excitingly prosperous prospect, on the other, also indicates at probable overfishing and loss of habitat in Areas. Overfishing was one of the main reasons for the Sardine Crash which happened in Kerala. Scientists had found that the fishers had constantly exceeded the sustainable yield from 2010 to 2013 and were catching an increased number of juvenile fish. This leads the Kerala Government to ban the fishing of juvenile sardines in 2015. But in 2018, Amanda Vincent, a professor at the University of British Columbia in an interview with Mongabay called the current fishing techniques as ‘Annihilation Trawling’. She had coined this word to explain the phenomenon where bull trawling was taking place, not for targeted species of fish, but to indiscriminately pilfer any form of life living underwater so that it could be transformed into animal fodder, chicken feed, etc. This would effectively destroy the local ecosystem. When investigated, it was discovered that the local authorities though aware of this situation let them slide.

The aim of PMMSY to achieve sustainable fishing in the light of the existing legal regime seems over-ambitious without the backing of a National Fishing Legislation or proper mechanisms to observe these regulations.

Conclusion:

The PMMSY promises generation of employment and improvement of fishing infrastructure in India, though ambitious, if successful would drastically change the fishing industry in India. The success of which shall ultimately depend on the enacting of a uniform National Fisheries Legislation and its enforcement authorities, which would in turn help in the implementation of the scheme. A plan without sufficient legal safeguards would equal a body without a heart.

Author: Madhuri Bhadriraju from Pendekanti Law College, Osmania University, Hyderabad.

Editor: Yashika Gupta from Rajiv Gandhi National University of Law, Patiala.

Aatma Nirbhar Bharat: Reforms in space sector

Reading time: 8-10 minutes.

The Coronavirus (Covid-19) pandemic has a disruptive impact on the economic condition of India. Different agencies like World Bank and Moody have downgraded India’s growth for the fiscal year 2021, leading to the estimation of India’s GDP in negative figures. The government of India then announced the special economic and comprehensive package of 20 lakh crores, introducing it as a call for Self-Reliant India or Aatma Nirbhar Bharat. This Aatma Nirbhar Bharat is to create an economy that is self- reliant, ultimately emphasizing the sale and purchase of domestic goods. The economic package of 20 lakh crores is worth 10% of the GDP of India.

Five pillars were outlined for the Aatma Nirbhar Bharat package- Economy, Infrastructure, Vibrant Demography, system, and Demand. All this was done to bring a structural reform, with a focus on public participation and greater transparency which will bring growth in the sector. Nirmala Sitharaman, the Finance minister of India, highlighted eight(8) core sectors in an effort towards Aatma Nirbhar Bharat. These eight (8) sectors are-

  1. Coal- The government will introduce more commercial mining in the coal sector, which will provide more diversified opportunities in the coal sector with the ultimate aim of augmenting transparency and competition with greater sector participation.
  2. Minerals- The economic package will enhance private investment in the mineral sector and the policy reforms that are introduced in the mineral will lead to better efficiency in running the mining sector. These structural reforms also aim at boosting employment, growth, and bring state of the art technology towards the sector.
  3. Defence production- The Aatma Nirbhar Bharat will strengthen self-reliance in the Defence Sector, promoting weapons to be “Make in India” which will reduce the defence bill of importing goods, bringing autonomy, efficiency, and accountability in the sector.
  4. Civil Aviation- The improvements in the civil aviation sector will pursue streamlined airspace management with building world-class airports on a public-private partnership basis. The main aim is to make India a global hub for aircraft maintenance, overhaul, and Repair. 
  5. Power Sector- In the power sector, the government is trying to lay down power sector reforms promoting consumer rights, industry, and sustainable sector.
  6. Social Infrastructure- The government has aimed at boosting the private sector investment in the social infrastructure through the Gap funding scheme.
  7. Space- The government here also aimed at partaking by private investors and their participation in Space related activities. There will be an area provided to companies that are involved in Space satellites, launchers, and activities. These private companies will be allowed to use ISRO facilities to work on their project.
  8. Atomic Energy- research reactors would be established with the help of public-private partnerships. This would lead to the growth of the sector.

What are the reforms introduced?

The Aatma Nirbhar Bharat focuses on bringing reforms to the space sector. The finance minister announced that the same will be done by allowing greater participation of private companies in the activities performed under this sector. These private companies will be authorized to use the infrastructure and facilities of the Indian Space Research Organization (ISRO) to provide them with the level playing field for competition. The reforms introduced in the space sector particularly focuses on the participation of the private sector with the ISRO which will be done with proper control so that the technologies do not fall into the wrong hands. This will not only lead to greater profit for the space sector but will also provide the private sector with greater technologies and facilities.

The package introduced has the following implications:

  1. For the start-up sector- They will be able to allude to the start-up sector of the Indian space as a grantee for the utilization of the Indian space and research organization infrastructure and facilities.
  2. For the Indian armed forces- This will provide a real opportunity to meet India’s defence needs with the help of the space sector.

Objectives of reforms

The objectives of bringing reforms to the space sector were to provide the economy with profits that are expected to provide losses as of yet.

Providing a platform for risk-taking- The government provided this sector with reform by being in the private sector and letting the private sector with access to facilities technologies and foreign direct investment ultimately meaning to the growth of the private sector providing greater profits to the government.

The Finance Minister elaborated on the objectives of the reform which includes encouragement to exploration in this sector by giving access to private partnerships who will be provided with working resources and facilities, ultimately improving their capacities to work. The future outer space travel would be provided to the private sector so as the objective of giving level playing field to companies

It’s relevance in law and legal provisions

The shift of government policy which has led to the encouragement of the private sector to work with Indian space research organization was exclusively done due to the Covid-19 pandemic. There were consultations on the space activities Bill from 2017 which is yet to become a law. The space activities Bill, 2017 will lead to the encouragement of the private sector in the space activities and dismantle of government control over the same. There was a need to include the private sector in the technologies as is done in other countries. This bill is yet to become a law due to the complexities related to space activities.  This bill is a step to bring transparency and accountability towards the government and from the government also leading to technological advancement and cost reduction benefiting the profits of the government. The main aim is that the provision of the bill is introduced in the Aatma Nirbhar Bharat scheme.

Critical analysis and Conclusion

The Aatma Nirbhar Bharat Special Economic Stimulus Package introduced by Smt. Nirmala Sitharaman, as demonstrated, is very promising and effective. It would lead to catalyze the growth of Indian economic status and would attempt to cover the losses faced during the pandemic COVID-19. However, every reform introduced brings with it several implications. In this case as well, the reform deserves scrutiny, a healthier implementation, and appropriate policy and regulatory reform.

  • The space start-ups as a contributor to the Research and Development for the armed services in the private sector:

As a contributor for the armed services by the space start-ups to the Research and Development sector, the urban centers in India, which incorporates these space start-ups have been adhering to a different path for the development of the space sector, unlike the others. Moreover, several space start-ups have already been working with the assistance of the Indian Space Research Organisation. The aim is to commercialize critical technologies and the Atma Nirbhar scheme will catalyze the vision. However, still, a proper mechanism needs to be found for effective implementation and the attainment of the vision.

  • Extensive the outreach for the armed services:

Due to the scheme granted, the Indian armed sector cannot be far away from contributing to the exploitation of the emerging possibilities which will be generated in due time by the Atma Nirbhar Scheme, introduced by Smt. Nirmala Sitharaman. Consequently, the armed services, the scheme, and the space services should collectively exploit the change. For this, the government should further grant an extensive outreach by the services. As a result, this will allow us to foresee the inventions accruing from the start-ups in the private sector. Furthermore, a partial contribution can be made towards the Indian armed forces’ ‘Intelligence, Surveillance, and Reconnaissance’ requirements.

  • An independent regulatory environment needs to be established:

The reform made by the Atma Nirbhar grant is very promising. However, an issue that needs to be deliberated upon is the establishment of an independent regulatory environment in India. Why such an establishment should be made? The activities associated with the space sector are complex and involve several intricacies. The UN’s Outer Space Treaty also suggests the establishment of an independent regulatory environment due to the multi-layered projects of the space services. Some of the complex intricacies involved are as follows: frequencies, ability to import products, licensing of satellites which will be used later for operations, and imagery. An independent regulator will be able to control these complex, multi-layered projects effectively and would lead to the enhancement of India’s rank in the ease of doing business index.

The reforms in the space sector provide a level playing field for private firms in launches of satellites and space-based activities. These private firms will be allowed to use the facilities of the Indian research space organization and other relevant resources to improve and provide them with proper capacities. Future outer space activities will also be open to the private sector. This will ultimately lead to the growth of the nation and better rankings in the world for space-related activities.

Author: Abhay Raj from Jindal Global Law School, O.P. Jindal Global University, Sonipat.

Editor: Yashika Gupta from Rajiv Gandhi National University of Law, Patiala.

Policy analysis: PM Bharatiya Janaushadhi Pariyojana

Reading time: 8-10 minutes.

Despite the vast improvement in the government’s healthcare spending over the last 25 years, there has been no respite on steadily rising medical costs in the country. The cost of medicines constitutes a large percentage of the total medical costs of an individual. Over 30-40% of people die due to lack of money to buy medicines. In order to aid the lower class people, the government in 2008 brought the PM Bharatiya Janaushadhi Yojana.

The campaign is launched by the Department of Pharmaceuticals in association with the Central Pharma Public Sector Undertakings, which is aimed to provide quality medicines at affordable prices through dedicated outlets. These stores provide generic medicines at very less price and the potency of these are the same when compared to branded medicines available in markets. It was renamed as Pradhan Mantri Bhartiya Janaushadhi Pariyojana giving further impetus to the scheme in 2016.

Janaushadhi week was celebrated across the country from 1st March to 7th March 2020. During this week, sugar level checkup, blood pressure check-up, free doctor consultation, and free medicine distribution were hosted at the Janaushadhi Kendras. March 7th is commemorated as the Janaushadhi day to create awareness about generic medicines. Prime minister Narendra Modi interacted with the beneficiaries of the scheme and the owners of the Janaushadhi Kendras through video-conferencing. He commended the role of store holders and announced to introduce awards to recognize the contribution of people associated with the scheme.

What is Janaushadhi?

Generic nomenclature is the chemical name of a drug. Pharmaceutical companies give the medicines a brand name for its dosage form, concentration, and patent such formulations. The companies advertise their brands to make them popular, influence the prescription behavior to increase the sale of their own branded medicine, and once the brand is established, make money out of it by pricing their branded medicines exorbitantly. Compared to the branded version, its generic version is available at a lesser price. The BPSU focuses on marketing generic medicines in Janaushadhi stores by sourcing medicines from pharma CPSUs and the private sector. When the generic medicines are made available in the market, the cost of the same medicines under other brand names also drops substantially to compete.

The predecessor to the Janaushadhi Yojna is the Neethi Medial store. It was started by the Kerala State Cooperatives Federation with the help of their government in 1998. On the success of this, the Central government adopted the Janaushadhi scheme for providing unbranded generic medicines at reasonable prices. Generic medicines are drugs marketed under a non-proprietary name rather than the brand name. The quality, safety, and efficacy of medicines are ensured by the CPSUs.  Around 6000 stores are in the districts of India. Initially, the government has identified 800 essential medicines to be available in the stores, and prescription is not required to buy from such stores. It is a measure to curb the death of people due to the inability to procure medicines. The term Janaushadhi means “medicine for people”.

Benefits under the scheme

The benefit under the scheme is two-fold. With the promotional intent the government has organized the scheme such that apart from the government, any NGO or institution can open Janaushadhi Kendras (Stores). Any NGO, institution, cooperative society identified by the state governments and free space provided in the premises of government hospital or any NGO, society, trust, institution or self-help group having experience of operation in welfare activities for three years and having space and financial capacity, or any pharmacist/ medical practitioner having space and financial capacity. For the Kendras run by government agencies, financial support of Rs.2.50 lakh is given by the Department of Pharmaceuticals, of which 1 lakh exclusively for medicine and the rest for infrastructure. For the individual entrepreneurs, an extended incentive of 15% of monthly sales up to Rs.2.5 lakh in total is provided.

The main aim of the scheme is to bring down the healthcare budget of every citizen of India by providing quality generic medicines at affordable prices. It is made available through effective public-private partnerships. The scheme promoted awareness about cost-effective drugs and perception about them and encourage government doctors to prescribe generic medicines. Lastly, it enabled substantial savings in the case of poor patients who suffer from chronic ailments requiring long periods of drug use. It also promoted & encouraged private industry to sell their quality unbranded generic products through these retail outlets.

As of now, there are more than 1000 therapeutic medicines and 154 surgical and consumables available in the market. The scheme has priced the medicines at a maximum of 50% of the average price of the top three branded medicines. Therefore, the cost of Janaushadhi medicines is cheaper by at least 50-80% of the market price of branded medicines.

The beneficiaries of the yojana

As discussed the following persons will be benefited by the scheme:

  • Poor and middle-class people
  • Those with ailments which require life-long treatment

The following persons setting up stores under the scheme can avail subsidies and other benefits.

  • NGO, Co-operative societies recognized by the state government
  • NGO, trust, society, self-help groups that have space and financial capacity
  • Any individual including an un-employed pharmacist or medical practitioner.

Legal framework of Janaushadhi

Quality aspects of medicines are regulated by the Drugs and Cosmetics Act, 1940 and Rules 1945 and pricing and availability of the drugs is governed by Drug Price Control Order 1995. An expert body called the National Pharmaceutical Pricing Authority (NPPA) also has control over the pricing of medicines. These rules have to be followed by the government and pharma dealers that have undertaken to provide generic medicines. The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 states that every physician should prescribe drugs with generic names and ensure that there is a rational prescription and use of medicines. The National Pharmaceuticals Pricing Policy, each year is notified with the object of framing regulatory framework for pricing drugs and ensure the availability of required medicines. If these rules and regulations are followed effectively then the goal of reducing the medical expenses by 70% can be achieved.

Critical analysis

  • Progress made under the scheme

Every year, progress is being made to the scheme either small or big. The first major amendment wase earlier, kendras were opened only in government hospitals whereas now it may be opened outside the premises of the hospital also. The product basket included surgical and consumables apart from therapeutic medicines. Private suppliers were included to provide generic medicines. Grant-in-aid is provided to stores run other than government and assistance is also provided to SC/ST and differently-abled persons.

These aids serve as an incentive and attract many people to open Janaushadhi stores. This is the reason for the success of opening around 5000 stores. The scheme serves as a job creator and helps in income generation. The scheme is further focused to provide health care products and services. Possibilities of establishing Janaushadi Kendras in Kisan centers, common service centers, and other retail outlets are being encouraged. Efforts are constantly being taken to improvise the scheme and thereby achieve the mission of reducing per head medical expenses.

  • Similar health care schemes in India

The Indian government has formulated similar schemes for poor people to avail medical services. A lot of schemes are formulated to provide insurance to people on satisfying certain financial and economic conditions. Rashtriya Swathya Bima Yojana is a health insurance program for the Indian poor. The scheme aims to provide insurance to the unrecognized sector workers. This scheme was replaced by the Ayushman Bharat Yojana a scheme to revamp the medical sector. Candidates under this scheme can get free of cost medical assistance in both government and private hospitals.

An amount of Rs.5 lakh per annum per family can be availed under this scheme. Pradhan Mantri Suraksha Bima Yojana is a scheme offering accident insurance. People aged 18 to 70 having a bank account can avail benefits under this scheme. It offers an annual cover of Rs.1 lakh for partial disability and Rs.2 lakhs for total disability or death. Pradhan Mantri National Dialysis Programme as a part of the National Health Mission provides free dialysis to the poor. Patients below the poverty line can avail of these fully free of cost dialysis.

  • Failure of the scheme

The major constrain faced by the Janaushadhi scheme is the misconception among the people that cheap medicines are not original and not effective. Due to the lack of campaign and awareness among the poor people, the scheme did not reach each and every citizen. Secondly, doctors are not prescribing generic medicines. Doctors in collaboration with the pharma industry, prescribe branded medicines so that they can make a profit from those industries.

The misconception among the public that branded medicines are very good to promote the doctors to prescribe them. Medical associations and societies are benefitted by the pharmaceutical companies since they agree to fund the doctors’ scientific research activities. The attractive returns tempt the doctors to prescribe branded medicines.

Researches show that the lack of generic medicines in stores is also a reason for the failure of the scheme. Since only the branded medicines are replaced on expiry and generic medicines are not done, the pharmacists are not ready to stock up generic medicines. The fear of economic loss to be faced by the pharmacist is a corollary to the fact that people do not buy generic medicines. Moreover, a hefty margin of 201-1016% margin can be achieved in branded medicines whereas only 50-55% margin in generic medicines.

Conclusion

Janaushadhi scheme was a major step in encouraging the sale of generic medicines and enabling poor people to procure medicines. Effective implementation will curb the practice of prescribing branded medicines. The quality of the medicines is also good and equal to that of branded ones. Pradhan Mantri Janaushadhi Pariyojana has reached its 50% goal of opening generic medicine stores in all districts and union territories. Over 6000 plus stores are now opened in India as per the report released in 2020.

Apart from selling medicines at low cost, it has increased employment opportunities for a lot of individuals. The credit facilities and other amenities have helped even economically poor people to earn a living. The most benefitted of the scheme are the ones in the unorganized work sector and ones suffering from ailments requiring long term medication.

However, the Janaushadhi scheme is not a great success due to certain factors. A huge misconception that the only costlier medicine is effective among the public stops the consumers from buying generic medicines. There are threats and confusion that medicines that are cheap will not be effective and of not good quality. Doctors are not ready to prescribe generic medicines since they are not benefitted by it. Branded pharmaceutical companies give commissions and other kinds of gifts to doctors who prescribe this.

They indulge in indirect marketing of their medicines. This increases the cost of branded medicines. The government is also not taking steps to promote generic medicines. Awareness is not created among the people about the scheme and stores opened under it. The government needs to take better advertising steps to popularize the scheme which will increase the sale of generic medicines.

Author: Rashmi Senthilkumar from Sastra University, Thanjavur.

Editor: Arya Mittal from Hidayatullah National Law University, Raipur.

Explained: PM Kaushal Vikas yojana (PM-KVY)

Reading time: 8-10 minutes.

Due to the coronavirus outbreak, Prime Minister Kaushal Vikas Yojana (PMKVY), the country’s flagship skill development plan, remains suspended. In the absence of a plan to make a transition from PMKVY 2.0 to PMKVY 3.0, the government has decided to halt any new enrolments. Such a delay in the launch of PMKVY 3.0 has been brought upon due to the coronavirus outbreak. Currently, fighting off the pandemic occupies major government focus and resources.

However, PMKVY 2.0 would continue the training and employment of existing candidates. Ministry of Skill Development and Entrepreneurship has notified an extension in the enrolment in the eight north-eastern States till 31st May 2020. But there is no such direction for the rest of India. This means for the remaining States PMKVY 2.0 ended on 31st March 2020. As per an order dated April 1, the scheme would continue in the Financial Year 2021 till the recommendations of the 15th Finance Commission Report or the Launch of PMKVY 3.0, whichever is earlier.

According to Economic Times, the government maintains that there was no issue and adequate measures are in place. Further, Minister Mahendra Nath Pandey clarified that the government will maintain continuity and quality in skill training.  It would ensure that the candidates and training partners are not affected by the delay due to the lockdown. Meanwhile, the training partners are advised to work with the guidelines of respective States and Union Territories.  They are to follow the Annexure-II User Manuals Due to Blackout Period for Short Term Training and make necessary updates in Skill India Portal.

Salient features of the scheme:

The Scheme aims to provide incentives for the successful accomplishment of a market-driven skill training and certification to around twenty-four lakh trainees in one year. The National Skill Development Corporation (NSDC), Sector Skill Councils (SSCs), Assessing agencies and Training Partners are collectively responsible for the smooth operation of this scheme.

The key features of the scheme are:

  • Short term training: The scheme adopts the short-term training approach. It aims to benefit school/college dropouts and unemployed youth. The training will be given at PMKVY Training Centers (TC). The training will be according to NSQF and will also be for soft skills, entrepreneurship, financial and digital literacy. The duration of training will depend upon the job and can vary anywhere between 150 and 300 hours.
  • Training standards: Training standards are set by the National Skill Qualification Framework (NSQF). The curriculum is decided by SSCs and approved by NSDC.
  • Recognition of prior learning: Trainees with prior skills are recognized and certified under the RPL component of this program. This aims to align the competence of the unregulated workforce with the set standards of NSQF. Bridge courses are also made available. The RPL projects are of three types to be implemented by the requisite agencies.
  • Special projects: These projects are a deviation from the short-term training program. They inculcate training in specific areas. Training in special areas includes that of government bodies, corporates or industry bodies, and training in special job roles.
  • Kaushal and rozgar mela:  The training partners are to organize a Mela once every 6 months to keep the spirit of active participation alive. They are also required to take part in National Career Services Mela and the on-ground activities for incentivizing participation. This maintains the accountability of Training Partners.
  • Placement guidelines: The ultimate object of this scheme is employment. The Training Partners are to provide job opportunities as well as support for entrepreneurship to trainees.
  • Monitoring Guidelines: To ascertain the quality of training, NSDC and other inspecting agencies verify and record the activities of the training centers. They can use various methods including self- audit reporting, call validations, surprise visits, etc.
  • Steering Committee: Such a committee is tasked with the implementation of the scheme. It is also empowered to review the framework and make suitable modifications to maintain the highest possible efficiency.
  • Grievance Redressal System: A robust grievance redressal system is in place. The Online Citizen’s Portal not only broadcasts information about the PMKVY but also acts as a grievance redressal platform.

Why is it introduced?

More than 62% of the working Indian population is in the age group of 15-59 years and around 54% below the age of 25. For such a demographic dividend to be useful, they must be skilled and employable. Only then can they make a significant contribution to economic growth. Thus, this scheme was introduced to train about 24 lakh Indian youth with an estimated cost of Rs. 1,500 Cr. The introduction of the scheme focuses on introducing such skills to the candidates that make them employable. A clear dynamic exists between skill, quality of work and efficiency. The scheme aims to balance the same by encouraging aptitude towards employable skills and thus increase efficiency.

The PMKVY targets the youth at the grass-root level and trains them to boost employability. The scheme would provide India with skilled workers that will help achieve the economic growth targets. About Rs. 1500 crore have been approved by the cabinet to yield the most out of the scheme. The farsightedness of the scheme aligns with the demand from the Central Government’s flagship programs, such as ‘Swachh Bharat’, ‘Make in India’, ‘Digital India’, ‘National Solar Mission’ and so on.

Who can benefit from it?

This Scheme applies to any person of Indian Nationality who has either dropped out of school or college or is unemployed. The candidate must have a valid Aadhaar card and an alternate ID such as a PAN Card or Voter ID. He should also have a bank account for direct transfer of the payouts. The PMKVY aims at reducing unemployment as well as aims at utilizing the youth force of India. This scheme will ensure that the candidates enrolled with it become certified with skills and are employable in the market.

Critical analysis

The Sharada Prasad Committee, in its report released in April 2017, observed that the targets set by the PMKVY were too ambitious. It also pointed out that the funds allocated were not being adequately monitored. Despite its targets, only 1.8% of youth gained training under this scheme. Only 16% of trainees were funded by the government. Many had to bear the cost of training themselves.

The focus of the policy is centric to short-term skill courses. And even then it resulted in low placements. The aim was to impart training in a short period but the training period for most of the trainees was 1 year. For 30% of the candidates, it took more than 2 years.

Skill development focuses on the Public-Private Partnership Model and thus it needs a lot of effort from both the players. Most private companies have training centers. The government with the PMKVY also presented an ambitious approach. Despite these efforts, there is a huge gap between the skills needed by the industry and the skills imparted through various training institutes. Even the introduction of PMKVY could not bring a significant change in the employability of youth as was claimed. This initiative suffered from severe lacuna in its implementation.

Conclusion

Any policy is inadequate without an appropriate implementation. Similarly, PMKVY needs to have clear, transparent and responsible implementation. Accountability should be attached to the Training Partners for the number of placement opportunities. The government needs to ensure high-quality education at school levels to prepare the youth for a better future. It should also promote vocational education in schools.

Thus, participation from more and more industries should be sought to increase the chances of employability under the scheme. Around one million youth enter the workforce every month. It is necessary to impart training to as many candidates as possible. But it should not strain the quality of training provided.

Author: Anmol Mathur from Symbiosis Law School, NOIDA.

Editor: Shalu Bhati  from Campus Law Centre, Faculty of Law, University of Delhi.

Pradhan Mantri Jan Arogya Yojana (Pm-Jay)

Reading time: 6-8 minutes.

The Pradhan Mantri Jan Arogya Yojana is the world’s largest health insurance scheme launched by the Government, under the recommendations of the National Health Policy, 2017. It was launched to achieve the goal of universal health coverage. This scheme was previously known as the National Health Protection Scheme.

Since its inception on 23rd September, 2018, the PM-JAY has treated fifty lakh people within a year, investing upto Eight Thousand Crores for secondary and tertiary treatments. Recently, about 171 hospitals were de-listed from the PM-JAY Scheme for alleged frauds and FIRs have been lodged against them.

Salient features of the Pm-Jay scheme

After its incorporation on 23rd September, 2018 under the guidance of Honourable Prime Minister Shri. Narendra Modi, the basic aim of the PM-JAY was to cater the medical insure needs of the poor and vulnerable families across India. The insurance was to be completely sponsored by the Government.

This sponsorship is shared between the Centre and the State Governments as per the guidelines of the Ministry of Finance. The scheme aims to bridge the gap between availability of hospitals to the poor and seeks to reduce the expenditure on hospitals.

The scheme will provide cover of Rs. 5 Lakh per family (can be used by one or all members of the family) per annum for families listed under the Socio -Economic Caste Census of 2011, from both rural and urban areas. One of the most important features of this scheme is that it doesn’t discriminate between the size of the poor families. Almost 11 crore families and 50 Crore beneficiaries have been enrolled under the PM-JAY.

Critical analysis

The Pradhan Mantri Jan Arogya Yojana supersedes the earlier prevailing Rashtriya Swasthya Bhima Yojana, 2008. The scheme also includes the list of families enrolled in the RSBY, 2008. It has taken a huge leap over the past two years and has provided advancements in the field of health insurance for poverty laden families. Since 2018, it has empanelled many hospitals under its network.

More than 20 thousand hospitals have been empanelled under the wing of the wing of Pradhan Mantri Jan Arogya Yojana. The health standards have improved immensely in the past year, lowering the death and infant mortality rate in the vulnerable families. It is also to be noted that public hospitals are reimbursed for the healthcare services at par with the private hospitals under this scheme, reducing the enormous amounts of money charged by the private hospitals.

This will be a good step forward as, since the early 1990s the governments gave way for the establishment of private hospitals which lead to huge feels and over diagnosis. However, the scheme is not entirely efficient as it is vulnerable to frauds. There is no hard and fast rule as to how the government ensures that the bills are not flawed and that the people are not exploited under the scheme.

The only way to ensure that the fraudulent activities have not taken place is to ensure electronic billing and the vigilance of the government’s IT Department. However, not all the hospitals in the remote areas are yet acquainted with digital billing, thus increasing the possibilities of commission of a fraud.

Performance so far:

So far, the Pradhan Mantri Jan Arogya Yojana Incentive Scheme has performed fairly well. However, there have been doubts and several questions have been raised over the efficiency of the scheme. It has acted as a link for public money going into private hands. Under this scheme, different insurers are enlisted for different cities and states, making life difficult for people who are being treated outside their hometown or state.

The chances of fraud commission are huge due the inefficiency of the scheme. The scheme only improves the financial stability of the vulnerable families; however, the quality of treatment and care should be of utmost importance and has been completely neglected by the scheme. The scheme will be of no use if there are no advancements in the medical technology. Primitive measures of treatment make this scheme a complete failure. 

Recent frauds:

The National Health Authority of India (NHA) under due deliberations with its anti-offence wing National Anti-Fraud Unit (NAFU) has de-listed 171 hospitals for alleged fraudulent activities. After the due diligence carried out by the Anti-Fraud Unit, it was found out that there were some entries of ‘suspect’ electronic-cards in the databases of the hospitals.

It was also found out that certain insurance schemes for which only government hospitals were authorized were being used by the private hospitals under the guise of ‘Unspecified Package’. It has been detected that most of the hospitals operating on fraudulent activities are from Maharashtra.

A fine of Rs. 4.5  crores has been imposed on such hospitals, along with First Information Reports which have been filed against the hospitals in Maharashtra, Uttar Pradesh, Uttarakhand and Jharkhand. To curb this issue, the government has come up with mandatory biometric authorization of the electronic cards of the beneficiaries at the time of their admission and discharge.

Conclusion

The Pradhan Mantri Jan Arogya Yojana is indeed a great initiative for medical insurance for poor and vulnerable families. However, lack of planning and incompetency of the government’s IT department has made this scheme prone to misuse. Moreover, the scheme aims at providing insurance facilities and not at improving the quality of treatment.

Several hospitals across India have improper health hygiene leading to several unwarranted deaths of their patients. The scheme aims at reducing catastrophic and out of pocket health expenditure and will slowly move towards the Universal Health Coverage as cited by the World Health Organization. India is still far from reaching the overall health goal.

This desire will be halted by many problems but one should be optimistic about this goal in the longer run. The intention where primitive health coverage is not a privilege to some but all the people will be created in the longer run and people will have the Pradhan Mantri Jan Arogya Yojana to thank for.

Author: Amogh Taskar from DY Patil College of Law, Navi Mumbai.

Editor: Tressa Maria Joseph from Symbiosis Law School, Hyderabad.

Resolving the Kashmir conundrum: Final nail in the coffin?

Reading time: 7-8 minutes.

Origin of Kashmir conflict

After Indian independence in 1947 J&K like other princely states was given an option to join either of the countries of India or Pakistan. J&K signed a standstill agreement with Pakistan. There was already an internal dispute in the state arising out of Hindu ruler ruling over Muslim majority. However, circumstances further deteriorated when Pathan tribesman from Pakistan attacked Kashmir, compelling Maharaja Hari Singh to sign the Instrument of Accession (IOA), acceding the 75% majority Muslim region to the Indian Union.

The first war over Kashmir broke out in 1947 when both India and Pak refused to withdraw their armies in the state thus, rendering a plebiscite impossible. Later in 1949, with the UNSC intervention, Indian and Pakistani forces agreed to ceasefire. India left in control of 75% of the valley, as well as Jammu and Ladakh; while Pakistan was given control of what Pakistan calls “Azad” Kashmir and India calls as Pakistan occupied Kashmir or “Ghulam” Kashmir.

An intriguing question that triggers our mental faculty is that at the time when Sardar Patel successfully integrated the 565 princely states of India, why wasn’t the same done in case of J&K? Sheikh Abdullah and other Muslims in J&K were against the rule of Maharaja in J&K since the implementation of the Treaty of Amritsar in 1847.

Baba sahib Ambedkar, who was initially approached by Sheikh Abdullah in 1949 for drafting article 370, he refused the offer with outmost disdain and said “You wish India should protect your borders, she should build roads in your area, she should supply your food grains, and Kashmir should get equal status as India. But the Government of India should have only limited powers, and Indian people should have no rights in Kashmir.

To give consent to this proposal, would be a treacherous thing against the interests of India and me, as the Law Minister of India, will never do it.” It was Pt. Nehru who appointed N. Gopalaswamy Ayyangar to draft Article 370 and to get it passed by the constituent assembly. Later when this draft of Article 370 was presented before the constituent assembly it was straightaway rejected.

When Nehru realised that it wouldn’t be possible to get this draft approved he again resorted to Patel who finally acceded to Nehru’s request and took the responsibility to get the draft approved despite having contrary views on the issue. Patel did succeed in convincing the assembly and so in 1950 the Constitution of India came into force the with article 370 enshrined in its fabric.

In 1951, first elections were held across states of independent India including J&K. Sheikh Abdullah got elected as the PM of J&K. 1953 saw major shift in power in J&K as Sheikh was arrested for anti-national activities and Bakshi Ghulam was appointed as the new prime minister of Kashmir. He signed a new Instrument of Accession (IOA) treaty formally with India.

In 1954 presidential orders extended several provisions of the Indian constitution to J&K’s constitution including 35-A inserted using the Constitution (Application to Jammu and Kashmir) Order, 1954, that would come in ambit of Article 370. Later in 1956 the State Constituent Assembly adopted a constitution for itself declaring J&K as integral part of the Indian Union. Following the elections in 1957 the constituent assembly was dissolved forming a new legislative assembly. But it was not the end of the problem instead a ground was set for the continuous contentions and conflicts in the coming years.

Current developments in Kashmir: Art 370

Since the state of J&K became an integral part of sovereign India (as stated in Article 1 of Constitution of India), there have been numerous modifications in the article 370 and 35-A. From 1956 to 2019 many provision of the Indian constitution has been extended to the state legislature of J&K.

Art 370 of Indian constitution grants certain special privileges to the state of Jammu and Kashmir: –

  • duration of the state’s Assembly is six years, not five like the rest of India;
  • it has a separate flag; Indian citizens cannot buy property there;
  • the Indian Parliament has only limited reach in J&K and only Defence, External affairs, Communication and the currency;
  • the state of J&K follows Ranbir Penal Code in place of IPC, no provision of RTI, RTE or CAG and other provisions incorporated in 35-A.”

 The seemingly sudden move by Union government to scrap off Art 370 was meticulously planned and researched. The legalities that were required to remove an article could not have been done overnight. Proper and planned homework was done beforehand by legal experts/officers of the government.

Union government was ready and waiting for the right opportunity to proceed with their plan; prepared with measures to mitigate any possible unrest arising thereafter. All the odds turned out to be in favour of ruling party as

  • There was no legislative assembly present in the state owing to the Presidents rule continuing from June 2018.
  • The ruling party had significant number of seats in both the houses and underpinning of other parties, who supported this resolution, led to uninhibited passing of this bill. (THE JAMMU AND KASHMIR REORGANISATION BILL, 2019)
  • Approval of the Bill from both the houses reinforced its legality.

Analysing the procedure for removal of Art 370

Removal of article 370 was executed through the Presidential Order (C.O. 272), 2019. The article used to dilute or scrap 370 was article 370(3) which states that, president has the power to declare this article (Art 370) ineffective or that the article may operate with specified modifications and exceptions, through public notification. This article empowers president to remove or modify any provision of the art 370 but with the recommendation of the constituent assembly.

 Article 370(1)(d), moots an imperative point, “Notwithstanding anything contained in this Constitution, 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.”

Although it seems powers rest in hands of president but the holistic approach tells us that real powers is vested with the constituent assembly. So for the abrogation of 370 the first and foremost requirement was the presence Constituent assembly which ceased to exist in 1957. So the question that arose was if 370 has thus become permanent to which an answer is the opening heading of 370 i.e.-Temporary provisions with respect to the State of Jammu and Kashmir.

The expression ‘temporary’ indicates the intent of the framers of our constitution, that is article 370 was never meant to exist for so long in the first place.  Although recently in 2018 the Indian Supreme Court further stated that ‘Article 370 had acquired permanent status, making its abolition almost impossible.’ And now comes in picture an entirely new article i.e. Article 367. Article 367 had 3 clauses that talks about the interpretation of constitution.

The C.O. 272 added an additional 4th clause with 4 sub clauses that included article 367(4)(c) stating that the references to the Government of Jammu and Kashmir shall be read and understood as references to the Governor of Jammu and Kashmir. Additionally, Article 367(4)(d) stipulates that in proviso to clause (3) of Article 370, the expression ‘Constituent Assembly of the State’ referred to in clause (2) shall inferred as ‘legislative Assembly of the State’.

One important fact to be kept in mind is that the state of J&K has been under President’s rule for around a year. There is no state government or legislative assembly in J&K. So very cleverly the powers that vested in hand of state government were put in hands of the governor using 367(4)(c) and (d). After this amendment the road ahead was free of predicaments (as far as the constitutionality is considered).

In other words, the Presidential powers in article 370(1)(d) were used, unhampered by the need of either concurrence of state government or the recommendation of the constituent assembly, to abrogate article 370 using the clause (3) of 370. In next step Statutory regulation was moved by Home Minister Amit Shah in Rajya Sabha that recommended the President to abrogate Article 370 and also included the reorganisation bill 2019 which aimed at bifurcating the state into two union territories of Ladakh (without legislature) and Jammu and Kashmir (with legislature).

So with the abrogation of Article 370 Article 35-A too ceased to exist as it was made through (presidential order) drawing its authority from 370. Referring to a J&K High Court judgement of 2002 which ruled that ‘Jammu and Kashmir women who marry non-permanent residents will not lose their rights in their ancestral properties, be devoid of their right to work, education, inheritance or even adoption.’ This decision was taken repealing a part of 35-A referred to as Permanent Residents Law which barred a woman (belonging to the state) from any property rights if she marries a person from outside the state.

The provision also extends to the children of such women as they do not have any succession rights over the property. Given the ‘special status’ of J&K it ought to have brought prosperity in the state as compared to rest of the country in terms of development, employment, low poverty etc. Unfortunately, the rhetoric seems to have failed to ensue changes. Unemployment is pushing the youth towards unlawful activities, stone pelting on army; had they been not poor, employed, educated, situation would have been at least some good.

Now when all this is done, we need to wait to see how this issue turns out. People have already challenged the scraping of Article 370 in Supreme Court of India and court proceedings concerning this issue will further enhance our wisdom about the constitution opening new doors of legal possibilities. This is the beauty of democracy and in the country like India where one gets ample opportunity to question the laws and their legalities with the presence of an independent supreme law institution.

-This article is brought to you in collaboration with Namrata Pal from Dr. Ram Manohar Lohiya National Law University, Lucknow.